RFEM ETF — Holdings & Analysis

First Trust RiverFront Dynamic Emerging Markets ETF (RFEM) is an actively managed fund that aims to provide capital appreciation by investing in emerging market equities. Unlike passive ETFs that track a specific index, RFEM's investment strategy involves actively selecting and weighting its holdings based on market conditions. The fund invests at least 80% of its net assets in equity securities of emerging market companies, including common stock, depositary receipts, and real estate investment trusts. RFEM's top holding is Taiwan Semiconductor Manufacturing Co Ltd, representing 14.98% of the portfolio.

RFEM has an expense ratio of 0.99%. This means that for every $10,000 invested in the fund, $99 is deducted annually to cover operating expenses. While this provides active management and dynamic allocation, it is higher than many passive emerging market ETFs. Investors should weigh the potential benefits of active management against the higher cost when considering RFEM. The category average expense ratio for international equity ETFs is approximately 0.44%.

RFEM's top holdings reflect its focus on technology and large-cap companies in emerging markets. As of 2026-03-15, the top three holdings are Taiwan Semiconductor Manufacturing Co Ltd (14.98%), Tencent Holdings Ltd (3.77%), and iShares MSCI China ETF (3.67%). Other significant holdings include MediaTek Inc (2.60%) and Alibaba Group Holding Ltd Ordinary Shares (2.41%). These holdings demonstrate a significant allocation to the technology sector and Chinese equities, either directly or through the iShares MSCI China ETF.

Whether RFEM is a suitable long-term investment depends on an individual's investment goals, risk tolerance, and time horizon. RFEM offers exposure to emerging market equities with active management, which could potentially lead to outperformance compared to passive strategies. However, the fund's higher expense ratio of 0.99% can impact long-term returns. the may be worth researching fund's sector and country concentrations, as well as its beta of 0.79, when evaluating its suitability for long-term investment. Past performance does not guarantee future results.

RFEM differentiates itself from similar ETFs through its active management strategy and dynamic allocation approach. Many emerging market ETFs are passively managed and track broad market indices like the MSCI Emerging Markets Index. RFEM's expense ratio of 0.99% is higher than many passive ETFs, which often have expense ratios below 0.20%. However, RFEM's active management may justify the higher cost if it can deliver superior risk-adjusted returns. RFEM has $0.07 billion in AUM, which is smaller than some of the larger, more established emerging market ETFs.

As of 2026-03-15, RFEM has a dividend yield of 0.00%. This indicates that the fund is not currently distributing dividends to its shareholders. The fund's focus on capital appreciation rather than income generation may explain the absence of dividend payments. Investors seeking dividend income from emerging market equities may want to consider other ETFs with a higher dividend yield.