First Trust Bloomberg Emerging Market Democracies ETF (EMDM)

Overview

The First Trust Bloomberg Emerging Market Democracies ETF (EMDM) seeks investment results that correspond generally to the price and yield of the Bloomberg Emerging Market Democracies Index. This index focuses on companies in emerging market countries that are considered to be democracies based on World Bank governance indicators.

Reputation and Reliability

First Trust is a well-established ETF provider with a solid reputation for offering a diverse range of investment products.

Management Expertise

First Trust Advisors L.P. has a dedicated team of investment professionals with experience in managing ETFs and indexing strategies.

Goal

To provide investment results that correspond generally to the price and yield of the Bloomberg Emerging Market Democracies Index.

Investment Approach and Strategy

Strategy: The ETF employs a passive management strategy, aiming to replicate the performance of its underlying index.

Composition The ETF holds a basket of stocks from emerging market countries classified as democracies. The composition reflects the weights of the companies in the Bloomberg Emerging Market Democracies Index.

Market Share: EMDM's market share is dependent on the specific segment of emerging market democracy-focused ETFs, but it can be considered to hold a moderately large share within this niche.

Total Net Assets (AUM): 58940000

Key Competitors

• IEMG
• VWO
• SMEZ

Competitive Landscape

The emerging market ETF industry is highly competitive. EMDM's focus on democracies provides a unique selling point, attracting investors seeking politically stable emerging markets. Competitors offer broader emerging market exposure, which can be advantageous or disadvantageous depending on the investor's goals.

Historical Performance: Historical financial performance data can be obtained from financial websites. The data can be presented by year as percentage returns. [0.0, 0.0, 0.0]

Benchmark Comparison: To gauge EMDM's effectiveness, it is useful to review the ETF's performance against the Bloomberg Emerging Market Democracies Index to quantify tracking error and active management benefits.

Expense Ratio: 0.85

Average Trading Volume

The average trading volume of EMDM is moderate, which may impact the ease of buying or selling large positions.

Bid-Ask Spread

The bid-ask spread of EMDM is typically moderate, meaning there are some costs associated with trading the ETF.

Market Environment Factors

Economic indicators of emerging markets, political stability, currency fluctuations, and investor sentiment toward emerging markets influence EMDM's performance.

Growth Trajectory

EMDM's growth trends depend on the overall performance and attractiveness of emerging market democracies. Changes in the index composition may also impact its trajectory.

Competitive Edge

EMDM's competitive edge lies in its focus on emerging market democracies, filtering out countries with questionable governance. This appeals to investors seeking exposure to emerging markets while prioritizing political and economic stability. The strategy differentiates it from broad emerging market ETFs and allows it to target a specific segment of the market. The selection criteria based on World Bank indicators further enhances its appeal.

Volatility

EMDM's historical volatility can be measured by standard deviation of returns to show how the fund has fluctuated in the past. Volatility data can be displayed [0.0, 0.0, 0.0]

Market Risk

Specific risks include political instability in emerging markets, currency risk, and economic slowdowns in the underlying countries.

Ideal Investor Profile

The ideal investor for EMDM is one who seeks exposure to emerging markets with a preference for politically stable and democratically governed countries. This investor is willing to accept the inherent risks of emerging markets but seeks to mitigate governance-related risks.

Market Risk

EMDM is more suitable for long-term investors who understand emerging markets and are looking for diversification, while preferring emerging market investments in politically stable and democratically governed countries.

First Trust Bloomberg Emerging Market Democracies ETF (EMDM) offers exposure to emerging market equities with a focus on countries demonstrating democratic governance. It targets investors seeking stable and politically sound emerging market exposure, differentiating itself from broader emerging market ETFs. EMDM's performance is tied to the economic conditions and political landscapes of its constituent countries, requiring careful consideration of market and political risks. Its selection criteria, based on World Bank governance indicators, provides a unique offering within the emerging market ETF landscape.

Data Sources:

• First Trust website
• Bloomberg
• ETFdb.com
• Morningstar

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Investment decisions should be made based on individual financial circumstances and consultation with a qualified financial advisor. Market share data may vary slightly depending on the source and date.