MFEM
PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity
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What's going on with MFEM (PIMCO RAFI Dynamic Multi-Factor Emerging Markets ETF)?
What's going on with MFEM (PIMCO RAFI Dynamic Multi-Factor Emerging Markets ETF)?
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That seems good. I think momentum and anti-vol/anti-beta tilts are worthwhile. I feel uncomfortable recommending stuff because my own factor holdings have not done well, but I'll list them if you're interested: VFMF, MTUM, IMTM, FNDF, MFEM, BTAL, CAPE. That last was an ETN and then switched management and became an ETF. It did fairly well before but its record since then has been poor. FNDF is probably pretty similar to AVDE. I think AVDV covers an exposure that's hard to find, and 36bps isn't too expensive for that. Maybe I should buy some myself. I've heard that value and small size factors don't do well on their own since their "discovery" but they still generate a premium when combined.
Don't model your portfolio after someone who invested in all U.S. stocks during a time period when the U.S. outperformed the rest of the world for decades. There's no guarantee that the U.S. will always outperform. As emerging markets become developed markets over the coming decades those gains could outpace U.S. gains, but no one knows. I somewhat do the Ben Felix suggested ETF portfolio but translated for U.S. funds. I buy VTI, VEA, and VWO in proportion to VT. And I factor tilt each segment with AVUV, AVDV, and MFEM (*In Ben's recommended factor portfolio, he didn't recommend an Emerging Market Factor tilt because there wasn't one up to his standards, but I'm going for it and MFEM is what I picked based on not knowing anything about anything. If Avantis or Dimensional ever make one, I'll jump on board. It's the smallest part of my portfolio by a long shot so it might not matter much). I've got 27 years til retirement so I'm being super risky and factor tilting by 27% now and will lower that percentage as bonds enter the mix.
I'm trying to factor tilt VT towards Small Cap Value and was recently looking for a small cap value emerging markets to go with my AVUV and AVDV positions, but couldn't find one. I settled on MFEM, which is an E.M. ETF that factor tilts towards value, low volatility, "quality" (whatever that means), and momentum. It has a high expense ratio of 0.49%, but it's by far my smallest position.
IMTM FNDF MFEM TUR PRIDX