Alternative Investments/ESG: Here’s FRDM, The ETF With A Conscience
The Life + Liberty Freedom 100 Emerging Markets index and ETF (FRDM) is a way to invest in emerging markets.
The Life + Liberty Freedom 100 Emerging Markets index and ETF (BATS: FRDM) is an ETF with a conscience. It’s investing proposition is based upon humanitarian factors such as freedom of speech, the battle against human trafficking, and international trade access. The ETF allows investors exposure to the emerging markets with the exclusion of China and Russia. (Investing.com)
Life + Liberty Freedom 100 Emerging Markets index and ETF (FRDM)
“It’s an alternative way to invest in emerging markets and growth driven by free people,” says Perth Tolle, the American-Chinese creator of the ETF.
“As long as Perth builds a brand, builds authenticity, we’re not dependent on raising $1 billion to keep the fund alive,” says Wesley Gray, CEO of Alpha Architect, the maverick research-intensive asset manager that launched the ETF as a white label product. The firm is unfazed by short-term losses and looks instead for long-term gains.
“We don’t really care what the track record is – if she can just stay around, I think she’ll win,” he adds referring to Tolle.
FRDM has gained 75% from its COVID lows in March.
That is substantially better than its emerging market rivals such as Vanguard FTSE Emerging Markets (NYSEARCA: VWO) +59%, iShares Core MSCI Emerging Markets ETF (NYSEARCA: IEMG) +64%, and iShares MSCI Emerging Markets ETF (NYSEARCA: EEM) +62%.
The fund’s biggest holdings are located in countries such as Taiwan and South Korea. These are recovering faster versus other countries such as China.
FRDM won ETF.com’s best new international global equity of ETF and index of the year in 2019.
How it works
The ETF tracks the Life + Liberty Freedom 100 Emerging Markets Index which is a freedom-weighted EM equity strategy that uses personal and economic freedom metrics as primary factors in the investment selection process.
The investment process (a fully automated selection algorithm) commences with a starting universe of 26 emerging market countries. These are put through the country level of market capitalization screen, deriving a freedom -weighted country allocation. Securities are selected excluding state-owned enterprises and the resulting portfolio holds 100 emerging market stocks.
The inception date of the fund, which has an expense ratio of 0.49%, is 23 May 2019.
The current AUM of FRDM is $ 23.54 million.
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