Hartford Multifactor Emerging Markets ETF (ROAM) seeks to track an emerging markets index that applies multiple factor screens to select and weight stocks from developing countries like China, India, Brazil, and Taiwan. This multifactor approach targets companies exhibiting quality, value, momentum, and low volatility characteristics across emerging market economies.
How It Works
ROAM uses a rules-based methodology that screens emerging market stocks through multiple quantitative factors including earnings quality, valuation metrics, price momentum, and volatility measures. The fund weights selected companies based on their composite factor scores rather than market capitalization alone. Holdings are typically rebalanced quarterly to maintain factor exposures and adapt to changing market conditions. The strategy combines passive indexing with systematic factor tilts to potentially enhance risk-adjusted returns.
Key Features
- Multifactor approach targets quality, value, momentum, and low volatility stocks rather than pure market-cap weighting
- Focuses exclusively on emerging markets including China, India, Brazil, Taiwan, and other developing economies
- Offers 3.97% dividend yield, providing income potential alongside emerging market growth exposure
Risks
- This ETF can lose significant value during emerging market selloffs, potentially declining 40-60% during global risk-off periods like 2008 or 2020
- Currency fluctuations can amplify losses when emerging market currencies weaken against the U.S. dollar during crisis periods
- Political instability, regulatory changes, or economic crises in major emerging markets can cause sharp, prolonged declines in fund value
Who Should Own This
Best suited as a satellite holding (5-15% of equity allocation) for experienced investors with high risk tolerance and 7+ year time horizons seeking emerging market diversification. Appropriate for investors comfortable with significant volatility who want factor-based exposure to developing economies rather than pure market-cap weighted emerging market funds.