Is FlexShares Morningstar Emerging Markets Factor Tilt ETF (TLTE) a Strong ETF Right Now?

The FlexShares Morningstar Emerging Markets Factor Tilt ETF (TLTE) was launched on 09/25/2012, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Emerging Market ETFs category of the market.

What Are Smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Managed by Flexshares, TLTE has amassed assets over $315.3 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. TLTE, before fees and expenses, seeks to match the performance of the Morningstar Emerging Markets Factor Tilt Index.

The Morningstar Emerging Markets Factor Tilt Index reflects the performance of a selection of equity securities designed to provide broad exposure to the global emerging equities markets, with increased exposure to small-capitalization stocks and value stocks.

Cost & Other Expenses

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Operating expenses on an annual basis are 0.57% for this ETF, which makes it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 3.57%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Taking into account individual holdings, Taiwan Semiconductor Manufacturing Co Ltd Commonaccounts for about 5.87% of the fund's total assets, followed by Samsung Electronics Co Ltd Common Stock Krw 100 and Sk Hynix Inc Common Stock Krw 5000.

Its top 10 holdings account for approximately 21.11% of TLTE's total assets under management.

Performance and Risk

So far this year, TLTE has added about 5.24%, and is up roughly 32.61% in the last one year (as of 04/01/2026). During this past 52-week period, the fund has traded between $46.89 and $74.69.

The fund has a beta of 0.58 and standard deviation of 15.35% for the trailing three-year period, which makes TLTE a medium risk choice in this particular space. With about 3114 holdings, it effectively diversifies company-specific risk .

Alternatives

FlexShares Morningstar Emerging Markets Factor Tilt ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

Vanguard Emerging Markets Stock Index Fund ETF Shares (VWO) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG) tracks MSCI Emerging Markets Investable Market Index. Vanguard Emerging Markets Stock Index Fund ETF Shares has $109.53 billion in assets, iShares Core MSCI Emerging Markets ETF has $134.84 billion. VWO has an expense ratio of 0.06% and IEMG changes 0.09%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs

Bottom Line

Boost Your Portfolio with Our Top ETF Insights

Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.

Don’t miss out on this valuable resource. It’s free!

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com