What Is the FEMS ETF? Returns, Expense Ratio, Holdings, and Alternative ETFs Explained
The First Trust Emerging Markets Small Cap AlphaDEX ETF (FEMS) is a rules-based smart beta strategy that screens stocks on growth and value metrics. Compared with broad emerging market ETFs such as FNDE and XSOE, the key selection criteria are its small-cap concentration, expense ratio, and dividend differences.
SubscribeWhat Is the First Trust Emerging Markets Small Cap AlphaDEX ETF?
This is an emerging markets small-cap ETF that tracks the NASDAQ AlphaDEX Emerging Markets Small Cap Index. It holds stocks selected through the AlphaDEX methodology from small caps listed in emerging countries, offering broadly diversified exposure.
It suits diversification-minded investors who want to pursue additional return potential in emerging market small caps and are willing to tolerate high volatility.
It is a passive (index-tracking) ETF managed by First Trust.
How Does the First Trust Emerging Markets Small Cap AlphaDEX ETF Invest?
| Item | Details |
|---|---|
| Tracked Index | NASDAQ AlphaDEX Emerging Markets Small Cap Index |
| Management Style | Passive (tracks a rules-based smart beta index) |
| Rebalancing Frequency | Regular rebalancing |
| Dividend Frequency | Quarterly dividends |
| Expense Ratio | 0.80% |
| Issuer | First Trust |
It uses a rules-based approach: stocks in the underlying emerging markets small-cap universe are scored on growth and value metrics, the top-ranked stocks are selected, and they are included at tiered weights. Because it does not simply follow market-cap weighting, its holdings and weights differ from those of comparable passive emerging market ETFs.
- AlphaDEX selection methodology based on growth and value metrics
- Diversified exposure specialized in emerging markets small caps
First Trust Emerging Markets Small Cap AlphaDEX ETF Size and Costs (AUM and Management Fees)
Assets under management (AUM) stand at $195.2M, and the expense ratio is 0.80% per year.
Because it concentrates on small caps compared with broad emerging market core ETFs, both volatility and return potential tend to be higher.
First Trust Emerging Markets Small Cap AlphaDEX ETF Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeAs emerging market small caps, the holdings react sensitively to global risk appetite and dollar movements, tending to show relative strength in risk-on phases and sharp swings in risk-off phases.
Fund flows into and out of emerging market small caps tend to be volatile. Capital movements shift with global liquidity and emerging market currency conditions, and price swings can widen depending on market sentiment.
First Trust Emerging Markets Small Cap AlphaDEX ETF Pros and Cons
Its strengths are diversified emerging market small-cap exposure and rules-based selection, while its weaknesses are high volatility and a heavier fee burden relative to peers.
💪 Key Strengths
⚠️ Points to Watch
First Trust Emerging Markets Small Cap AlphaDEX ETF Alternative ETFs and Related Products
The three ETFs shown in the table, FNDE, XSOE, and EMGF, are lower-cost, broad ETFs covering emerging markets as a whole, and they differ in character because their small-cap concentration is lower. Direct substitutes that focus on the same emerging market small caps include EEMS, EWX, and DGS, and if you want core emerging market exposure, you can also consider VWO and IEMG.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 FNDE | Schwab Fundamental Emerging Markets Equity ETF | $40.63 | +0.1% | $10.0B | 0.39% | 3.66% | +10.1% |
 FRDM | Freedom 100 Emerging Markets ETF | $61.95 | -0.1% | $3.2B | 0.49% | 1.9% | +28.3% |
 PXH | Invesco RAFI Emerging Markets ETF | $28.12 | +0.2% | $1.9B | 0.47% | 4.13% | +8.7% |
 XSOE | WisdomTree Emerging Markets ex-State-Owned Enterprises Fund | $42.75 | +0.2% | $1.9B | 0.32% | 1.82% | +8.7% |
 EMGF | iShares Emerging Markets Equity Factor ETF | $65.50 | -0.3% | $1.8B | 0.26% | 2.2% | +11.5% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
 IMOS | Chipmos Technologies Inc ADR | 0.01% | $53.94 | -0.8% | $1.9B | 26.4 | 3.61% |
 NEXA | Nexa Resources SA | 0.01% | $11.43 | +3.2% | $1.5B | 5.5 | 3.18% |
 TBBB | BBB Foods Inc | 0.01% | $56.97 | +0.7% | $6.2B | - | - |
 WB | Weibo Corp ADR | 0.01% | $6.35 | +2.3% | $1.0B | 5.4 | 8.3% |
 DRD | DRDGold Ltd ADR | 0.01% | $22.96 | +1.5% | $2.0B | 7.9 | 3.79% |
 SSL | Sasol Ltd ADR | 0.01% | $15.81 | -8.2% | $10.0B | 14.0 | 5.15% |
 INTR | Inter & Co Inc | 0.01% | $4.03 | +0.5% | $1.8B | 6.2 | 3.32% |
 BWMX | Betterware de Mexico SAPI de CV | 0.01% | $17.48 | +3.9% | $690.2M | 8.7 | 7.25% |
 NERV | Minerva Neurosciences Inc | 0.00% | $2.35 | +1.1% | $112.0M | - | - |
First Trust Emerging Markets Small Cap AlphaDEX ETF Investor Checkpoints
Here are the points to review before investing in FEMS. Since this ETF specializes in emerging market small caps, checking volatility, costs, regional exposure, and the currency environment in advance can help your decision-making.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 💵 Expense Ratio | Compare costs with similar emerging market ETFs | Somewhat high |
| 🌏 Regional Exposure | Review the distribution of top-weighted countries | Diversified across emerging countries |
| 📉 Volatility | Whether you can tolerate the price swings typical of small caps | High volatility |
| 💱 Currency | Impact of emerging market currencies and dollar conversion | No currency hedge applied |
Emerging market small caps are sensitive to economic and liquidity shocks, so drawdowns in downturns can be deep. Emerging market currency weakness can further drag down won-denominated returns, and small-cap liquidity constraints also add to volatility.
It works well as a satellite holding for those seeking extra returns from rules-based selection in emerging market small caps. If cost and broad diversification come first, core ETFs such as FNDE and VWO are a better fit, and if you want small-cap concentration, FEMS fits.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
This article reflects information as of June 18, 2026.
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