Freedom 100 Emerging Markets ETF

FRDM

Market cap $2.64B

The Freedom 100 Emerging Markets ETF leverages 'freedom-weighting' to select and allocate equities from 24 emerging market countries. FRDM excludes state-owned enterprises (over 20% state ownership) and prioritizes personal and economic freedom metrics in its portfolio construction. With $2.97 billion AUM and a 0.49% expense ratio, FRDM has outperformed the market since inception, even during recent U.S. market stagnation.

Emerging market ETFs are back in focus. Two of the ten largest U.S.-listed ETF inflow winners year-to-date are broad EM funds.

The Freedom 100 Emerging Markets ETF's return of 99% over the past five years is 5 times that of the iShares Emerging Markets ETF. Its strategy of excluding countries and companies with high exposure to personal, political, and economic risks gives it a high-quality tilt.

At the same time developed markets have been generating policy and macro noise, emerging markets have been quietly outperforming. The inextricable relationship between the direction of U.S. monetary policy and emerging market risk assets remains powerful, but this time the rally is not just about the Fed.

Emerging-market stocks have broadly crushed the U.S. equities market this year, in one of the biggest market surprises of 2025.

Emerging markets equity returns have been driven by extreme mega-cap concentration, with index breadth collapsing to historic lows and masking weakness across much of the opportunity set. This concentration has distorted relative results for active managers, particularly those constrained by diversification rules or broad benchmarks, as small-cap underperformance and index construction limit flexibility.

The Freedom 100 Emerging Markets ETF offers exposure to democratic, capitalist emerging markets, avoiding autocratic regimes. FRDM's portfolio features world-class companies, like Samsung Electronics, SK hynix, and Taiwan Semiconductor.

Freedom ETFs' FRDM ETF targets emerging markets with high economic freedom, offering a differentiated approach to EM investing. FRDM invests in countries with compelling valuations and strong growth prospects, often outpacing the broader MSCI Emerging Markets index. The ETF avoids state-owned enterprises (SOEs) and focuses on governance, liquidity, and country-specific risks to enhance long-term returns.

The on-again-off-again trade war between the U.S. and China is enough to keep investors guessing. Some investors are avoiding China stocks.

FRDM ETF has outperformed major emerging market benchmarks due to strategic overweights in Poland, Chile, Korea, and tech, while avoiding China and India. The fund's low valuation (12.4x earnings, PEG 1.3x) and strong technicals support its recent alpha, but liquidity is a concern with a wide bid/ask spread. Despite stellar momentum and a bullish long-term trend, bearish RSI divergence and seasonal weakness suggest caution in the near term.