At a glance
FEM charges 0.8% a year, above the 0.25% average of the 6 funds most like it (the most expensive of 7). It has $747.0M in assets, the 7th largest of that group; it paid 2.24% of its price in distributions over the past 12 months, quarterly. Over the past year it returned +19.9% with distributions reinvested (S&P 500: +11.5%), 3rd of those 7 funds; over three years it returned +20.2% a year. At its worst it fell 39.4% in the 2020 crash (S&P 500: 33.7%) and 28.3% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 9 months and 19 months after the lows. Its ten largest positions make up 21.8% of the fund, out of 158 in all.
The short version
First Trust Emerging Markets AlphaDEX Fund (FEM) tracks the Nasdaq AlphaDEX Emerging Markets Index. That index holds about 150 mid- and large-cap emerging market stocks and picks and weights them by growth and value scores, not by company size. FEM charges 0.80% a year, far above the 0.25% average of similar funds. As of June 30, 2026, about a third of its assets were in Taiwan.
Price history
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FEM +19.9% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| FEM official prospectus, to Dec 31, 2025 | — | +26.35% | — | +6.13% | +8.12% | +2.94% |
| FEM price data to Oct 27, 2026 | +17.6% | +19.9% | +20.2% | +7.9% | +8.1% | +3.8% |
- Over the year to Oct 27, 2026, FEM returned +19.9%, 3rd of 7 among similar funds.
- Its 5-year annualized return was +7.9% and its 10-year +8.1%.
- In the 2020 COVID crash it fell 39.4% and regained its old high 9.4 months after the low.
- Its worst full calendar year was 2018 (-15.5%); its best was 2017 (+41.1%).
- The deepest fall in its price history was 46.2% (Jan 26, 2018 to Mar 18, 2020), recovered by May 7, 2021.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +17.6% | — |
| 2025 | +28.3% | +26.35% |
| 2024 | +2.9% | +3.97% |
| 2023 | +10.8% | +10.87% |
| 2022 | -14.2% | -14.33% |
| 2021 | +7.3% | +7.90% |
| 2020 | -1.7% | -0.92% |
| 2019 | +20.6% | +19.81% |
| 2018 | -15.5% | -15.48% |
| 2017 | +41.1% | +39.43% |
| 2016 | +15.7% | +15.86% |
| 2015 | -13.8% | — |
| 2014 | -11.0% | — |
| 2013 | -3.3% | — |
| 2012 | +21.2% | — |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 38.9% over that stretch · deepest drop along the way 39.4%, back to its old high 9.4 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 26% over that stretch · deepest drop along the way 28.3%, back to its old high 19.1 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $0.5000 | |
| 2025 | $0.8500 | +7.6% |
| 2024 | $0.7900 | -28.2% |
| 2023 | $1.1000 | -14.7% |
| 2022 | $1.2900 | +20.6% |
| 2021 | $1.0700 | +57.4% |
| 2020 | $0.6800 | -22.7% |
| 2019 | $0.8800 | +8.6% |
| 2018 | $0.8100 | +17.4% |
| 2017 | $0.6900 | +48.4% |
| 2016 | $0.4650 | -28.5% |
| 2015 | $0.6500 | +6.6% |
| 2014 | $0.6100 | -6.2% |
| 2013 | $0.6500 | +10.2% |
| 2012 | $0.5900 |
What's inside
As of Jun 30, 2026, the fund held 158 securities; the ten largest made up 21.76% of assets.
| Holding | Weight | |
|---|---|---|
| RBC DOMINION SECURITIES INC. RA | 4.74% | |
| KINSUS INTERCONNECT TECHNOLOGY CORP | 2.92% | |
| INNOLUX CORP | 2.36% | |
| UNIMICRON TECHNOLOGY CORP | 1.95% | |
| DESTEK FINANS FAKTORING AS | 1.87% | |
| NAN YA PRINTED CIRCUIT BOARD CORP | 1.86% | |
| ELITE MATERIAL COMPANY LTD | 1.70% | |
| ACCTON TECHNOLOGY CORP | 1.69% | |
| EVA AIRWAYS CORP | 1.36% | |
| ASIA VITAL COMPONENTS COMPANY LTD | 1.30% | |
| WEICHAI POWER CO LTD | 1.27% | |
| ASE TECHNOLOGY HOLDING CO LTD | 1.27% | |
| WPG HOLDINGS LTD | 1.25% | |
| TATA MOTORS PASSENGER VEHICLES LTD | 1.22% | |
| CHROMA ATE INC | 1.21% |
By country
Taiwan 32.98%China 14.85%Brazil 8.42%Turkey 7.77%India 6.41%By asset type
Stocks 96.46%RA 4.74%Preferred stock 2.72%What changed recently
- Over the three months to Jun 30, 2026, investors added a net $90.9M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +11.42%, -0.88%, -2.75%.
How it works
FEM aims to match the Nasdaq AlphaDEX Emerging Markets Index, before fees. Nasdaq, Inc. owns and runs the index. The fund normally puts at least 90% of its net assets in the index's stocks. The starting pool is the broader Nasdaq Emerging Markets Index. Nasdaq decides which countries count as emerging using measures such as income per person and the size and trading volume of each stock market.
Nasdaq then drops duplicate share classes, thinly traded stocks and companies below the mid-cap breakpoint, which was $4.45 billion as of March 31, 2026. It scores the remaining stocks on growth and value factors, and each stock keeps its higher score. The top 150 are split into five equal groups, called quintiles, and higher-scoring groups get bigger weights. Each industry and country is capped at 15% above its share of the base index. This AlphaDEX method aims for alpha, meaning better risk-adjusted returns than a traditional index.
The index is rebalanced and rebuilt twice a year, and the prospectus reports portfolio turnover of 111%. The fund may create and redeem shares for cash instead of swapping stocks, which can make it less tax-efficient than many ETFs. To reach some Chinese companies that foreign investors can't buy directly, it owns offshore shell companies that use variable interest entities (VIEs). These are contracts that give economic exposure without direct ownership.
What it really costs
- FEM charges 0.8% a year, versus an average of 0.25% for the similar funds below (7th of 7, cheapest first).
In a retirement portfolio
FEM is concentrated in Taiwan and China, has seen deep, long drawdowns and costs more than similar funds, so it fits better as a small side position than as a core holding.
FEM can add emerging market stocks with a tilt toward Taiwanese technology suppliers, but the ride has been bumpy. It fell 39.4% in the 2020 COVID crash and took about 9.4 months to recover. In the 2022 bear market it dropped 28.3% and needed about 19.1 months to get back to its old high. Its worst calendar year was 2018, at -15.5%. Its deepest drop, 46.2%, ran from January 2018 to March 2020, and the fund didn't recover until May 2021. Anyone forced to sell during a stretch like that would lock in losses. FEM launched in 2011, so it has no 2008 record.
The trailing yield was 2.24% as of October 27, 2026, and the fund pays quarterly. Its 0.80% expense ratio is well above the 0.25% peer average. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want emerging market stocks picked by growth and value scores instead of company size, and who accept a 0.80% expense ratio for that.
- Those comfortable with heavy Asian exposure: as of June 30, 2026, Taiwan made up 32.98% of assets and China 14.85%.
- Holders who want some quarterly income along with growth. The trailing yield was 2.24% as of October 27, 2026.
Look elsewhere if
- Cost-focused investors: Vanguard's VWO and SPDR's SPEM each charge 0.07%, compared with FEM's 0.80%.
- Anyone who may need to sell in a downturn: FEM fell 39.4% in early 2020 and needed 19.1 months to recover from its 2022 drop.
- Taxable-account investors who mind cash redemptions and 111% turnover, which can make FEM less tax-efficient than ETFs that redeem in kind.
Close alternatives
Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).
| Fund | Overlap | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| FEM this fund | — | 0.8% | $747.0M | +19.9% | +20.2% |
| FNDE Schwab Fundamental Emerging Markets Equity … | 18% | 0.39% | $10.31B | +15.0% | +22.8% |
| SCHE Schwab Emerging Markets Equity ETF | 12% | 0.11% | $13.00B | +4.4% | +16.7% |
| EMXC iShares MSCI Emerging Markets ex China ETF | 11% | 0.25% | $24.92B | +27.3% | +24.6% |
| SPEM SPDR Portfolio Emerging Markets ETF | 11% | 0.07% | $17.31B | +5.0% | +16.8% |
| DEM WisdomTree Emerging Markets High Dividend F… | 10% | 0.63% | $3.87B | +20.4% | +19.1% |
| VWO Vanguard FTSE Emerging Markets ETF | 10% | 0.07% | $162.04B | +3.3% | +16.8% |
Questions investors ask
Is FEM good for retirement?
FEM works better as a higher-risk side holding than as a core one. It owns about 150 emerging market stocks, and 32.98% of its assets were in Taiwan as of June 30, 2026. It fell 39.4% in early 2020 and 28.3% in 2022, and it charges 0.80% a year. It may suit retirees who want a small slice of emerging markets chosen by growth and value scores and who can sit through deep drops.
What's the difference between FEM and FNDE?
Both funds hold emerging market stocks, but only about 18% of their holdings overlap. FEM charges 0.80% a year, against 0.39% for the Schwab Fundamental Emerging Markets Equity ETF (FNDE). FNDE is also much bigger: about $10.3 billion in net assets as of August 31, 2026, compared with FEM's $747 million as of June 30, 2026. As of October 27, 2026, FEM returned 19.9% over one year and 20.2% a year over three years. FNDE returned 15% and 22.8%.
Does FEM pay monthly dividends?
No. FEM pays distributions quarterly, not monthly. In the 12 months to October 27, 2026, it paid about $0.71 per share, a trailing yield of 2.24%. Dividends from emerging market companies can change with company profits and with currency moves against the dollar. So the amount may vary from one quarter to the next.
What is FEM's expense ratio?
FEM's expense ratio is 0.80% a year, according to its prospectus filed April 30, 2026. That is all management fee, with no fee waiver. It is the highest of the seven similar emerging market funds compared here. The group averages 0.25%, and VWO and SPEM charge just 0.07% each. Part of FEM's cost comes from an index that reselects and reweights its stocks twice a year, rather than simply holding companies by size.
How has FEM performed over the last 10 years?
FEM returned an average of 8.12% a year over the 10 years ended December 31, 2025, according to its prospectus. The path was uneven. It gained 39.43% in 2017, then lost 15.48% in 2018 and 14.33% in 2022. Since its 2011 launch, its average annual return through the same date was only 2.94%, which points to weak results in its first years. Its worst quarter was a 32.89% loss in early 2020.