At a glance
FEMS charges 0.8% a year, above the 0.61% average of the 2 funds most like it (the most expensive of 3). It has $251.8M in assets, the 3rd largest of that group; it paid 4.35% of its price in distributions over the past 12 months, quarterly. Over the past year it returned +1.2% with distributions reinvested (S&P 500: +11.5%), the weakest of those 3 funds; over three years it returned +8.9% a year. At its worst it fell 21.2% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 4 months after the low. Its ten largest positions make up 16.9% of the fund, out of 206 in all.
The short version
First Trust Emerging Markets Small Cap AlphaDEX Fund (FEMS) tracks a Nasdaq index of about 200 small companies in emerging markets. It picks and weights them by growth and value scores rather than by company size. Its 0.80% expense ratio is above the 0.61% average of the two similar funds compared here. Its trailing yield was 4.35% as of October 27, 2026, paid quarterly.
Price history
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FEMS +1.2% 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 | |
|---|---|---|---|---|---|---|
| FEMS official prospectus, to Dec 31, 2025 | — | +15.61% | — | +5.54% | +8.98% | +6.43% |
| FEMS price data to Oct 27, 2026 | +0.9% | +1.2% | +8.9% | +4.4% | — | +13.4% |
- Over the year to Oct 27, 2026, FEMS returned +1.2%, 3rd of 3 among similar funds.
- Its 5-year annualized return was +4.4%.
- Its worst full calendar year was 2022 (+1.9%); its best was 2025 (+16.5%).
- The deepest fall in its price history was 30.4% (Jun 3, 2021 to Sep 29, 2022), recovered by Jul 3, 2025.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +0.9% | — |
| 2025 | +16.5% | +15.61% |
| 2024 | +1.9% | +4.43% |
| 2023 | +3.5% | +3.21% |
| 2022 | +1.9% | +1.36% |
| 2021 | +3.7% | +3.68% |
| 2020 | — | +8.73% |
| 2019 | — | +26.90% |
| 2018 | — | -21.42% |
| 2017 | — | +46.57% |
| 2016 | — | +13.53% |
| 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 | Not in the price data, which starts Apr 1, 2020 |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 16.2% over that stretch · deepest drop along the way 21.2%, back to its old high 3.7 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $1.1500 | |
| 2025 | $1.7900 | +19.3% |
| 2024 | $1.5000 | -15.7% |
| 2023 | $1.7800 | +0.6% |
| 2022 | $1.7700 | -29.5% |
| 2021 | $2.5100 |
What's inside
As of Jun 30, 2026, the fund held 206 securities; the ten largest made up 16.9% of assets.
| Holding | Weight | |
|---|---|---|
| TD SECURITIES (USA) LLC RA | 3.30% | |
| ITEQ CORP | 2.01% | |
| HOLY STONE ENTERPRISE COMPANY LTD | 1.98% | |
| KATILIMEVIM TASARRUF FINANSMAN AS | 1.71% | |
| EUROPOWER ENERJI VE OTOMASYON TEKNOLOJILERI SANAYI TICARET AS | 1.56% | |
| TOPOINT TECHNOLOGY CO LTD | 1.53% | |
| KAORI HEAT TREATMENT CO LTD | 1.48% | |
| CHIPMOS TECHNOLOGIES INC | 1.20% | |
| AMTRAN TECHNOLOGY COMPANY LTD | 1.12% | |
| THAIFOODS GROUP PCL | 1.02% | |
| PELL BIO-MED TECHNOLOGY CO LTD | 1.00% | |
| JHSF PARTICIPACOES SA | 0.99% | |
| C SUN MANUFACTURING COMPANY LTD | 0.99% | |
| HYPROP INVESTMENTS LTD | 0.94% | |
| HTC CORP | 0.93% |
By country
Taiwan 23.84%Turkey 19.61%Brazil 12.67%Thailand 7.84%Cayman Islands 6.77%By asset type
Stocks 97.37%RA 3.3%Preferred stock 2.04%What changed recently
- Over the three months to Jun 30, 2026, investors added a net $0.00 (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +5.12%, -0.74%, -3.02%.
How it works
FEMS aims to track the Nasdaq AlphaDEX Emerging Markets Small Cap Index, which is owned and run by Nasdaq. The fund normally puts at least 90% of its net assets in the index's stocks. The process starts with the Nasdaq Emerging Markets Index. Nasdaq removes duplicate share classes and stocks that trade too thinly, then keeps smaller companies. As of March 31, 2026, that meant companies valued between about $467 million and $4.45 billion.
Each remaining stock is ranked on growth factors and on value factors, and its higher rank becomes its score. The top 199 stocks make the index. They are split into five equal groups, and higher-scoring groups get bigger weights. The goal is "alpha": beating a traditional index after adjusting for risk. Each industry and country is capped at 15% above its weight in the starting index. A stock that would break a cap moves down to a lower-weighted group, or drops out.
The index is rebuilt twice a year, which helps explain the fund's 114% portfolio turnover. That figure means it replaced roughly all of its holdings within a year. The fund can buy Chinese "A shares" through Stock Connect, a Hong Kong trading link with daily limits. It also owns shell companies that hold Chinese businesses through contracts (variable interest entities) rather than direct ownership. Some share creations and redemptions are settled in cash, which can make the fund less tax-efficient than ETFs that trade in kind.
What it really costs
- FEMS charges 0.8% a year, versus an average of 0.61% for the similar funds below (3rd of 3, cheapest first).
In a retirement portfolio
It concentrates on small emerging-market stocks, heavy in Taiwan and Turkey, with large past drops and above-average costs.
FEMS adds small companies in places like Taiwan, Turkey and Brazil, markets most US-focused portfolios barely hold. It can swing hard. It lost 21.42% in 2018, and its worst quarter was a 35.53% drop in early 2020. Its price fell 21.2% during the 2022 bear market and got back to its prior level by January 20, 2023. Its deepest drop was 30.4%, from June 3, 2021 to September 29, 2022, and it took about 33 months to recover. Anyone who had to sell during that stretch would have locked in losses. The trailing yield was 4.35% as of October 27, 2026, paid quarterly, though payouts from small emerging-market companies can vary. The 0.80% expense ratio is higher than both similar funds compared here. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors seeking small emerging-market companies, with Taiwan at 23.8% and Turkey at 19.6% of the fund as of June 30, 2026.
- Those who prefer a rules-based growth-and-value screen over size weighting, and who accept twice-yearly rebuilds and 114% turnover.
- Income-minded investors who are fine with a volatile stock fund that had a 4.35% trailing yield, paid quarterly, as of October 27, 2026.
Look elsewhere if
- Cost-focused investors: the 0.80% expense ratio is above both DGS (0.58%) and EWX (0.65%).
- Anyone who may need to sell in a downturn: a 30.4% price drop took about 33 months to recover, ending July 2025.
- Investors who want direct ownership: the fund holds some Chinese companies through contract-based VIE structures and trades A shares under Stock Connect quotas.
Close alternatives
Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).
Net assets from each fund's latest N-PORT or annual report where available. Returns through Oct 27, 2026.Questions investors ask
Is FEMS good for retirement?
FEMS works better as a small, higher-risk add-on than as a core retirement holding. It holds about 200 small emerging-market stocks and lost 21.42% in 2018. Its worst quarter was a 35.53% drop in early 2020. Its deepest price drop, 30.4% from June 2021 to September 2022, took about 33 months to recover. It does pay income: the trailing yield was 4.35% as of October 27, 2026. Its 0.80% expense ratio is above similar funds.
What's the difference between FEMS and DGS?
Both own small emerging-market stocks, but they pick them differently and share only about 10% of holdings. WisdomTree's DGS focuses on dividend payers and charges 0.58%. FEMS uses Nasdaq's growth-and-value AlphaDEX screen and charges 0.80%. As of October 27, 2026, DGS returned 8.7% over one year and 15% a year over three years. FEMS returned 1.2% and 8.9%. DGS is also much larger, at about $1.78 billion in net assets versus about $252 million for FEMS.
Does FEMS pay dividends?
Yes. FEMS pays dividends quarterly. Over the 12 months to October 27, 2026, it paid about $1.80 per share, a trailing yield of 4.35%. The money comes from the small emerging-market companies it owns, so payments can rise or fall from one quarter to the next. Because the fund rebuilds its holdings twice a year and has 114% turnover, the companies producing that income also change often.
What does FEMS invest in?
FEMS owns small companies from emerging markets, with 206 positions as of June 30, 2026. The largest stock holdings were ITEQ Corp (2.0%) and Holy Stone Enterprise (2.0%), both from Taiwan. Next came Turkey's Katilimevim Tasarruf Finansman (1.7%) and Europower Enerji (1.6%), then Taiwan's Topoint Technology (1.5%). By country, Taiwan was 23.8% of the fund, Turkey 19.6%, Brazil 12.7%, Thailand 7.8% and South Africa 6.2%. The top 10 positions made up 16.9% of assets.
How has FEMS performed over 10 years?
FEMS returned 8.98% a year over the 10 years ending December 31, 2025, according to its prospectus. It returned 5.54% a year over five years, and 15.61% in 2025. The ride was uneven: it gained 46.57% in 2017 and lost 21.42% in 2018. Since 2021 its results have been modest. Through October 27, 2026, its one-year and three-year returns trailed both DGS and EWX, the similar funds compared here.