Rayliant NxtGen Multifactor Emerging Markets Equity ETF

Rayliant NxtGen Multifactor Emerging Markets Equity ETF (RWEM) is an actively managed fund. It does not track an index. Instead, machine-learning models, checked by human managers, pick and weight about 218 emerging-market stocks. It costs 0.52% a year, about twice the 0.25% average of similar funds. As of June 30, 2026, it held $71 million, which makes it far smaller than rival funds from iShares, Vanguard and Schwab.

• Over the year to Oct 27, 2026, RWEM returned +16.4%, 2nd of 9 among similar funds.
• Its worst full calendar year was 2022 (-20.1%); its best was 2025 (+28.1%).
• The deepest fall in its price history was 26.9% (Jan 12, 2022 to Oct 31, 2022), recovered by Feb 22, 2024.

As of Jun 30, 2026, the fund held 218 securities; the ten largest made up 41.27% of assets.

• Over the three months to Jun 30, 2026, investors withdrew a net $19.1M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -2.63%, +10.25%, +13.36%.

RWEM does not track an index. Rayliant, the adviser, picks stocks actively, aiming to grow investors' capital over the long term. At least 80% of net assets go into emerging market companies, defined as those based in a country in the MSCI Emerging Markets Index or a similar widely recognized index. The fund leans toward mid- and large-sized companies and can buy China A shares, which trade in Shanghai and Shenzhen, through the Stock Connect links with Hong Kong.

Selection relies on quantitative models that use machine learning: computer programs that find patterns in large amounts of data. The models favor stocks they expect to earn better returns for the risk taken. Inputs range from daily prices to quarterly financial statements and data collected from public websites. Portfolio managers can adjust trades or weights for news, liquidity or their own research, and may skip countries where trading costs outweigh the benefits.

The prospectus describes no set rebalancing calendar, and the fund trades heavily: portfolio turnover was 238%, per the prospectus filed June 9, 2026. Costs from that trading are not included in the 0.52% expense ratio. The fund uses no leverage. As of June 30, 2026, it had 218 holdings and no derivatives, led by Taiwan Semiconductor Manufacturing at 12.5% of assets.

• RWEM charges 0.52% a year, versus an average of 0.25% for the similar funds below (8th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $53 in the first year and $653 over 10 years (assuming a 5% annual return).

RWEM is a small, high-turnover fund that leans heavily on Asian chipmakers, so it fits better as a small add-on next to a core holding than as the main emerging-markets fund.

RWEM launched in December 2021, so it has no record in the 2008 financial crisis or the 2020 COVID crash. In the 2022 bear market it fell 25.8% from peak to trough. Its deepest drop was 26.9%, from January to October 2022. It took about 16 months to recover that loss, which it did by February 22, 2024. Its worst calendar year was 2022, with a loss of 20.5% (prospectus figure). Anyone who had to sell shares or draw income during that stretch would have sold at a loss. Price swings were large: one-year volatility was 37.9% as of October 27, 2026. The trailing yield was 1.9%, paid once a year. In the SEC's standard example, $10,000 invested would cost $53 in fees over one year and $653 over ten. Past results don't predict future returns, and any plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.