First Trust WCM Developing World Equity ETF

First Trust WCM Developing World Equity ETF (WCME) is an actively managed fund holding 36 stocks from developing countries. The stocks are chosen by sub-advisor WCM Investment Management, and the fund does not track an index. It is concentrated: Taiwan Semiconductor alone made up 13.3% of assets as of June 30, 2026. It also costs far more than index peers, at 0.95% a year versus 0.09% for iShares Core MSCI Emerging Markets ETF (IEMG).

• Over the year to Oct 27, 2026, WCME returned +1.3%, 7th of 7 among similar funds.
• Its worst full calendar year was 2025 (+35.1%); its best was 2025 (+35.1%).
• The deepest fall in its price history was 15.6% (Jan 28, 2026 to Mar 30, 2026), recovered by May 5, 2026.

As of Jun 30, 2026, the fund held 36 securities; the ten largest made up 49.06% of assets.

• Over the three months to Jun 30, 2026, investors added a net $10.0M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +11.20%, +5.41%, -1.56%.

WCME is actively managed and does not track an index. First Trust offers the fund; its sub-advisor, WCM Investment Management, picks the stocks. Under normal conditions, at least 80% of net assets go into stocks of developing-country companies of any size. To decide which countries count as developing, WCM weighs World Bank classifications, MSCI emerging and frontier index membership, income per person and limits on foreign ownership.

Selection is bottom-up: WCM studies individual businesses and ranks them on corporate performance, competitive position, growth potential and intrinsic value. It sets that value using a discounted cash flow model (what expected future cash is worth now) plus earnings multiples: historical EV/EBITDA and next year's price-to-earnings ratio. Position sizes reflect the manager's judgment, not an index formula. Turnover, the share of holdings replaced in a year, was 62% in the April 30, 2026, prospectus.

As of June 30, 2026, the portfolio was concentrated: 36 holdings, with the top 10 at about 49% of assets, led by Taiwan Semiconductor Manufacturing at 13.3%. As a non-diversified fund, it can put more money in a few companies, though it keeps less than 25% in any one industry. For some Chinese companies closed to foreign owners, it invests significantly in non-Chinese shell companies that use variable interest entities (VIEs), contracts that give exposure without direct ownership.

• WCME charges 0.95% a year, versus an average of 0.06% for the similar funds below (7th of 7, cheapest first).

It is a concentrated, high-cost, volatile bet on 36 developing-market stocks, so it fits better as a small side position than as a core holding.

WCME could add developing-market stocks, especially Asian chipmakers, to a US-focused portfolio. Its trading history doesn't reach back to the 2008, 2020 or 2022 sell-offs. The prospectus does show a 13.61% loss in 2022, before the ETF launched on October 7, 2024. Its deepest drop as an ETF was 15.6%, from January 28 to March 30, 2026. It recovered by May 5, 2026. As of October 27, 2026, one-year volatility was 24.9% and beta was 1.49, meaning it tended to move about one and a half times as much as the market. Someone forced to sell in a slump could lock in steep losses. Income is small: a 0.34% trailing yield, paid twice a year. The 0.95% fee is far above the 0.06% peer average. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).