MFEM Profile
The PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF aims to provide investors with targeted exposure to emerging market equities by utilizing a sophisticated multi-factor investment strategy. In pursuit of its investment objective, the fund invests at least 80% of its total assets, excluding any collateral held from securities lending, in the securities that are components of the RAFI Dynamic Multi-Factor Emerging Markets Index. This index is specifically designed to capture equity opportunities across emerging markets through a dynamic, factor-based approach.
Constructed by RAFI Indices, LLC, the RAFI Dynamic Multi-Factor Emerging Markets Index employs a systematic, rules-based methodology to create factor portfolios. This involves selecting equities based on multiple investment factors, including value, quality, momentum, and low volatility. By integrating these factors, the index seeks to enhance performance and achieve superior risk-adjusted returns. The index is regularly adjusted to reflect changes in market conditions and factor dynamics, ensuring that it remains aligned with its investment objectives.
PIMCO, renowned for its expertise in fixed income and multi-asset management, oversees the ETF's operations and investment strategy. The firm’s approach combines quantitative analysis with deep fundamental research to construct a portfolio that mirrors the index’s multi-factor framework. This process includes rigorous screening of stocks to identify those with favorable factor characteristics, such as strong value metrics, high-quality earnings, positive momentum, and lower volatility.
By focusing on emerging markets, the ETF offers investors exposure to high-growth regions with significant potential for capital appreciation. The multi-factor investment approach aims to mitigate risks associated with emerging markets by balancing exposure to various factors that can drive performance. This strategic focus on dynamic factor investing helps the ETF provide a diversified and robust investment solution for those looking to capitalize on opportunities in emerging market equities while managing inherent market risks.
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