Emerging markets equities continue to attract capital as global investors rotate toward value and cyclical exposures. The PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF (MFEM) climbed to $27.90, near its 52-week high of $27.93, underscoring renewed strength in developing market assets amid improving risk sentiment and stabilizing global growth expectations.

Performance Outpaces Category Benchmarks

MFEM has gained 20.65% year-to-date, significantly outperforming its category average of 8.49%. Over the past year, the ETF delivered a 49.84% return compared with 39.86% for its peer group. The three-year annualized return stands at 21.30%, also ahead of category benchmarks.

Longer-term performance shows resilience through volatility cycles. After a challenging 2022 (-19.53%), the fund rebounded strongly in 2023 and 2025. The five-year average return of 8.86% highlights steady multi-cycle participation, supported by disciplined factor construction.

Factor-Driven Strategy with Cyclical Bias

MFEM tracks the RAFI Dynamic Multi-Factor Emerging Markets Index, allocating across value, quality, low volatility, and momentum factors. This rules-based methodology aims to systematically capture structural inefficiencies in emerging markets.

Sector allocations show a diversified yet economically sensitive profile. Financial services represent 20.60% of assets, followed by technology at 17.92% and basic materials at 17.34%. Industrials and consumer cyclical exposure further reinforce the ETF’s pro-growth positioning.

Top holdings include Hyundai Motor Company, Korea Electric Power Corporation, Delta Electronics, Hon Hai Precision Industry, and Samsung Electronics, among others. The top 10 positions account for approximately 14.83% of total assets, reflecting broad diversification.

Valuation and Risk Profile Remain Balanced

MFEM trades with a price-to-earnings ratio of 11.97 and offers a 2.52% yield. Net assets total approximately $125.1 million. The ETF maintains a beta of 0.96 (5-year monthly), suggesting volatility roughly in line with broader global equities.

The expense ratio stands at 0.49%, positioning it competitively within the multi-factor emerging markets space. With a 52-week range of $16.74 to $27.93, the ETF’s current level indicates strong recovery momentum following prior drawdowns.

As global capital flows gradually return to emerging markets amid stabilizing U.S. rates and improving commodity demand, MFEM’s factor-diversified framework may continue to benefit from cyclical and value rotations across developing economies.