What does 'Diversified Emerging Markets' actually mean for these funds?

Diversified Emerging Markets refers to a broad exposure to economies that are developing rather than established markets. Both AVEM and FRDM fall into this category, meaning they invest in companies from various countries. However, 'diversified' does not guarantee uniformity; the approach to selection differs significantly between funds. While AVEM focuses on a broader range of global companies across market caps, FRDM filters based on specific criteria. Understanding this category helps investors know that these funds serve different roles within a portfolio.

How does an ETF's size and net assets affect a beginner investor?

Net assets represent the total market value of the fund's holdings. AVEM is significantly larger with $28.4 billion in net assets compared to FRDM's $3.5 billion. Larger funds often benefit from higher liquidity, meaning they may be easier to buy or sell with minimal price impact. This can lead to tighter bid-ask spreads. For beginners, understanding fund size is crucial because it relates to how easily shares can be traded. A very small fund might have wider trading costs, so investors should consider liquidity when choosing between these two ETFs.

What role does the expense ratio play in long-term returns?

The expense ratio is an annual fee that shareholders pay for fund management. AVEM has a ratio of 0.33%, while FRDM is 0.49%. This means FRDM costs 0.16 percentage points more per year than AVEM. For example, on a $1,000 investment, this difference is $1.60 annually before any growth or loss. Over decades, compounding fees can significantly affect final wealth. Beginners should view expense ratios as a fixed cost that must be weighed against potential benefits of the specific strategy each fund employs, ensuring they understand how fees erode net returns.

Do AVEM and FRDM track a specific index?

According to the provided data, neither AVEM nor FRDM lists a specific 'Index tracked' value, as it is marked as 'not available'. This typically indicates that both are actively managed funds rather than passive funds mirroring a benchmark like the MSCI Emerging Markets Index. Active management means fund managers make specific stock-picking decisions. AVEM focuses on broad market caps and global companies, while FRDM employs a thematic filter based on freedom. Investors should note the absence of a benchmark when assessing whether a manager's skill justifies the fees.

Are the top holdings of AVEM and FRDM very different?

Interestingly, the data shows a notable similarity in the single largest holding. Both funds list TSM as their top holding, though the weight differs. In AVEM, TSM accounts for 6.39% of the portfolio, while in FRDM, it represents 8.01%. This means that despite differing strategies, both funds have a significant concentration risk in the semiconductor industry. When comparing ETFs, checking top holdings helps identify overlap; here, the shared leader indicates that a specific sector event could impact both funds' performance simultaneously.

Which fund has a better dividend yield?

AVEM reports a higher dividend yield of 2.50% compared to FRDM's 1.51%. For income-focused investors, this suggests AVEM currently generates more cash flow relative to its share price. However, yield is not the only factor; it reflects the price paid relative to distributions and can change. FRDM's lower yield might be attributed to its specific stock selection or growth-oriented nature. Beginners should consider whether they prioritize current income (yield) or potential capital appreciation when evaluating these emerging markets ETFs.

What is concentration risk in these emerging markets funds?

Concentration risk arises when a large portion of a fund is invested in a single company or sector. With TSM being the top holding for both AVEM (6.39%) and FRDM (8.01%), both funds are exposed to semiconductor industry performance. If this sector declines, both funds would likely suffer regardless of the broader emerging markets performance. Beginners must assess these weights to understand that high top-holding percentages reduce the 'diversification' benefit typically associated with funds, creating vulnerability to single-stock news or industry-specific downturns.

What is the political or ethical angle to FRDM's strategy?

FRDM focuses on companies in nations with strong political, civil, and economic freedom. This provides a distinct value angle that separates it from standard emerging markets funds. The theory is that institutional stability and freedom can correlate with long-term economic success. AVEM does not report sector weights or freedom criteria, offering a broader global view across market caps. For investors who want to avoid regimes with poor governance metrics, FRDM's approach is highly relevant, though it requires understanding the correlation between freedom indices and stock performance.

When were these funds established?

Fund history provides insight into track records. AVEM was established on September 17, 2019, while FRDM was established slightly earlier on May 23, 2019. Both funds have been active since 2019, meaning their track records cover a period that includes various economic conditions, though not a full cycle of decades. Investors should note that past performance does not guarantee future results, but knowing the inception date helps contextualise whether the fund has experienced a significant market downturn or if its history is relatively short.

What information is missing when comparing AVEM and FRDM?

Based on the available data, both AVEM and FRDM lack 'Sector weights'. This missing information makes it harder for investors to fully assess their industry diversification and risk exposure at a granular level. Without sector weights, it is unclear how heavily these funds lean towards Technology, Financials, or Consumer Discretionary beyond what the top holdings imply. Additionally, 'Index tracked' is not available for either. Prospective investors should seek additional documentation or prospectuses to fill these informational gaps before making a decision.

AVEM vs FRDM

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare Avantis Emerging Markets Equity ETF (AVEM) and EA Series Trust Freedom 100 Emerging Markets ETF (FRDM). Explore expense ratios, net assets, dividend yields and top holdings. Understand how each fund approaches diversified emerging markets. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

AVEM

Metric

FRDM

0.33%

Expense Ratio

0.49%

2.50%

Dividend Yield

1.51%

$28.44B

Net Assets

$3.53B

4,046

Holdings

136

Sep 17, 2019

Inception Date

May 23, 2019

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Index Tracked

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Diversified Emerging Mkts

Fund Category

Diversified Emerging Mkts

AVEM costs about $16.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	AVEM	FRDM
TSMTaiwan Semiconductor Manufacturing Company Limited	6.39%	8.01%

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Investment Analysis

AVEM

Pros

AVEM offers a higher dividend yield of 2.50% compared to many other emerging markets funds.
AVEM provides exposure to a broad range of global companies across different market caps and countries.
AVEM is a very large fund with $28.4 billion in assets, which ensures high liquidity for investors.

Considerations

AVEM has an expense ratio of 0.33%, which may be higher than some passively managed index funds.
AVEM's top holding, TSM, accounts for 6.39% of the fund, creating some concentration risk in semiconductors.
AVEM does not report sector weights, which makes it harder for investors to assess its industry diversification.

FRDM

Pros

FRDM focuses on companies in nations with strong political, civil, and economic freedom, providing a distinct value angle.
FRDM is smaller with $3.5 billion in assets, which might allow for a more concentrated investment in its selected names.
FRDM has a low expense ratio of 0.49%, making it one of the more affordable actively managed emerging market options.

Considerations

FRDM has a lower dividend yield of 1.51%, which might be less attractive for income-focused investors.
FRDM's top holding, TSM, represents 8.01% of the fund, indicating a higher level of single-stock concentration risk.
FRDM's smaller asset base of $3.5 billion may result in slightly wider bid-ask spreads compared to larger funds.

About AVEM and FRDM

AVEM (AVEM)

The Avantis Emerging Markets Equity ETF (AVEM) offers investors a structured way to gain exposure to a broad range of stocks in emerging market economies. As an exchange-traded fund launched in September 2019, it currently holds a substantial portfolio of 4,046 holdings with net assets of USD 28.44 billion. This fund fits within the Diversified Emerging Markets category, which includes economies from Asia, Latin America, Africa, and Eastern Europe. While emerging markets can provide opportunities for growth that developed markets might not offer, they also tend to be more volatile. The fund features a dividend yield of 2.50% and an expense ratio of 0.33%. Investors should remember that share prices and yields can rise as well as fall, and returns are not guaranteed.

FRDM (FRDM)

The EA Series Trust Freedom 100 Emerging Markets ETF is designed to provide diversified exposure to emerging market companies that exhibit characteristics associated with economic and political freedom. By focusing on nations with strong rule of law, free markets, and open societies, the fund aims to capture growth opportunities in regions that may benefit from these structural advantages. It holds 136 companies, offering a broad snapshot of the emerging market landscape. Investors should note that while this approach seeks to identify potentially robust economies, emerging markets can be more volatile than developed ones. The fund has an expense ratio of 0.49% and a dividend yield of 1.51%. As with any investment, the value of this ETF can rise and fall, and returns are not guaranteed.

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AVEM vs FRDM

Fund Snapshot