Is Hartford Multifactor Developed Markets (ex-US) ETF (RODM) a Strong ETF Right Now?

Launched on 02/25/2015, the Hartford Multifactor Developed Markets (ex-US) ETF (RODM) is a smart beta exchange traded fund offering broad exposure to the Foreign Large Value ETF category of the market.

What Are Smart Beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Because the fund has amassed over $1.05 billion, this makes it one of the larger ETFs in the Foreign Large Value ETF. RODM is managed by Hartfordfunds. This particular fund seeks to match the performance of the Hartford Risk-Optimized Multifactor Developed Markets (ex-US) Index before fees and expenses.

The Hartford Risk-Optimized Multifactor Developed Markets (ex-US) Index seeks to de-concentrate country, currency, and individual company risks in developed market economies (ex US).

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

With one of the cheaper products in the space, this ETF has annual operating expenses of 0.29%.

The fund has a 12-month trailing dividend yield of 3.74%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

When you look at individual holdings, Equinor Asa Common Stock Nok2.5 (EQNR) accounts for about 1.09% of the fund's total assets, followed by Nokia Corp Spon Adr Adr (NOK) and Orange Common Stock Eur4.0 (ORA).

RODM's top 10 holdings account for about 9.88% of its total assets under management.

Performance and Risk

The ETF return is roughly 9.47% so far this year and was up about 19.48% in the last one year (as of 04/22/2025). In the past 52-week period, it has traded between $27.35 and $31.57.

The fund has a beta of 0.70 and standard deviation of 14.43% for the trailing three-year period, which makes RODM a medium risk choice in this particular space. With about 335 holdings, it effectively diversifies company-specific risk.

Alternatives

Hartford Multifactor Developed Markets (ex-US) ETF is a reasonable option for investors seeking to outperform the Foreign Large Value ETF segment of the market. However, there are other ETFs in the space which investors could consider.

Dimensional International Value ETF (DFIV) tracks ---------------------------------------- and the Schwab Fundamental International Equity ETF (FNDF) tracks Russell RAFI Developed ex US Large Co. Index (Net). Dimensional International Value ETF has $9.39 billion in assets, Schwab Fundamental International Equity ETF has $14.30 billion. DFIV has an expense ratio of 0.27% and FNDF charges 0.25%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Foreign Large Value ETF.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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