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

The Hartford Multifactor Developed Markets (ex-US) ETF (RODM) made its debut on 02/25/2015, and is a smart beta exchange traded fund that provides broad exposure to the Foreign Large Value ETF category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

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.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

RODM is managed by Hartfordfunds, and this fund has amassed over $1.13 billion, which makes it one of the larger ETFs in the Foreign Large Value ETF. RODM 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 5.38%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Orange Common Stock Eur4.0 (ORA) accounts for about 1.06% of total assets, followed by Koninklijke Ahold Delhaize N Common Stock Eur.01 (AD) and Fairfax Financial Hldgs Ltd Common Stock (FFH).

RODM's top 10 holdings account for about 9.84% of its total assets under management.

Performance and Risk

The ETF return is roughly 19.76% so far this year and is up roughly 24.52% in the last one year (as of 06/26/2025). In the past 52-week period, it has traded between $27.35 and $34.22

The ETF has a beta of 0.71 and standard deviation of 13.65% for the trailing three-year period, making it a medium risk choice in the space. With about 336 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.

Vanguard International High Dividend Yield ETF (VYMI) tracks FTSE All-World ex US High Dividend Yield Index and the Schwab Fundamental International Equity ETF (FNDF) tracks Russell RAFI Developed ex US Large Co. Index (Net). Vanguard International High Dividend Yield ETF has $10.38 billion in assets, Schwab Fundamental International Equity ETF has $16.02 billion. VYMI has an expense ratio of 0.17% and FNDF changes 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

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

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