Hartford Multifactor Developed Markets ex-U.S. ETF RODM should deliver solid risk-adjusted performance over the long run. It leans toward profitable stocks with lower valuations and strong momentum while also cutting back on risk.

This strategy starts with all large- and mid-cap stocks from 22 developed markets outside of the United States. It scores each one on the strength of its value, momentum, and quality characteristics, and combines those scores into an overall score. The formulation emphasizes value over the other two. So, the final portfolio may lean toward the value factor, while incorporating momentum and quality should steer the portfolio away from value traps.

An optimizer selects and weights constituents in a way that maximizes the portfolio’s exposure to those with the highest overall scores, while simultaneously cutting back on risk. It uses each stock's historical standard deviation and relationship with others to build a portfolio with 20% less expected volatility than the market. Cutting back on risk should smooth the fund's performance throughout a market cycle. It should underperform the market during rallies and outperform during drawdowns.

The combination of sector constraints, preference for the value factor, and reducing risk means this portfolio will likely straddle the border between the large-blend and large-value segments of the Morningstar Style Box. Its value-leaning tendencies recently pushed it into the foreign large-value Morningstar Category. But its sector weights remain tethered to the market, meaning it has less exposure to cyclical sectors (particularly energy) that are more prominent in the MSCI ACWI ex USA Value Index. Energy stocks were strong performers in 2022, causing the portfolio to trail the index by about 5.8 percentage points over the full year.

Overall, the fund has effectively cut back on risk, with a standard deviation that was roughly 12% lower than the MSCI ACWI ex USA Value's. Hartford charges 0.29% for this exchange-traded fund, making it one of the cheaper funds in the foreign large-value category.

Analyst Rating

A multifactor strategy that cuts back on risk.

Senior Analyst

Daniel Sotiroff

Ormat Technologies

CNA Financial

Banco Santander

Rogers

Novan

Powered Brands

Manulife Financial

MoneyLion

Merck

Loews

This strategy takes a low-risk approach to value investing. It builds its portfolio from cheap but profitable companies in a way that intentionally reduces overall volatility, earning an Above Average Process Pillar rating.

Above Average

Process

Despite recent turnover, the team at Mellon should continue to deliver tight index-tracking performance. However, the team does not stand out from its peers and the fruits of the expansion are yet to be fully realized, warranting an Average People Pillar rating.

Marlene Walker-Smith is joined by a team of experienced managers on this strategy, following Thomas Durante's retirement in June 2021. David France, Todd Frysinger, Vlasta Sheremeta, and Michael Stoll are senior portfolio managers who have been with Mellon for 10 years or more. Daphne Du joined the team in April 2023. They worked behind the scenes on the equity index team prior to being named managers. Their wealth of experience and the team’s supporting infrastructure should aid the expansion plans, which involve increasing headcount and consolidating trading, risk, and compliance systems.

The managers draw on a team of analysts to anticipate index changes and handle corporate actions. While the analyst team has facilitated effective index tracking, it is smaller than the analyst teams of other index fund managers, so personnel turnover may have a bigger impact on operations. The managers' primary objective is to track the benchmark as closely as possible. Manager compensation is not tied to any specific tracking-difference targets, but the team is subject to separate risk oversight.

Mellon merged three arms of its asset-management business in January 2018 and consolidated the trading operations from each unit into a single desk. This expanded the team's trading capabilities and expertise. The team has consolidated its portfolio management, compliance, and trading functions into BlackRock’s Aladdin platform to unify operations.

Average

People

Hartford Funds’ investors benefit from access to strong subadvisors at a reasonable cost. The firm earns an Above Average Parent Pillar rating.

Hartford’s industry relationships are key to its success. It maintains a long-standing partnership with standout investment manager Wellington Management Company, which has run the firm's equity and fixed-income funds since 1996 and 2012, respectively. Wellington now subadvises more than half of Hartford’s $124.1 billion in fund assets. In 2016, Hartford launched strategic-beta exchange-traded funds with its acquisition of Lattice Strategies and partnered with Schroders to expand its investment platform’s offerings, especially in non-U.S. strategies.

Hartford leaves most investment decisions to its subadvisors but collaborates with them on product development, risk oversight, and distribution. The firm reorganized its sales efforts and grew its product-management capabilities in 2013. Firm leadership has since added further resources to its distribution and oversight teams, while merging and liquidating subpar offerings, and has introduced new strategies. 

Hartford has sought to provide more-competitive fees. The firm has launched share classes without embedded distribution charges and reduced fees on other share classes. Still, as most shares remain in average or costlier fee groups, there is room for improvement.

Parent

Hartford Multifactor Developed Markets (ex-US) ETF

RODM tracks an index that selects developed-market companies outside the US, based on factors like valuation, momentum and quality.

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 Broad Developed World ETFs category of the market.

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

Hartford Total Return Bond ETF

Hartford Multifactor US Equity ETF

Hartford Quality Value ETF

Hartford Funds has added the first active equity ETF to its lineup through the conversion of an existing mutual fund with a 27-year track record. The Hartford Quality Value ETF (QUVU) is subadvised by Wellington Management.

Hartford Funds Launches Active Equity ETF via Mutual Fund Conversion

Hartford Multifactor Emerging Markets ETF

Hartford Multifactor Diversified International ETF

Asian stocks largely posted gains on Thursday, lifting multifactor ETFs, as investors awaited the release of U.S. consumer price data. Asia-Pacific markets climbed across the board, led by South Korean stocks.

Check Out These 3 Multifactor ETFs as South Korea, Japan Rally

A challenged U.S. market highlights the value of diversification in a portfolio. Higher for longer interest rates, the automotive strike, high oil prices, and the possibility of a government shutdown again are all current headwinds for the U.S. economy.

Use International Multifactor ETFs to Diversify Portfolios

JPMorgan BetaBuilders Japan ETF

Xtrackers MSCI Japan Hedged Equity ETF

WisdomTree Japan Hedged Equity Fund

iShares MSCI EAFE ETF

iShares Edge MSCI Min Vol EAFE ETF

iShares MSCI Japan ETF

Franklin FTSE Japan ETF

WisdomTree Europe Hedged Equity Fund

iShares Currency Hedged MSCI EAFE ETF

IQ FTSE International Equity Currency Neutral ETF

Invesco S&P International Developed Momentum ETF

ALPS International Sector Dividend Dogs ETF

iShares Core MSCI Europe ETF

iShares Core MSCI Total International Stock ETF

ALPS Sector Dividend Dogs ETF

SPDR Portfolio Developed World ex-US ETF

SPDR Portfolio S&P 500 ETF

Vanguard FTSE Developed Markets ETF

Vanguard Total International Stock ETF

There's been more talk lately about aiming for diversification through international investing, which wasn't a major topic of discussion for a while.

VettaFi Voices On: International Investing's Revival

One of Hartford Funds' multifactor ETFs providing international exposure has recently seen a jump in flows and investor interest. The Hartford Multifactor Developed Markets (ex-US) ETF (RODM) has seen $51 million in one-month net flows, bringing its year-to-date net flows to $30 million.

Multifactor International RODM Sees Uptick in Investor Attention

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iShares MSCI Emerging Markets ETF

iShares Core MSCI International Developed Markets ETF

Now is an opportune time for investors with home country biases to add international exposure. With international stocks trading at a discount relative to past valuations, there is significant upside opportunity.

Optimize International Exposure for Current Opportunities

There are opportunities in broad international and emerging markets for investors willing to challenge home country bias. U.S. equities have outperformed international markets for the longest period in history, suggesting their run is near its end, as U.S. and international markets leadership has historically been cyclical.

Investors Should Not Overlook Opportunities in International Markets

Is Hartford Multifactor Developed Markets exUS ETF (RODM) a Strong ETF Right Now?

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SPDR MSCI EAFE Fossil Fuel Free ETF

ProShares Ultra MSCI EAFE 

ProShares UltraShort MSCI EAFE

ProShares Short MSCI EAFE

iShares MSCI EAFE ESG Optimized ETF

First Trust Developed Markets ex-US AlphaDEX fund

Gabelli Equity Trust

Goldman Sachs ActiveBeta International Equity ETF

Invesco S&P International Developed Quality ETF

iShares Core MSCI EAFE ETF

IQ 500 International ETF

Knowledge Leaders Developed World ETF

First Trust RiverFront Dynamic Developed International ETF

iShares MSCI World ETF

Developed-market (DM) household savings recorded a significant gain last year, with an increase equivalent to 10% of combined gross domestic product (GDP). This build-up is likely to bolster consumption as restrictions on economic and social activity are removed and pent-up demand unlocked.

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Investors looking for exposure to ex-US developed markets stocks may want to consider putting the benefits of factors on their side, a task made easier by the Hartford Multifactor Developed Markets (ex-US) ETF (NYSEArca: RODM). RODM seeks to provide investment results that correspond to the total return performance of the Hartford Risk-Optimized Multifactor Developed Markets [.

Seeking a Multi-Factor Approach to Developed Markets Equities?

News for Hartford Multifactor Developed Markets (ex-US) ETF ETF (RODM)