FlexShares Quality Dividend Index Fund (QDF)

Overview

The FlexShares Quality Dividend Index Fund (QDF) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Quality Dividend IndexSM. It focuses on dividend-paying companies exhibiting financial strength, profitability, and efficient capital allocation within the broader U.S. equity market.

Reputation and Reliability

Northern Trust is a well-established financial institution with a long history of providing investment management services.

Management Expertise

Northern Trust has a dedicated team of investment professionals with expertise in index management and dividend strategies.

Goal

To provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Quality Dividend IndexSM.

Investment Approach and Strategy

Strategy: The fund employs a passive management investment strategy, attempting to replicate the performance of the Northern Trust Quality Dividend IndexSM.

Composition The ETF primarily holds dividend-paying common stocks of U.S. companies.

Market Share: QDF's market share within the dividend ETF segment is moderate, with significant competition from larger funds.

Total Net Assets (AUM): 1780000000

Key Competitors

• Vanguard Dividend Appreciation ETF (VIG)
• Schwab US Dividend Equity ETF (SCHD)
• iShares Select Dividend ETF (DVY)

Competitive Landscape

The dividend ETF market is highly competitive, with several large and well-established funds. QDF distinguishes itself through its focus on quality metrics in addition to dividend yield, but it faces challenges in competing with the larger funds due to their economies of scale and brand recognition. VIG focuses on dividend growth while SCHD and DVY focus on high dividend yield which provides a different target audience for QDF.

Historical Performance: The fund's historical performance is based on the ability of the underlying index it is trying to track. Reviewing its track record will indicate how well the fund performs under different financial situations.

Benchmark Comparison: QDF's performance should closely track the Northern Trust Quality Dividend IndexSM, with deviations primarily due to fees and expenses.

Expense Ratio: 0.29

Average Trading Volume

QDF's average trading volume is moderate, providing sufficient liquidity for most investors but could be higher.

Bid-Ask Spread

The bid-ask spread is generally competitive, reflecting the ETF's decent liquidity.

Market Environment Factors

Economic growth, interest rates, inflation, and dividend payout ratios of companies within the index can impact QDF's performance.

Growth Trajectory

QDF's growth trajectory depends on its continued ability to attract assets and its success in replicating the performance of its underlying index. There are no major changes to the strategy and holdings but periodic rebalancing will occur.

Competitive Edge

QDF's competitive edge lies in its emphasis on quality dividend stocks, utilizing financial strength, profitability, and efficient capital allocation criteria. The index construction methodology seeks to identify companies that are not only paying dividends but also have the financial wherewithal to sustain and potentially grow those dividends. This quality focus distinguishes it from purely yield-focused dividend ETFs. This can make it more appealing to investors seeking a balance between dividend income and capital appreciation.

Volatility

QDF's volatility is generally in line with the broader equity market and dividend-focused ETFs.

Market Risk

QDF is subject to market risk, including the potential for declines in the value of its underlying holdings due to economic downturns or company-specific issues.

Ideal Investor Profile

QDF is suitable for investors seeking a combination of dividend income and capital appreciation, with a focus on quality companies. Investors looking for exposure to dividend-paying stocks with strong financials.

Market Risk

QDF is suitable for long-term investors seeking a core equity allocation with a dividend focus. Investors can use QDF as a component for their retirement or other income seeking accounts.

The FlexShares Quality Dividend Index Fund (QDF) provides exposure to U.S. dividend-paying stocks with a focus on financial strength, profitability, and efficient capital allocation. It offers a blend of dividend income and potential capital appreciation and is suitable for long-term investors seeking a core equity allocation. QDF faces competition from larger, more established dividend ETFs, but its quality-focused approach provides a differentiator. The fund is considered of moderate expense and reasonable liquidity which makes it a decent fund to track.

Data Sources:

• Northern Trust Asset Management Website
• ETF.com
• Morningstar

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Investors should consult with a qualified financial advisor before making any investment decisions.