FlexShares Emerging Markets Quality Low Volatility Index Fund (QLVE)

Overview

The FlexShares Emerging Markets Quality Low Volatility Index Fund (QEEM) aims to provide exposure to emerging market equities while emphasizing high-quality stocks with relatively low volatility. It targets companies exhibiting strong financial health and consistent performance while mitigating downside risk.

Reputation and Reliability

Northern Trust is a well-established and reputable asset manager known for its index-tracking expertise and commitment to transparency.

Management Expertise

Northern Trust has a dedicated team of experienced professionals managing its ETF offerings, with expertise in quantitative analysis and portfolio construction.

Goal

The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Emerging Markets Quality Low Volatility Index.

Investment Approach and Strategy

Strategy: The fund aims to track the Northern Trust Emerging Markets Quality Low Volatility Index.

Composition The ETF primarily holds stocks of companies located in emerging markets. The index methodology selects companies based on quality and low volatility factors.

Market Share: QEEM holds a moderate market share within the emerging markets low volatility ETF category.

Total Net Assets (AUM): 323000000

Key Competitors

• EEMV
• XSOE
• EMLC

Competitive Landscape

The emerging markets low volatility ETF space is moderately competitive. QEEM competes with larger, more established funds like EEMV. QEEM's advantage lies in its specific index methodology, which may appeal to investors seeking a particular approach to quality and volatility. Disadvantages include its smaller AUM and potentially lower liquidity compared to larger competitors.

Historical Performance: Historical performance varies with market conditions. Investors should review performance data over multiple periods (1-year, 3-year, 5-year, 10-year) to assess the ETF's consistency.

Benchmark Comparison: The ETF's performance should be compared to the Northern Trust Emerging Markets Quality Low Volatility Index to evaluate tracking efficiency.

Expense Ratio: 0.4

Average Trading Volume

QEEM's average trading volume is moderate, indicating sufficient but not extremely high liquidity.

Bid-Ask Spread

The bid-ask spread is typically reasonable, but it can widen during periods of market volatility.

Market Environment Factors

QEEM is affected by global economic conditions, emerging market growth rates, currency fluctuations, and geopolitical events.

Growth Trajectory

The growth trajectory depends on investor demand for emerging market equities and the fund's ability to consistently deliver low volatility and quality exposure.

Competitive Edge

QEEM's competitive edge lies in its focus on quality and low volatility factors within the emerging markets. The Northern Trust index methodology aims to identify financially sound companies with lower price fluctuations. This approach can be attractive to investors seeking downside protection. The ETF's transparent and rules-based methodology also enhances its appeal. The low volatility factor can smooth returns over time.

Volatility

QEEM is designed to exhibit lower volatility than broad emerging market indices, but it still carries inherent risks associated with emerging market equities.

Market Risk

The ETF is exposed to market risk, emerging market risk, currency risk, and political risk. Specific risks include economic slowdowns in emerging markets, trade tensions, and geopolitical instability.

Ideal Investor Profile

QEEM is suitable for investors seeking exposure to emerging markets with a focus on quality and lower volatility. It is appropriate for those with a moderate risk tolerance and a long-term investment horizon.

Market Risk

QEEM is best suited for long-term investors seeking to balance growth potential with downside protection. It can be used as a core holding within a diversified emerging markets portfolio.

FlexShares Emerging Markets Quality Low Volatility Index Fund provides exposure to emerging market equities while prioritizing high-quality, low-volatility stocks. The fund tracks the Northern Trust Emerging Markets Quality Low Volatility Index and is managed by Northern Trust. It aims to offer a smoother investment experience compared to broader emerging market benchmarks. Its competitive edge is its unique approach to quality and volatility factors in the emerging markets and is best suited for investors with a moderate risk tolerance and long-term investment horizon.

Data Sources:

• Northern Trust Asset Management, ETF.com, Bloomberg

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be based on individual circumstances and consultation with a qualified financial advisor. Data is based on available public information and may be subject to change.