FlexShares Launches Three International Dividend-Focused Equity Funds

FlexShares® Exchange Traded Funds, sponsored and managed by Northern Trust Corp., today introduced three funds that invest in international securities and complement its existing quality dividend fund (QDF) suite. The new funds pursue income potential and long-term capital growth from a universe of international stocks.

The exchange traded funds – the International Quality Dividend Index Fund (IQDF), International Quality Dividend Defensive Index Fund (IQDE) and the International Quality Dividend Dynamic Index Fund (IQDY) – may help equity investors achieve an attractive dividend yield while also controlling for various levels of market risk. The new funds provide exposure to developed and emerging markets, offering investors a diversified set of strategies from which to choose within the FlexShares ETFs family.

Combining quality factors with the search for yield may help deliver a more stable dividend income stream over time for investors. The ETFs employ Northern Trust’s proprietary Dividend Quality Score (DQS), which focuses on management efficiency, profitability and cash flow – 3 factors that may be reliable predictors of quality than historical metrics like dividend growth.

The new ETFs strive to meet their investment objective by focusing on quality and yield, but each has a slightly different approach to market volatility or beta:

  • FlexShares International Quality Dividend Index Fund (IQDF) – pursues a beta similar to that of the market while mitigating sector, industry and security concentration risks.
  • FlexShares International Quality Dividend Defensive Index Fund (IQDE) – pursues a beta less than the market, while mitigating sector, industry and security concentration risks.
  • FlexShares International Quality Dividend Dynamic Index Fund (IQDY) – pursues a beta greater than the market, while mitigating sector, industry and security concentration risks.

“With the prior introduction of our domestic series of QDF funds, we were able to deliver a set of income generation strategies that could be applied to portfolios with a range of risk tolerances,” said Shundrawn Thomas, head of Northern Trust's Exchange Traded Funds Group. “Income remains a key consideration for individual and institutional investors alike, and geopolitical, regulatory and market structure changes are driving a clear evolution in this area. Now with the release of our international series of QDF funds, we believe FlexShares is positioned as a global leader in this category.”

For more information, please visit www.flexshares.com.

Before investing, carefully consider the FlexShares investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting www.flexshares.com. Read the prospectus carefully before you invest.

Foreside Fund Services, LLC, distributor.

Investment in a FlexShares Quality Dividend fund (QDF, QDEF, QDYN, IQDE, IQDF, IQDY) is subject to numerous risks including loss of principal. Highlighted risks: dividend (issuers of underlying stock might not declare a dividend, or dividend rate may not remain at current levels); concentration (more than 25% of assets in a single industry); currency (foreign currencies may fluctuate in value relative to the US dollar, adversely affecting IQDE, IQDF & IQDY investments); emerging markets (countries potentially less liquid and subject to greater volatility); foreign securities (IQDE, IQDF & IQDY typically invest at least 80% of assets in ADRs and GDRs); small cap stock (smaller-company stock may be subject to more abrupt/erratic market movement than larger companies); and volatility (volatility may not equal target of Underlying Index). See prospectus for full description of risks.

FlexShares International Quality Dividend Index Fund is passively managed and uses a representative sampling strategy to track its underlying index. Use of a representative sampling strategy creates tracking risk where the Fund’s performance could vary substantially from the performance of the underlying index. Additionally, the Fund is at increased dividend risk, as the issuers of the underlying stock might not declare a dividend, or the dividend rate may not remain at current levels. The Fund is also is at increased risk of industry concentration, where it may be more than 25% invested in the assets of a single industry. The Fund may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that country, market, industry, sector or asset class. Finally, the Fund may also be subject to increased volatility risk, where volatility may not equal the target of the underlying index.

FlexShares International Quality Dividend Defensive Index Fund is passively managed and uses a representative sampling strategy to track its Underlying Index. Use of a representative sampling strategy creates Tracking Risk where the Fund’s performance could vary substantially from the performance of the Underlying Index. Additionally, the Fund is at increased Dividend Risk, as the issuers of the underlying stock might not declare a dividend, or the dividend rate may not remain at current levels. The Fund is also is at increased risk of Industry Concentration, where it may be more than 25% invested in the assets of a single industry. The Fund may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that country, market, industry, sector or asset class. Finally, the Fund may also be subject to increased Volatility Risk, where volatility may not equal the target of the Underlying Index.

FlexShares International Quality Dividend Dynamic Index Fund is passively managed and uses a representative sampling strategy to track its Underlying Index. Use of a representative sampling strategy creates Tracking Risk where the Fund’s performance could vary substantially from the performance of the Underlying Index. Additionally, the Fund is at increased Dividend Risk, as the issuers of the underlying stock might not declare a dividend, or the dividend rate may not remain at current levels. The Fund is also is at increased risk of Industry Concentration, where it may be more than 25% invested in the assets of a single industry. The Fund may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that country, market, industry, sector or asset class. Finally, the Fund may also be subject to increased Volatility Risk, where volatility may not equal the target of the Underlying Index.

Beta is a statistical measure of the volatility, or sensitivity, of rates of return on a portfolio or security compared to a market index. The beta for an ETF measures the expected change in return of the ETF relative to the return of a designated index. By definition, the beta of the Standard & Poor’s (S&P) 500 Index is 1.00. Accordingly, a fund with a 1.10 beta is expected to perform 10% better than the S&P 500 Index in rising markets and 10% worse in falling markets.

About FlexShares

FlexShares is a suite of ETF products designed to pursue real-world goals by evolving the process of ETF development, providing flexibility for meeting investor needs. FlexShares Funds are sponsored by Northern Trust. Individual investors can purchase and sell shares through any brokerage firm, financial advisor or online broker.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2012, Northern Trust had assets under custody of US$4.8 trillion, and assets under investment management of US$758.9 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.

Contacts:

Media Contacts:
Northern Trust Corporation
Doug Holt, 312-557-1571
Doug_Holt@ntrs.com
or
Michael Burdeen, 312-240-3152
Michael.Burdeen@Edelman.com
http://www.flexshares.com
Follow Us on Twitter @FlexSharesETFs
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