FlexShares Introduces Suite Of Dividend-Focused Equity Funds

FlexShares® Exchange Traded Funds, sponsored and managed by Northern Trust Corp., today introduced dividend-focused equity index funds to help investors achieve their income needs while still participating in capital growth through the equity market.

The exchange-traded funds – the Quality Dividend Index Fund, Quality Dividend Defensive Index Fund and the Quality Dividend Dynamic Index Fund – seek to deliver a portfolio of stocks that emphasize long-term capital growth and income. They invest in quality companies that provide dividend income while controlling for market risk.

The ETFs employ Northern Trust’s proprietary Dividend Quality Score, used for many years in separately managed accounts. They also seek to replicate Northern Trust's 1250 index, but target different levels of market volatility or beta. They include:
  • FlexShares Quality Dividend Index Fund (QDF), which seeks to deliver a beta similar to that of the market, while mitigating sector, industry, and security concentration risks.
  • FlexShares Quality Dividend Dynamic Index Fund (QDYN), which seeks to deliver a beta greater than the market, while mitigating sector, industry, and security concentration risks.
  • FlexShares Quality Dividend Defensive Index Fund (QDEF), which strives to deliver a beta less than the market, while mitigating sector, industry, and security concentration risks.

“Our research shows that a high-quality, yield-focused equity position can potentially act as a return stabilizer for a broader portfolio, mitigate risk in volatile markets and provide higher dividend growth,” said Shundrawn Thomas, head of Northern Trust's Exchange Traded Funds Group. “The new equity funds are designed to outperform in a variety of market environments, including upward- and downward-trending markets.”

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.

An investment in FlexShares is subject to numerous risks, including possible loss of principal. Fund returns may not match the return of the respective indexes. The Funds are subject to the following principal risks: asset class; commodity; concentration; counterparty; currency; derivatives; dividend; emerging markets; equity securities; fluctuation of yield; foreign securities; geographic; income; industry concentration; inflation-protected securities; interest rate / maturity risk; issuer; management; market; market trading; mid cap stock; natural resources; new funds; non-diversification; passive investment; privatization; small cap stock; tracking error; value investing; and volatility risk. A full description of risks is in the prospectus.

FlexShares 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 at increased risk of Industry Concentration, where it may be more than 25% invested in the assets of a single industry. Finally, the Fund may also be subject to increased Volatility Risk, where volatility may not equal the target of the Underlying Index.

FlexShares 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 at increased risk of Industry Concentration, where it may be more than 25% invested in the assets of a single industry. Finally, the Fund may also be subject to increased Volatility Risk, where volatility may not equal the target of the Underlying Index.

FlexShares 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 at increased risk of Industry Concentration, where it may be more than 25% invested in the assets of a single industry. 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 September 30, 2012, Northern Trust had assets under custody of US$4.8 trillion, and assets under investment management of US$749.7 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.

Copyright Business Wire 2010

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