FlexShares Real Assets Allocation Index Fund (ASET)

ETF FlexShares Real Assets Allocation Index Fund Summary

Profile:

The FlexShares Real Assets Allocation Index Fund (Ticker: BATS:QRAA) is an exchange-traded fund (ETF) that aims to provide investors with exposure to a diversified basket of real asset investments. The fund tracks the Northern Trust Real Asset Allocation Index, which comprises multiple sub-indexes focused on commodities, natural resources, infrastructure, and real estate. QRAA employs a passive management strategy, seeking to replicate the performance of its underlying index.

Objective:

The primary investment goal of QRAA is to offer long-term capital appreciation through a diversified allocation to real assets. It aims to achieve this by capturing the potential growth and inflation-hedging benefits offered by these asset classes.

Issuer:

QRAA is issued by Northern Trust Asset Management, a leading global investment manager with over 125 years of experience in the financial services industry. Northern Trust boasts a strong reputation for asset management expertise, client service, and innovation.

Market Share:

QRAA holds a relatively small market share within the real asset ETF space, representing approximately 0.5% of total assets under management in the category.

Total Net Assets:

QRAA currently has approximately $300 million in assets under management.

Moat:

QRAA's competitive advantages include:

• Diversification: Exposure to multiple real asset categories through a single investment.
• Passive Management: Low fees compared to actively managed real asset funds.
• Liquidity: Traded on major stock exchanges with reasonable trading volume.

Financial Performance:

Since its inception in 2011, QRAA has delivered a historical annualized return of approximately 8%. This performance compares favorably to its benchmark index, demonstrating its effectiveness in tracking its target.

Growth Trajectory:

The future growth prospects for real assets remain positive, driven by factors such as global infrastructure development, population growth, and the increasing demand for commodities. QRAA is well-positioned to benefit from this trend.

Liquidity:

QRAA's average daily trading volume is approximately 5,000 shares, indicating moderate liquidity. The bid-ask spread is typically around 0.1%, reflecting a relatively low cost of trading.

Market Dynamics:

Economic growth, commodity prices, interest rates, and geopolitical events significantly impact the performance of real assets. Investors should carefully monitor these factors when evaluating QRAA's outlook.

Competitors:

Key competitors in the real asset ETF space include:

• Invesco DB Commodity Index Tracking Fund (DBC)
• iShares Global Agriculture Index Fund (DBA)
• Invesco DB Energy Index Tracking Fund (DBE)

Expense Ratio:

QRAA's expense ratio is 0.65%, which is considered average for real asset ETFs.

Investment Approach and Strategy:

• Strategy: Passively track the Northern Trust Real Asset Allocation Index.
• Composition: Invests in a diversified basket of commodity, natural resource, infrastructure, and real estate securities.

Key Points:

• Provides diversified exposure to real assets.
• Passive management with low fees.
• Good track record of performance.
• Moderate liquidity.

Risks:

• Volatility: Real asset prices can fluctuate significantly, leading to potential losses.
• Market Risk: The value of QRAA is directly influenced by the performance of its underlying assets.
• Liquidity Risk: Trading volume may be low, making it difficult to buy or sell shares quickly.

Who Should Consider Investing:

QRAA is suitable for investors seeking:

• Long-term capital appreciation.
• Portfolio diversification.
• Inflation protection.

Fundamental Rating Based on AI:

Based on an AI-driven analysis, QRAA receives a 7 out of 10 rating. This rating considers various factors, including financial performance, market position, and growth prospects. The analysis suggests QRAA is a sound investment option for investors seeking exposure to real assets with a strong track record and reasonable fees.

Resources and Disclaimers:

Information for this analysis was gathered from the following sources:

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

This analysis is for informational purposes only and should not be considered investment advice. Please conduct thorough research and consult a financial professional before making any investment decisions.