FlexShares® High Yield Value-Scored Bond Index Fund (HYGV)

ETF FlexShares® High Yield Value-Scored Bond Index Fund Overview

Profile:

The FlexShares® High Yield Value-Scored Bond Index Fund (HYGV) is an exchange-traded fund (ETF) that tracks the Northern Trust High Yield Value-Scored Bond Index. It invests primarily in high-yield corporate bonds with a focus on value. This means the fund seeks to buy bonds that are undervalued by the market and have the potential to generate higher returns over time.

Objective:

The primary investment goal of HYGV is to provide long-term capital appreciation with a secondary focus on current income. It achieves this by investing in a diversified portfolio of high-yield bonds selected based on their relative value and creditworthiness.

Issuer:

Northern Trust Asset Management

Reputation and Reliability:

Northern Trust is a renowned global financial institution with over 130 years of experience in the asset management industry. It has a strong reputation for expertise and reliability, evidenced by its excellent track record of managing various investment funds.

Management:

The ETF is actively managed by a team of experienced portfolio managers at Northern Trust. They have extensive knowledge and expertise in the high-yield bond market, ensuring strategic selection and management of the fund's holdings.

Market Share:

HYGV holds a small market share within the high-yield bond ETF space. However, it has a growing investor base due to its unique value-oriented approach.

Total Net Assets:

As of October 26, 2023, HYGV has approximately $395 million in total net assets.

Moat:

The ETF's competitive advantages include:

• Proprietary Value-Scoring Model: Northern Trust utilizes a proprietary quantitative model that identifies undervalued bonds with higher potential returns.
• Active Management: The experienced portfolio management team actively selects and weights holdings within the index, optimizing the portfolio for performance.
• Niche Focus: The unique value-oriented approach caters to investors seeking higher returns from undervalued high-yield bonds.

Financial Performance:

HYGV has delivered competitive returns since its inception in 2013. It has outperformed the broader high-yield bond market as represented by the Bloomberg Barclays High Yield Bond Index.

Benchmark Comparison:

HYGV has consistently outperformed the Bloomberg Barclays High Yield Bond Index, demonstrating the effectiveness of its value-oriented approach.

Growth Trajectory:

The ETF's assets under management have grown steadily over the years, indicating increasing investor interest in its value proposition.

Liquidity:

• Average Trading Volume: HYGV has a decent average trading volume, ensuring easy buying and selling of shares.
• Bid-Ask Spread: The bid-ask spread is relatively narrow, indicating low transaction costs.

Market Dynamics:

Factors affecting the ETF's market environment include:

• Interest Rate Changes: Rising interest rates can negatively impact high-yield bond prices.
• Economic Conditions: A strong economy tends to benefit high-yield bonds, while an economic downturn can lead to higher default rates.
• Market Volatility: Increased market volatility can lead to wider price fluctuations in high-yield bonds.

Please note that data on current performance and specific details like market share may change rapidly and require further research for up-to-date information.

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