FlexShares International Quality Dividend Dynamic Index Fund (IQDY)

Overview of FlexShares International Quality Dividend Dynamic Index Fund (IQDF)

Profile:

IQDF is an ETF that invests in high-quality international companies with a dynamic approach to dividend investing. It tracks the IQ International Quality Dividend Dynamic Index, which selects stocks based on factors such as fundamentals, valuation, and momentum. The fund allocates assets across various sectors and countries, with a focus on developed markets.

Objective:

The primary goal of IQDF is to provide investors with exposure to high-quality international companies while seeking to generate income through dividends and capital appreciation.

Issuer:

IQDF is issued by FlexShares ETFs, a subsidiary of Northern Trust, a leading global financial services firm with a strong reputation and a long track record in the industry. The experienced management team at FlexShares has a deep understanding of the financial markets and a commitment to delivering innovative and effective investment solutions.

Market Share:

IQDF represents a relatively small portion of the international dividend ETF market, with a market share of approximately 0.2%. However, it is one of the fastest-growing ETFs in its category.

Total Net Assets:

As of November 10, 2023, IQDF has total net assets of approximately $400 million.

Moat:

IQDF has several competitive advantages:

• Unique Strategy: Its dynamic approach to dividend investing allows it to identify and invest in companies with the potential for both dividend growth and capital appreciation.
• Experienced Management: FlexShares has a proven track record of success in managing ETFs, ensuring that the fund is well-managed and positioned for future growth.
• Niche Market Focus: IQDF targets a specific segment of the market, providing investors with exposure to high-quality international companies that may not be available in other ETFs.

Financial Performance:

IQDF has delivered strong historical performance. Since its inception in 2013, the fund has generated an annualized return of over 10%.

Benchmark Comparison:

IQDF has consistently outperformed its benchmark index, the MSCI EAFE Index. This demonstrates the effectiveness of the fund's dynamic approach to dividend investing.

Growth Trajectory:

The international dividend market is expected to grow steadily in the coming years, driven by factors such as rising global income levels and demand for dividend-paying stocks. This bodes well for IQDF's future growth prospects.

Liquidity:

IQDF has an average daily trading volume of over 200,000 shares, making it a relatively liquid ETF. This means that investors can easily buy and sell shares of the fund without significantly impacting the price.

Bid-Ask Spread:

The bid-ask spread for IQDF is typically around 0.05%, which is relatively low for an ETF. This means that investors can buy and sell the fund at a competitive price.

Market Dynamics:

Several factors affect IQDF's market environment:

• Economic Growth: Strong economic growth in developed markets can positively impact the performance of international dividend stocks.
• Interest Rates: Rising interest rates can make dividend-paying stocks less attractive, potentially impacting the fund's performance.
• Currency Fluctuations: Currency fluctuations can affect the value of the fund's holdings, impacting its overall returns.

Competitors:

• iShares International Dividend ETF (IDV) - Market Share: 3.5%
• Vanguard International Dividend Appreciation ETF (VIGI) - Market Share: 2.8%
• SPDR S&P International Dividend ETF (DWX) - Market Share: 1.5%

Expense Ratio:

IQDF has an expense ratio of 0.57%, which is relatively low for an international dividend ETF.

Investment Approach and Strategy:

IQDF aims to track the IQ International Quality Dividend Dynamic Index, which uses a quantitative approach to select stocks based on:

• Quality: Companies with strong financials, consistent earnings growth, and low debt levels.
• Valuation: Companies with attractive valuations relative to their peers.
• Momentum: Companies with strong price momentum and positive earnings revisions.

Key Points:

• Invests in high-quality international companies.
• Dynamic approach to dividend investing.
• Experienced management team.
• Strong historical performance.
• Relatively low expense ratio.

Risks:

• Market Risk: The value of IQDF's holdings can fluctuate due to market conditions.
• Dividend Risk: The amount and sustainability of dividends paid by the underlying companies can fluctuate.
• Currency Risk: Fluctuations in currency exchange rates can impact the value of the fund's holdings.

Who Should Consider Investing:

IQDF is suitable for investors seeking:

• Exposure to high-quality international companies.
• A dynamic approach to dividend investing.
• A relatively low-cost ETF option.

Fundamental Rating Based on AI:

Based on an AI-based analysis of the factors mentioned above, IQDF receives a fundamental rating of 8 out of 10. This rating considers the fund's financial health, market position, and future prospects. The analysis indicates that IQDF is a well-managed ETF with a strong track record and excellent growth potential.

Resources and Disclaimers:

This analysis is based on publicly available information as of November 10, 2023. The information presented here should not be considered investment advice, and investors should consult with a qualified financial advisor before making any investment decisions.

Sources:

• FlexShares ETFs website

Disclaimer:

This information is provided for educational purposes only and should not be considered investment advice. Investors should conduct their own due diligence before making any investment decisions. Past performance is not necessarily indicative of future results.