FlexShares Quality Dividend Index Fund (QDF)

ETF FlexShares Quality Dividend Index Fund (QDF) Overview

Profile: FlexShares Quality Dividend Index Fund (QDF) is an ETF that tracks the Northern Trust Quality Dividend Index. This index focuses on large-cap US stocks with high dividend yields and strong fundamentals. QDF invests in approximately 100 stocks across various sectors, with a focus on sectors with historically high and sustainable dividend payouts.

Objective: QDF aims to provide investors with a high level of current income and capital appreciation through exposure to a portfolio of high-quality dividend-paying stocks.

Issuer: Northern Trust Asset Management is the issuer of QDF. It is a leading global asset management firm with over 110 years of experience and over $1.3 trillion in assets under management.

Market Share: QDF has a market share of approximately 0.8% in the dividend-paying ETF category.

Total Net Assets: As of October 26, 2023, QDF has total net assets of over $1.6 billion.

Moat: QDF's competitive advantage lies in its focus on high-quality dividend-paying stocks. This strategy attracts investors seeking a reliable income stream and long-term capital appreciation from established companies with proven track records. Additionally, QDF benefits from Northern Trust's experience and expertise in managing dividend-focused portfolios.

Financial Performance: QDF has delivered a solid performance since its inception in 2013. Over the past three years, it has generated an average annual return of 12.7%, outperforming its benchmark index, the S&P 500.

Benchmark Comparison: QDF has consistently outperformed the S&P 500 in terms of total returns and risk-adjusted returns. This indicates that QDF's focus on high-quality dividend stocks has contributed to its outperformance.

Growth Trajectory: The demand for dividend-paying ETFs is expected to grow in the coming years as investors seek reliable income sources in a low-interest-rate environment. QDF is well-positioned to benefit from this trend due to its focus on high-quality dividend-paying stocks and track record of performance.

Liquidity: QDF has an average daily trading volume of over 100,000 shares, ensuring its liquidity for investors looking to buy or sell their shares quickly without significantly impacting the price. The bid-ask spread is tight, indicating low transaction costs.

Market Dynamics: The ETF's market environment is influenced by factors such as interest rates, economic growth, and sector performance. Rising interest rates may lead to lower demand for dividend-paying stocks, while strong economic growth can positively impact the performance of underlying companies.

Competitors: QDF's main competitors include Vanguard Dividend Appreciation ETF (VIG), iShares Select Dividend ETF (DVY), and Schwab U.S. Dividend Equity ETF (SCHD). These ETFs have similar investment objectives and offer diversification across various high-quality dividend-paying stocks.

Expense Ratio: QDF has an expense ratio of 0.3%, which is considered average for dividend-paying ETFs.

Investment Approach and Strategy: QDF utilizes a passive management approach, tracking the Northern Trust Quality Dividend Index. The ETF invests in large-cap US stocks with high dividend yields and strong financial metrics, focusing on sectors with historically high and sustainable dividend payouts.

Key Points:

• High-quality dividend-paying stocks
• Track record of outperformance
• Strong management team
• Competitive expense ratio
• Suitable for income-seeking investors

Risks:

• Volatility risk - QDF's price fluctuates with the underlying stock market.
• Interest rate risk - Rising interest rates could decrease the attractiveness of dividend-paying stocks.
• Market risk - The value of the underlying stocks may decline due to various market factors.

Who Should Consider Investing:

• Investors seeking current income and long-term capital appreciation
• Investors comfortable with moderate volatility
• Investors with a long-term investment horizon

Fundamental Rating Based on AI: 8.5/10

QDF receives a solid rating based on its strong financial performance, experienced management team, competitive fees, and focus on high-quality dividend stocks. However, investors should be aware of the inherent risks associated with the equity market and potential interest rate fluctuations.

Resources:

• FlexShares website: https://www.flexshares.com/etfs/qdf/
• Northern Trust website: https://www.northerntrust.com/

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.