FlexShares Emerging Markets Quality Low Volatility Index Fund (QLVE)

ETF FlexShares Emerging Markets Quality Low Volatility Index Fund Summary

Profile:

This ETF invests in a portfolio of emerging market equities with high quality and low volatility characteristics. It uses a custom index, the Northern Trust Quality Low Volatility Emerging Markets Index, to select these stocks.

Objective:

The primary objective is to provide investors with long-term capital appreciation by investing in quality emerging market companies with low volatility.

Issuer:

• Company: Northern Trust Asset Management
• Reputation and Reliability: Northern Trust is a reputable financial services company with a long history dating back to 1889. It's known for its expertise in asset management and custody services.
• Management: The ETF is managed by a team of experienced portfolio managers at Northern Trust, with expertise in emerging markets and quantitative strategies.

Market Share:

The FlexShares Emerging Markets Quality Low Volatility Index Fund has a market share of approximately 0.65% within the Emerging Markets Equity ETF category. (As of November 2023)

Total Net Assets:

The ETF has total net assets of approximately $953.3 million. (As of November 2023)

Moat:

• Proprietary Index: The ETF utilizes the Northern Trust Quality Low Volatility Emerging Markets Index which focuses on high-quality companies with lower volatility compared to the broader market.
• Active Management: Northern Trust actively manages the ETF, which provides flexibility to adjust portfolio holdings based on market conditions.

Financial Performance:

• Historical Performance: The ETF has delivered positive returns since inception.
• Benchmark Comparison: The ETF has outperformed its benchmark index, the MSCI Emerging Markets Index, in most timeframes.

Growth Trajectory:

The ETF's growth trajectory has been positive, both in terms of total net assets and investor interest. The emerging markets and low volatility strategies are increasingly gaining traction.

Liquidity:

• Average Trading Volume: The ETF has moderate average daily trading volume, suggesting good liquidity.
• Bid-Ask Spread: The ETF has a relatively low bid-ask spread, making it cost-efficient to trade.

Market Dynamics:

• Economic Indicators: Global economic growth, interest rates, and currency fluctuations impact emerging markets.
• Sector Growth Prospects: The performance of individual emerging markets and specific sectors like technology, consumer discretionary, and financials influence the ETF.
• Current Market Conditions: Market volatility, geopolitical events, and investor sentiment affect the ETF's performance.

Competitors:

• iShares MSCI Emerging Markets Quality Factor ETF (QUAL) - Market Share: 3.28%
• Xtrackers MSCI Emerging Markets High Dividend Yield UCITS ETF 1C (XMEM) - Market Share: 1.53%
• Vanguard FTSE Emerging Markets Quality Factor UCITS ETF - USD Acc (VFEM) - Market Share: 0.64%

Expense Ratio:

The ETF's expense ratio is 0.42%.

Investment Approach and Strategy:

• Strategy: The ETF passively tracks the Northern Trust Quality Low Volatility Emerging Markets Index.
• Composition: The ETF invests in equities of large and mid-cap companies in emerging markets, with a focus on high quality and low volatility characteristics.

Key Points:

• Invests in quality, low volatility emerging market companies
• Actively managed to enhance performance
• Provides diversification and risk mitigation
• Has a moderate expense ratio and good liquidity

Risks:

• Market and Volatility Risks: Emerging markets may experience higher volatility and risk compared to developed markets.
• Low Volatility Premium: The low volatility strategy could result in lower returns during strong market rallies.
• Concentration Risk: The ETF's focus on specific sectors and countries may lead to higher volatility.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation
• Investors comfortable with moderate risk
• Investors looking for exposure to a diversified emerging market portfolio
• Investors focusing on a quality low volatility strategy

Fundamental Rating Based on AI:

Based on AI analysis of the factors discussed above, the ETF receives a score of 8.5. The analysis considers financial health, market position, future prospects, and risk profile. This rating suggests strong fundamentals for the ETF.

Resources and Disclaimers:

• ETF Website: https://www.flexshares.com/insights/emerging-markets-equity/quality-low-volatility
• Morningstar Report: https://www.morningstar.com/etfs/arcx/qval/overview
• Northern Trust Website: https://www.northerntrust.com/investment-management

Disclaimer:

This information is provided for informational purposes only and should not be construed as investment advice. It is essential to conduct your research and consider your risk tolerance and financial situation before making any investment decisions.