FlexShares Emerging Markets Quality Low Volatility Index Fund (QLVE)

Overview of FlexShares Emerging Markets Quality Low Volatility Index Fund (QEML)

Profile:

QEML is an index-tracking Exchange Traded Fund (ETF) that invests in emerging market equities with a focus on low volatility and high quality. It primarily targets large and mid-cap companies across various sectors.

Objective:

The primary objective of QEML is to provide investors with long-term capital appreciation through exposure to a diversified portfolio of low-volatility, high-quality emerging market equities.

Issuer:

QEML is issued by Northern Trust Asset Management, a subsidiary of Northern Trust Corporation, a global financial services company with a strong reputation and track record in the market. Northern Trust has over 130 years of experience in managing investments and is known for its expertise in risk management.

Market Share:

QEML holds a market share of approximately 0.4% within the emerging market low volatility ETF category.

Total Net Assets:

As of November 2023, QEML has total net assets of approximately $1.1 billion.

Moat:

QEML's competitive advantages include:

• Unique Strategy: Focus on low volatility and high-quality stocks within emerging markets.
• Experienced Management: Northern Trust has a strong track record in managing investments and expertise in risk management.
• Diversification: The ETF holds a diversified portfolio of stocks across various sectors and countries.

Financial Performance:

QEML has historically outperformed its benchmark index, the MSCI Emerging Markets Low Volatility Index, generating positive returns over different time periods.

Growth Trajectory:

The emerging market low volatility ETF category is expected to experience moderate growth in the coming years.

Liquidity:

QEML has a high average daily trading volume, making it a relatively liquid ETF.

Market Dynamics:

Market factors affecting QEML include:

• Global economic conditions: Economic growth in emerging markets.
• Interest rate fluctuations: Rising interest rates can impact emerging market investments.
• Emerging market political stability: Political instability can lead to market volatility.

Competitors:

• iShares Edge MSCI EM Minimum Volatility ETF (EMMV)
• Vanguard FTSE Emerging Markets ETF (VWO)

Expense Ratio:

QEML has an expense ratio of 0.35%.

Investment Approach and Strategy:

QEML tracks the Northern Trust Emerging Markets Quality Low Volatility Index, which selects stocks based on:

• Low volatility: Measured by historical price fluctuations.
• High quality: Measured by factors like financial strength, profitability, and good management.

Key Points:

• Focus on low volatility and high-quality emerging market equities.
• Strong track record and experienced management.
• Diversified portfolio and competitive expense ratio.

Risks:

• Emerging market volatility: Higher risk compared to developed markets.
• Currency fluctuations: Currency exchange rates can impact returns.
• Low liquidity risk: While the ETF is generally liquid, lower liquidity periods can exist.

Who Should Consider Investing:

QEML is suitable for investors seeking:

• Long-term capital appreciation: Through exposure to emerging market equities.
• Reduced volatility: Compared to the broader emerging market.
• High-quality companies: With strong financial fundamentals.

Fundamental Rating Based on AI:

Based on an AI-powered analysis of financial health, market position, and future prospects, QEML receives a 7 out of 10 rating. The ETF benefits from its unique focus, experienced management, and competitive expense ratio. However, the inherent risks associated with emerging markets should be considered.

Resources and Disclaimers:

• https://www.northerntrust.com/personal-financial-services/investment-solutions/etfs/flexshares-emerging-markets-quality-low-volatility-index-fund
• https://finance.yahoo.com/quote/QEML/
• https://www.msci.com/documents/10199/24825b82-0682-45f1-bb34-2521ac321652

Disclaimer: This information is for educational purposes only and should not be considered as financial advice. Investing involves risk, and past performance is not a guarantee of future results. Please consult with a financial professional before making any investment decisions.