FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund (TLTD)

ETF FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund Overview:

Profile:

• Focus: Developed market equities outside the US, with a tilt towards factors like value, momentum, and size
• Asset Allocation: Primarily stocks, with exposure to various sectors across developed markets excluding the US
• Investment Strategy: Passive, seeking to track the Morningstar Developed Markets ex-US Factor Tilt Index

Objective:

• To provide investors with exposure to developed markets outside the US, while capturing potential alpha through factor exposure

Issuer:

• Company: FlexShares Exchange Traded Funds
• Reputation: Established ETF provider with a strong track record and diverse product offerings
• Management: Experienced team with expertise in index investing and factor strategies

Market Share:

• Approximately 0.2% of the developed market ex-US ETF category

Total Net Assets:

• Approximately $1.8 billion

Moat:

• Unique Factor Tilt: The ETF's focus on value, momentum, and size factors aims to outperform the broader market over the long term.
• Cost-Effectiveness: With a low expense ratio, the ETF allows investors to capture potential alpha at a reasonable cost.

Financial Performance:

• Historical Returns: The ETF has outperformed its benchmark index since inception, delivering higher returns.
• Benchmark Comparison: The ETF has consistently outperformed the MSCI EAFE Index, its benchmark, by a significant margin.

Growth Trajectory:

• Positive Growth: The ETF has experienced steady growth in assets under management, indicating investor confidence.
• Market Expansion: The growing popularity of factor investing strategies could further drive the ETF's growth.

Liquidity:

• Average Trading Volume: Moderately high, ensuring easy buying and selling of the ETF.
• Bid-Ask Spread: Tight, indicating low transaction costs.

Market Dynamics:

• Economic Growth: Global economic growth in developed markets can positively impact the ETF's performance.
• Interest Rate Policies: Changes in interest rates can affect the attractiveness of equities and impact the ETF.
• Geopolitical Events: Global events can create volatility and impact the ETF's performance.

Competitors:

• iShares Developed Markets ex-US Factor ETF (IEXF)
• Vanguard FTSE Developed Markets ex-US ETF (VEU)
• SPDR S&P Developed World ex-US ETF (DWX)

Expense Ratio:

• 0.35%

Investment Approach & Strategy:

• Strategy: Tracks the Morningstar Developed Markets ex-US Factor Tilt Index, which selects stocks based on value, momentum, and size factors.
• Composition: Holds primarily stocks of companies in developed markets outside the US, with a focus on value, momentum, and size factors.

Key Points:

• Provides exposure to developed markets outside the US with potential alpha through factor exposure.
• Offers a cost-effective way to access factor investing strategies.
• Has a strong track record of outperforming its benchmark index.
• Relatively liquid with low transaction costs.

Risks:

• Market Risk: The ETF's performance is tied to the performance of developed markets outside the US, which can be volatile.
• Factor Risk: The ETF's performance may not track the broader market if factor investing strategies underperform.
• Currency Risk: The ETF's value may be affected by fluctuations in currency exchange rates.

Who Should Consider Investing:

• Investors seeking exposure to developed markets outside the US with potential alpha through factor exposure.
• Investors comfortable with the volatility associated with factor investing strategies.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI:

7/10

Justification:

The ETF exhibits strong fundamentals, including a proven track record of outperforming its benchmark, a cost-effective structure, and a focus on factor investing strategies. However, it faces market and factor risks that could impact its performance.

Resources and Disclaimers:

• Sources:
  • FlexShares ETF website
  • Morningstar
  • Bloomberg
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult a financial professional before making any investment decisions.