The FlexShares exchange traded fund suite of targeted investment outcomes and risk-adjusted returns celebrated its fifth anniversary.
FlexShares first came out with four funds in September 2011, including the FlexShares Morningstar U.S. Market Factor Tilt Index Fund (TILT) , FlexShares Morningstar Global Upstream Natural Resource Index Fund (GUNR) , FlexShares iBoxx 5-Year Target Duration TIPS Index Fund Profile (TDTF) and FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (TDTT) .
“We focus on the fundamental investor objectives of growing assets, managing risks, generating income and providing liquidity,” Shundrawn Thomas, head of Northern Trust’s Funds and Managed Accounts Group, said in a press release.
TILT tries to reflect the performance of the Morningstar U.S. Market Factor Tilt Index, which provides enhanced exposure to U.S. equities by tilting the portfolio toward long-term growth potential of small-cap and value stocks. By delving deeper than other market indices, the Morningstar Index seeks to capture more of the size premium while still avoiding the very bottom of the market that may have illiquidity issues.
GUNR provides exposure to the rising demand for natural resources and tracks global companies in the energy, metals and agriculture sectors, while maintaining a core exposure to the timberlands and water resources sectors.
Trending on ETF Trends
TDTF tracks inflation-hedging TIPS and seeks to provide targeted duration exposure through changing interest rate and economic cycles. Specifically, the fund includes a target average duration of approximately five years and maturity dates of at least three years but not more than 20 years. The ETF shows a 12-month yield of 1.14% and a 5.15 year adjusted duration.
TDTT also provides exposure to inflation-hedging TIPs but targets averaged duration of about three years, with maturity dates of at least one year but not more than ten years. The fund has a 0.73% 12-month yield and a 3.05 year duration.
“Investors possess real goals,” Thomas added. “We have always started with those fundamental investment objectives because that’s what matters. We seek to provide targeted investment solutions that do not simply track indices, but deliver outcomes.”
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