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The Rise of FlexShares ETFs


Northern Trust’s (NTRS) FlexShares unit is not the oldest issuer of exchange traded funds. Rather, it is one of the newer kids on the ETF block.

The oldest members of the FlexShares lineup, a group that includes the FlexShares Morningstar U.S. Market Factor Tilt Index ETF (TILT) and the FlexShares Morningstar Global Upstream Natural Resource Index Fund (GUNR) , will not turn three until September. Yet FlexShares has been able to leverage of a lineup currently comprised of just 15 ETFs into almost $7.4 billion in assets under management. [FlexShares Introduces Global Real Estate ETF]

GUNR is “ one of the more unique products in the space. It serves as a very good long-term hedge for inflation in a portfolio,” said said Shundrawn A. Thomas, global head of Northern Trust’s ETFs, in an interview with Marie Beerens of Investor’s Business Daily.

With $2.8 billion in assets under management, GUNR is one of the largest FlexShares ETFs. One of the firm’s newest additions, the FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA) , debuted in October and already has $116.2 million in assets.

“ When you look at infrastructure companies, they track really well to inflation. The reason in part being when you think about some of the underlying investments, such as a road or a toll bridge, often the way that they earn their revenues are tied to inflation-pegged metrics, like CPI and the like,” Thomas told IBD. [Spotlight on Global Infrastructure ETF]

About two-thirds of FlexShares ETFs have over $100 million in assets under management and some of reached that milestone in short order. For example, the FlexShares International Quality Dividend Index Fund (IQDF) has amassed over $135 in AUM in just 11 months of trading. [International Dividend ETFs Merit Consideration]

IQDF has a weighted average dividend yield of 5.56%, according to FlexShares data. The fund primarily focuses on developed markets with the U.K. and Japan combining for over 27% of the ETF’s weight. IQDF focuses on fundamental factors, such as profitability, solid management and reliable cash flow.

FlexShares Morningstar Global Upstream Natural Resource Index Fund

ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.