Northern Trust today announced the fifth anniversary of the launch of FlexShares® Exchange Traded Funds, designed to provide targeted investment outcomes and risk-adjusted returns. Since the launch, the suite of ETFs has attracted more than $10 billion in assets.
FlexShares debuted four funds in September 2011: FlexShares Morningstar U.S. Market Factor Tilt Index Fund (TILT), FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR), FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (TDTT) and FlexShares iBoxx 5-Year Target Duration TIPS Index Fund (TDTF).
The first four funds are part of FlexShares' innovative lineup with 23 of 24 funds in alternatively weighted and factor weighted index ETF strategies. To commemorate the five-year mark for FlexShares, Shundrawn Thomas, head of Northern Trust’s Funds and Managed Accounts Group, and other members of the FlexShares team are scheduled to ring the opening bell at the New York Stock Exchange (NYSE) on Oct. 17.
“Both advisors and institutional investors have been drawn to the unique FlexShares approach, called ‘Flexible Indexing,’ which spans the entire process from concept and index construction through product development and fund management,” Thomas said. “Our investor-centric approach differentiates FlexShares: We focus on the fundamental investor objectives of growing assets, managing risks, generating income and providing liquidity.
“Investors possess real goals,” he said. “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.”
ETFs are among the fastest growing product categories in the U.S. asset management industry, with 68 new sponsors entering the market over the last 5 years. In 2016, according to Morningstar, growth in the U.S. market increased more than 18 percent from the prior year to $2.4 trillion in assets as of Aug. 31, 2016. In the midst of this rapid growth, FlexShares has raised over $10.3 billion in assets from September 2011 to August 2016.
Details on the four funds celebrating their five-year anniversary include:
FlexShares® Morningstar® Global Upstream Natural Resources Index Fund (GUNR)
The Fund tracks the Morningstar® Global Upstream Natural Resources Index which seeks investment results through the identification of upstream natural resources equities based on a Morningstar industry classification system while balancing exposure to three traditional and two nontraditional natural resource sectors (30 percent each in Agriculture, Energy, and Metals, and 5 percent each in Timber and Water).
FlexShares® Morningstar® U.S. Market Factor Tilt Index Fund (TILT)
The Fund tracks the Morningstar® U.S. Market Factor Tilt Index which seeks to improve absolute total return by “tilting” the portfolio to the small-cap and value segments of the U.S. equity market while providing exposure to 99.5 percent of the investable market and minimizing turnover.
FlexShares® iBoxx® 3-Year Target Duration TIPS Index Fund (TDTT)
The Fund tracks the iBoxx® 3-Year Target Duration TIPS Index which seeks to provide investment results through combining the inflation hedging attributes of TIPS with duration management while investing in maturities from 1 to 10 years to reach a modified adjusted duration of approximately 3 years.
FlexShares® iBoxx® 5-Year Target Duration TIPS Index Fund (TDTF)
The Fund tracks the iBoxx® 5-Year Target Duration TIPS Index which seeks to provide investment results through combining the inflation hedging attributes of TIPS with duration management while investing in maturities from 3 to 20 years to reach a modified adjusted duration of approximately 5 years.
For more information, please visit www.flexshares.com.
FlexShares Exchange Traded Funds are designed to pursue specific investment goals across both passive and active strategies. FlexShares offers differentiated ETF strategies that improve and simplify the investment decision process for the long-term investor.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, and affluent families and individuals. Founded in Chicago in 1889, Northern Trust has offices in the United States in 19 states and Washington, D.C., and 22 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of June 30, 2016, Northern Trust had assets under custody of US$6.4 trillion, and assets under management of US$906 billion. For more than 125 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/disclosures.
Before investing, carefully consider the FlexShares investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting www.flexshares.com. Read the prospectus carefully before you invest. Foreside Fund Services, LLC, distributor.
An investment in FlexShares is subject to numerous risks, including possible loss of principal. Fund returns may not match the return of the respective indexes. The Funds are subject to the following principal risks: asset class; commodity; concentration; counterparty; currency; derivatives; dividend; emerging markets; equity securities; fluctuation of yield; foreign securities; geographic; income; industry concentration; inflation-protected securities; infrastructure-related companies; interest rate / maturity risk; issuer; large cap; management; market; market trading; mid cap stock; MLP; momentum; natural resources; new funds; non-diversification; passive investment; privatization; small cap stock; tracking error; value investing; and volatility risk. A full description of risks is in the prospectus.
FlexShares iBoxx 3-Year Target Duration TIPS Fund (TDTT) and the FlexShares iBoxx 5-Year Target Duration TIPS Index Fund (TDTF) may invest in derivative instruments. Changes in the value of the derivative may not correlate with the underlying asset, rate or index and the Funds could lose more than the principal amount invested. The Funds are subject to fluctuation of yield risk, income risk, inflation protected security risk and interest rate/maturity risk. The Funds are non-diversified meaning the Funds’ performance may depend on the performance of a small number of issuers because the Funds may invest a large percentage of its assets in securities issued by or representing a small number of issuers.
Duration is a measure of the sensitivity of a fixed income security’s price (or principal value) to a change in interest rates. Duration is expressed as a number of years and allows bonds of different maturities and coupon rates to be directly compared. The higher the duration, the greater the magnitude of price change as interest rates change. Modified adjusted duration (MAD) is an estimate of the market duration of a specific TIPS investment. MAD provides a way for investors to compare the interest rate sensitivity of TIPS to other fixed income securities, based on inflation expectations.
FlexShares Morningstar U.S. Market Factor Tilt Index Fund (TILT) is subject to concentration risk. The Fund's investments are concentrated in the securities of issuers in a particular market, industry, sector or asset class. The Fund may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that market, industry, and sector or asset class. The Fund may also invest in derivative instruments. Changes in the value of the derivative may not correlate with the underlying asset, rate or index and the Fund could lose more than the principal amount invested.
FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR) is subject to the global natural resource industry. As the demand for or prices of natural resources increase, the Fund's equity investment generally would be expected to also increase. Conversely, declines in demand for or prices of natural resources generally would be expected to cause declines in value of such equity securities. Such declines may occur quickly and without warning and may negatively impact your investment in the Fund.