IQDE Profile
The FlexShares International Quality Dividend Defensive Index Fund is designed to provide exposure to high-quality, dividend-paying companies outside the United States. The fund seeks to reflect the performance of a specific underlying index that focuses on companies demonstrating superior financial strength and stability compared to the broader Northern Trust International Large Cap Index. This emphasis on financial health makes the fund particularly attractive to investors seeking stable income and defensive characteristics in their international equity investments. The fund’s investment strategy prioritizes companies that are likely to maintain or grow their dividends, thereby offering potential for both income and long-term capital appreciation.
At least 80% of the fund’s total assets are invested in the securities that comprise its underlying index, which includes large-cap companies from developed and emerging markets. The fund also invests in American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs), which are certificates representing shares in foreign companies that are traded on U.S. or international exchanges. This strategy allows investors to gain exposure to high-quality international companies while benefiting from the liquidity and accessibility of these depositary receipts. The focus on quality dividends ensures that the fund targets companies with consistent earnings and strong balance sheets, which can be particularly valuable in volatile markets.
The underlying index of the FlexShares International Quality Dividend Defensive Index Fund is carefully constructed to select companies that not only offer attractive dividend yields but also demonstrate lower volatility and defensive characteristics. This defensive approach means that the fund is likely to include companies in sectors that are less sensitive to economic cycles, such as consumer staples, utilities, and healthcare. By focusing on these sectors, the fund aims to provide more stable returns during periods of market uncertainty, making it a potential choice for conservative investors looking for international exposure.
The fund’s investment approach is grounded in Northern Trust’s proprietary quality and dividend yield metrics, which assess companies based on factors such as profitability, earnings stability, and efficient capital management. By selecting companies that rank highly on these metrics, the fund seeks to minimize risk while maximizing potential returns. This approach is particularly beneficial for investors looking to balance the pursuit of income with the need for capital preservation. Overall, the FlexShares International Quality Dividend Defensive Index Fund offers a robust solution for those seeking to invest in international markets with an emphasis on quality, stability, and defensive characteristics.
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