TLTD Profile
The FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund is designed to offer investors exposure to developed-market equities outside the United States, with a particular focus on companies exhibiting size and value characteristics. The fund tracks an index that emphasizes a tilt towards smaller and undervalued companies relative to the Morningstar Developed Markets ex-US Index. This approach seeks to capture potential excess returns associated with these factors, distinguishing itself from broader market indices by concentrating on specific investment styles.
The underlying index is a float-adjusted market-capitalization weighted benchmark that includes companies from developed markets excluding the U.S. It is constructed to reflect a higher exposure to the size and value factors compared to the broader Morningstar Developed Markets ex-US Index. This strategic tilt towards smaller companies and those trading at lower valuations is based on research suggesting that such stocks may offer enhanced long-term returns, aligning with the fund’s goal of providing differentiated performance relative to conventional developed market benchmarks.
To achieve its investment objective, the fund invests at least 80% of its total assets in the securities that are constituents of the index. This includes direct investments in the index’s equities as well as American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) that are based on the index’s securities. By focusing on these specific investments, the fund aims to deliver performance that closely mirrors the index, providing investors with targeted exposure to the size and value factors within developed markets outside the U.S.
The FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund offers a specialized investment approach for those seeking to enhance their portfolios with exposure to developed markets through a factor-based strategy. The fund’s focus on size and value factors provides a unique opportunity to potentially benefit from the investment characteristics associated with smaller and undervalued companies. Investors can gain diversified exposure to developed markets outside the U.S. while targeting specific factors that may offer enhanced return potential over the long term.
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