TLTE Profile
The FlexShares Morningstar Emerging Markets Factor Tilt Index Fund aims to capture the performance of emerging market equities with a pronounced focus on size and value factors. The fund follows an index that is strategically designed to provide greater exposure to smaller and undervalued companies compared to the Morningstar Emerging Markets Index. This tilt towards size and value factors is intended to leverage the potential for enhanced returns by emphasizing these specific investment characteristics in emerging markets.
The underlying index is a float-adjusted market-capitalization weighted benchmark that includes equities from emerging-market countries. It is crafted to reflect a higher exposure to size and value factors than the broader Morningstar Emerging Markets Index. This methodology is based on the principle that smaller and undervalued stocks in emerging markets may offer superior long-term performance, and the fund’s strategy is tailored to harness these potential benefits through its focused investment approach.
To achieve its investment goal, the fund commits at least 80% of its total assets to securities included in the index. This includes direct investments in the equities that make up the index, as well as American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) representing these index securities. By aligning its portfolio with the index, the fund seeks to deliver returns that closely track the performance of emerging market companies with a specific emphasis on size and value characteristics.
The FlexShares Morningstar Emerging Markets Factor Tilt Index Fund offers investors a targeted approach to emerging markets exposure by focusing on companies with size and value attributes. This factor-based strategy is designed to provide differentiated performance relative to the broader emerging markets index, potentially capturing excess returns associated with smaller and undervalued stocks. The fund’s investment approach provides a nuanced way for investors to gain exposure to emerging markets while targeting specific investment factors.
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