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Is FlexShares International Quality Dividend ETF (IQDF) a Strong ETF Right Now?
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Making its debut on 04/12/2013, smart beta exchange traded fund FlexShares International Quality Dividend ETF (IQDF - Free Report) provides investors broad exposure to the World ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Flexshares, and has been able to amass over $590 million, which makes it one of the larger ETFs in the World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Northern Trust International Quality Dividend Index.
The Northern Trust International Quality Dividend Index is designed to provide exposure to a high-quality income-oriented portfolio of long-only international securities issued by non-U.S.-based companies, with an emphasis on long-term capital growth and a targeted overall beta that is similar to that of the Northern Trust International Large Cap Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.47% for IQDF, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.47%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Taiwan Semiconductor Manufacturing Co Ltd Common accounts for about 2.17% of the fund's total assets, followed by L'oreal Sa Common Stock Eur 0.2 (OR - Free Report) and Roche Holding Ag Common Stock Chf 0 (ROG - Free Report) .
Its top 10 holdings account for approximately 2.17% of IQDF's total assets under management.
Performance and Risk
Year-to-date, the FlexShares International Quality Dividend ETF has lost about -8.31% so far, and is down about -4.47% over the last 12 months (as of 03/17/2022). IQDF has traded between $22.39 and $27.61 in this past 52-week period.
IQDF has a beta of 0.86 and standard deviation of 20.51% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 316 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares International Quality Dividend ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
FlexShares International Quality Dividend Defensive ETF (IQDE - Free Report) tracks Northern Trust International Quality Dividend Defensive Index and the FlexShares International Quality Dividend Dynamic ETF (IQDY - Free Report) tracks Northern Trust International Quality Dividend Dynamic Index. FlexShares International Quality Dividend Defensive ETF has $66.69 million in assets, FlexShares International Quality Dividend Dynamic ETF has $81.90 million. IQDE has an expense ratio of 0.47% and IQDY charges 0.47%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is FlexShares International Quality Dividend ETF (IQDF) a Strong ETF Right Now?
Making its debut on 04/12/2013, smart beta exchange traded fund FlexShares International Quality Dividend ETF (IQDF - Free Report) provides investors broad exposure to the World ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Flexshares, and has been able to amass over $590 million, which makes it one of the larger ETFs in the World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Northern Trust International Quality Dividend Index.
The Northern Trust International Quality Dividend Index is designed to provide exposure to a high-quality income-oriented portfolio of long-only international securities issued by non-U.S.-based companies, with an emphasis on long-term capital growth and a targeted overall beta that is similar to that of the Northern Trust International Large Cap Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.47% for IQDF, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.47%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Taiwan Semiconductor Manufacturing Co Ltd Common accounts for about 2.17% of the fund's total assets, followed by L'oreal Sa Common Stock Eur 0.2 (OR - Free Report) and Roche Holding Ag Common Stock Chf 0 (ROG - Free Report) .
Its top 10 holdings account for approximately 2.17% of IQDF's total assets under management.
Performance and Risk
Year-to-date, the FlexShares International Quality Dividend ETF has lost about -8.31% so far, and is down about -4.47% over the last 12 months (as of 03/17/2022). IQDF has traded between $22.39 and $27.61 in this past 52-week period.
IQDF has a beta of 0.86 and standard deviation of 20.51% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 316 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares International Quality Dividend ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
FlexShares International Quality Dividend Defensive ETF (IQDE - Free Report) tracks Northern Trust International Quality Dividend Defensive Index and the FlexShares International Quality Dividend Dynamic ETF (IQDY - Free Report) tracks Northern Trust International Quality Dividend Dynamic Index. FlexShares International Quality Dividend Defensive ETF has $66.69 million in assets, FlexShares International Quality Dividend Dynamic ETF has $81.90 million. IQDE has an expense ratio of 0.47% and IQDY charges 0.47%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.