We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is FlexShares International Quality Dividend ETF (IQDF) a Strong ETF Right Now?
Read MoreHide Full Article
Designed to provide broad exposure to the World ETFs category of the market, the FlexShares International Quality Dividend ETF (IQDF - Free Report) is a smart beta exchange traded fund launched on 04/12/2013.
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $540.96 million, this makes it one of the larger ETFs in the World ETFs. IQDF is managed by Flexshares. This particular fund seeks to match the performance of the Northern Trust International Quality Dividend Index before fees and expenses.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for IQDF are 0.47%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.71%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Royal Bank Of Canada Common Stock Cad 0 (RY - Free Report) accounts for about 2.87% of total assets, followed by Bhp Group Ltd (BHP - Free Report) and Roche Holding Ag Common Stock Chf 0 (ROG - Free Report) .
Performance and Risk
The ETF has gained about 7.24% so far this year and is down about -3.14% in the last one year (as of 04/03/2023). In the past 52-week period, it has traded between $17.72 and $24.35.
The fund has a beta of 0.85 and standard deviation of 17.59% for the trailing three-year period, which makes IQDF a medium risk choice in this particular space. With about 268 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares International Quality Dividend ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $34.05 million in assets, FlexShares International Quality Dividend Dynamic ETF has $112.96 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is FlexShares International Quality Dividend ETF (IQDF) a Strong ETF Right Now?
Designed to provide broad exposure to the World ETFs category of the market, the FlexShares International Quality Dividend ETF (IQDF - Free Report) is a smart beta exchange traded fund launched on 04/12/2013.
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $540.96 million, this makes it one of the larger ETFs in the World ETFs. IQDF is managed by Flexshares. This particular fund seeks to match the performance of the Northern Trust International Quality Dividend Index before fees and expenses.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for IQDF are 0.47%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.71%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Royal Bank Of Canada Common Stock Cad 0 (RY - Free Report) accounts for about 2.87% of total assets, followed by Bhp Group Ltd (BHP - Free Report) and Roche Holding Ag Common Stock Chf 0 (ROG - Free Report) .
Performance and Risk
The ETF has gained about 7.24% so far this year and is down about -3.14% in the last one year (as of 04/03/2023). In the past 52-week period, it has traded between $17.72 and $24.35.
The fund has a beta of 0.85 and standard deviation of 17.59% for the trailing three-year period, which makes IQDF a medium risk choice in this particular space. With about 268 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares International Quality Dividend ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $34.05 million in assets, FlexShares International Quality Dividend Dynamic ETF has $112.96 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.