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Is FlexShares US Quality Large Cap ETF (QLC) a Strong ETF Right Now?
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The FlexShares US Quality Large Cap ETF (QLC - Free Report) made its debut on 09/23/2015, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 $460.30 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Blend. QLC is managed by Flexshares. QLC, before fees and expenses, seeks to match the performance of the Northern Trust Quality Large Cap Index.
The Northern Trust Quality Large Cap Index is designed to measure the performance of a universe of large capitalization securities which demonstrate characteristics of better quality, attractive valuation and positive momentum.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for QLC are 0.25%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.01%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 32.70% of the portfolio. Financials and Telecom round out the top three.
Taking into account individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL - Free Report) accounts for about 6.75% of the fund's total assets, followed by Nvidia Corp Common Stock Usd 0.001 (NVDA - Free Report) and Microsoft Corp Common Stock Usd 0.00000625 (MSFT - Free Report) .
Its top 10 holdings account for approximately 34.52% of QLC's total assets under management.
Performance and Risk
The ETF has added roughly 0.92% so far this year and is up about 13.19% in the last one year (as of 05/23/2025). In the past 52-week period, it has traded between $56.84 and $69.86.
The fund has a beta of 0.99 and standard deviation of 17.68% for the trailing three-year period, which makes QLC a medium risk choice in this particular space. With about 166 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares US Quality Large Cap ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO - Free Report) tracks S&P 500 Index. SPDR S&P 500 ETF has $597.90 billion in assets, Vanguard S&P 500 ETF has $640.70 billion. SPY has an expense ratio of 0.09% and VOO charges 0.03%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
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 US Quality Large Cap ETF (QLC) a Strong ETF Right Now?
The FlexShares US Quality Large Cap ETF (QLC - Free Report) made its debut on 09/23/2015, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 $460.30 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Blend. QLC is managed by Flexshares. QLC, before fees and expenses, seeks to match the performance of the Northern Trust Quality Large Cap Index.
The Northern Trust Quality Large Cap Index is designed to measure the performance of a universe of large capitalization securities which demonstrate characteristics of better quality, attractive valuation and positive momentum.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for QLC are 0.25%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.01%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 32.70% of the portfolio. Financials and Telecom round out the top three.
Taking into account individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL - Free Report) accounts for about 6.75% of the fund's total assets, followed by Nvidia Corp Common Stock Usd 0.001 (NVDA - Free Report) and Microsoft Corp Common Stock Usd 0.00000625 (MSFT - Free Report) .
Its top 10 holdings account for approximately 34.52% of QLC's total assets under management.
Performance and Risk
The ETF has added roughly 0.92% so far this year and is up about 13.19% in the last one year (as of 05/23/2025). In the past 52-week period, it has traded between $56.84 and $69.86.
The fund has a beta of 0.99 and standard deviation of 17.68% for the trailing three-year period, which makes QLC a medium risk choice in this particular space. With about 166 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares US Quality Large Cap ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO - Free Report) tracks S&P 500 Index. SPDR S&P 500 ETF has $597.90 billion in assets, Vanguard S&P 500 ETF has $640.70 billion. SPY has an expense ratio of 0.09% and VOO charges 0.03%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
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.