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Is FlexShares Quality Dividend ETF (QDF) a Strong ETF Right Now?
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The FlexShares Quality Dividend ETF (QDF - Free Report) made its debut on 12/14/2012, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is sponsored by Flexshares. It has amassed assets over $1.89 billion, making it one of the larger ETFs in the Style Box - All Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Northern Trust Quality Dividend Index.
The Northern Trust Quality Dividend Index is designed to provide exposure to a high-quality income-oriented portfolio of long-only U.S. equity securities, with an emphasis on long-term capital growth and a targeted overall beta that is similar to that of the Northern Trust 1250 Index and the Index are selected based on expected dividend payment and fundamental factors.
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.
Annual operating expenses for this ETF are 0.37%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.83%.
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.
QDF's heaviest allocation is in the Information Technology sector, which is about 32.4% of the portfolio. Its Financials and Industrials round out the top three.
Looking at individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL) accounts for about 7.05% of total assets, followed by Nvidia Corp Common Stock Usd 0.001 (NVDA) and Microsoft Corp Common Stock Usd 0.00000625 (MSFT).
The top 10 holdings account for about 37.72% of total assets under management.
Performance and Risk
The ETF has added about 6.39% so far this year and it's up approximately 13.3% in the last one year (as of 07/07/2025). In the past 52-week period, it has traded between $59.99 and $74.52
QDF has a beta of 0.92 and standard deviation of 16.03% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 140 holdings, it effectively diversifies company-specific risk .
Alternatives
FlexShares Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Core S&P Total U.S. Stock Market ETF (ITOT) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $71.14 billion in assets, Vanguard Total Stock Market ETF has $504.93 billion. ITOT has an expense ratio of 0.03% and VTI changes 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 - All 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 Quality Dividend ETF (QDF) a Strong ETF Right Now?
The FlexShares Quality Dividend ETF (QDF - Free Report) made its debut on 12/14/2012, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is sponsored by Flexshares. It has amassed assets over $1.89 billion, making it one of the larger ETFs in the Style Box - All Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Northern Trust Quality Dividend Index.
The Northern Trust Quality Dividend Index is designed to provide exposure to a high-quality income-oriented portfolio of long-only U.S. equity securities, with an emphasis on long-term capital growth and a targeted overall beta that is similar to that of the Northern Trust 1250 Index and the Index are selected based on expected dividend payment and fundamental factors.
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.
Annual operating expenses for this ETF are 0.37%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.83%.
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.
QDF's heaviest allocation is in the Information Technology sector, which is about 32.4% of the portfolio. Its Financials and Industrials round out the top three.
Looking at individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL) accounts for about 7.05% of total assets, followed by Nvidia Corp Common Stock Usd 0.001 (NVDA) and Microsoft Corp Common Stock Usd 0.00000625 (MSFT).
The top 10 holdings account for about 37.72% of total assets under management.
Performance and Risk
The ETF has added about 6.39% so far this year and it's up approximately 13.3% in the last one year (as of 07/07/2025). In the past 52-week period, it has traded between $59.99 and $74.52
QDF has a beta of 0.92 and standard deviation of 16.03% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 140 holdings, it effectively diversifies company-specific risk .
Alternatives
FlexShares Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Core S&P Total U.S. Stock Market ETF (ITOT) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $71.14 billion in assets, Vanguard Total Stock Market ETF has $504.93 billion. ITOT has an expense ratio of 0.03% and VTI changes 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 - All 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.