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Is FlexShares Quality Dividend Defensive ETF (QDEF) a Strong ETF Right Now?
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Launched on 12/14/2012, the FlexShares Quality Dividend Defensive ETF (QDEF - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Flexshares. QDEF has been able to amass assets over $445.48 million, making it one of the average sized ETFs in the Style Box - All Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the Northern Trust Quality Dividend Defensive Index.
The Northern Trust Quality Dividend Defensive 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 generally between 0.5 to 1.0 times that of the Northern Trust 1250 Index that 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 QDEF are 0.37%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.77%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For QDEF, it has heaviest allocation in the Information Technology sector --about 29.5% of the portfolio --while Healthcare and Financials round out the top three.
Taking into account individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL) accounts for about 6.32% of the fund's total assets, followed by Nvidia Corp Common Stock Usd 0.001 (NVDA) and Microsoft Corp Common Stock Usd 0.00000625 (MSFT).
QDEF's top 10 holdings account for about 37.02% of its total assets under management.
Performance and Risk
The ETF has gained about 7.36% and it's up approximately 13.87% so far this year and in the past one year (as of 07/14/2025), respectively. QDEF has traded between $62.50 and $75.33 during this last 52-week period.
The fund has a beta of 0.84 and standard deviation of 13.90% for the trailing three-year period, which makes QDEF a medium risk choice in this particular space. With about 128 holdings, it effectively diversifies company-specific risk .
Alternatives
FlexShares Quality Dividend Defensive 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 $71.71 billion in assets, Vanguard Total Stock Market ETF has $503.63 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 Defensive ETF (QDEF) a Strong ETF Right Now?
Launched on 12/14/2012, the FlexShares Quality Dividend Defensive ETF (QDEF - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Flexshares. QDEF has been able to amass assets over $445.48 million, making it one of the average sized ETFs in the Style Box - All Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the Northern Trust Quality Dividend Defensive Index.
The Northern Trust Quality Dividend Defensive 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 generally between 0.5 to 1.0 times that of the Northern Trust 1250 Index that 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 QDEF are 0.37%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.77%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For QDEF, it has heaviest allocation in the Information Technology sector --about 29.5% of the portfolio --while Healthcare and Financials round out the top three.
Taking into account individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL) accounts for about 6.32% of the fund's total assets, followed by Nvidia Corp Common Stock Usd 0.001 (NVDA) and Microsoft Corp Common Stock Usd 0.00000625 (MSFT).
QDEF's top 10 holdings account for about 37.02% of its total assets under management.
Performance and Risk
The ETF has gained about 7.36% and it's up approximately 13.87% so far this year and in the past one year (as of 07/14/2025), respectively. QDEF has traded between $62.50 and $75.33 during this last 52-week period.
The fund has a beta of 0.84 and standard deviation of 13.90% for the trailing three-year period, which makes QDEF a medium risk choice in this particular space. With about 128 holdings, it effectively diversifies company-specific risk .
Alternatives
FlexShares Quality Dividend Defensive 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 $71.71 billion in assets, Vanguard Total Stock Market ETF has $503.63 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.