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Is FlexShares Quality Dividend ETF (QDF) a Strong ETF Right Now?

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Launched on 12/14/2012, the FlexShares Quality Dividend ETF (QDF - 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?

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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

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

Because the fund has amassed over $1.97 billion, this makes it one of the larger ETFs in the Style Box - All Cap Blend. QDF is managed by Flexshares. QDF, before fees and expenses, 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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are 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 1.71%.

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.

This ETF has heaviest allocation in the Information Technology sector - about 35.9% of the portfolio. Industrials and Financials round out the top three.

Taking into account individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL) accounts for about 8.15% 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).

The top 10 holdings account for about 38.78% of total assets under management.

Performance and Risk

So far this year, QDF has added about 12.89%, and is up roughly 11.64% in the last one year (as of 11/20/2025). During this past 52-week period, the fund has traded between $59.99 and $81.10.

The fund has a beta of 0.93 and standard deviation of 14.36% for the trailing three-year period, which makes QDF a medium risk choice in this particular space. With about 126 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 $77.66 billion in assets, Vanguard Total Stock Market ETF has $546.85 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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