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Is FlexShares International Quality Dividend ETF (IQDF) a Strong ETF Right Now?
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The FlexShares International Quality Dividend ETF (IQDF - Free Report) made its debut on 04/12/2013, and is a smart beta exchange traded fund that provides broad exposure to the World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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.
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
Managed by Flexshares, IQDF has amassed assets over $551.90 million, making it one of the larger ETFs in the World ETFs. 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
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.
Operating expenses on an annual basis are 0.47% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 6.08%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Taking into account individual holdings, Bhp Group Ltd Common Stock Aud 0 (BHP - Free Report) accounts for about 2.94% of the fund's total assets, followed by Novo Nordisk A/s Common Stock Dkk 0.2 (NOVOb.CO) and Royal Bank Of Canada Common Stock Cad 0 (RY - Free Report) .
IQDF's top 10 holdings account for about 20.51% of its total assets under management.
Performance and Risk
The ETF return is roughly 19.24% and was up about 18.95% so far this year and in the past one year (as of 12/27/2023), respectively. IQDF has traded between $20.56 and $23.24 during this last 52-week period.
The fund has a beta of 0.85 and standard deviation of 15.55% for the trailing three-year period, which makes IQDF a medium risk choice in this particular space. With about 284 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares International Quality Dividend ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $27.05 million in assets, FlexShares International Quality Dividend Dynamic ETF has $75.09 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.
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Is FlexShares International Quality Dividend ETF (IQDF) a Strong ETF Right Now?
The FlexShares International Quality Dividend ETF (IQDF - Free Report) made its debut on 04/12/2013, and is a smart beta exchange traded fund that provides broad exposure to the World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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.
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
Managed by Flexshares, IQDF has amassed assets over $551.90 million, making it one of the larger ETFs in the World ETFs. 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
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.
Operating expenses on an annual basis are 0.47% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 6.08%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Taking into account individual holdings, Bhp Group Ltd Common Stock Aud 0 (BHP - Free Report) accounts for about 2.94% of the fund's total assets, followed by Novo Nordisk A/s Common Stock Dkk 0.2 (NOVOb.CO) and Royal Bank Of Canada Common Stock Cad 0 (RY - Free Report) .
IQDF's top 10 holdings account for about 20.51% of its total assets under management.
Performance and Risk
The ETF return is roughly 19.24% and was up about 18.95% so far this year and in the past one year (as of 12/27/2023), respectively. IQDF has traded between $20.56 and $23.24 during this last 52-week period.
The fund has a beta of 0.85 and standard deviation of 15.55% for the trailing three-year period, which makes IQDF a medium risk choice in this particular space. With about 284 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares International Quality Dividend ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $27.05 million in assets, FlexShares International Quality Dividend Dynamic ETF has $75.09 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.