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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?
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.
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.
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
QDF is managed by Flexshares, and this fund has amassed over $1.71 billion, which makes it one of the larger ETFs in the Style Box - All Cap Blend. Before fees and expenses, QDF 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 QDF 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 2.13%.
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.
Representing 31.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL - Free Report) accounts for about 9.29% of the fund's total assets, followed by Microsoft Corp Common Stock Usd 0.00000625 (MSFT - Free Report) and Johnson &no.38; Johnson Common Stock Usd 1 (JNJ - Free Report) .
QDF's top 10 holdings account for about 36.44% of its total assets under management.
Performance and Risk
So far this year, QDF has added about 2.71%, and is up about 16.13% in the last one year (as of 02/19/2024). During this past 52-week period, the fund has traded between $51.86 and $63.57.
The fund has a beta of 0.98 and standard deviation of 15.99% for the trailing three-year period, which makes QDF a medium risk choice in this particular space. With about 134 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 - Free Report) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI - Free Report) tracks CRSP US Total Market Index. IShares Core S&P Total U.S. Stock Market ETF has $51.84 billion in assets, Vanguard Total Stock Market ETF has $369.29 billion. ITOT has an expense ratio of 0.03% and VTI 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 - 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?
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?
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.
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.
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
QDF is managed by Flexshares, and this fund has amassed over $1.71 billion, which makes it one of the larger ETFs in the Style Box - All Cap Blend. Before fees and expenses, QDF 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 QDF 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 2.13%.
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.
Representing 31.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL - Free Report) accounts for about 9.29% of the fund's total assets, followed by Microsoft Corp Common Stock Usd 0.00000625 (MSFT - Free Report) and Johnson &no.38; Johnson Common Stock Usd 1 (JNJ - Free Report) .
QDF's top 10 holdings account for about 36.44% of its total assets under management.
Performance and Risk
So far this year, QDF has added about 2.71%, and is up about 16.13% in the last one year (as of 02/19/2024). During this past 52-week period, the fund has traded between $51.86 and $63.57.
The fund has a beta of 0.98 and standard deviation of 15.99% for the trailing three-year period, which makes QDF a medium risk choice in this particular space. With about 134 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 - Free Report) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI - Free Report) tracks CRSP US Total Market Index. IShares Core S&P Total U.S. Stock Market ETF has $51.84 billion in assets, Vanguard Total Stock Market ETF has $369.29 billion. ITOT has an expense ratio of 0.03% and VTI 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 - 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.