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Is FlexShares Quality Dividend Defensive ETF (QDEF) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Blend category of the market, the FlexShares Quality Dividend Defensive ETF (QDEF - Free Report) is a smart beta exchange traded fund launched on 12/14/2012.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
QDEF is managed by Flexshares, and this fund has amassed over $404.92 million, which makes it one of the average sized ETFs in the Style Box - All Cap Blend. QDEF, 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.37%.
It has a 12-month trailing dividend yield of 1.84%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 28.10% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL - Free Report) accounts for about 7.41% of total assets, followed by Nvidia Corp Common Stock Usd 0.001 (NVDA - Free Report) and Microsoft Corp Common Stock Usd 0.00000625 (MSFT - Free Report) .
QDEF's top 10 holdings account for about 34.85% of its total assets under management.
Performance and Risk
The ETF has added roughly 0.76% and was up about 22.95% so far this year and in the past one year (as of 01/07/2025), respectively. QDEF has traded between $59.08 and $73.73 during this last 52-week period.
The ETF has a beta of 0.90 and standard deviation of 14.22% for the trailing three-year period, making it a medium risk choice in the space. With about 132 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares Quality Dividend Defensive ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
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 $65.25 billion in assets, Vanguard Total Stock Market ETF has $459.96 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 Defensive ETF (QDEF) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - All Cap Blend category of the market, the FlexShares Quality Dividend Defensive ETF (QDEF - Free Report) is a smart beta exchange traded fund launched on 12/14/2012.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
QDEF is managed by Flexshares, and this fund has amassed over $404.92 million, which makes it one of the average sized ETFs in the Style Box - All Cap Blend. QDEF, 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.37%.
It has a 12-month trailing dividend yield of 1.84%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 28.10% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL - Free Report) accounts for about 7.41% of total assets, followed by Nvidia Corp Common Stock Usd 0.001 (NVDA - Free Report) and Microsoft Corp Common Stock Usd 0.00000625 (MSFT - Free Report) .
QDEF's top 10 holdings account for about 34.85% of its total assets under management.
Performance and Risk
The ETF has added roughly 0.76% and was up about 22.95% so far this year and in the past one year (as of 01/07/2025), respectively. QDEF has traded between $59.08 and $73.73 during this last 52-week period.
The ETF has a beta of 0.90 and standard deviation of 14.22% for the trailing three-year period, making it a medium risk choice in the space. With about 132 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares Quality Dividend Defensive ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
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 $65.25 billion in assets, Vanguard Total Stock Market ETF has $459.96 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.