CHICAGO--(BUSINESS WIRE)--FlexShares® Exchange Traded Funds, sponsored and managed by Northern Trust, today introduced two new currency hedged ETFs that complement its developed market and emerging market tilt products - the FlexShares® Currency Hedged Morningstar® DM ex-US Factor Tilt IndexSM Fund (NYSE: TLDH) and the FlexShares® Currency Hedged Morningstar® EM Factor Tilt IndexSM Fund (NYSE: TLEH).
"International equity exposure is a core element of many portfolios seeking long-term growth as developed markets allow investors to expand their opportunity set beyond U.S. borders. Our research shows that employing a tilted approach to capturing size and value factors potentially adds value to global equity strategies,” said Shundrawn A. Thomas, head of Northern Trust's Funds and Managed Accounts Group. “Currency fluctuations, however, add complexity when implementing an international strategy, especially during times of monetary intervention. By hedging the currency exposure in a tilted strategy, the resulting portfolio may provide optimal exposure while reducing potential volatility from currency fluctuations."
FlexShares ETFs are designed to address the specific objectives of investors, such as growing assets, managing risk, generating income and managing liquidity. The new ETFs are:
Currency Hedged Morningstar® DM ex-US Factor Tilt IndexSM
FlexShares ® Currency Hedged Morningstar® DM ex-US Factor Tilt IndexSM ETF seeks to enhance exposure to international stock market equities by tilting the portfolio toward the long-term growth potential of the smaller-cap and value segments and hedging currency exposure. Designed to replace traditional market-weighted international equity products, the Fund applies a tilt to small-cap and value stocks using a multi-factor modeling approach that attempts to enhance portfolio risk/return characteristics. One-month currency forward contracts are used to reduce exposure to potential volatility in currencies with respect to the U.S.-dollar.
Currency Hedged Morningstar® EM Factor Tilt IndexSM
FlexShares® Currency Hedged Morningstar® EM Factor Tilt IndexSM ETF seeks to enhance exposure to emerging market equities by tilting the portfolio toward the long-term growth potential of the smaller-cap and value segments and hedging currency exposure. Designed to replace traditional market-weighted international equity products, the Fund applies a tilt to small-cap and value stocks using a multi-factor modeling approach that attempts to enhance portfolio risk/return characteristics. One-month currency forwards contracts are used to reduce exposure to potential volatility in currencies with respect to the US-dollar.
The underlying indices are the Morningstar® Developed Markets ex-US Factor Tilt Hedged IndexSM and the Morningstar® Emerging Markets Factor Tilt Hedged IndexSM, respectively. They are governed by transparent, objective rules for security selection, exclusion, rebalancing and adjustments for corporate actions. It is reconstituted on a semi-annual basis and rebalanced quarterly.
For more information, please visit www.flexshares.com.
Before investing, carefully consider the FlexShares investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by visiting www.flexshares.com. Read the prospectus carefully before you invest.
Foreside Fund Services, LLC, distributor.
FlexShares Exchange Traded Funds are designed to pursue specific investment goals across both passive and active strategies. FlexShares offers differentiated ETF strategies that improve and simplify the investment decision process for the long-term investor. For more information, please visit flexshares.com. Follow us on Twitter @FlexSharesETFs.
About Northern Trust
Northern Trust Corporation (NASDAQ: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has offices in the United States in 19 states and Washington, D.C., and 20 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2015, Northern Trust had assets under custody of US$6 trillion, and assets under management of US$887 billion. For more than 125 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at http://www.northerntrust.com/disclosures.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 17 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $170 billion in assets under advisement and management as of Sept. 30, 2015. The company has operations in 27 countries.
The FlexShares Morningstar ETFs are not sponsored, endorsed, sold or promoted by Morningstar, Inc. and Morningstar makes no representation regarding the advisability of investing in them.
An investment in FlexShares is subject to numerous risks, including possible loss of principal. Fund returns may not match the return of the respective indexes. The Funds are subject to the following principal risks: asset class; commodity; concentration; counterparty; currency; derivatives; dividend; emerging markets; equity securities; fluctuation of yield; foreign securities; geographic; income; industry concentration; inflation-protected securities; infrastructure-related companies; interest rate / maturity risk; issuer; large cap; management; market; market trading; mid cap stock; MLP; momentum; natural resources; new funds; non-diversification; passive investment; privatization; small cap stock; tracking error; value investing; and volatility risk. A full description of risks is in the prospectus.
In addition, the Funds are subject to commodity exposure risk, the risk of investing in economies that are susceptible to fluctuations in certain commodity markets. The Funds enter into foreign currency forward contracts designed to offset the Funds' currency exposure of non-U.S. dollar denominated securities included in the Underlying Index against the U.S. dollar, which may not be successful. Investments in foreign and emerging market securities involve certain risks such as currency volatility, political and social instability and reduced market liquidity. The Funds' investments are concentrated in the securities of issuers in a particular market, industry, sector or asset class. The Funds may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that market, industry, sector or asset class. The Funds may also invest in derivative instruments. Changes in the value of the derivative may not correlate with the underlying asset, rate or index and the Funds could lose more than the principal amount invested.