CHICAGO--(BUSINESS WIRE)--Northern Trust’s FlexShares® Exchange Traded Funds announced today the expansion of its fixed-income exchange traded fund roster with the launch of an ETF that uniquely screens high yield corporate debt: FlexShares High Yield Value-Scored Bond Index Fund (NYSE: HYGV).
“As high yield bonds have become a mainstream fixed-income asset, we believe fund providers have sacrificed their original focus on yield generation,” said Mark Carlson, Senior Investment Strategist at FlexShares. “Our new value-scored high yield fund offers investors an innovative approach to income generation by focusing on maximizing the value factor to enhance total return potential, while also placing a renewed focus on the ‘yielding’ aspect of high yield.”
The FlexShares High Yield Value-Scored Bond Index Fund utilizes Northern Trust’s proprietary credit scoring model to maximize factor inputs for value while screening for quality and liquidity risk. The fundamentals of the bond issuers are then evaluated against current market conditions, and the lowest quality issuers are removed from the index.
“The addition of the FlexShares High Yield Value-Scored Bond Index Fund will enhance our suite of efficient fixed-income funds, providing investors a diverse set of income generating products within the FlexShares lineup,” said Darek Wojnar, Head of Northern Trust’s Funds and Managed Accounts Group. “We believe our deep fixed-income expertise and selective approach to product development will help our clients meet their investment goals and potentially deliver income in a dynamic market environment where traditional income sources have become less predictable.”
Fixed-income ETFs are increasingly attracting investor interest, becoming a more frequent tool for investors who are looking for diversification, regular income generation and risk averse options. In April 2018, fixed-income ETFs saw record inflows of $15.3 billion, bringing total fixed-income ETF assets to about $600 billion. Since inception in 2011, FlexShares has accrued over $16.8 billion in assets under management, with approximately $3.3 billion in its fixed-income suite.
FlexShares Exchange Traded Funds are designed to pursue specific investment goals across both passive and active strategies. FlexShares offers differentiated ETF strategies that can improve and simplify the investment decision process for the long-term investor. 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 23 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2018, Northern Trust had assets under custody/administration of US$10.8 trillion, and assets under management of US$1.2 trillion. 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 https://www.northerntrust.com/disclosures.
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.
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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.
FlexShares High Yield Value-Scored Bond Index Fund (HYGV) invests in high yield securities, which are considered highly speculative, and is subject to greater credit risk, price volatility and risk of loss than if it invested primarily in investment grade securities. There is a higher risk that an issuer will be unable to meet principal and interest rate payments on an obligation and may also be subject to more substantial price volatility due to such factors as interest rate sensitivity, market perception of credit worthiness of and general market liquidity than if the fund invested in investment grade securities. The fund may invest in distressed securities, which generally exposes the fund to risks in addition to investing non-investment grade securities. These risks can adversely impact the Fund’s return and net asset value. When interest rates rise, the value of corporate debt can be expected to decline. The value of the securities in the Fund’s portfolio may fluctuate, sometimes rapidly and unpredictably at a greater level than the overall market. The Fund may invest in derivative instruments. Changes in the value of the derivative may not correlate with the underlying asset, rate or index and the Fund could lose more than the principal amount invested. The Fund will concentrate its investments (i.e., hold 25% or more of its total assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated. The fund is also subject to the risk that the Fund’s investment in companies whose securities are believed to be undervalued will not appreciate in value as anticipated.