The fund attempts to outperform traditional real estate indices via global exposure to listed, non-mortgage real estate investment trusts and operating companies that emphasize stable, long-term capital growth at an attractive price.
The fund employs Northern Trust Corporation’s Quality Score, a proprietary quantitative methodology that uses fundamental data to evaluate the strength of a company’s financial health and growth prospects. The Quality Score index, similar to the methodology used in FlexShares’ Quality Dividend product suite, incorporates factors of management efficiency, profitability and cash flow.
The aim of the fund is to outperform legacy real estate indices in upward and downward trending markets, during central bank tightening and easing cycles. It uses a combination of current and historical valuation metrics.
“Research shows that a high quality, value-focused portfolio of real estate securities may offer attractive returns with less volatility compared to traditional capitalization-weighted global real estate indices,” says Shundrawn Thomas, head of Northern Trust’s FlexShares Exchange Traded Funds Group. “This fund provides investors a disciplined approach for investing in global real estate equities.”