Northern Trust Unveils International Dividend ETFs
April 18, 2013
Northern Trust Corp.(NASDAQGS:NTRS) has just added three U.S. listed exchange-traded funds (ETFs) to its lineup that target dividends from international securities.
The new funds were launched this week and now join its FlexShares ETF menu of what the company calls “quality dividend funds” or QDF.
“Income remains a key consideration for individual and institutional investors alike,” said Shundrawn Thomas, head of Northern Trust's Exchange Traded Funds Group. “Geopolitical, regulatory and market structure changes are driving a clear evolution in this area.”
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The new ETFs strive to meet their investment objective by focusing on quality and yield, but each has a slightly different approach to market volatility or beta:
--FlexShares International Quality Dividend Index Fund (NYSE:IQDF) – pursues a beta similar to that of the market while mitigating sector, industry and security concentration risks.
--FlexShares International Quality Dividend Defensive Index Fund (NYSE:IQDE) – pursues a beta less than the market, while mitigating sector, industry and security concentration risks.
--FlexShares International Quality Dividend Dynamic Index Fund (NYSE:IQDY) – pursues a beta greater than the market, while mitigating sector, industry and security concentration risks.
The ETFs employ Northern Trust’s proprietary Dividend Quality Score (DQS), which focuses on management efficiency, profitability and cash flow. According to the company’s research, these three factors may very well be reliable predictors of quality rather than historical metrics like dividend growth. One of the main goals behind this method is to achieve a more stable dividend income stream over time for investors.
“With the prior introduction of our domestic series of QDF funds, we were able to deliver a set of income generation strategies that could be applied to portfolios with a range of risk tolerances. Now with the release of our international series of QDF funds, we believe FlexShares is positioned as a global leader in this category,” added Thomas.
The new funds provide exposure to developed and emerging markets and are linked to proprietary benchmark indices developed by Northern Trust.
All three funds charge annual net expense ratios of 0.47% and are listed on the NYSE.
Including this latest launch, Northern Trust now manages 13 U.S. listed ETFs with approximately $4.5 billion in assets.
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