For investors seeking a core portfolio that leans toward capturing the potential performance advantage of US small cap and value stocks
Investors seeking capital appreciation may look to invest in products that mimic general market indexes in an attempt to capture the overall growth in the market. One of the more common approaches is through a market-weighted index fund, which often means investors own companies in proportion to their size in the market. That can mean potentially higher exposure toward speculative growth and even larger companies.
But research by Eugene Fama and Ken French in 1992 found that size and value were important factors to consider in judging portfolio performance. Their research showed that the level of exposure to value and small capitalization stocks, alongside beta, explained 90% or more of returns. This demonstrates that there can be a potential advantage to “tilting” a core equity portfolio to smaller cap and value stocks.
The FlexShares Morningstar US Market Factor Tilt Index suite of funds are engineered to provide deep exposure to the broad US equity market, while seeking to take advantage of this persistent, longer-term small cap and value performance advantage.
To learn more about how the FlexShares Morningstar US Market Factor Tilt Index (TILT) attempts to achieve this in a rules-based process - download our white paper today.
FlexShares offers an array of ETFs, designed for all types of investors. Visit our website to learn more.
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IMPORTANT INFORMATION
Before investing, carefully consider the FlexShares investment objectives, risks, charges and expenses. This and other information is in the prospectus and a summary prospectus, copies of which may be obtained by visiting www.flexshares.com. Read the prospectus carefully before you invest.
Foreside Fund Services, LLC, distributor.
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. A full description of risks is in the prospectus.
FlexShares Morningstar U.S. Market Factor Tilt Index Fund (TILT) is passively managed and uses a representative sampling strategy to track its underlying index. Use of a representative sampling strategy creates tracking risk where the Fund’s performance could vary substantially from the performance of the underlying index along with the risk of high portfolio turnover. It is subject to concentration risk. The Fund's investments are concentrated in the securities of issuers in a particular market, industry, sector or asset class. The Fund 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 Fund 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 Fund could lose more than the principal amount invested.
The Morningstar U.S. Market Factor Tilt Index is the intellectual property (including registered trademarks) of Morningstar and/or its licensors ("Licensors"), which is used under license. The securities based on the Index are in no way sponsored, endorsed, sold or promoted by Morningstar and its Licensors and neither of the Licensors shall have any liability with respect thereto.