FlexShares Plans Emerging Market Factor ETF

By
September 20, 2012
Share:

Related ETFs

Ticker Fund name
TILTFlexShares Morningstar U.S. Market Factor Tilt
Related ETF Lists
Total Market ETFs

FlexShares' planned ETF is another way to tap into emerging markets.

FlexShares, the ETF unit of Chicago-based Northern Trust, filed paperwork with the Securities and Exchange Commission to market an emerging markets version of a U.S. small-cap and value-tilt ETF it launched a year ago.

The FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (NYSEArca: TLTE) would replicate a Morningstar index that assigns more weight to small-cap and value stocks than would a traditional cap-weighted methodology. The underlying benchmark includes nearly 2,000 securities.

The fund, which is slated to cost a net of 0.65 percent in annual fees, would join FlexShares’ Morningstar U.S. Market Factor Tilt Index Fund (NYSEArca: TILT), which is built much in the same way, but focuses on U.S. equities.

TILT has gathered some $116 million since it came to market a year ago, and it has kept up pace with the broad stock market rally, with gains of more than 16 percent year-to-date.

Indeed, FlexShares seems to be making a strong push into the factor-based strategies, often called smart beta or intelligent beta strategies. Such smart beta products cherry-pick securities with certain characteristics with a view to managing risk the way an active manager might, only with rules-based indexes instead.

The company has recently filed paperwork to market an international developed-markets ex-U.S. version of TILT, TLTD, which is currently sitting in the regulatory pipeline.

The latest filing did not detail market capitalization screens or country exposure of the planned emerging market ETF, but did say its underlying benchmark rebalances quarterly and is reconstituted on a semiannual basis.

ETF.COM CHANNELS

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

International equity funds like 'IEMG' led inflows on Monday, May 18, as rising markets lifted U.S.-listed ETF assets to a record $2.174 trillion.

'SPY' and 'GLD' paced SSgA's issuer-leading outflows on Monday, May 18, as rising markets lifted total U.S.-listed ETF assets to a record $2.174 trillion.

ETF.COM ANALYST BLOGS

By Olly Ludwig

Yields will one day head higher, so is it time to get bond exposure outside the U.S.?

By Rachael Revesz

Stop dancing around the subject, call women ‘women’ and let’s be a more visible part of this industry.

By Olly Ludwig

It’s no secret that hedge funds love ETFs, but what’s less appreciated is that their love of ETFs will likely spell their demise.

By Olly Ludwig

Yes, bond yields are ticking higher these days, but it’s important to keep the whole yield-curve picture in mind.