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Northern Trust launches FlexShares family of ETFs


Northern Trust has launched FlexShares, a new family of exchange traded funds based on indexes created and maintained by Morningstar, Inc and Markit. Four ETFs are now available, each designed to provide flexibility to construct, allocate and manage portfolios according to real-world goals.

The FlexShares funds available on the New York Stock Exchange include:

FlexShares Morningstar Global Upstream Natural Resources Index Fund
FlexShares Morningstar US Market Factor Tilt Index Fund
FlexShares iBoxx 3-Year Target Duration TIPS Index Fund
FlexShares iBoxx 5-Year Target Duration TIPS Index Fund

"FlexShares represent Northern Trust’s global expertise in asset management, investment solutions and risk management," says Shundrawn Thomas (pictured), head of Northern Trust’s Exchange Traded Funds Group. "With $684 billion in assets under management, Northern Trust has deep connections to sophisticated investors, and FlexShares reflect our insights into investor needs in an evolving marketplace. FlexShares are designed to help construct and manage portfolios that seek to achieve investor goals, while offering all the traditional benefits of ETFs."

FlexShares Morningstar Global Upstream Natural Resources Index Fund seeks to offer balanced exposure to rising global demand for natural resources, emphasising companies with business interests in the early stages of the resource supply chain. "Exposure to natural resource commodities is an investment strategy tool for investors to participate in the rising prices of raw materials because of increased global demand," Thomas said. "At a time when natural resources are gaining in strategic importance to nations, companies and investors, an allocation to these assets can be a useful component of a diversified investment portfolio. We worked with Morningstar, leveraging its deep research and index construction experience, to create an index with efficient, global exposure to a broad array of upstream-focused natural resource-related companies."

FlexShares Morningstar US Market Factor Tilt Index Fund [TILT] seeks to offer an alternative exposure to the broad US stock market by tilting the portfolio to capture the size and value premiums in the equity market. "Morningstar’s index captures 99.5 per cent of the US market," Thomas says. "With a rules-based tilt toward small cap and value, the FlexShares Morningstar US Market Factor Tilt Index ETF counterbalances the inherent bias toward large-growth companies embedded in market-weighted mutual funds."

FlexShares iBoxx 3-Year Target Duration TIPS [TDTT] and FlexShares iBoxx 5-Year Target Duration TIPS Index Funds [TDTF] seek to provide investors access to Treasury Inflation Protected Securities with stable duration exposure through changing interest rate and economic cycles. The funds’ secondary goal of income generation may also help diversify portfolios. iBoxx is a family of independent bond indexes provided by Markit, a leading financial information services company. "The FlexShares TIPS ETFs precisely target TIPS durations, seeking to provide investors with more efficient inflation-hedging strategies than market-weighted investment products," Thomas says. "Using indexes developed by Markit, these are the first ETFs to offer investors a passively managed, liquid investment vehicle that effectively removes duration variability in a TIPS portfolio."

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