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FlexShares launches two currency hedged Factor Tilt Index ETFs

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FlexShares has launched two new currency hedged ETFs that complement its developed market and emerging market tilt products – the Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund and the Currency Hedged Morningstar EM Factor Tilt Index Fund.

"International equity exposure is a core element of many portfolios seeking long-term growth as developed markets allow investors to expand their opportunity set beyond US borders. Our research shows that employing a tilted approach to capturing size and value factors potentially adds value to global equity strategies,” says Shundrawn A Thomas, head of Northern Trust's Funds and Managed Accounts Group. “Currency fluctuations, however, add complexity when implementing an international strategy, especially during times of monetary intervention. By hedging the currency exposure in a tilted strategy, the resulting portfolio may provide optimal exposure while reducing potential volatility from currency fluctuations."
 
FlexShares ETFs are designed to address the specific objectives of investors, such as growing assets, managing risk, generating income and managing liquidity.
 
The FlexShares® Currency Hedged Morningstar DM ex-US Factor Tilt IndexSM Fund (TLDH) seeks to enhance exposure to international stock market equities by tilting the portfolio toward the long-term growth potential of the smaller-cap and value segments and hedging currency exposure. Designed to replace traditional market-weighted international equity products, the Fund applies a tilt to small-cap and value stocks using a multi-factor modelling approach that attempts to enhance portfolio risk/return characteristics. One-month currency forward contracts are used to reduce exposure to potential volatility in currencies with respect to the US-dollar.
 
The FlexShares Currency Hedged Morningstar EM Factor Tilt Index ETF seeks to enhance exposure to emerging market equities by tilting the portfolio toward the long-term growth potential of the smaller-cap and value segments and hedging currency exposure. Designed to replace traditional market-weighted international equity products, the Fund applies a tilt to small-cap and value stocks using a multi-factor modellng approach that attempts to enhance portfolio risk/return characteristics. One-month currency forwards contracts are used to reduce exposure to potential volatility in currencies with respect to the US-dollar.

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