Advisors and investors can turn to exchange traded funds that target quality stocks to capture attractive returns over time. Along those lines, it is worth noting the quality factor is one of the most revered and studied investment factors.

Dividend exchange traded fund investors who are seeking a stable return, along with exposure to the growing U.S. markets, should stick to quality instead of chasing after yields. The FlexShares Quality Dividend Index Fund (NYSEArca: QDF) is a prime example of an ETF that emphasizes both quality and dividends.

QDF emphasizes the quality factor, of which a company’s ability to generate free cash and dividend growth and stability are integral tenants. QDF tries to reflect the performance of the Northern Trust Quality Dividend Index, which holds high-quality income-oriented U.S. companies with a targeted overall beta similar to the Northern Trust 1250 Index, or the parent index. QDF’s quality emphasis implies a safer payout and more room for potential dividend growth. [Dividend ETF Asserts Itself]

Another element that has been critical to QDF’s success that is the FlexShares emphasis on management efficiency and a company’s ability to generate cash. Focusing on return on assets and return on capital, derivatives of the quality factor, over more prosaic measures such as dividend increase streaks, QDF and its brethren ETFs have handsomely outperformed some highly popular dividend ETFs since coming to market in December 2012. [Dividend ETF Shows its Strength]

QDF’s “beta of 0.91 suggests a lower risk ETF but valuations are getting stretched. One would expect large dividend paying companies to carry lower valuations due to the mature, slow growth nature of their businesses. The Quality Dividend ETF, however, carries a P/E of over 19. That’s comparable to other dividend ETFs in the space while providing a slightly higher yield – the Quality Dividend yields 2.8%,” according to a Seeking Alpha analysis of the ETF.