FlexShares this week slashed fees on a U.S. large-cap ETF in its stable of factor ETFs.
The expense ratio for the FlexShares US Quality Large Cap Index Fund (QLC) dropped from 0.32% to 0.25%, effective July 11, according to the firm. QLC is best suited for investors seeking to maximize U.S. large-cap exposure to the quality, value, and momentum factors.
“With increased market volatility in 2022, advisors are seeking out equity strategies that can provide relative stability. While many such strategies are constructed differently, costs are still a key criteria for selection. The fee cut for QLC should help boost overall demand,” Todd Rosenbluth, head of research at VettaFi, said.
The fee reduction has placed QLC among the least expensive offerings in the ETF Database Large Cap Growth Equities and the FactSet Equity: U.S. – Large Cap categories, which charge an average expense ratio of 37 basis points and 57 basis points, respectively, according to VettaFi.
QLC tracks the Northern Trust Quality Large Cap Index, which is an index of large-cap U.S. companies that scores companies based on quality metrics like profitability, management efficiency, and cash flow, according to VettaFi. The methodology weeds out the lowest-scoring companies.
The fund comprises 177 securities. The top 10 holdings in QLC as of July 11 include Apple Inc. (AAPL, 8.15%), Microsoft Corporation (MSFT, 4.60%), Alphabet Inc. Class A (GOOGL, 3.18%), Alphabet Inc. Class C (GOOG, 3.09%), Johnson & Johnson (JNJ, 2.65%), Berkshire Hathaway Inc. Class B (BRK.B, 2.16%), Amazon.com Inc. (AMZN, 1.78%), Procter & Gamble Company (PG, 1.78%), Pfizer Inc. (PFE, 1.65%), and Visa Inc. Class A (V, 1.63%), according to VettaFi.
Incepted in 2015, the fund has $144 million in assets under management. The fund has seen $21 million in net inflows year-to-date. The fund’s annual dividend yield is 0.96%, according to VettaFi.
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