The top three ETFs in FlexShares’ line-up that raked in the newest assets in March are largely funds that offer high income, demonstrating investors’ desire for yield.
The FlexShares iBoxx 3 Year Target Duration TIPS Index Fund (TDTT) took in the most flows in March, taking in $455 million over one month and $566 million year-to-date, according to ETF Database.
TDTT, which has $2.05 billion in assets under management, offers exposure to short-term TIPS, bonds issued by the U.S. government that feature a principal that adjusts based on certain measures of inflation.
TDTT is often used for protecting portfolios against anticipated upticks in inflationary pressures, given that it features securities that are relatively close to maturity and that exhibit minimal credit risk; it serves as a “risk-off” tool for those anticipating chaos in the markets, according to ETF Database.
Second place is taken by the $8.25 billion FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR), which took in $229 million in March inflows, totaling $318 million in year-to-date inflows.
GUNR is one of the more unique products in the Commodity Producers Equities ETFdb Category; the fund focuses on the “upstream” portion of the natural resources supply chain, maintaining meaningful exposure to the water and timber industries along with positions in companies engaged in energy production, metals extraction, and agriculture, according to ETF Database.
GUNR is tilted heavily towards mega cap stocks, including Big Oil and major mining firms. GUNR can help investors gain “indirect” exposure to commodity prices. According to ETF Database, because the profitability of the component stocks tends to move in unison with spot prices of the underlying resources, this fund should perform well when natural resource prices are on the rise.
The FlexShares High Yield Value-Score Bond Index Fund (HYGV) saw $155 million in inflows in March, putting it in third place. The fund has $865 million in total assets and has taken in $256 million in year-to-date inflows, driven by investors looking to add income while avoiding the riskiest junk debt.
HYGV tracks a proprietary index of high-yield bonds screened for value and quality. HYGV’s methodology rates issuers based on factors like valuation, solvency, management efficiency, and profitability. The securities are screened for liquidity, and the portfolio imposes caps on individual bonds, issuers, sectors, duration, turnover, and credit score, according to ETF Database.
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