Over-exposure to larger stocks could be robbing investors of opportunities in other market capitalization equities, which is why FlexShares offers three exchange traded funds (ETFs) that can tilt investors’ portfolios in any, right direction.
First up is the FlexShares Morningstar US Market Factors Tilt Index Fund (TILT), which seeks investment results that correspond generally to the price and yield performance of the Morningstar® US Market Factor Tilt Index. The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to size and value factors relative to the Morningstar US Market Index, a float-adjusted market-capitalization weighted index of U.S.-incorporated large-, mid-, small-, and micro-capitalization companies.
“The FlexShares Morningstar U.S. Market Factor Tilt Index Fund (TILT) is intended to provide deep exposure to the investable U.S. equity universe while potentially providing investors a vehicle to track the performance of the broad U.S. equity market,” a FlexShares Fund Focus article explained.
“Strategic reweighting in the underlying index then is designed to provide a tilt toward the small-cap and value stocks that other market-weighted indices may have historically missed,” the Fund Focus added. “The resulting fund seeks to reflect the experience of investing in the broad equity market, while reducing the risk of overconcentration in large-cap stocks and pursuing the excess return potential from the value and small size factors.”
An International Tilt
Getting international holds its own nuances when navigating markets outside of the States. Flexshares offers two funds that also use factor-based exposure.
For one, there’s the FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund (TLTD). TLTD seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar® Developed Markets ex-US Factor Tilt Index.
The index reflects the performance of a selection of companies that, in aggregate, possess greater exposure to size and value factors relative to the Morningstar Developed Markets ex-US Index. The index is a float-adjusted market-capitalization weighted index of companies incorporated in developed-market countries, excluding the U.S.
For emerging markets exposure, there’s the FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (TLTE). TLTE seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar® Emerging Markets Factor Tilt Index.
The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to size and value factors relative to the Morningstar Emerging Markets Index. The index is a float-adjusted market-capitalization weighted index of companies incorporated in emerging-market countries.
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