Three ETFs issued by Northern Trust’s FlexShares unit will shift their listings to the CBOE, the issuer reveal Monday. That trio includes the FlexShares US Quality Large Cap Index Fund (NasdaqGM: QLC).
QLC selects and weights companies based on management efficiency, profitability, and cash flow to determine quality, according to FlexShares. Management efficiency is a quantitative evaluation of a firm’s deployment of capital and its financing decision. Profitability scores help weed out firms with wider margins, which may be better positioned to grow. Lastly, cash flow signals the liquidity level of a company. Those with higher cash flows may be better situated to take advantage of potential opportunities or enjoy a financial cushion in downturns.
Also making the move to the CBOE is the FlexShares Credit‐Scored US Long Corporate Bond Index Fund (NasdaqGM: LKOR). LKOR tracks a fixed-income portfolio of corporate debt securities with a longer maturity selected based on a proprietary credit evaluation process.
Improving Liquidity And Transparency
LKOR excludes illiquid and smaller issuers to improve liquidity and transparency. Additionally, the fund targets company bonds that have a higher credit quality, lower risk of default and potential for higher yield and price appreciation. LKOR holds 186 bonds with a weighted average maturity of 23.52 years, according to issuer data.
The FlexShares STOXX Global ESG Impact Index Fund (NasdaqGM: ESGG) is the other FlexShares ETF moving to the CBOE, joining its counterpart, the FlexShares STOXX US ESG Impact Index Fund (CBOE: ESG). All three FlexShares ETF will shift to the CBOE on Oct. 9.
Related: As ESG Investing Evolves, So Does FlexShares ETF
ESGG is based on the STOXX Global ESG Impact Index, which screens companies scoring better with respect to a select set of ESG key performance indicators (KPIs), with the bottom 50% of such companies based on their ESG KPI scores excluded from the Index, as are companies that do not adhere to the UN Global Compact principles, are involved in controversial weapons or are coal miners.
“FlexShares’ Capital Markets team is dedicated to optimizing the ETF trading experience by consistently evaluating each product listing to select the top exchange for its funds,” according to a statement. “With this transfer, FlexShares is aiming to diversify the exchanges on which its ETFs trade. Many FlexShares ETFs remain listed on NYSE and Nasdaq, as FlexShares continues to consider them strong listing partners.”
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