FlexShares Plans ex-US Small-Cap/Value ETF
January 18, 2012
FlexShares, the ETF unit of Chicago-based Northern Trust, filed regulatory paperwork with the Securities and Exchange Commission to market an international version of a U.S. small cap and value tilt ETF it launched in September of last year.
The new FlexShares Morningstar Developed ex-US Markets Factor Tilt Index Fund targets broad developed-markets equities, excluding those in the United States, with a slight tilt to small-capitalization and value stocks, giving it a cache that a straight market-cap weighted fund wouldn’t have.
FlexShares said in the filing the new ETF will trade on Arca, the New York Stock Exchange’s electronic trading platform, under the symbol TLTD. It didn’t say how much the fund would cost.
The FlexShares Morningstar U.S. Market Factor Tilt Index Fund (NYSEArca: TILT), TLTD’s U.S.-focused counterpart, comes with a net annual expense ratio of 0.27 percent. The fund has gathered about $32 million in three months, according to data compiled by IndexUniverse.
The new non-U.S. fund will use a representative sampling approach to achieve its investment objectives, which means it won’t own all the stocks in the index.
Under normal circumstances the fund will invest at least 80 percent of its total assets in the securities of the underlying index, and in American depositary receipts and global depositary receipts that are based on stocks in the underlying index.
To help track its underlying index, the fund may also invest up to 20 percent of its assets in cash and cash equivalents including future contracts, options and forward currency contracts.