feig

Fixed Income

Income Generation

FlexShares ESG & Climate Investment Grade Corporate Core Index Fund

For investors seeking to align their ESG & climate values within core investment grade.

The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust ESG & Climate Investment Grade U.S. Corporate Core Index (the “Underlying Index”).

$40.69 (0.26%)

$40.46

0.12%

$49.51/$37.85

OBJECTIVE AND STRATEGY

1:40

Transcript
Northern Trust ESG & Climate Investment Grade U.S. Corporate Core Index

Diagraming the index process

A Turnkey Approach for Creating Sustainable Portfolios

In depth discussion of the index and fund process

INDEX

The Northern Trust ESG & Climate Investment Grade U.S. Corporate Core Index is designed to measure the performance of a diversified universe of US-dollar denominated bonds of companies with investment grade credit quality, that also possess environmental, social, and governance (ESG) characteristics.

Index Methodology

FlexShares ESG & Climate Investment Grade Corporate Core Index Fund (FEIG) is a passively managed fund that invests in United States fixed income securities and use a representative sampling strategy to track its underlying index. Use of a representative sampling strategy creates tracking risk where the Fund’s performance could vary substantially from the performance of the underlying index along with the risk of high portfolio turnover. Northern Trust does not attempt to take defensive positions in any market conditions, including declining markets.

ESG Investment Risk is the risk that because the Index Provider includes and excludes issuers and assigns weights to issuers in the Underlying Index by applying non-financial factors, the Fund may underperform the broader equity market or other funds that do or do not use ESG investment criteria. Although the Underlying Index is designed to measure a portfolio of companies with certain ESG characteristics, there is no assurance that the Underlying Index or Fund will be comprised of such securities or that companies that have historically exhibited such characteristics will continue to exhibit such characteristics.

Concentration Risk is the risk that, to the extent the Fund’s investments are concentrated in the securities of issuers in a particular region, country, market, industry, sector or asset class, the Fund may be subject to increased price volatility. Authorized Participant Concentration Risk is the risk that the Fund may be adversely affected because it has a limited number of  institutions that act as authorized participants. Derivatives Risk is the risk that the use of futures and options on futures may pose risks in addition to and greater than those associated with investing directly in securities and other instruments, may be illiquid or less liquid, more volatile, more difficult to value and leveraged so that small changes in the value of the underlying instrument may produce disproportionate losses to the Fund.

Non Diversification Risk is the risk that Fund performance may depend on the performance of a small number of issuers because the Fund may invest a large percentage of its assets in securities issued by or representing a small number of issuers. New Fund Risk is the risk that the Fund will not grow to or maintain an economically viable size, in which case it may experience greater tracking error to its Underlying Index than it otherwise would at higher asset levels, or it could ultimately liquidate without shareholder approval.

Corporate Bond Risk is the risk the Fund faces because it invests primarily in bonds issued by corporations.  Income Risk is the risk that the Fund’s income may decline when interest rates fall.  LIBOR Risk is the risk from the expected discontinuation of the publication of the London Interbank Offered Rate (LIBOR),which many debt securities, derivatives and other financial instruments use as the reference or benchmark rate for interest rate calculations, at the end of June 2023.  Liquidity Risk is the risk that certain portfolio securities may be less liquid than others, which may make them difficult or impossible to sell at the time and the price that the Fund would like, adversely affecting the value of the Fund’s investments and its returns.

High Portfolio Turnover Risk is the risk that active and frequent trading of the Fund’s portfolio securities may result in increased transaction costs to the Fund.  Tracking Error Risk is the risk that the Fund’s performance may vary substantially from the performance of the Underlying Index. The Fund’s performance may vary from the performance of the Underlying Index for a number of reasons including that the Fund incurs operating expenses that the Underlying Index does not and that the Fund accepts custom baskets. Fixed Income Securities Risk is the risk that the values of the fixed income securities owned by the Fund may be more volatile and under perform other asset classes and the general securities markets. Passive Investment Risk is the risk that the Fund is not actively managed.

The Northern Trust ESG & Climate Investment Grade U.S. Corporate Core Index is the intellectual property (including registered trademarks) of Northern Trust and/or its licensors ("Licensors"), which is used under license. The securities based on the Index are in no way sponsored, endorsed, sold or promoted by Northern Trust and its Licensors and neither of the Licensors shall have any liability with respect thereto.

All data provided by: Northern Trust, J.P. Morgan, Refinitiv and Morningstar.