INDEX STRATEGYMorningstar Emerging Markets Factor Tilt Index
Diagraming the index process
The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Morningstar Emerging Markets Factor Tilt Index (Underlying Index).
The Morningstar Emerging Markets Factor Tilt IndexSM measures the performance of stocks located in emerging countries across the world (as defined by Morningstar) with increased exposure to small-capitalization and value stocks. Stocks that are deemed to be small capitalization or small value have an overweighting in the index compared to their weight in a corresponding market-capitalization-weighted index. Likewise, stocks designated as "large" or "growth" stocks have underweighting compared to a standard market-capitalization weighting.
FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (TLTE) is passively managed and uses 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. It is subject to concentration risk. The Fund's investments are concentrated in the securities of issuers in a particular country, market, industry, sector or asset class. Investments in foreign market securities involve certain risks such as currency volatility, political and social instability and reduced market liquidity. Investments in Emerging markets may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that country, market, industry, sector or asset class. The Fund may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that country, market, industry, sector or asset class. The Fund may also invest in derivative instruments. Changes in the value of the derivative may not correlate with the underlying asset, rate or index and the Fund could lose more than the principal amount invested.
The Morningstar Emerging Markets Factor Tilt Index is the intellectual property (including registered trademarks) of Morningstar 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 Morningstar 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.