FlexShares Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund

C000162188 Fund Overview

FlexShares Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund is a US ETF managed by Flexshares Trust, categorised as Money Market. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.

• Type: US ETF
• Manager: Flexshares Trust
• Category: Money Market
• Assets under management: $6.13M
• 1-year return: -9.7%
• SEC CIK: 0001491978
• SEC series ID: S000051516
• Share class ID: C000162188

C000162188 Investment Objective and Strategy

FlexShares Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Flexshares Trust.

Investment objective

The Fund 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 Hedged Index SM (the “Underlying Index”).

Principal investment strategy

The Underlying Index reflects the performance of a selection of equity securities designed to provide broad exposure to the global developed equities markets, excluding the U.S., with (i) increased exposure (or a tilt) to small-capitalization stocks and value stocks and (ii) currency risk of the securities included in the Index hedged against the U.S. dollar on a monthly basis. Small-capitalization and value stocks in the Underlying Index are weighted slightly more than such stocks would be in an index that is solely market-capitalization weighted, all as determined by Morningstar, Inc. (the Index Provider) pursuant to its index methodology. In addition to tracking the performance of the Underlying Index, the Investment Adviser seeks to minimize portfolio turnover and tax inefficiencies. The Underlying Index is governed by published, objective rules for security selection, exclusion, rebalancing and adjustments for corporate actions and is reconstituted on a semi-annual basis and is rebalanced quarterly.

As of December 31, 2017, the Underlying Index was comprised of 3,320 issues with market capitalizations ranging from $44.5 million to $266.7 billion. As of December 31, 2017, the top five countries (by weighting) represented in the Underlying Index were Japan (26.9%), Great Britain (16.2%), Canada (8.8%), Germany (7.5%), and France (7.1%). The composition of the Underlying Index will change over time. Currently, the Fund achieves its investment objective by investing a substantial portion of its assets in the FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund (an Underlying Fund). The Fund may also invest directly in the securities included in the Underlying Index. NTI uses a passive or indexing approach to try to achieve the Funds investment objective. Unlike many investment companies, the Fund does not try to beat the index it tracks and does not seek temporary defensive positions when markets decline or appear overvalued.

NTI uses a representative sampling strategy to manage the Fund and the Underlying Fund. Representative sampling is investing in a representative sample of securities that collectively has an investment profile similar to the Underlying Index. The Fund or the Underlying Fund may or may not hold all of the securities that are included in its underlying index. The Fund reserves the right to invest in substantially all of the securities in its underlying index in approximately the same proportions (i.e., replication) if NTI determines that it is in the best interest of the Fund. Under normal circumstances, the Fund will invest at least 80% of its total assets (exclusive of collateral held from securities lending) in the securities of the Underlying Index (including indirect investments through the Underlying Fund) and in American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) (collectively Depositary Receipts) based on the securities in the Underlying Index.

The Fund may also invest up to 20% of its assets in cash and cash equivalents, including shares of money market funds advised by NTI or its affiliates, futures contracts, options on futures contracts, and foreign currency forward contracts, as well as securities not included in the Underlying Index, but which NTI believes will help the Fund track its Underlying Index. Components of the Underlying Index include equity securities and foreign currency forward contracts (both deliverable and non-deliverable) designed to hedge against non-U.S. currency fluctuations. The notional exposure to foreign currency forward contracts (deliverable and non-deliverable) generally will be a short position that hedges the currency risk of the equity portfolio. The Underlying Index uses a methodology that sells forward the total value of the non-U.S.

dollar denominated securities included in the Underlying Index at a one-month forward rate to effectively create a hedge against fluctuations in the relative value of the component currencies in relation to the U.S. dollar. The hedge is reset on a monthly basis. The Underlying Index is designed to have higher returns than an equivalent unhedged investment when the component currencies are weakening relative to the U.S. dollar. Conversely, the Underlying Index is designed to have lower returns than an equivalent unhedged investment when the component currencies are rising relative to the U.S. dollar. In order to replicate the hedging component of the Underlying Index, the Fund intends to enter into foreign currency forward contracts designed to offset the Funds exposure to the component currencies.

A foreign currency forward contract is a contract between two parties to buy or sell a specified amount of a specific currency in the future at an agreed upon exchange rate. The Funds exposure to foreign currency forward contracts is based on the aggregate exposure of the Fund to the component currencies. While this exposure is designed to minimize the impact of currency fluctuations on Fund returns, it does not necessarily eliminate the Funds exposure to the component currencies. The return of the foreign currency forward contracts may not perfectly offset the actual fluctuations between the component currencies and the U.S. dollar. The Fund may use non-deliverable foreign currency forward contracts (NDFs) to execute its hedging transactions. A non-deliverable foreign currency forward contract is a contract where there is no physical settlement of two currencies at maturity.

Rather, based on the movement of the currencies, a net cash settlement will be made by one party to the other. The Underlying Index is sponsored by the Index Provider, an organization that is independent of the Fund and NTI. The Index Provider determines the composition and relative weightings of the securities in the Underlying Index and publishes information regarding the market value of the Underlying Index. The Fund is non-diversified under the Investment Company Act of 1940, as amended, and may invest more of its assets in fewer issuers than diversified funds. The Fund may lend securities representing up to one-third of the value of the Funds total assets (including the value of the collateral received). Industry Concentration Policy. The Fund will concentrate its investments (i.e., hold 25% or more of its total assets) in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.

C000162188 Performance

Total returns for C000162188 (as of 2026-10-01), from SEC filings.

C000162188 Risk Information

Risk metrics for C000162188, derived from monthly returns in SEC filings.

• 1-year volatility (annualised): 21.4%

C000162188 Costs and Fees

C000162188 costs about $44 per $10,000 invested per year in fund expenses.

• Net expense ratio: 0.44%
• Gross expense ratio: 0.84%
• Portfolio turnover: 4%
• Brokerage commissions: 0.45 bps of average net assets (SEC N-CEN)

C000162188 Cashflows

Over the 12 months to 2020-10, FlexShares Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund had net outflows of $1.07M, from monthly SEC N-PORT filings.

C000162188 Debt Constituents

No individual debt constituents are reported in FlexShares Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund's latest SEC N-PORT filing.

C000162188 Prospectus and SEC Filings

Official FlexShares Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.

• Prospectus (485BPOS) — filed 2020-03-13
• Prospectus (485BPOS) — filed 2019-03-13
• Prospectus (485BPOS) — filed 2018-03-14
• Portfolio holdings (N-PORT) — filed 2020-12-29
• Portfolio holdings (N-PORT) — filed 2020-09-24
• Portfolio holdings (N-PORT) — filed 2020-06-25
• Annual census (N-CEN) — filed 2021-01-14
• Annual census (N-CEN) — filed 2020-01-14

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Data Sources

ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.