Understanding Volatility and the FlexShares ESG Process

Posted by David Partain on Sep 4, 2017 8:30:00 AM

For some investors, considering environmental, social or governance (ESG) factors as part of the investment process may be based upon more than a desire to “do good." Investors will sometimes use key performance indicators (KPIs), which are quantitative and qualitative metrics reported by public companies as part of their regulatory filings, which demonstrate how effectively a company is achieving its business objectives, which often include ESG considerations. ESG in our opinion is as much about managing risk and boosting investment returns as it is about any altruistic motivations.

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Tags: ETF

Understanding Key Performance Indicators

Posted by FlexShares on Aug 28, 2017 8:30:00 AM

Key performance indictors (KPIs) are quantitative and qualitative metrics reported by public companies as part of their regulatory filings. Many KPIs relate to ESG factors. As ESG investing continues to become more mainstream, investment managers have begun to use ESG-based KPIs as part of their screening process in building ESG indexes and funds. ESG-based KPIs span environmental, social, and governance factors. Here are some examples.

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Tags: ETF

Incorporating ESG as Equals

Posted by FlexShares on Aug 14, 2017 8:30:00 AM

ESG investing, or investing informed by facts about a company's environmental, social, and corporate governance policies and practices, is a hot topic in investing circles. ESG considerations have moved into the investing mainstream. How are investors, their advisors, and corporate managers integrating ESG factors?

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Tags: ETF

The Historical Processes of ESG Investing

Posted by FlexShares on Aug 7, 2017 8:30:00 AM

Environmental, social, and governance (ESG) investing puts a new spin on an old concept: investing with a moral, ethical, or social bent.

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Tags: ETF

Explaining the G: Putting Governance in ESG

Posted by FlexShares on Jul 31, 2017 8:30:00 AM

Of the three variables — environmental, social practices and corporate governance — that comprise an ESG investment, corporate governance may often require the most explanation.

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Tags: ETF

Explaining the S: Putting Social in ESG

Posted by FlexShares on Jul 24, 2017 8:30:00 AM

Environmental, social, and governance (ESG) investing is increasingly taking center stage among investors whose intention is to build a portfolio that aligns with their values. As such, ESG investing is of increasing interest to the financial advisors who serve these clients. Of the three legs of the ESG stool, the social aspect often proves difficult to define. Gauging how well a particular company fits the social requirements of an ESG strategy begins with a deeper understanding of both the activities "social" encompasses, as well as the outcomes they're intended to produce.

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Tags: ETF

ETFs vs. ETNs - There's a Difference

Posted by FlexShares on Jun 26, 2017 8:30:00 AM

The popularity of ETF investing has given rise to the growth of other exchange-traded products (ETPs). One such vehicle is the ETN, or exchange traded note. The number of ETFs in the marketplace and the value of their underlying assets are still exponentially higher than for ETNs. While there are many similarities between ETFs and ETNs, investors need to understand the differences, too.

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Tags: ETF

Risk Management Using Strategic Beta ETFs

Posted by FlexShares on Jun 19, 2017 8:35:50 AM

The debate over the benefits of active management–in the form of generating portfolio performance over an index–has been going on for decades.

A 2017 study from S&P of over 2,800 funds over a rolling period of 15 years found that over 80% of large-cap active equity managers did not beat benchmark market indexes. 1 This study included indexes tied to small-cap, mid-cap, emerging market, and international equities. The study also found that manager selection also did not improve market performance results over indexing.

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Tags: ETF

Investing in Real Assets via ETFs

Posted by FlexShares on Jun 13, 2017 9:04:10 AM

Real assets are different than financial assets like stocks and bonds. Real assets include gold and other precious metals, commodities, real estate, and oil, among others. These assets have value due to their physical properties rather than as a financial vehicle. Our analysis shows that real assets are generally not highly correlated with stocks and bonds, thus potentially adding diversification to a portfolio. Asset correlation is a measure of how investments move in relation to one another and when. When assets move in the same direction at the same time, they are considered to be highly correlated. When one asset tends to move up when the other goes down, the two assets are considered to be negatively correlated.

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Tags: ETF

How to Effectively Educate Your Bigger is Better Clients About the FlexShares ETF Difference

Posted by FlexShares on Jun 5, 2017 9:04:11 AM

We believe FlexShares ETFs beneficial investor offerings include our growing innovative fund product lineup. Partnering with seasoned index investment professionals using quantitative research, our alternatively weighted indices and mixedasset classes provide investors with funds that are designed to help meet a variety of investor financial goals.

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Tags: ETF

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