ETF Research Center

The FlexShares US Quality Large Cap Index Fund ETF tracks an index of the highest quality large-caps, as defined by Northern Trust's proprietary scoring model.

FUND BASICS
Category	US Equities
Fund Sponsor	Northern Trust
Website	www.flexshares.com
Inception date	Sep 24, 2015
Assets (mns)	$52
Currency	USD
Expense ratio	32 bp
Distributions	Quarterly

FUND STRUCTURE
Regulation	Open-End Investment Company
Custodian
Weighting	Proprietary
Index replication
Uses derivatives	No
Options available	No

SECTOR BREAKDOWN

CONSTITUENT BREAKDOWN
No. of constituents	141
Wgt avg mkt cap (mns)	$217,795
Large cap (>$10bn)	95.6%
Mid cap ($2-10bn)	4.4%
Small cap (<$2bn)	0.0%
Developed mkts	100.0%
Emerging mkts	0.0%

TOP TEN HOLDINGS
Total	24.0 %
APPLE INC	5.3 %
MICROSOFT CORP	2.7 %
JOHNSON & JOHNSON	2.4 %
HOME DEPOT INC	2.2 %
CHEVRON CORP	2.1 %
CITIGROUP INC	2.1 %
CISCO SYSTEMS INC	1.9 %
AMGEN INC	1.8 %
BROADCOM INC.	1.8 %
ORACLE CORP	1.7 %

TOP COUNTRY EXPOSURE
	UNITED STATES	92.8 %
	IRELAND	3.8 %
	BRITAIN	1.2 %
	NETHERLANDS	0.3 %
	ISRAEL	0.2 %

HISTORICAL PERFORMANCE info

	Custom date range	Compare to
	thru

Standardized Annual Returns (thru October 31)
Year-to-date	1 year	5 years	10 years	Since Incep.
16.9%	5.1%	--	--	10.4%

Market Correlations
versus...	Beta	R-squared
S&P500	1.03	92%
MSCI EAFE	0.87	56%
MSCI Emg. Mkts.	0.58	41%

Technical Indicators
Recent close	$35.37
30d moving avg.	$34.36
Annualized volatility	13.0%
Short interest (ETF)	0.0%
Relative strength (RSI)	65

Liquidity measures
Avg. volume (thou.)	9
Turnover	0.6%
Bid/Ask (% of price)	0.11%
ADV underlying (mns)	$61,410

Distributions

FINDING ALTERNATIVE FUNDS

Below is a list of 20 potential alternatives to the FlexShares US Quality Large Cap ETF based on the alternatives' overlap in portfolio holdings with QLC. Consider funds with lower expense ratios and/or higher ALTAR Score™ ratings as possible alternatives.

Benchmark ticker:

QLC

Expense:

32 bp

ALTAR Score™:

6.6%

ALTERNATIVE ETFs BASED ON OVERLAP WITH QLC
Ticker	Fund Name	Overlap¹ vs QLC (%)	Expense ratio (bp)	Savings vs QLC (bp)	ALTAR Score™ (%)	ALTAR vs QLC (%)
QDF	FlexShares Quality Dividend	44.2	37	-5	6.9	+0.4
DIVB	iShares U.S. Dividend & Buyback	44.0	25	7	6.7	+0.1
QDYN	FlexShares Quality Dividend Dynamic	42.0	37	-5	6.7	+0.2
FVAL	Fidelity Value Factor	40.7	29	3	8.2	+1.6
QARP	Xtrackers Russell 1000 US QARP	40.6	19	13	6.5	-0.1
GSLC	Goldman Sachs ActiveBeta U.S. Large Cap Equity	40.0	9	23	6.4	-0.1
IWL	iShares Russell Top 200	39.7	15	17	5.7	-0.8
QUS	SPDR MSCI USA Quality Mix	39.4	15	17	6.0	-0.5
MGC	Vanguard Mega Cap 300 ETF	38.9	7	25	5.9	-0.7
OEF	iShares S&P 100	38.9	20	12	5.5	-1.0
JQUA	JPMorgan U.S. Quality Factor	38.9	12	20	5.9	-0.7
EPS	WisdomTree Earnings 500	38.8	8	24	7.0	+0.4
PBP	Invesco S&P 500 Buy/Write	38.7	49	-17	5.6	-1.0
JUST	Goldman Sachs JUST U.S. Large Cap Equity	38.5	20	12	5.7	-0.9
HSPX	Global X S&P 500 Covered Call	38.0	65	-33	5.4	-1.1
SNPE	Xtrackers S&P 500 ESG	37.9	11	21	5.8	-0.8
ESGU	iShares MSCI USA ESG Optimized	37.9	15	17	5.6	-0.9
PLC	Principal U.S. Large-Cap Multi-Factor Core Index	37.8	15	17	5.5	-1.1
SPY	S&P 500 SPDR	37.8	9	23	5.9	-0.6
IVV	iShares Core S&P 500	37.7	4	28	6.0	-0.6

¹Overlap is the percentage of holdings by weight that are identical. For example, if Fund A has a 2% position in Apple, Inc. (AAPL) and Fund B has a 5% position, their overlapping position in AAPL is 2%.

Content on this tab for subscribers only**

RESULTS & ESTIMATES

	2014	2015	2016	2017	2018	2019E	2020E
Sales per share	**	**	**	**	**	**	**
Earnings per share	**	**	**	**	**	**	**
Dividends per share	**	**	**	**	**	**	**
Book value per share	**	**	**	**	**	**	**

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

OTHER FUNDAMENTAL METRICS

Long term EPS growth est.	**%		Debt-to-equity	**x
Asset turnover	**%		Assets-to-equity	**x

Return on equity

Revision activity*

*Six months ago = 100

Net margins

Compound annual growth rates

Content on this tab for subscribers only

VALUATION METRICS

	2018	2019E	2020E
Price-to-sales	**	**	**
Price-to-earnings	**	**	**
Price-to-cash flow	**	**	**
Price-to-growth	**	**	**
Price-to-book value	**	**	**
Yield	**	**	**

Historical valuation trends

Forward multiple:	FlexShares US Quality Large Cap
Relative to:	S&P500	MSCI EAFE	MSCI Emg. Mkts.	Other ETF:

OVERWEIGHT

Above average appreciation potential. A rating of OVERWEIGHT is assigned to ETFs with ALTAR Scores in the 4th quintile (ranking higher than 60%-80%) of their category. Typically, funds in this category consist of stocks trading at attractive valuations and/or having above-average fundamentals.

ALTAR Score™

Calculation of ALTAR Score™
Avg. Return on Equity	16.7	%
Divided by: Fwd. P/BV	2.4	x
Less: Expense ratio	32	bp
Equals: ALTAR Score	6.6	%

More information on ALTAR Score™

MODERN PORTFOLIO THEORY info

CONSENSUS RECOMMENDATIONS: FUND CONSTITUENTS

COMPOSITE RATING	1.56	CATEGORY AVERAGE	1.55

The composite rating is a weighted average of analysts' consensus recommendations for individual ETF constituents, based on the following scale: BUY = 1; OVERWEIGHT = 1.5, HOLD = 2; UNDERWEIGHT = 2.5; and SELL = 3. Readers are cautioned that because analyst ratings tend to be inflated, the composite score may be more useful as a relative measure of sentiment between funds rather than as a stand-alone recommendation.