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	143
Wgt avg mkt cap (mns)	$277,407
Large cap (>$10bn)	97.3%
Mid cap ($2-10bn)	2.7%
Small cap (<$2bn)	0.0%
Developed mkts	100.0%
Emerging mkts	0.0%

TOP TEN HOLDINGS
Total	25.2 %
APPLE INC	6.2 %
MICROSOFT CORP	3.1 %
VISA INC-CLASS A SHARES	2.6 %
JOHNSON & JOHNSON	2.6 %
HOME DEPOT INC	2.1 %
CITIGROUP INC	1.8 %
CHEVRON CORP	1.8 %
CISCO SYSTEMS INC	1.7 %
AMGEN INC	1.6 %
AMAZON.COM INC	1.6 %

TOP COUNTRY EXPOSURE
	UNITED STATES	91.9 %
	IRELAND	3.8 %
	BRITAIN	1.8 %
	ISRAEL	0.5 %
	LUXEMBOURG	0.1 %

HISTORICAL PERFORMANCE info

	Custom date range	Compare to
	thru

Standardized Annual Returns (thru January 31)
Year-to-date	1 year	5 years	10 years	Since Incep.
-0.8%	13.8%	--	--	11.2%

Market Correlations
versus...	Beta	R-squared
S&P500	1.02	93%
MSCI EAFE	0.95	67%
MSCI Emg. Mkts.	0.63	51%

Technical Indicators
Recent close	$38.06
30d moving avg.	$37.44
Annualized volatility	12.8%
Short interest (ETF)	0.0%
Relative strength (RSI)	60

Liquidity measures
Avg. volume (thou.)	5
Turnover	0.4%
Bid/Ask (% of price)	0.08%
ADV underlying (mns)	$71,150

Distributions

FINDING ALTERNATIVE FUNDS

Below is a list of 20 potential alternatives to the FlexShares US Quality Large Cap Index Fund 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™:

6.0%

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 (%)
DIVB	iShares U.S. Dividend & Buyback	46.4	25	7	6.6	+0.6
RECS	Columbia Research Enhanced Core	44.7	15	17	5.9	-0.1
OQAL	Invesco Russell 1000 Quality Factor ETF	43.7	19	13	6.0	0.0
OVOL	Invesco Russell 1000 Low Volatility Factor ETF	43.4	19	13	6.6	+0.6
IWL	iShares Russell Top 200	42.2	15	17	5.3	-0.7
QARP	Xtrackers Russell 1000 US QARP	42.1	19	13	6.3	+0.3
FVAL	Fidelity Value Factor	41.8	29	3	7.7	+1.7
EPS	WisdomTree Earnings 500	41.6	8	24	6.7	+0.7
QUS	SPDR MSCI USA Quality Mix	41.3	15	17	5.7	-0.3
QDF	FlexShares Quality Dividend	41.3	37	-5	7.2	+1.2
OEF	iShares S&P 100	41.2	20	12	5.2	-0.8
MGC	Vanguard Mega Cap 300 ETF	41.0	7	25	5.5	-0.5
GSLC	Goldman Sachs ActiveBeta U.S. Large Cap Equity	40.8	9	23	5.7	-0.3
JQUA	JPMorgan U.S. Quality Factor	40.6	12	20	5.6	-0.4
OMOM	Invesco Russell 1000 Momentum Factor ETF	40.4	19	13	5.8	-0.2
QDYN	FlexShares Quality Dividend Dynamic	40.1	37	-5	7.0	+1.0
PBP	Invesco S&P 500 Buy/Write	40.0	49	-17	5.2	-0.8
HSPX	Global X S&P 500 Covered Call	39.6	65	-33	5.1	-0.9
JUST	Goldman Sachs JUST U.S. Large Cap Equity	39.6	20	12	5.2	-0.8
SPY	S&P 500 SPDR	39.6	9	23	5.6	-0.4

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%.

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RESULTS & ESTIMATES

	2015	2016	2017	2018	2019	2020E	2021E
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

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VALUATION METRICS

	2019	2020E	2021E
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 Index Fund
Relative to:	S&P500	MSCI EAFE	MSCI Emg. Mkts.	Other ETF:

NEUTRAL

Average appreciation potential. A rating of NEUTRAL is assigned to ETFs with ALTAR Scores in the middle quintile (ranking between 40%-60%) of their category. This indicates that valuations adequately reflect the fundamentals of stocks in these funds.

ALTAR Score™

Calculation of ALTAR Score™
Avg. Return on Equity	17.2	%
Divided by: Fwd. P/BV	2.7	x
Less: Expense ratio	32	bp
Equals: ALTAR Score	6.0	%

More information on ALTAR Score™

MODERN PORTFOLIO THEORY info

CONSENSUS RECOMMENDATIONS: FUND CONSTITUENTS

COMPOSITE RATING	1.54	CATEGORY AVERAGE	1.56

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.