FlexShares STOXX US ESG Select Index Fund

FlexShares STOXX US ESG Select Index Fund (ESG) is a Northern Trust ETF that tracks the STOXX USA ESG Select KPIs Index. The index holds about 250 large US companies that score above their industry's median on environmental, social and governance (ESG) measures. The fund costs 0.32% a year, about three times the 0.11% average of similar funds. It is also small, with about $132 million in assets as of July 31, 2026.

• Over the year to Oct 27, 2026, ESG returned +17.3%, 2nd of 9 among similar funds.
• Its 5-year annualized return was +11.8% and its 10-year +15.4%.
• In the 2020 COVID crash it fell 32.5% and regained its old high 4.5 months after the low.
• Its worst full calendar year was 2022 (-19.9%); its best was 2019 (+31.7%).
• The deepest fall in its price history was 32.5% (Feb 19, 2020 to Mar 23, 2020), recovered by Aug 6, 2020.

As of Jul 31, 2026, the fund held 253 securities; the ten largest made up 41.44% of assets.

By sector

• Over the three months to Jul 31, 2026, investors withdrew a net $4.4M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +6.18%, +0.36%, +0.08%.

The fund is passive. It aims to match the STOXX USA ESG Select KPIs Index, before fees, and does not try to beat it. Index provider STOXX Ltd. starts with the US companies in its STOXX Global 1800 Index. It then removes companies that fail Sustainalytics' global standards screening. It also removes companies with certain ties to controversial weapons, small arms, military contracting, unconventional oil and gas, thermal coal, tobacco or private prisons, plus those with poor customer-controversy ratings.

Each remaining company gets an ESG score built from key performance indicators (KPIs). Each company is compared only with others in its own industry. Companies below their industry's median score are dropped. The rest are tilted so higher scorers get more weight than in the parent index. No company can top 5% at each quarterly review, but weights can drift between reviews. Microsoft was 5.8% of the fund as of July 31, 2026. As of December 31, 2025, the index held 255 companies and was concentrated in information technology.

Northern Trust Investments uses representative sampling. That means it may hold a sample of stocks that behaves like the index rather than every stock in it. At least 80% of assets must be in index securities. The rest can go to cash, futures and other holdings. The fund may also lend up to one-third of its assets to other investors. Lending adds a small risk if a borrower fails to return the shares.

• ESG charges 0.32% a year, versus an average of 0.11% for the similar funds below (8th of 9, cheapest first).
• The fee includes a 0.01% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $33 in the first year and $417 over 10 years (assuming a 5% annual return).

It holds about 250 large US stocks across most sectors, so it can stand in for a broad US stock fund for investors who want ESG screens, though at a higher cost.

ESG moves much like the broad US stock market, so it falls when stocks fall. It launched in 2016, so it has no record from the 2008 crisis. In the 2020 COVID crash it dropped 32.5% between February 19 and March 23, then recovered 4.5 months later. In the 2022 bear market it fell 26% and took 14.1 months to recover. It ended 2022 down 19.82%, its worst calendar year. Anyone who sold shares to cover spending in 2022 would have locked in those losses. Income is small: the yield was 0.82% as of October 27, 2026, paid quarterly. Costs add up too. In the SEC's standard $10,000 example, expenses come to $417 over 10 years. Past results don't predict future ones, and a retirement plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.