FlexShares STOXX Global ESG Select Index Fund

FlexShares STOXX Global ESG Select Index Fund (ESGG), from Northern Trust, tracks the STOXX Global ESG Select KPIs Index. The index holds US and developed-market stocks and keeps only the stronger ESG (environmental, social and governance) scorers in each industry. About 72% of assets were in US companies as of July 31, 2026. The 0.42% expense ratio is well above the 0.11% average for similar funds, and the fund is small, at about $111 million.

• Over the year to Oct 27, 2026, ESGG returned +19.6%, 1st of 9 among similar funds.
• Its 5-year annualized return was +12.1% and its 10-year +14.2%.
• In the 2020 COVID crash it fell 30.8% and regained its old high 4.8 months after the low.
• Its worst full calendar year was 2022 (-18.6%); its best was 2019 (+29.1%).
• The deepest fall in its price history was 30.9% (Feb 12, 2020 to Mar 20, 2020), recovered by Aug 12, 2020.

As of Jul 31, 2026, the fund held 686 securities; the ten largest made up 41.6% of assets.

By sector

• Over the three months to Jul 31, 2026, investors withdrew a net $5.6M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +7.21%, +0.66%, -0.08%.

The fund tracks an index built by STOXX Ltd. It starts with the STOXX Global 1800 Index, which holds US and developed international companies weighted by market value. STOXX then removes companies that fail the Sustainalytics Global Standards Screening or have set levels of involvement in controversial weapons, small arms, military contracting, unconventional oil and gas, thermal coal, tobacco or private prisons. It also removes companies with poor ratings for controversies over customer incidents.

Each remaining company gets an ESG score based on key performance indicators, compared within its own industry. Companies below their industry's median are dropped. The rest are reweighted so that higher scorers count for more than they do in the parent index. Each country's weight must stay within 1 percentage point of the parent index, and no company can exceed 5% at a rebalance. Because the cut is made within each industry, whole sectors aren't excluded. ExxonMobil, for example, was 3.0% of the fund as of July 31, 2026. The index is reviewed quarterly and held 856 companies as of December 31, 2025.

Northern Trust Investments uses "representative sampling." That means the fund buys a set of stocks that closely matches the index without always owning every one. At least 80% of assets must be in index stocks or depositary receipts based on them. Small positions in futures and currency forwards help with cash flows and trade settlement. Between rebalances, a holding can drift above the cap: Microsoft was 5.8% as of July 31, 2026.

• ESGG charges 0.42% a year, versus an average of 0.11% for the similar funds below (9th of 9, cheapest first).
• The fee includes a 0.03% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $43 in the first year and $564 over 10 years (assuming a 5% annual return).

It holds 686 large US and developed-market companies across most sectors, so it could serve as the main stock fund for investors who want ESG screens.

ESGG moves with the stock market and offers no cushion against it. In the 2020 COVID crash it fell 30.8%, then regained its peak by August 12, 2020, about 4.8 months later. In the 2022 bear market it dropped 27.6% and took 14.2 months to recover, in December 2023. Its worst calendar year was 2022, at -18.34%. Anyone who has to sell shares for income in a stretch like that would be selling at low prices. The fund launched in 2016, so it has no record from the 2008 crisis. Income is modest: the trailing 12-month yield was 1.26% as of October 27, 2026, paid quarterly. On the SEC's standard $10,000 example, costs total $564 over 10 years. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

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