FlexShares International Quality Dividend Index Fund

FlexShares International Quality Dividend Index Fund (IQDF) is a Northern Trust ETF that tracks an index of dividend-paying companies based outside the US, screened for financial quality. It aims for a higher dividend yield than its parent index while moving about as much as the market. Its trailing yield was 3.51% as of October 27, 2026. Its 0.47% expense ratio is well above the 0.21% average of similar funds.

• Over the year to Oct 27, 2026, IQDF returned +20.2%, 3rd of 9 among similar funds.
• Its 5-year annualized return was +11.0% and its 10-year +9.3%.
• In the 2020 COVID crash it fell 34.7% and regained its old high 8.1 months after the low.
• Its worst full calendar year was 2018 (-17.4%); its best was 2025 (+35.4%).
• The deepest fall in its price history was 39.8% (Jan 26, 2018 to Mar 23, 2020), recovered by Jan 8, 2021.

As of Jul 31, 2026, the fund held 190 securities; the ten largest made up 20.18% of assets.

• Over the three months to Jul 31, 2026, investors added a net $3.6M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +4.80%, -0.41%, +2.16%.

IQDF tracks the Northern Trust International Quality Dividend Index. Northern Trust Investments (NTI) builds the index and also manages the fund. The starting point is the Northern Trust International Large Cap Index, a list of large and mid-sized companies based outside the US, weighted by the value of their freely traded shares. NTI removes three groups: stocks that traded less than $125,000 a day on average over the prior 90 days, companies that pay no dividend, and the bottom fifth on its own quality score. That score ranks data from company filings on management efficiency, profitability and cash flow.

Software then picks and weights the remaining stocks with three goals: raise the quality score, beat the parent index's dividend yield, and keep beta close to the parent's. Beta measures how much a portfolio tends to move with the market. Limits on sectors, countries, single stocks and turnover keep the index from straying too far from its parent. The index held 199 stocks as of December 31, 2025, was concentrated in financials, and is rebuilt every quarter. Portfolio turnover was 61%.

The fund uses representative sampling, which means it holds a group of stocks that resembles the index but not necessarily every one. It held 190 stocks as of July 31, 2026. At least 80% of assets go into index stocks or depositary receipts, which are certificates that trade in place of foreign shares. The fund may also use futures and currency contracts and may lend out up to one-third of its assets.

• IQDF charges 0.47% a year, versus an average of 0.21% for the similar funds below (7th of 9, cheapest first).
• The fee includes a 0.02% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $48 in the first year and $614 over 10 years (assuming a 5% annual return).

It adds non-US stocks with a quality and dividend tilt to a portfolio built mostly on US shares, but it rises and falls about as much as the market.

IQDF could add non-US companies with a dividend and quality tilt to a portfolio built mostly on US shares. Its trailing yield was 3.51% as of October 27, 2026, paid quarterly. It fell 34.7% in the 2020 COVID crash and recovered by November 2020. It fell 29.1% in 2022 and did not recover until December 2023. Its worst calendar year was 2018, when it lost 17.03%. Its deepest drop, 39.8% from January 2018 to March 2020, was not made up until January 2021. The fund launched in 2013, so it has no record from 2008. Selling shares for cash in years like those locks in losses. In the SEC's standard example, the 0.47% expense ratio costs $48 in the first year and $614 over 10 years on $10,000. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

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