FlexShares International Quality Dividend Dynamic Index Fund

FlexShares International Quality Dividend Dynamic Index Fund (IQDY) is a Northern Trust index ETF that holds dividend-paying, higher-quality stocks of companies based outside the US. Most dividend funds lean toward steadier stocks. This one's index is built to be more sensitive to market swings than its parent index. Its 0.47% expense ratio is about double the 0.24% average of similar funds, and its yield was 3.44% as of October 27, 2026.

• Over the year to Oct 27, 2026, IQDY returned +19.5%, 4th of 9 among similar funds.
• Its 5-year annualized return was +11.6% and its 10-year +10.6%.
• In the 2020 COVID crash it fell 35.2% and regained its old high 7.6 months after the low.
• Its worst full calendar year was 2018 (-20.0%); its best was 2025 (+37.5%).
• The deepest fall in its price history was 39.6% (Jan 25, 2018 to Mar 23, 2020), recovered by Dec 4, 2020.

As of Jul 31, 2026, the fund held 202 securities; the ten largest made up 21.24% of assets.

• Over the three months to Jul 31, 2026, investors added a net $4.2M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +5.79%, -0.30%, +1.06%.

Northern Trust manages IQDY and builds the index it tracks. The starting point, or parent index, is the Northern Trust International Large Cap Index of large and mid-size companies based outside the US. Northern Trust drops stocks that average under $125,000 of daily trading over the prior 90 days, pay no dividend, or rank in the bottom fifth on its own quality score built from management efficiency, profitability and cash flow.

Each quarter, an optimization process picks and weights the remaining stocks to top the parent index on quality score and dividend yield, while targeting a beta of 1.0 to 1.5 times the parent's. Beta measures how sharply a fund moves with the market, so the index is built to swing more than its parent. Sector, country, single-stock and turnover limits keep any one bet from growing too large. As of December 31, 2025, the index held 187 securities and was concentrated (25% or more) in financials.

The fund uses representative sampling: it may hold only a sample of index stocks chosen to behave like the whole. At least 80% of assets go into index stocks or depositary receipts (certificates representing foreign shares). Portfolio turnover, the share of holdings traded over a year, was 65% per the February 25, 2026 prospectus.

• IQDY charges 0.47% a year, versus an average of 0.24% for the similar funds below (7th of 9, cheapest first).
• The fee includes a 0.04% 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 $637 over 10 years (assuming a 5% annual return).

IQDY pays quarterly dividends from quality-screened non-US companies, but its index is built to swing more than the broad international market.

IQDY could add quarterly dividends from companies outside the US to a portfolio. Its trailing 12-month yield was 3.44% as of October 27, 2026. Its drops have been steep. It fell 35.2% between February 19 and March 23, 2020, and took about 7.6 months to recover. It fell 32.3% in 2022 and did not regain its peak until December 26, 2023. Its worst calendar year was 2018, when it lost 19.03%. The fund launched in 2013, so it has no record from the 2008 crisis.

If you draw income from the fund, selling shares after drops like these would lock in losses. Dividends can also be cut. The 0.47% expense ratio works out to $48 in the first year on $10,000, using the SEC's standard example. 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.