Category Archives: Season 2

Episode 10 – Systematic Ways To Invest with Factors



Factors can identify systematic ways to invest that have historically been tested and are tied to economic rationales. These can lead to statistically significant incremental returns over time.

In this episode, Jehan Mady is joined by Christopher Huemmer, senior investment strategist at Flexshares to discuss how factors have performed in the U.S market.

In this episode, you will learn:

  • How to identify factors that fluctuate ETFs
  • How to use different factors
  • Insight on what factors performed well from 2020 to the first quarter of 2021
  • And more!

Play this full episode to hear Jehan and Chris discuss factor exposures on the market.

Resources: FlexShares | Jehan Mady on LinkedIn | Christopher Huemmer on LinkedIn


Episode 9 – The Impact of Inflation on Portfolios



Inflation continues to be top of mind for listeners and market participants alike with interest rates and inflation expectations on the rise this year. 

In this episode, Jehan Mady is joined by Mark Carlson and Ellen Chenoweth, two of Flexshares Investment Strategists to share their perspectives on the impact of inflation on portfolios. 

In this episode you will learn:

  • The key drivers when evaluating for potential inflation to portfolios
  • Why investors often turn to “tips” as a first line of defense against rising inflation
  • How every portfolio could benefit from a strategic allocation to natural resources 
  • And more!

Play this full episode to hear Jehan, Mark and Ellen, share perspectives on why you should be focusing on the future impact of inflation on your portfolio.

Chu, Quentin C., Pittman, Deborah N., Yu, Linda Q., “When Do TIPS Prices Adjust to Inflation Information?” Financial Analysts Journal, Vol. 67, No. 2

Resources: FlexShares | Jehan Mady on LinkedIn | Mark Carlson on LinkedIn | Ellen Chenoweth on LinkedIn

Definitions: 

Negative roll yield occurs when a market is in contango, which is the opposite of backwardation.

Contango is a situation in which the futures price of a commodity is above the spot price.

Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other.

The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).

Before investing, carefully consider the FlexShares investment objectives, risks, charges and expenses. This and other information are in the prospectus, a copy of which may be obtained by visiting www.flexshares.com. Read the prospectus carefully before you invest.

Foreside Fund Services, LLC, distributor.

Fixed income investments involve risks including credit risk, interest rate risk, default risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall. .As the demand for or prices of natural resources increase, the Fund`s equity investment generally would be expected to also increase. Conversely, declines in demand for or prices of natural resources generally would be expected to cause declines in value of such equity securities. Such declines may occur quickly and without warning and may negatively impact your investment in the Fund.

 


Episode 8 – The Trend of ESG Continues into 2021



If investors thought ESG would go away, 2020 really caught them by surprise. In 2021, experts are still projecting ESG assets to reach more than one third of global assets under management in 2025.

In this episode, Jehan Mady is joined by Evan McCall, Second VP investment strategist in asset management for Flexshares exchange traded funds, to discuss one of the more attention grabbing investment categories known as environmental, social and governance. We’ll dive into how the market concentration has changed due to the global pandemic and what’s next for ESG.

In this episode you will learn:

  • What is ESG (environmental, social and governance)
  • The conditions of the ESG space before COVID-19
  • The recent developments in ESG
  • What may happen to ESG going forward
  • And more!

Listen as Jehan and Evan, share insight on the true impact of ESG.

Resources: FlexShares | Jehan Mady on LinkedIn | Evan McCall | ESG | ESGG | ESG Performance Impact | ESGG Performance Impact

Definitions:

  • Basis point: Basis points, otherwise known as bps or “bips,” are a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument.
  • MSCI World Index:  is a stock index that tracks about 3,000 stocks in 49 developed and emerging market countries, representing a total market capitalization of tens of trillions of dollars
  • Russell 1000 Index: a subset of the Russell 3000 Index, represents the 1000 top companies by market capitalization in the United States.
  • S&P 500 Index: The S&P 500 Index, or the Standard & Poor’s 500 Index, is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies.
  • KPI: Key performance indicators (KPIs) measure a company’s success versus a set of targets, objectives, or industry peers.
  • Tracking error: the divergence between the price behavior of a position or a portfolio and the price behavior of a benchmark.

Disclosures:

Diversification does not assure a profit nor protect against loss in the current market

Before investing, carefully consider the FlexShares investment objectives, risks, charges and expenses.  This and other information are in the prospectus and summary prospectus, copies of which may be  obtained by visiting www.flexshares.com. Read the prospectus carefully before you invest. 

Foreside Fund Services, LLC, distributor.

FUND RISKS

An investment in FlexShares is subject to numerous risks, including possible loss of principal. Fund returns may not match the return of the respective indexes. A full description of risks are in the prospectus and summary prospectus. FlexShares STOXX® Global ESG Impact Index Fund (ESGG) is passively managed and uses a representative sampling strategy to track its underlying index. Use of a representative sampling strategy creates tracking risk where the Fund`s performance could vary substantially from the performance of the underlying index. The Fund is subject to environmental, social and governance (ESG) Investment  Risk, which is the risk that because the methodology of the Underlying Index selects and assigns weights to securities of issuers for non-financial reasons, the Fund may underperform the broader equity market or other funds that do not utilize ESG criteria when selecting investments. The Fund is also at increased risk of industry concentration, where it may be more than 25% invested in the assets of a single industry.  Investments in foreign market securities involve certain risks such as currency volatility, political and social instability and reduced market liquidity.

To the extent that the Fund invests in Emerging markets, those investments may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory  occurrences affecting that country, market, industry, sector or asset class. The Fund may also invest in derivative instruments. Changes in the value of the derivative may not correlate with the underlying asset,  rate or index and the Fund could lose more than the principal amount invested. The STOXX® Global ESG  Impact Index is the intellectual property (including registered trademarks) of STOXX® Limited, Zurich,  Switzerland and/or its licensors (“Licensors”), which is used under license. The securities based on the  Index are in no way sponsored, endorsed, sold or promoted by STOXX® and its Licensors and neither of the Licensors shall have any liability with respect thereto. Price to Earnings is calculated as a company’s current stock price divided by its earnings per share. Price to Book is calculated as the market value of all common stock shares of a company divided by the book value of the company. All data provided by:  Northern Trust, J.P. Morgan, Rimes, Morningstar and Refinitiv

Performance data quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed or sold in the secondary market, may be worth more or less than the original cost. Investors will incur usual and customary brokerage commissions when buying or selling shares of the exchange-traded funds  (“ETFs”) in the secondary market, and that, if reflected, the brokerage commissions would reduce the performance returns. Current performance may be lower or higher than the performance shown. Shares are bought and sold at market price not net asset value (“NAV”) and are not individually redeemable from the fund. Call 855-FLEXETF (855-353-9383) for more information.

Click here for ESG standardized performance and index definitions 

Click here for ESGG standardized performance and index definitions 


Episode 7 – Probability of Success with Low Volatility



Are you an investor using the low volatility approach in today’s environment?

In this episode, Jehan Mady is joined by Christopher Huemmer, senior investment strategist at Flexshares to discuss how to use low volatility strategies as a way to seek to offer some level of downside protection while delivering potential upside participation to stay exposed to the equity markets.

In this episode you will learn:

  • The low volatility factor and why some investors find it as an attractive way to invest
  • Why low volatility exists and its trend
  • What investors need know about low volatility investing
  • Using quality in addition to the low volatility investment approach
  • And more!

Listen as Jehan and Chris share insight into investing with the low volatility approach!

Resources:  FlexShares | Jehan Mady on LinkedIn | Chris Huemmer on LinkedIn

VIX Index is a real-time market index representing the market’s expectations for volatility over the coming 30 days.

The S&P 500 or simply the S&P, is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.

Beta is a measure of a stock’s volatility in relation to the overall market. … If a stock moves less than the market, the stock’s beta is less than 1.0.

Diversification does not assure a profit nor protect against loss in a declining market.