UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORMN-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number:811-22555
FlexShares Trust
(Exact name of registrant as specified in charter)
50 South LaSalle Street
Chicago, Illinois 60603
(Address of principal executive offices) (Zip code)
Diana E. McCarthy, Esq.
Drinker Biddle & Reath LLP
One Logan Square, Ste. 2000
Philadelphia, Pennsylvania 19103-6996
(Name and Address of Agent for Service)
with a copy to:
Jeff Beeson
Jose Del Real, Esq.
Northern Trust Investments, Inc.
50 South LaSalle Street
Chicago, Illinois 60603
(Name and Address of Agent for Service)
Registrant’s telephone number, including area code:855-353-9383
Date of fiscal year end: October 31
Date of reporting period: October 31, 2019
Item 1. Reports To Stockholders.
The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940 (17 CFR270.30e-1).
FlexShares® Trust
Annual Report
October 31, 2019
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of FlexShares® Trust’s shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from FlexShares® Trust or your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on FlexShares® Trust’s website (www.flexshares.com) and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you have already elected to receive your shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from FlexShares® Trust electronically at any time by contacting your financial intermediary.
You may elect to receive all future reports in paper free of charge. Please contact your financial intermediary to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds in FlexShares® Trust that you hold in your account at the financial intermediary. You must provide separate instructions to each of your financial intermediaries.
Table of Contents
Letter to Shareholders
Dear Shareholder:
We are pleased to present our FlexShares Annual Report for the year ended October 31, 2019. It details fund characteristics, performance results and investment commentaries on our family of FlexShares exchange traded funds (ETFs). We believe that FlexShares benefits from being a part of the broader Northern Trust Asset Management (NTAM)1 organization which has almost $1 trillion in assets under management2. As the investment adviser for the Funds, Northern Trust Investments, Inc. (NTI), has observed that the past twelve months have been a period of anxiety and opportunity. Deciding what investment products to own has become a more frequent exercise for many advisors and investors. In conjunction with NTI and NTAM, the FlexShares value proposition is anchored in constructing innovative and efficient strategies that seek to appropriately compensate investors for risk and deliver potentially attractive outcomes.
As part of a global investment manager, the FlexShares approach to ETF construction is paired with NTI and NTAM’s expertise in index design and portfolio management and I believe that our suite of ETFs reflects this broader perspective. For example, our recently introduced suite of low-volatility equity-focused ETFs applies the NTAM “quality” score3 and is designed for investors who desire to own stocks during uncertain times and are willing to limit upside market performance with potential for some measure of protection on the downside. In these and other ways our clients can use FlexShares ETFs as building blocks to structure portfolios that may help them achieve their goals.
Over the past twelve months FlexShares launched three new ETFs:
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| FlexShares ETF | | Ticker | | Investor Objective |
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US Quality Low Volatility Index Fund | | QLV | | Capital Appreciation |
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Developed Markets ex-US Quality Low Volatility Index Fund | | QLVD | | Capital Appreciation |
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| FlexShares ETF | | Ticker | | Investor Objective |
|
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Emerging Markets Quality Low Volatility Index Fund | | QLVE | | Capital Appreciation |
Numerous interactions over the past year continue to inform and shape our views about what FlexShares investors want from their ETF sponsors. Our observations suggest and we believe that many of the explicit needs and implicit expectations of investors align well with NTAM’s strengths. We attempt to deliver NTAM’s strengths to shareholders through the FlexShares Funds. NTAM has a long track record of thinking about investments through a multi-asset solution framework, and also has substantial expertise in the implementation of quantitative strategies. A key priority in the years ahead will be to effectively deploy our organizational strengths to manage the FlexShares Funds.
Please review the FlexShares Trust Annual Report to learn more about FlexShares ETFs, and visit our website atwww.flexshares.com for additional information about our products. We look forward to continuing to serve your investment needs and thank you for choosing FlexShares ETFs to help meet your investment objectives.
Sincerely,
Darek Wojnar, CFA
Head, Funds & Managed Account Solutions, Northern Trust Asset Management
The views in this letter were as of October 31, 2019 and may not necessarily reflect the same views on the date this letter is first published or any time thereafter. These views are intended to help shareholders in understanding the Funds’ investment methodology and do not constitute investment advice.
This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus, which includes information regarding the Funds’ risks, objectives, fees and expenses, experience of its management, and other information.
| 1 | Northern Trust Asset Management is the branding name of the asset management business of Northern Trust Corporation, a financial holding company and publicly traded company. |
| 2 | Source: Northern Trust Corporation as of October 31, 2019. |
| 3 | The Northern Trust Asset Management Quality Score is based on management efficiency, profitability, and cash flow. |
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| 2 | | FLEXSHARES ANNUAL REPORT |
Economic & Market Overview
General Observations
Ongoing market volatility tied to a mix of new and old drivers characterized the 12-month period ending October 31, 2019. Uncertainty was again the dominant theme. From the U.S.-China trade war to Brexit to monetary policy shifts, investor convictions were frequently challenged by periods of strong optimism and deep pessimism. On the economic growth front, our analysis suggests that the trade and tariff battles weakened manufacturing and business investment to produce a summer slowdown. This triggered recession alarm bells in Europe but less so in the U.S. We believe the growth scare was accompanied by a sharp drop in bond yields and commodity prices. The bearish outlook was soon swept aside as the U.S. Federal Reserve (Fed) initiated a series of rate cuts and the European Central Bank signaled it would restart its bond-buying program. Throughout the period, however, U.S. households maintained their spending which helped keep the economic expansion on its record run.
The overall U.S. market strength in the period’s closing months generated renewed investor concerns about market index valuation levels and put a fresh focus on signs of possible late-cycle market behaviors, such as spiking M&A activity, and the urgency to invest in more speculative companies. However, these market-cycle arguments were not supported by either inflation or central bank actions. We believe that the fallout from the trade war and the United Kingdom’s drawn out plan to exit the European Union have not generated troubling price impacts. In fact, U.S. inflation again fell short of its 2% target over the past twelve months. Now seven years running, this trend of inflation misses is shifting how the central bank operates. We have observed that the Fed has signaled that it will wait to see significant and persistent inflation before considering rate hikes, a significant change from its traditional anticipatory approach. Investors accustomed to watching for late-cycle inflation as a prelude to central bank tightening may need to adjust their playbook.
Looking at key regions through a central bank lens highlights the important role monetary stimulus continues to play in supporting global growth. A year ago we reviewed the policy phases of quantitative easing (i.e. implementation,
maintenance, exit) to calibrate the progress of regional economies towards normalization. The Fed was furthest down this road, well-into “exit mode,” while the European Central Bank (ECB) was poised to start winding down its quantitative easing (QE) program. Other central banks were still well ensconced in the “maintenance” phase. We believe that the picture one year later is dramatically different. Forward progress towards interest rate normalization has stopped as both the Fed and ECB have reversed course. The Fed is back in an easing mode while the ECB has resumed QE. We believe that this recalibration of expectations by these central banks suggests the path to economic and interest rate normalization will be a longer journey than originally thought. This may or may not end-up being good for investors’ long term, but for the past 12 months, it has proven highly rewarding for many investors in both fixed income and equity markets.
Financial Market Highlights
We believe that the negative global growth impacts of the trade war along with the return of low bond yields and the resumption of central bank monetary easing were the key inputs to general equity market performance during the fiscal year ending October 31, 2019. Except for the sturdy U.S. consumer, who benefited from steady job growth and higher wages, the elixir of easy money may have been the primary catalyst underpinning the generally positive investment results for both fixed income and equity market investors.
| · | | In general, equity markets posted strong returns over the fiscal period notwithstanding the backdrop of swirling uncertainty. The outlook for growth suffered due to fallout from the U.S.-China trade war which was evident in slower earnings growth and lowered 2020 profit forecasts. On-again, off-again optimism about Fed easing and a possible “phase-one” China trade agreement coincided positively at the fiscal period end to in general push U.S. stocks to record levels. During the 12-month period, our research suggests that the U.S. economy once again grew more strongly than most other regions. |
| · | | We believe that a year ago many investors thought the era of record low bond yields was coming to an end. Rates on 10-year Treasuries had moved above 3% as the |
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| FLEXSHARES ANNUAL REPORT | | | 3 | |
Economic & Market Overview (cont.)
| | | Fed managed what was expected to be an extended rate normalization program. Instead, the 2019 growth slowdown caused Treasury yields to fall sharply and the curve to invert – a situation in which, long-term fixed income rates generally are lower than short-term fixed income rates. An inverted curve is viewed by some investors as a key predictor of a potential recession. Although manufacturing did contract for three consecutive months, the service sector kept expanding. Importantly, the Fed eased policy three times starting in July. The inverted curve moderated near the end of the fiscal period. |
| · | | Commodities and natural resources again experienced considerable volatility before ending the period with moderate declines. Fundamental, monetary and geo-political developments pulled natural resource segments in different directions at different times, including several periods where we believe perceived safe-haven demand boosted overall precious metals prices. Oil, as measured by the price of Texas Crude fell sharply early in the fiscal period before recouping losses mid-year and then weakening into the fiscal year’s closing months. |
To learn more about how these economic and market observations may have impacted FlexShares ETFs, please read the Annual Report or visit our website at www.flexshares.com for additional information about our products.
An investment in the Funds’ is subject to numerous risks, including possible loss of principal. Fund returns may not match the return of the respective indexes. Some of the risks include, but are not limited to, the following: asset class; commodity; concentration; counterparty; currency; derivatives; dividend; emerging markets; equity securities; fluctuation of yield; foreign securities; geographic; income; industry concentration; inflation-protected securities; infrastructure-related companies; interest rate / maturity risk; issuer; large cap; management; market; market trading; mid cap stock; MLP; momentum; natural resources; new funds; non-diversification; passive investment; privatization; small cap stock; tracking error; value investing; and volatility risk. A full description of risks is in each Fund’s prospectus.
Foreside Fund Services, LLC, distributor.
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| 4 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® Morningstar® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
US Market Factor Tilt Index Fund Ticker: TILT
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
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| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
9/16/2011 | |
| | | | |
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FlexShares Morningstar US Market Factor TILT Index Fund (Based on Net Asset Value) | | | 10.41 | % | | | 12.51 | % | | | 8.81 | % | | | 12.96 | % |
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FlexShares Morningstar US Market Factor TILT Index Fund (Based on Market Price) | | | 10.41 | % | | | 12.49 | % | | | 8.81 | % | | | 12.96 | % |
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Morningstar® U.S. Market Factor Tilt IndexSM | | | 10.80 | % | | | 12.68 | % | | | 8.98 | % | | | 13.17 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assumes that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from net asset value returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.25%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Morningstar® US Market Factor Tilt Index (the “Underlying Index”). The Underlying Index reflects the performance of a selection of U.S. equity securities that is designed to provide a broad exposure to the overall U.S. equities market, with increased exposure (or a “tilt”) to small-capitalization stocks and value stocks. As of October 31, 2019, there were 2,475 issues in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the issues that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on domestic investments generally traded higher. Domestic investments rebounded in Q1 of 2019 from the volatility that predominated during 4Q of 2018, as the U.S. Federal Reserve Bank (the “Fed”) signaled it would adjust its planned interest rate hike schedule to reflect slower growth and investors grew optimistic that trade tensions may decrease as the U.S. suspended planned tariffs on Chinese imports. U.S. equity markets were volatile in Q2 as concerns around growth and trade continued, but domestic investments ultimately finished higher as the Fed signaled possible interest rate cuts to combat the inverted yield curve and employment data remained strong. Domestic equities moved modestly higher in Q3 as market volatility, global growth concerns and continued trade tensions offset stable economic data and accommodative monetary policy. The Fed cut rates interest twice in the quarter keeping in line with market expectations. U.S. markets advanced in October 2019 as the Fed cut rates a third time and U.S.-China trade negotiations improved. At the beginning of 4Q of 2019, however, U.S. equity markets declined on concerns surrounding the sustainability of continued earnings growth, the cadence of future Fed interest rate hikes and escalating trade tensions between the U.S. and China.
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| FLEXSHARES ANNUAL REPORT | | | 5 | |
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| FlexShares® Morningstar® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
US Market Factor Tilt Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
Increased market volatility and concerns of slowing global growth dampened investor appetites for small cap stocks, which we believe caused small cap stocks to underperform large cap stocks during the fiscal year ended October 31, 2019. In addition, value factor1 exposure was a negative driver of performance over the twelve months, as value stocks underperformed growth stocks2. Overall, the negative performance derived from the size3 and value factor exposures was the primary source of the Underlying Index’s underperformance against the Russell 3000 Index by -2.69%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12 month period was -39 basis points (“bps”)4, which is reflective of the management fee (-25 bps), stock selection/futures (-19 bps), securities lending (+4 bps) and performance calculation differences between the Underlying Index and the Fund (+1 bps).
| 1 | The value factor is based on a belief that stocks that are inexpensive relative to some measure of fundamental value outperform those that are pricier. |
| 2 | The growth factor is based on a belief that the underlying company is anticipated to grow at a rate significantly above the average for the market. |
| 3 | The size factor is measured by a stock’s total capitalization—found by multiplying the current share price times all the outstanding shares of stock. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 6 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® Morningstar | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Developed Markets ex-US Factor Tilt Index Fund Ticker: TLTD
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
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| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
9/25/2012 | |
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FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund (Based on Net Asset Value) | | | 8.13 | % | | | 7.17 | % | | | 4.02 | % | | | 5.88 | % |
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FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund (Based on Market Price) | | | 8.16 | % | | | 7.07 | % | | | 3.86 | % | | | 5.83 | % |
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Morningstar® Developed Marketsex-US Factor Tilt IndexSM | | | 7.97 | % | | | 7.18 | % | | | 4.08 | % | | | 5.98 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from net asset value returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.39%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Morningstar® Developed Markets ex-US Factor Tilt Index (the “Underlying Index”). The Underlying Index reflects the performance of a selection of equity securities designed to provide broad exposure to the global developed equities markets, excluding the U.S., with increased exposure (or a “tilt”) to small-capitalization stocks and value stocks. As of October 31, 2019, there were 3,316 issues in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the issues that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on developed international investments generally traded higher. Over the course of the 12-month period, the U.S. dollar (“USD”) was volatile, but ultimately strengthened modestly against developed market currencies. This negatively impacted U.S. investors as returns in local currencies generally were diminished by the rising value of the USD. Through Q4 of 2018, developed international markets declined on global trade concerns based on multiple factors including concerns over slowing global growth, the impact of U.S.-China tariff escalations and the potential for a “no deal” Brexit between the United Kingdom and the European Union. Developed international investments rebounded in Q1 and Q2 of 2019 as central banks signaled more accommodative monetary measures to combat stagnant growth and inflation. Investors, however, continued to react to the various fits and starts of trade tensions, but remained optimistic for a resolution of U.S.-China tariffs and that even a delay in Brexit’s March deadline would lead to a negotiated agreement that would potentially avoid the most punitive “no deal” option. Developed international equities moved modestly lower in Q3 as the European Central Bank (“ECB”) restarted quantitative easing in an effort to combat global growth concerns, while
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| FLEXSHARES ANNUAL REPORT | | | 7 | |
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| FlexShares® Morningstar | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Developed Markets ex-US Factor Tilt Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
renewed trade tensions continued to weigh on markets. Developed international markets moved higher at the beginning of October 2019 as firming economic data in the Eurozone, the diminished prospect of a “no deal” Brexit, along with the potential thawing of trade tensions, were viewed as positive developments.
Increased market volatility and concerns of slowing global growth dampened investor appetites for small cap stocks, which we believe caused small cap stocks to underperform large cap stocks during the fiscal year ended October 31, 2019. In addition, value factor1 exposure was a negative driver of performance over the twelve months, as value stocks underperformed growth stocks2. Overall, the negative performance derived from the size3 and value factor exposures was the primary source of the Underlying Index’s underperformance against the MSCI World ex-USA IMI Index of -2.75%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the12-month period was +16 basis points (“bps”)4, which is reflective of the Fund’s management fee (-39 bps), stock selection/futures (+23 bps), securities lending (+11 bps), dividend tax differential (+22 bps) and performance calculation differences between the Underlying Index and the Fund (-1 bps).
| 1 | The value factor is based on a belief that stocks that are inexpensive relative to some measure of fundamental value outperform those that are pricier. |
| 2 | The growth factor is based on a belief that the underlying company is anticipated to grow at a rate significantly above the average for the market. |
| 3 | The size factor is measured by a stock’s total capitalization—found by multiplying the current share price times all the outstanding shares of stock. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 8 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® Morningstar | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Emerging Markets Factor Tilt Index Fund Ticker: TLTE
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
9/25/2012 | |
| | | | |
| | | | |
FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (Based on Net Asset Value) | | | 8.30 | % | | | 4.77 | % | | | 1.84 | % | | | 2.20 | % |
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FlexShares Morningstar Emerging Markets Factor Tilt Index Fund (Based on Market Price) | | | 8.08 | % | | | 4.20 | % | | | 1.62 | % | | | 2.05 | % |
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Morningstar® Emerging Markets Factor Tilt IndexSM | | | 8.98 | % | | | 5.41 | % | | | 2.42 | % | | | 2.89 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.59%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Morningstar® Emerging Markets Factor Tilt Index (the “Underlying Index”). The Underlying Index reflects the performance of a selection of equity securities designed to provide broad exposure to the global emerging equities markets, with increased exposure (or a “tilt”) to small-capitalization stocks and value stocks. As of October 31, 2019, there were 2,569 issues in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the securities that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on emerging market equities generally traded higher. Over the course of the 12-month period, the U.S. dollar (“USD”) was volatile and ultimately weakened against emerging market currencies, which positively affected U.S. investors as returns in local currencies generally, were enhanced by the falling of the USD. Emerging market investments rose overall in Q1 of 2019 as the U.S. Federal Reserve Bank (“Fed”) signaled it would adjust its planned interest rate hike schedule and investors grew optimistic that trade tensions may decrease as the U.S. suspended planned tariffs on Chinese imports. Emerging market performance in Q1 of 2019, however, trailed developed markets as concerns over China’s slowing growth tempered gains. Emerging market equities were volatile in Q2 as U.S.-China trade tensions rose and fell throughout the quarter, but ultimately ended modestly higher as the Fed’s pivot to accommodative monetary policy boosted developing countries reliant on foreign financing. Emerging markets moved lower in Q3 as global growth concerns, weakness in crude oil prices and trade escalations between the U.S. and China weighed on investors. Emerging markets rallied in October 2019, due to accommodative monetary policy from global central banks and positive developments in U.S.-China trade negotiations.
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| FLEXSHARES ANNUAL REPORT | | | 9 | |
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| FlexShares® Morningstar | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Emerging Markets Factor Tilt Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
Increased market volatility and concerns of slowing global growth dampened investor appetites for small cap stocks, which we believe caused small cap stocks to underperform large cap stocks during the fiscal year ended October 31, 2019. In addition, value factor1 exposure was a negative driver of performance over the 12-month period, as value stocks underperformed growth stocks2. Overall, the negative performance derived from the size3 and value factor exposures was the primary source of the Underlying Index’s underperformance against the MSCI EM IMI Net Index of 2.63%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12-month period was -68 basis points (“bps”)4, which is reflective of the Fund’s management fee(-59 bps), stock selection/futures (-14 bps), securities lending (+4 bps) and dividend tax differential (+1 bps).
| 1 | The value factor is based on a belief that stocks that are inexpensive relative to some measure of fundamental value outperform those that are pricier. |
| 2 | The growth factor is based on a belief that the underlying company is anticipated to grow at a rate significantly above the average for the market. |
| 3 | The size factor is measured by a stock’s total capitalization—found by multiplying the current share price times all the outstanding shares of stock. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 10 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® Currency | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Hedged Morningstar DM ex-US Factor Tilt Index Fund Ticker: TLDH
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | Fund
Inception
11/9/2015 | |
| | | | |
| | | |
FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund (Based on Net Asset Value) | | | 10.02 | % | | | 8.97 | % | | | 6.85 | % |
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FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund (Based on Market Price) | | | 10.61 | % | | | 9.01 | % | | | 6.98 | % |
| | | |
Morningstar® Developed Marketsex-US Factor Tilt Hedged IndexSM | | | 9.81 | % | | | 9.24 | % | | | 7.02 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from net asset value returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross expense ratio of the Fund is 0.83% and the net expense ratio is 0.44%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Morningstar® Developed Markets ex-US Factor Tilt Hedged Index (the “Underlying Index”). The Underlying Index reflects the performance of a selection of equity securities designed to provide broad exposure to the global developed equities markets, excluding the U.S., with (i) increased exposure (or a “tilt”) to small-capitalization stocks and value stocks and (ii) currency risk of the securities included in the Underlying Index hedged against the U.S. dollar on a monthly basis. As of October 31, 2019, there were 3,316 issues in the Underlying Index. Currently, the Fund seeks to achieve its investment objective by investing a substantial portion of its assets in the FlexShares Morningstar Developed Markets ex-US Factor Tilt Index Fund (an “Underlying Fund”). In order to replicate the “hedging” component of the Underlying Index, the Fund enters into foreign currency forward contracts designed to offset the Fund’s exposure to the component currencies. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the issues that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on developed international investments generally traded higher. Over the course of the12-month period, the U.S. dollar (“USD”) was volatile, but ultimately strengthened modestly in developed international markets. This negatively impacted U.S. investors as returns in local currencies generally were diminished by the rising value of the USD. Through Q4 of 2018, developed international markets declined on global trade concerns based on multiple factors including slowing global growth, the impact of U.S.-China tariff escalations and the potential for a “no deal” Brexit between the United Kingdom and the European Union. Developed international investments rebounded in Q1 and Q2 of 2019 as central banks signaled more accommodative monetary measures to combat stagnant growth and inflation. Investors, however, continued to react to the various fits and starts of trade tensions, but ultimately were optimistic for a resolution of U.S.-China tariffs and that a delay in Brexit ’s March deadline would lead to a negotiated agreement that would potentially avoid the most
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| FLEXSHARES ANNUAL REPORT | | | 11 | |
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| FlexShares® Currency | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Hedged Morningstar DM ex-US Factor Tilt Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
punitive “no deal” option. Developed international equities moved modestly lower in Q3 as the European Central Bank (“ECB”) restarted quantitative easing in an effort to combat global growth concerns, while renewed trade tensions continued to weigh on markets. Developed international markets moved higher at the beginning of October 2019 as firming economic data in the Eurozone, the diminished prospect of a “no deal” Brexit, along with the potential thawing of trade tensions, were viewed as positive developments.
Increased market volatility and concerns of slowing global growth dampened investor appetites for small cap stocks in developed international markets, which we believe caused small cap stocks to underperform large cap stocks in those markets during the fiscal year ended October 31, 2019. In addition, value factor1 exposure was a negative driver of performance over the twelve months, as value stocks underperformed growth stocks2. As the USD appreciated versus most developed market currencies over the 12 months, hedging the underlying foreign currency exposure was a positive driver of the Underlying Index’s performance. Overall, the positive impact of the currency hedge of the Underlying Index was not enough, however, to offset the negative performance derived from the size3 and value factor exposures. Consequently, the Underlying Index underperformed the MSCI World ex-USA IMI Index by -0.91%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12-month period was +21 basis points (“bps”)4, which is reflective of the Fund’s management fee of-44 basis points, implementation of the currency hedge (-8 bps), tracking error of the Underlying Fund against its underlying index (+60 bps) and performance calculation differences between the Underlying Index and the Fund (+13 bps).
| 1 | The value factor is based on a belief that stocks that are inexpensive relative to some measure of fundamental value outperform those that are pricier. |
| 2 | The growth factor is based on a belief that the underlying company is anticipated to grow at a rate significantly above the average for the market. |
| 3 | The size factor is measured by a stock’s total capitalization—found by multiplying the current share price times all the outstanding shares of stock. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 12 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® Currency | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Hedged Morningstar® EM Factor Tilt Index Fund Ticker: TLEH
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | Fund
Inception
11/9/2015 | |
| | | | |
| | | |
FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund (Based on Net Asset Value) | | | 7.52 | % | | | 4.50 | % | | | 5.16 | % |
| | | |
FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund (Based on Market Price) | | | 7.89 | % | | | 4.48 | % | | | 5.17 | % |
| | | |
Morningstar® Emerging Markets Factor Tilt Hedged IndexSM | | | 9.11 | % | | | 6.21 | % | | | 6.43 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross expense ratio of the Fund is 1.23% and the net expense ratio is 0.64%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Morningstar® Emerging Markets Factor Tilt Hedged Index (the “Underlying Index”). The Underlying Index reflects the performance of a selection of equity securities designed to provide broad exposure to the global emerging equities markets, with (i) increased exposure (or a “tilt”) to small-capitalization stocks and value stocks and (ii) currency risk of the securities included in the Index hedged against the U.S. dollar on a monthly basis. As of October 31, 2019, there were 2,569 issues in the Underlying Index. Currently, the Fund seeks to achieve its investment objective by investing a substantial portion of its assets in the FlexShares Morningstar® Emerging Markets Factor Tilt Index Fund (an “Underlying Fund”). In order to replicate the “hedging” component of the Underlying Index, the Fund intends to enter into foreign currency forward contracts designed to offset the Fund’s exposure to the component currencies. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the issues that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on emerging market equities generally traded higher. Over the course of the 12-month period, the U.S. dollar (“USD”) was volatile, but ultimately weakened and positively impacted U.S. investors as returns in local currencies generally were enhanced by the falling of the USD. Through Q4 of 2018 emerging market equities moved modestly higher and outperformed developed market equities as gains in emerging market currencies offset concerns over slowing global growth and the escalation of U.S.-China trade tensions. Emerging market investments continued higher in Q1 of 2019 as the U.S. Federal Reserve Bank (“Fed”) signaled it would adjust its planned interest rate hike schedule and investors grew optimistic that trade tensions may decrease as the U.S. suspended planned tariffs on Chinese imports. Emerging markets performance in
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| FLEXSHARES ANNUAL REPORT | | | 13 | |
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| FlexShares® Currency | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Hedged Morningstar® EM Factor Tilt Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
Q1 of 2019 trailed developed markets as concerns over China’s slowing growth tempered gains. Emerging market equities were volatile in Q2 as U.S.-China trade tensions rose and abated throughout the quarter, but emerging markets ultimately ended modestly higher as the Fed’s pivot to accommodative monetary policy boosted developing countries reliant on foreign financing. Emerging markets moved lower in Q3 as global growth concerns, weakness in crude oil prices and trade escalations between the U.S. and China weighed on equities. Emerging markets rallied in October of 2019, due to accommodative monetary policy from global central banks and positive developments in U.S.-China trade negotiations.
Increased market volatility and concerns of slowing global growth dampened investor appetites for small cap stocks in emerging markets, which we believe caused small cap stocks to underperform large cap stocks in those markets during the year ended October 31, 2019. In addition, value factor1 exposure was a negative driver of performance over the 12-month period, as value stocks underperformed growth stocks2. As the USD depreciated versus most emerging market currencies over the 12 months, hedging the underlying foreign currency exposure was a negative driver of the Fund’s performance. Overall, the negative performance from the size, value and currency exposures was the primary source of the Underlying Index’s underperformance to the MSCI EM IMI Net Index by 2.50%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12-month period was-1.59%, which is reflective of the Fund’s management fee of -64 basis points (“bps”)3, implementation of the currency hedge(-55 bps), tracking error of the of the Underlying Fund against its underlying index(-4 bps) and performance calculation differences between the Underlying Index and the Fund (-36 bps).
| 1 | The value factor is based on a belief that stocks that are inexpensive relative to some measure of fundamental value outperform those that are pricier. |
| 2 | The growth factor is based on a belief that the underlying company is anticipated to grow at a rate significantly above the average for the market. |
| 3 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 14 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
US Quality Large Cap Index Fund Ticker: QLC
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | Fund
Inception
9/23/2015 | |
| | | | |
| | | |
FlexShares US Quality Large Cap Index Fund (Based on Net Asset Value) | | | 6.04 | % | | | 11.82 | % | | | 10.21 | % |
| | | |
FlexShares US Quality Large Cap Index Fund (Based on Market Price) | | | 6.01 | % | | | 11.82 | % | | | 10.21 | % |
| | | |
Northern Trust Quality Large Cap IndexSM | | | 6.14 | % | | | 12.12 | % | | | 10.54 | % |
| | | |
S&P 500 Index | | | 14.33 | % | | | 14.92 | % | | | 13.86 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from net asset value returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.32%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Northern Trust Quality Large Cap Index (the “Underlying Index”). The Underlying Index is designed to measure the performance of companies that exhibit certain quality, valuation and momentum characteristics, within a universe of publicly-traded U.S. large capitalization equity securities. As of October 31, 2019, there were 142 issues in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the issues that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on domestic investments generally traded higher. Domestic investments rebounded in Q1 of 2019 from the volatility that predominated during 4Q of 2018, as the U.S. Federal Reserve Bank (the “Fed”) signaled it would adjust its planned interest rate hike schedule to reflect slower growth and investors grew optimistic that trade tensions may decrease as the U.S. suspended planned tariffs on Chinese imports. U.S. equity markets were volatile in Q2 as concerns around growth and trade continued, but domestic investments ultimately finished higher as the Fed signaled possible interest rate cuts to combat the inverted yield curve and employment data remained strong. Domestic equities moved modestly higher in Q3 as market volatility, global growth concerns and continued trade tensions offset stable economic data and an accommodative monetary policy. The Fed cut interest rates twice in the quarter, keeping in line with market expectations. U.S. markets advanced in October 2019 as the Fed cut interest rates a third time and U.S.-China trade negotiations improved. At the beginning of 4Q of 2019, however, U.S. equity markets declined on concerns surrounding the sustainability of continued earnings growth, the cadence of future Fed interest rate hikes and escalating trade tensions between the U.S. and China.
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| FLEXSHARES ANNUAL REPORT | | | 15 | |
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| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
US Quality Large Cap Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
Value factor1 exposure was a negative driver of Underlying Index and Fund performance during the 12 months ended October 31, 2019, as value stocks underperformed growth stocks2 in the U.S. In addition, investor’s preference for momentum factor3 exposure reversed over the 12-month period and became a negative driver of performance, as positive momentum stocks underperformed negative momentum stocks. The quality factor4 exposure of the Underlying Index was a positive driver of performance as we believe companies deemed higher quality generally outperformed those domestic companies deemed to be lower quality. Overall, the positive exposure from quality was not enough to offset the headwinds from the negative performance derived from the value and momentum exposures and the Underlying Index underperformed the S&P 500 Index by -8.19%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12-month period was -10 basis points (“bps”)5, which is reflective of the management fee (-32 bps), stock selection/futures (+24 bps) and performance calculation differences between the Underlying Index and the Fund (-2 bps).
| 1 | The value factor is based on a belief that stocks that are inexpensive relative to some measure of fundamental value outperform those that are pricier. |
| 2 | The growth factor is based on a belief that the underlying company is anticipated to grow at a rate significantly above the average for the market. |
| 3 | Momentum in a stock is described as the tendency for the stock price to continue rising if it is going up and to continue declining if it is going down. |
| 4 | The quality factor is based on a belief that there are a set of clearly defined fundamental criteria that seek to identify companies with outstanding financial characteristics. |
| 5 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 16 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® STOXX® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
US ESG Impact Index Fund Ticker: ESG
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | Fund
Inception
7/13/2016 | |
| | | | |
| | | |
FlexShares STOXX US ESG Impact Index Fund (Based on Net Asset Value) | | | 14.21 | % | | | 15.01 | % | | | 13.64 | % |
| | | |
FlexShares STOXX US ESG Impact Index Fund (Based on Market Price) | | | 14.26 | % | | | 15.01 | % | | | 13.65 | % |
| | | |
STOXX USA ESG Impact Index | | | 13.76 | % | | | 14.19 | % | | | 12.88 | % |
| | | |
Russell 1000® Index | | | 14.15 | % | | | 14.74 | % | | | 13.09 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.32%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the STOXX® USA ESG Impact Index (“Underlying Index”). The Underlying Index is an optimized index designed to provide broad market exposure that is tilted toward U.S. companies that score better with respect to a small set of environmental, social and governance (“ESG”) characteristics and to provide the potential for attractive risk-adjusted performance relative to the STOXX® USA 900 Index, as determined by STOXX Ltd., the index provider, in accordance with its methodology and analytical findings. As of October 31, 2019, there were 271 issues in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. The Fund may or may not hold all of the securities that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on domestic investments generally traded higher. Domestic investments rebounded in Q1 of 2019 from the volatility that predominated during Q4 of 2018, as the U.S. Federal Reserve Bank (the “Fed”) signaled it would adjust its planned interest rate hike schedule to reflect slower growth, and investors grew optimistic that trade tensions may decrease as the U.S. suspended planned tariffs on Chinese imports. U.S. equity markets were volatile in Q2 of 2019 as concerns around growth and trade continued, but domestic investments ultimately finished higher as the Fed signaled possible interest rate cuts to combat the inverted yield curve, and employment data remained strong. Domestic equities moved modestly higher in Q3 as market volatility, global growth concerns and continued trade tensions offset stable economic data and accommodative monetary policy. The Fed cut interest rates twice in the quarter keeping in-line with market expectations. U.S. markets advanced in October 2019 as the Fed cut rates a third time and US-China trade negotiations improved. At the beginning of Q4 of 2019, however, U.S. equity markets declined on
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| FLEXSHARES ANNUAL REPORT | | | 17 | |
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| FlexShares® STOXX® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
US ESG Impact Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
concerns surrounding the sustainability of continued earnings growth, the cadence of future Fed interest rate hikes and escalating trade tensions between the U.S. and China.
The Underlying Index had a positive total return during the 12 months ended October 31, 2019 but underperformed the domestic equity markets, as defined by the Russell 1000 Index, by -0.39%. The Underlying Index’s ESG tilted approach resulted in a slightly greater allocation to consumer staples/discretionary, energy, information technology, communication services and financials sectors and an underweight position in the industrials, materials, utilities, real estate and health care sectors. All sectors were positive contributors to performance during the period, except energy. In comparison to the Russell 1000 Index, sector overweight positions in information technology, communication services, financials and consumer discretionary, while an underweight in the health care and utilities sectors contributed to performance of the Underlying Index. Overweight positions, however, to the consumer staples and energy sectors and an underweight to the real estate and industrials sector detracted from performance of the Underlying Index. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the12-month period was +45 basis points (“bps”)1, which is reflective of the management fee (-32 bps), stock selection/futures (+15 bps) and dividend tax differential (+62 bps).
| 1 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 18 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® STOXX® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Global ESG Impact Index Fund Ticker: ESGG
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | Fund
Inception
7/13/2016 | |
| | | | |
| | | |
FlexShares STOXX Global ESG Impact Index Fund (Based on Net Asset Value) | | | 13.49 | % | | | 12.68 | % | | | 11.80 | % |
| | | |
FlexShares STOXX Global ESG Impact Index Fund (Based on Market Price) | | | 12.96 | % | | | 12.69 | % | | | 11.81 | % |
| | | |
STOXX Global ESG Impact IndexSM | | | 13.42 | % | | | 12.64 | % | | | 11.78 | % |
| | | |
MSCI World Index | | | 12.69 | % | | | 11.87 | % | | | 10.83 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.42%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the STOXX® Global ESG Impact Index (“Underlying Index”). The Underlying Index is an optimized index designed to provide broad market exposure that is tilted toward global companies that score better with respect to a small set of environmental, social and governance (“ESG”) characteristics and to provide the potential for attractive risk-adjusted performance relative to the STOXX® Global 1800 Index, as determined by STOXX Ltd., the index provider, in accordance with its methodology and analytical findings. As of October 31, 2019, there were 891 issues in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. The Fund may or may not hold all of the securities that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on global investments generally traded higher. Through Q4 of 2018, overall global markets declined on global trade concerns based on multiple factors including concerns over slowing global growth, the impact of U.S.-China tariff escalations and the potential for a “no deal” Brexit between the United Kingdom and the European Union. Global investments rebounded in Q1of 2019 as the U.S. Federal Reserve Bank (“Fed”) signaled it would adjust its planned interest rate hike schedule to reflect slower growth and investors grew optimistic that trade tensions may decrease as the U.S. suspended planned tariffs on Chinese imports. Global equity markets were volatile in Q2 as concerns around global growth and trade continued, but global investments ultimately finished higher for the quarter as central banks signaled more accommodative monetary measures to combat stagnant growth and inflation. Global equities moved modestly higher in Q3 as market volatility, global growth concerns and continued trade tensions were offset by accommodative monetary policy. Global markets moved higher still in October 2019 as firming economic data in
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| FLEXSHARES ANNUAL REPORT | | | 19 | |
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| FlexShares® STOXX® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Global ESG Impact Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
the Eurozone, accommodative monetary policy from global central banks and the potential thawing of U.S.-China trade tensions were viewed as positive developments by investors.
The Underlying Index had a positive total return during the 12 months ended October 31, 2019, and outperformed the global equity markets, as defined by the MSCI World Index, by 0.73%. The Underlying Index’s ESG tilted approach resulted in a slightly greater allocation to the consumer staples/discretionary, information technology, communication services and financials sectors and underweight positions in the industrials, energy, materials, utilities, real estate and health care sectors. For the12-month period ended October 31, 2019, the utilities, consumer staples, information technology, real estate and communication services sectors were positive contributors to performance while the remaining sectors detracted from performance. In comparison to the MSCI World Index, sector overweight positions to consumer staples, information technology and communication services and an underweight in industrials, energy and materials sectors contributed positively to performance of the Underlying Index. Overweight positions, however, to the consumer discretionary and financials and an underweight to the real estate, healthcare and utilities sectors detracted from performance of the Underlying Index. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12-month period was +7 basis points (“bps”)1, which is reflective of the management fee (-42 bps), stock selection/futures (+5 bps) and dividend tax differential (+44 bps).
| 1 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 20 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® Morningstar | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Global Upstream Natural Resources Index Fund Ticker: GUNR
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
9/16/2011 | |
| | | | |
| | | | |
FlexShares Morningstar Global Upstream Natural Resources Index Fund (Based on Net Asset Value) | | | 3.16 | % | | | 7.54 | % | | | 2.27 | % | | | 1.14 | % |
| | | | |
FlexShares Morningstar Global Upstream Natural Resources Index Fund (Based on Market Price) | | | 3.06 | % | | | 7.44 | % | | | 2.23 | % | | | 1.12 | % |
| | | | |
Morningstar® Global Upstream Natural Resources IndexSM | | | 3.55 | % | | | 7.98 | % | | | 2.73 | % | | | 1.49 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.46%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the performance of the Morningstar® Global Upstream Natural Resources Index (the “Underlying Index”). The Underlying Index reflects the performance of a selection of equity securities that are traded in or are issued by companies domiciled in global developed or emerging market countries, including the U.S., as determined by Morningstar, Inc., (the “Index Provider”) pursuant to its index methodology. The companies included in the Underlying Index have significant business operations in the ownership, management and/or production of natural resources in energy, agriculture, precious or industrial metals, timber and water resources sectors, as determined by the Index Provider, pursuant to its index methodology. As of October 31, 2019, there were 119 issues in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective and a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the issues that are included in the Underlying Index.
During the first quarter of the fiscal year ended October 31, 2019, commodity and natural resources prices in many sectors were lower, driven by concerns over the U.S./China trade war, slowing global growth and the U.S. Federal Reserve Bank’s (“Fed”) move towards higher short-term interest rates. Prices rebounded late in the Q1 and early Q2 of 2019 as the Fed paused its monetary tightening policy, and other central banks maintained accommodative monetary stances. Commodity and natural resource prices remained volatile for the balance of the Fund’s fiscal year as the continued trade war between the U.S. and China, along with other geopolitical events, destabilized global markets. A weakening U.S. Dollar (“USD”) during Q1 of 2019 helped to mitigate some of the lower natural resource prices, however, the USD rallied to end the fiscal year up slightly. The U.S. Dollar Index (“DXY”) fell 2% through early-January and then recovered to finish at 0.23% at fiscal year-end.1
| 1 | Source: Bloomberg. DXY Index. January 2, 2019 through October 31, 2019. |
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| FLEXSHARES ANNUAL REPORT | | | 21 | |
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| FlexShares® Morningstar | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Global Upstream Natural Resources Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
In general, industrial metals prices were mixed during the fiscal year, with nickel the best performing base metal partly because of supply issues within Southeast Asia. We believe aluminum, tin and steel were all lower during the period because of slowing China demand and supply issues. Our analysis suggests that China’s slowing economic growth caused by the ongoing trade war with the U.S., had a negative impact on base metal prices globally. Following a mixed price performance in the fiscal year ended October 31, 2018, precious metals, such as gold and silver, posted strong price performance during the fiscal year ended October 31, 2019. We believe this was due to the function of precious metals as a store of value against the roughly $17 trillion of global debt, some of which has been providing investors with negative yields. Additionally, precious metals, like palladium that are used in specialized industrial applications, saw demand increase and posted strong price increases during the fiscal year. Grains were mostly higher for the fiscal year as supplies may have been depressed by wet spring weather, which may have impacted North American planting schedules. Protein prices, specifically hogs, were higher for the fiscal year as an African swine flu virus devastated hog herds in China. U.S. lumber prices posted strong price gains on housing demand and supply restriction issues, which may have been caused by ongoing trade disputes between the U.S. and Canada.
Production cutbacks by the Organization of Petroleum Exporting Countries (“OPEC”) producers failed to stymie oil price declines in the first quarter of the fiscal year as investors focused on potentially slowing demand for oil based on an assumption of decreased global growth. By the third quarter of the fiscal year, however, oil prices, as measured by West Text Intermediate Crude (“WTI”), moved into a trading band between $52—60 per barrel.2 The trading band was interrupted in late September 2019, when an attack on major Saudi Arabian fields and facilities caused oil prices to temporarily spike.3 WTI prices, however, ended the fiscal year down roughly 17%.4
For the 12-month period, the Underlying Index outperformed the global natural resource equity markets, as defined by the S&P Global Natural Resources Index, 3.55% versus -0.98%, respectively. We believe that, due to the Underlying Index’s focus on the upstream section of the natural resource supply chain, there was limited to no exposure to underperforming downstream natural resource sectors. Four of the five natural resource sectors (agriculture, metals, timber and water) generated positive returns during the same period. The
PORTFOLIO ANALYSIS (cont.)
remaining sector, energy, detracted slightly from performance. Tracking difference for the period between the Fund’s NAV and the Underlying Index was -39 basis points (“bps”)5, which is reflective of the Fund’s management fee (-46 bps), futures(-1 bps), foreign dividend tax differential treatment (+7 bps), securities lending (+4 bps) and transaction costs (-3 bps).
| 2 | Source: Bloomberg. WTI Index. July 1, 2019 through September 13, 2019. |
| 3 | Source: Bloomberg. WTI Index. September 14, 2019 through September 23, 2019. |
| 4 | Source: Bloomberg. WTI Index. January 2, 2019 through October 31, 2019. |
| 5 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 22 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® STOXX® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Global Broad Infrastructure Index Fund Ticker: NFRA
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
10/8/2013 | |
| | | | |
| | | | |
FlexShares STOXX Global Broad Infrastructure Index Fund (Based on Net Asset Value) | | | 19.52 | % | | | 9.60 | % | | | 5.57 | % | | | 7.40 | % |
| | | | |
FlexShares STOXX Global Broad Infrastructure Index Fund (Based on Market Price) | | | 19.99 | % | | | 9.54 | % | | | 5.43 | % | | | 7.41 | % |
| | | | |
STOXX Global Broad Infrastructure Index | | | 19.40 | % | | | 9.46 | % | | | 5.44 | % | | | 7.32 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.47%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the STOXX® Global Broad Infrastructure Index (the “Underlying Index”). The Underlying Index reflects the performance of a selection of equity securities of infrastructure-related companies that are domiciled or traded in developed and emerging markets around the world (including the U.S.). The companies included in the Underlying Index derive at least 50% of their revenues from the ownership, development, construction, financing or operation of infrastructure assets, as determined by STOXX, the index provider, pursuant to its index methodology. As of October 31, 2019, there were 164 issues in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the issues that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on global investments generally traded higher. Through Q4 of 2018, overall global markets declined on global trade concerns based on multiple factors including concerns over slowing global growth, the impact of U.S.-China tariff escalations and the potential for a “no deal” Brexit between the United Kingdom and the European Union. Global investments rebounded in Q1 of 2019 as the U.S. Federal Reserve Bank (“Fed”) signaled it would adjust its planned interest rate hike schedule to reflect slower growth and investors grew optimistic that trade tensions may decrease as the U.S. suspended planned tariffs on Chinese imports. Global equity markets were volatile in Q2 as concerns around global growth and trade continued, but ultimately investments finished higher for the quarter as central banks signaled more accommodative monetary measures to combat stagnant growth and inflation. Global equities moved modestly higher in Q3 as market volatility, global growth concerns and continued trade tensions were offset by accommodative monetary policy. Global markets moved higher still
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 23 | |
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| FlexShares® STOXX® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Global Broad Infrastructure Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
in October 2019 as firming economic data in the Eurozone, accommodative monetary policy from global central banks and the potential thawing of U.S.-China trade tensions were viewed as positive developments by investors.
The Underlying Index had a positive total return during the 12 months ended October 31, 2019, but underperformed the global infrastructure market, as defined by the S&P Global Infrastructure Index, by 0.54%. The Underlying Index’s exposures to the energy and utilities sectors positively affected its performance while exposures to the communication, transportation and social infrastructure sectors detracted from its performance. The tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12-month period was +12 basis points (“bps”)1, which is reflective of the Fund’s management fee(-47 bps), stock selection/futures (+3 bps), securities lending (+3 bps) and dividend tax differential (+53 bps).
| 1 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 24 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Global Quality Real Estate Index Fund Ticker: GQRE
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
11/5/2013 | |
| | | | |
| | | | |
FlexShares Global Quality Real Estate Index Fund (Based on Net Asset Value) | | | 18.37 | % | | | 8.39 | % | | | 6.78 | % | | | 7.78 | % |
| | | | |
FlexShares Global Quality Real Estate Index Fund (Based on Market Price) | | | 18.65 | % | | | 8.38 | % | | | 6.68 | % | | | 7.81 | % |
| | | | |
Northern Trust Global Quality Real Estate IndexSM | | | 18.53 | % | | | 8.42 | % | | | 6.73 | % | | | 7.76 | % |
| | | | |
FTSE EPRA/NAREIT Developed IndexSM | | | 20.29 | % | | | 8.59 | % | | | 5.97 | % | | | 6.76 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.45%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Northern Trust Global Quality Real Estate Index (the “Underlying Index”). The Underlying Index is designed to measure the performance of companies that exhibit certain quality, valuation and momentum characteristics within a universe of publicly-traded equity securities of U.S. and non-U.S. real estate investment trusts (“REITs”) and real estate companies. As of October 31, 2019, there were 151 issues in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the issues that are included in the Underlying Index. During the 12 months ended October 31, 2019, prices on global investments generally traded higher. Through Q4 of 2018 overall global markets declined on global trade concerns based on multiple factors including concerns over slowing global growth, the impact of U.S.-China tariff escalations and the potential for a “no deal” Brexit between the United Kingdom and the European Union. Global investments rebounded in Q1 of 2019 as the U.S. Federal Reserve Bank (“Fed”) signaled it would adjust its planned interest rate hike schedule to reflect slower growth and investors grew optimistic that trade tensions may decrease as the U.S. suspended planned tariffs on Chinese imports. Global equity markets were volatile in Q2 as concerns around global growth and trade continued, but global investments ultimately finished higher for the quarter as central banks signaled more accommodative monetary measures to combat stagnant growth and inflation. Global equities moved modestly higher in Q3 as market volatility, global growth concerns and continued trade tensions were offset by accommodative monetary policy. Global markets moved higher still in October 2019 as firming economic data in the Eurozone, accommodative monetary policy from global central banks and the potential thawing of U.S.-China trade tensions were viewed as positive developments by investors.
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| FLEXSHARES ANNUAL REPORT | | | 25 | |
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| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Global Quality Real Estate Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
The Underlying Index had a positive total return during the 12 months ended October 31, 2019, but underperformed the global equity real estate markets, as defined by the FTSE EPRA/NAREIT Developed Net Index, by 1.76%. The quality1 and value2 factor exposures of the Underlying Index were negative drivers of performance while the momentum3 factor exposure was a positive driver of performance. Overall, the positive exposure to momentum was not enough to offset the headwinds from the negative performance derived from the quality and value exposures. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the period was -16 basis points (“bps”)4, which is reflective of the Fund’s management fee (-45 bps), stock selection/futures (-10 bps), securities lending (+2 bps), dividend tax differential (+35 bps) and performance calculation differences between the Underlying Index and the Fund (+2 bps).
| 1 | The value factor is based on a belief that stocks that are inexpensive relative to some measure of fundamental value outperform those that are pricier. |
| 2 | The growth factor is based on a belief that the underlying company is anticipated to grow at a rate significantly above the average for the market. |
| 3 | Momentum in a stock is described as the tendency for the stock price to continue rising if it is going up and to continue declining if it is going down. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 26 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Real Assets Allocation Index Fund Ticker: ASET
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | Fund
Inception
11/23/2015 | |
| | | | |
| | | |
FlexShares Real Assets Allocation Index Fund (Based on Net Asset Value) | | | 17.69 | % | | | 8.74 | % | | | 8.06 | % |
| | | |
FlexShares Real Assets Allocation Index Fund (Based on Market Price) | | | 17.72 | % | | | 8.76 | % | | | 8.09 | % |
| | | |
Northern Trust Real Assets Allocation IndexSM | | | 17.82 | % | | | 8.87 | % | | | 8.19 | % |
| | | |
MSCI ACWI Index | | | 12.59 | % | | | 11.34 | % | | | 9.19 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross expense ratio of the Fund is 1.03% and the net expense ratio is 0.57%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the performance of the Northern Trust Real Assets Allocation Index (the “Underlying Index”). The Underlying Index measures the performance of an optimized allocation to other FlexShares ETFs (“Underlying Funds”) that is intended to provide exposures to certain real assets and minimize overall volatility of investment in the Underlying Funds. The Underlying Funds invest primarily in separate sets of securities representing or providing exposures to global “real assets.” Examples of real assets include but are not limited to commodities, precious metals, oil and real estate. As of October 31, 2019, there were three Underlying Funds in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective and to manage the Fund.
During the 12 months ended October 31, 2019, prices on global investments generally traded higher. Through Q4 of 2018 overall global markets declined on global trade concerns based on multiple factors, including concerns over slowing global growth, the impact of U.S.-China tariff escalations and the potential for a “no deal” Brexit between the United Kingdom and the European Union. Global investments rebounded in Q1 of 2019 as the U.S. Federal Reserve Bank (“Fed”) signaled it would adjust its planned interest rate hike schedule to reflect slower growth and investors grew optimistic that trade tensions may decrease as the U.S. suspended planned tariffs on Chinese imports. Global equity markets were volatile in Q2 as concerns around global growth and trade continued, but global investments ultimately finished higher for the quarter as central banks signaled more accommodative monetary measures to combat stagnant growth and inflation. Global equities moved modestly higher in Q3 as market volatility, global growth concerns and continued trade tensions were offset by accommodative monetary policy. Global markets moved higher still in October 2019 as firming economic data in the Eurozone, accommodative monetary policy from global central banks and the
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| FLEXSHARES ANNUAL REPORT | | | 27 | |
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| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Real Assets Allocation Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
potential thawing of U.S.-China trade tensions were viewed as positive developments by investors.
The Underlying Index had a positive total return during the 12 months ended October 31, 2019 and outperformed the global equity markets, as defined by the MSCI All Country World Index (ACWI) by 5.23%. The Underlying Index had a greater allocation to real estate and infrastructure relative to its natural resource allocation. Traditional yield-attractive assets, like infrastructure and real estate, outperformed due, in part, to lower U.S. Treasury yields as the Fed halted its monetary tightening policy and then moved into an accommodative position with three interest rate reductions in July, September and October 2019. The tracking difference between the Fund’s NAV and the Underlying Index’s total return for the period was -12 basis points (“bps”)1, which is largely reflective of the Fund’s management fee, net of reimbursed amounts, equal to the Acquired Fund Fees and Expenses attributable to the Fund’s investments in the Underlying Fund (-11 bps) and transaction costs(-1 bps).
| 1 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
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| 28 | | FLEXSHARES ANNUAL REPORT |
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| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Quality Dividend Index Fund Ticker: QDF
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
12/14/2012 | |
| | | | |
| | | | |
FlexShares Quality Dividend Index Fund (Based on Net Asset Value) | | | 8.45 | % | | | 11.22 | % | | | 8.65 | % | | | 12.64 | % |
| | | | |
FlexShares Quality Dividend Index Fund (Based on Market Price) | | | 8.52 | % | | | 11.22 | % | | | 8.67 | % | | | 12.65 | % |
| | | | |
Northern Trust Quality Dividend IndexSM | | | 9.25 | % | | | 11.82 | % | | | 9.18 | % | | | 13.16 | % |
| | | | |
Russell 1000® Index | | | 14.15 | % | | | 14.74 | % | | | 10.55 | % | | | 13.96 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from net asset value returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.37%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Northern Trust Quality Dividend Index (the “Underlying Index”). The Underlying Index is designed to provide exposure to a high quality, income-oriented portfolio of U.S. equity securities, with an emphasis on long-term capital growth and a targeted overall volatility similar to that of the Northern Trust 1250 Index (the “Parent Index”).1 Companies included in the Underlying Index are a subset of the Parent Index, and are selected based on expected dividend payments and fundamental factors such as profitability, management expertise and cash flow, as determined by Northern Trust Investments, Inc. (“NTI”) in its capacity as the index provider (the “Index Provider”) pursuant to its index methodology. The Underlying Index begins with the Parent Index, and then follows a rules-based methodology to calculate optimal weights for securities in the Underlying Index based upon a targeted overall beta2 similar to the Parent Index, dividend yield, quality factors and lower total risk. As of October 31, 2019, there were 137 issues in the Underlying Index. NTI uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the issues that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on domestic investments generally traded higher. Domestic investments rebounded in Q1 of 2019 from the volatility that predominated during 4Q of 2018, as the U.S. Federal Reserve Bank (“Fed”) signaled it
| 1 | Northern Trust 1250 Index is a float-adjusted market-capitalization weighted index comprised of the 1250 largest U.S. domiciled companies by market capitalization. |
| 2 | A statistical measure of the volatility, or sensitivity, of rates of return on a portfolio or security compared to a market index. The beta for an ETF measures the expected change in return of the ETF relative to the return of a designated index. By definition, the beta of the Standard & Poor’s (“S&P”) 500 Index is 1.00. Accordingly, a fund with a 1.10 beta is expected to perform 10% better than the S&P 500 Index in rising markets and 10% worse in falling markets. |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 29 | |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Quality Dividend Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
would adjust its planned rate hike schedule to reflect slower growth and investors grew optimistic that trade tensions may decrease as the U.S. suspended planned tariffs on Chinese imports. U.S. equity markets were volatile in Q2 as concerns around growth and trade continued, but domestic investments ultimately finished higher as the Fed signaled possible rate cuts to combat the inverted yield curve and employment data remained strong. Domestic equities moved modestly higher in Q3 as market volatility, global growth concerns and continued trade tensions offset stable economic data and accommodative monetary policy. The Fed cut rates twice in the quarter, keeping in line with market expectations. U.S. markets advanced in October 2019 as the Fed cut rates a third time and U.S.-China trade negotiations improved. At the beginning of 4Q, 2019, however, U.S. equity markets declined on concerns surrounding the sustainability of continued earnings growth, the cadence of future Fed rate hikes and escalating trade tensions between the U.S. and China.
The Underlying Index’s exposure to equities that traditionally have derived some of their market value from their overall higher yield levels versus the broader market was perceived by investors as a negative influence, as the top dividend yielding stocks underperformed non-dividend paying stocks during the 12 months ended October 31, 2019. The quality factor3 focus of the Fund’s Underlying Index was a positive driver of performance for the 12-month period. We believe that, in general, U.S. companies deemed higher quality outperformed those domestic companies deemed to be lower quality during the same period. Overall, the positive performance derived from the quality exposure was not enough to offset the negative performance derived from investor preference for non-dividend paying stocks. Consequently, the Underlying Index underperformed the Russell 1000 Index by -4.90%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12-month period was-80 basis points (“bps”)4, which is reflective of the management fee (-37 bps), stock selection/futures (-47 bps), securities lending (+3 bps) and performance calculation differences between the Underlying Index and the Fund (+1 bps).
| 3 | The quality factor is based on a belief that there are a set of clearly defined fundamental criteria that seek to identify companies with outstanding financial characteristics. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| 30 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Quality Dividend Defensive Index Fund Ticker: QDEF
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
12/14/2012 | |
| | | | |
| | | | |
FlexShares Quality Dividend Defensive
Index Fund (Based on Net Asset Value) | | | 11.40 | % | | | 12.45 | % | | | 9.62 | % | | | 12.99 | % |
| | | | |
FlexShares Quality Dividend Defensive
Index Fund (Based on Market Price) | | | 11.40 | % | | | 12.46 | % | | | 9.64 | % | | | 12.99 | % |
| | | | |
Northern Trust Quality Dividend Defensive IndexSM | | | 12.17 | % | | | 13.31 | % | | | 10.33 | % | | | 13.64 | % |
| | | | |
Russell 1000® Index | | | 14.15 | % | | | 14.74 | % | | | 10.55 | % | | | 13.96 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from net asset value returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.37%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Northern Trust Quality Dividend Defensive Index (the “Underlying Index”). The Underlying Index is designed to provide exposure to a high-quality, income-oriented portfolio of U.S. equity securities, with an emphasis on long-term capital growth and a targeted overall volatility that is lower than that of the Northern Trust 1250 Index (the “Parent Index”)1. Companies included in the Underlying Index are a subset of the Parent Index, and are selected based on expected dividend payment and fundamental factors such as profitability, management expertise and cash flow, as determined by Northern Trust Investments, Inc. (“NTI”) in its capacity as the index provider (the “Index Provider”), pursuant to its index methodology. The Underlying Index begins with the Parent Index, and then follows a rules-based methodology to calculate optimal weights for securities in the Underlying Index based upon a targeted overall beta2 generally between 0.5 and 1.0 times that of the Parent Index, dividend yield, quality factors and lower total risk. As of October 31, 2019, there were 166 issues in the Underlying Index. NTI uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the securities that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on domestic investments generally traded higher. Domestic investments rebounded in Q1 of 2019 from the volatility that predominated during 4Q of 2018, as the U.S. Federal Reserve Bank (the “Fed”) signaled it would adjust its planned interest rate hike schedule to reflect slower growth and investors grew optimistic that trade tensions may
| 1 | Northern Trust 1250 Index is a float-adjusted market-capitalization weighted index comprised of the 1250 largest U.S. domiciled companies by market capitalization. |
| 2 | A statistical measure of the volatility, or sensitivity, of rates of return on a portfolio or security compared to a market index. The beta for an ETF measures the expected change in return of the ETF relative to the return of a designated index. By definition, the beta of the Standard & Poor’s (S&P) 500 Index is 1.00. Accordingly, a fund with a 1.10 beta is expected to perform 10% better than the S&P 500 Index in rising markets and 10% worse in falling markets. |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 31 | |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Quality Dividend Defensive Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
decrease as the U.S. suspended planned tariffs on Chinese imports. U.S. equity markets were volatile in Q2 as concerns around growth and trade continued, but domestic investments ultimately finished higher as the Fed signaled possible rate cuts to combat the inverted yield curve and employment data remained strong. Domestic equities moved modestly higher in Q3 of 2019 as market volatility, global growth concerns and continued trade tensions offset stable economic data and accommodative monetary policy. The Fed cut rates twice in the quarter keeping in line with market expectations. U.S. markets advanced in October 2019 as the Fed cut rates a third time and U.S.-China trade negotiations improved. At the beginning of 4Q of 2019, however, U.S. equity markets declined on concerns surrounding the sustainability of continued earnings growth, the cadence of future Fed rate hikes and escalating trade tensions between the U.S. and China.
The Underlying Index’s exposure to equities that traditionally have derived some of their market value from their overall higher yield levels versus the broader market was perceived by investors as a negative influence, as the top dividend yielding stocks underperformed non-dividend paying stocks during the 12 months ended October 31, 2019. The quality factor3 focus of the Fund’s Underlying Index was a positive driver of performance for the 12-month period. We believe that in general U.S. companies deemed higher quality, outperformed those domestic companies deemed to be lower quality during the same period. The Underlying Index’s lower beta exposure was a positive driver, as both lower volatility and higher volatility stocks outperformed stocks with market-like volatility. Overall, the positive performance derived from the quality and lower beta exposures was not enough to offset the negative performance derived from investor preference for non-dividend paying stocks. Consequently, the Underlying Index underperformed the Russell 1000 Index by -1.98%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12-month period was-77 basis points (“bps”)4, which is reflective of the management fee (-37 bps), stock selection/futures (-42 bps), and securities lending (+2 bps).
| 3 | The quality factor is based on a belief that there are a set of clearly defined fundamental criteria that seek to identify companies with outstanding financial characteristics. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| 32 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Quality Dividend Dynamic Index Fund Ticker: QDYN
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
12/14/2012 | |
| | | | |
| | | | |
FlexShares Quality Dividend Dynamic
Index Fund (Based on Net Asset Value) | | | 10.86 | % | | | 11.84 | % | | | 8.01 | % | | | 12.19 | % |
| | | | |
FlexShares Quality Dividend Dynamic
Index Fund (Based on Market Price) | | | 10.89 | % | | | 11.81 | % | | | 8.03 | % | | | 12.19 | % |
| | | | |
Northern Trust Quality Dividend Dynamic IndexSM | | | 11.08 | % | | | 12.17 | % | | | 8.34 | % | | | 12.56 | % |
| | | | |
Russell 1000® Index | | | 14.15 | % | | | 14.74 | % | | | 10.55 | % | | | 13.96 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from net asset value returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.37%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Northern Trust Quality Dividend Dynamic Index (the “Underlying Index”). The Underlying Index is designed to provide exposure to a high-quality, income-oriented portfolio of U.S. equity securities, with an emphasis on long-term capital growth and a targeted overall volatility that is greater than that of the Northern Trust 1250 Index (the “Parent Index”)1. Companies included in the Underlying Index are a subset of the Parent Index, and are selected based on expected dividend payment and fundamental factors such as profitability, management expertise and cash flow, as determined by Northern Trust Investments, Inc. (“NTI”) in its capacity as the index provider (the “Index Provider”), pursuant to its index methodology. The Underlying Index begins with the Parent Index, and then follows a rules-based methodology to calculate optimal weights for securities in the Underlying Index based upon a targeted overall beta2 generally between 1.0 and 1.5 times that of the Parent Index, dividend yield, quality factors and lower total risk. As of October 31, 2019, there were 159 issues in the Underlying Index. NTI uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the securities that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on domestic investments generally traded higher. Domestic investments rebounded in Q1 of 2019 from the volatility that predominated during 4Q of 2018, as the U.S. Federal Reserve Bank (the “Fed”) signaled it would adjust its planned interest rate hike schedule to reflect slower growth and investors grew optimistic that trade tensions may
| 1 | Northern Trust 1250 Index is a float-adjusted market-capitalization weighted index comprised of the 1250 largest U.S. domiciled companies by market capitalization. |
| 2 | A statistical measure of the volatility, or sensitivity, of rates of return on a portfolio or security compared to a market index. The beta for an ETF measures the expected change in return of the ETF relative to the return of a designated index. By definition, the beta of the Standard & Poor’s (S&P) 500 Index is 1.00. Accordingly, a fund with a 1.10 beta is expected to perform 10% better than the S&P 500 Index in rising markets and 10% worse in falling markets. |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 33 | |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Quality Dividend Dynamic Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
decrease as the U.S. suspended planned tariffs on Chinese imports. U.S. equity markets were volatile in Q2 as concerns around growth and trade continued, but domestic investments ultimately finished higher as the Fed signaled possible rate cuts to combat the inverted yield curve and employment data remained strong. Domestic equities moved modestly higher in Q3 as market volatility, global growth concerns and continued trade tensions offset stable economic data and accommodative monetary policy. The Fed cut rates twice in the quarter, keeping in line with market expectations. U.S. markets advanced in October 2019 as the Fed cut rates a third time and U.S.-China trade negotiations improved. At the beginning of 4Q of 2019, however, U.S. equity markets declined on concerns surrounding the sustainability of continued earnings growth, the cadence of future Fed rate hikes and escalating trade tensions between the U.S. and China.
The Underlying Index’s exposure to equities that traditionally have derived some of their market value from their overall higher yield levels versus the broader market was perceived by investors as a negative influence, as the top dividend yielding stocks underperformed non-dividend paying stocks during the 12 months ended October 31, 2019. The quality factor3 focus of the Fund’s Underlying Index was a positive driver of performance for the 12-month period. We believe that, in general, U.S. companies deemed higher quality, outperformed those domestic companies deemed to be lower quality during the same period. The Underlying Index’s higher beta exposure was a positive driver as both higher and lower volatility stocks outperformed stocks with market-like volatility. Overall, the positive performance derived from the quality exposure and higher beta exposures was not enough to offset the negative performance derived from investor preference for non-dividend paying stocks and consequently, the Underlying Index underperformed the Russell 1000 Index by -3.07%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the12-month period was -22 basis points (“bps”)4, which is reflective of the management fee(-37 bps), stock selection/futures (+13 bps) and securities lending (+2 bps).
| 3 | The quality factor is based on a belief that there are a set of clearly defined fundamental criteria that seek to identify companies with outstanding financial characteristics. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| 34 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
International Quality Dividend Index Fund Ticker: IQDF
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
4/12/2013 | |
| | | | |
| | | | |
FlexShares International Quality Dividend Index Fund (Based on Net Asset Value) | | | 8.41 | % | | | 5.65 | % | | | 1.78 | % | | | 2.81 | % |
| | | | |
FlexShares International Quality Dividend Index Fund (Based on Market Price) | | | 9.09 | % | | | 5.63 | % | | | 1.61 | % | | | 2.82 | % |
| | | | |
Northern Trust International Quality Dividend IndexSM | | | 8.41 | % | | | 5.75 | % | | | 2.16 | % | | | 3.16 | % |
| | | | |
MSCI ACWI ex USA Index | | | 11.27 | % | | | 8.08 | % | | | 3.82 | % | | | 4.30 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.47%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust International Quality Dividend Index (the “Underlying Index”). The Underlying Index is designed to provide exposure to a high-quality, income-oriented portfolio of international equity securities issued by non-U.S.-based companies, with an emphasis on long-term capital growth and a targeted overall volatility similar to that of the Northern Trust International Large Cap Index (the “Parent Index”)1. Companies included in the Underlying Index are a subset of the Parent Index, and are selected based on expected dividend payment and fundamental factors such as profitability, management expertise and cash flow, as determined by Northern Trust Investments, Inc. (“NTI”) in its capacity as the index provider (the “Index Provider”), pursuant to its index methodology. The Underlying Index begins with the Parent Index, and then follows a rules-based methodology to calculate optimal weights for securities in the Underlying Index based upon a targeted overall beta2 similar to the Parent Index, dividend yield, quality factors and lower total risk.
As of October 31, 2019, there were 195 issues in the Underlying Index. NTI uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the securities that are included in the Underlying Index.
During the 12 months ended October 31, 2019, prices on developed international
| 1 | The Northern Trust International Large Cap Index is a float-adjusted market capitalization weighted index comprised of eligible large capitalization securities of developed or emerging market countries as determined by the Index Provider. |
| 2 | A statistical measure of the volatility, or sensitivity, of rates of return on a portfolio or security compared to a market index. The beta for an ETF measures the expected change in return of the ETF relative to the return of a designated index. By definition, the beta of the Standard & Poor’s (S&P) 500 Index is 1.00. Accordingly, a fund with a 1.10 beta is expected to perform 10% better than the S&P 500 Index in rising markets and 10% worse in falling markets. |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 35 | |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
International Quality Dividend Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
investments generally traded higher. Over the course of the 12-month period, however, the U.S. dollar (“USD”) was volatile, but ultimately strengthened modestly against developed market currencies, which negatively affected U.S. investors as returns in local currencies generally were diminished by the rising of the USD. Through Q4 of 2018 developed international markets declined on global trade concerns based on multiple factors including concerns over slowing global growth, the impact of U.S.-China tariff escalations and the potential for a “no deal” Brexit between the United Kingdom and the European Union. Developed international investments rebounded in Q1 and Q2 of 2019, as central banks signaled more accommodative monetary measures to combat stagnant growth and inflation. Investors, however, continued to react to the various fits and starts of trade tensions but remained optimistic for a resolution of the U.S.-China tariff dispute and that a delay in Brexit’s March deadline would lead to a negotiated agreement that would potentially avoid the most punitive “no deal” option. Developed international equities moved modestly lower in Q3 as the European Central Bank restarted quantitative easing in an effort to combat global growth concerns while renewed trade tensions continued to weigh on markets. Developed international markets moved higher at the beginning of October 2019, as firming economic data in the Eurozone, the diminished prospect of a “no deal” Brexit, along with the potential thawing of trade tensions, were viewed as positive developments by investors.
The exposure within the Underlying Index to equities that traditionally have derived some of their market value from their overall higher yield levels versus the broader market had a negative influence on performance, as the top dividend yielding stocks underperformed non-dividend paying stocks during the 12 months ended October 31, 2019. The impact of the quality factor3 focus on international equity markets of the Fund’s Underlying Index was a positive driver of performance for the 12-month period. We believe that in general international companies deemed higher quality outperformed those international companies deemed to be lower quality. Overall, the positive performance derived from the quality exposure was not enough to offset the negative performance derived from investor preference for non-dividend paying stocks. Consequently the Underlying Index underperformed the MSCI ACWI ex USA Index by 2.86%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12-month period was 0 basis points (“bps”)4, which is reflective of
PORTFOLIO ANALYSIS (cont.)
the Fund’s management fee (-47 bps), stock selection/futures (+36 bps), securities lending (+8 bps), dividend tax differential (-1 bps) and performance calculation differences between the Underlying Index and the Fund (+4 bps).
| 3 | The quality factor is based on a belief that there are a set of clearly defined fundamental criteria that seek to identify companies with outstanding financial characteristics. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| 36 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
International Quality Dividend Defensive Index Fund Ticker: IQDE
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
4/12/2013 | |
| | | | |
| | | | |
FlexShares International Quality Dividend Defensive Index Fund (Based on Net Asset Value) | | | 7.66 | % | | | 4.39 | % | | | 1.28 | % | | | 2.12 | % |
| | | | |
FlexShares International Quality Dividend Defensive Index Fund (Based on Market Price) | | | 8.12 | % | | | 4.27 | % | | | 1.12 | % | | | 2.11 | % |
| | | | |
Northern Trust International Quality Dividend Defensive IndexSM | | | 7.77 | % | | | 4.54 | % | | | 1.78 | % | | | 2.65 | % |
| | | | |
MSCI ACWI ex USA Index | | | 11.27 | % | | | 8.08 | % | | | 3.82 | % | | | 4.30 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.47%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust International Quality Dividend Defensive Index (the “Underlying Index”). The Underlying Index is designed to provide exposure to a high-quality, income-oriented portfolio of international equity securities issued by non-U.S.-based companies, with an emphasis on long-term capital growth and a targeted overall volatility that is lower than that of the Northern Trust International Large Cap Index (the “Parent Index”)1. Companies included in the Underlying Index are a subset of the Parent Index, and are selected based on expected dividend payment and fundamental factors such as profitability, management expertise and cash flow, as determined by Northern Trust Investments, Inc. (“NTI”) in its capacity as the index provider (the “Index Provider”), pursuant to its index methodology.
The Underlying Index begins with the Parent Index, and then follows a rules-based methodology to calculate optimal weights for securities in the Underlying Index based upon a targeted overall beta2 generally between 0.5 and 1.0 times that of the Parent Index, dividend yield, quality factors and lower total risk. As of October 31, 2019, there were 190 issues in the Underlying Index. NTI uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the securities that are included in the Underlying Index.
| 1 | The Northern Trust International Large Cap Index is a float-adjusted market capitalization weighted index comprised of eligible large capitalization securities of developed or emerging market countries as determined by the Index Provider. |
| 2 | A statistical measure of the volatility, or sensitivity, of rates of return on a portfolio or security compared to a market index. The beta for an ETF measures the expected change in return of the ETF relative to the return of a designated index. By definition, the beta of the Standard & Poor’s (S&P) 500 Index is 1.00. Accordingly, a fund with a 1.10 beta is expected to perform 10% better than the S&P 500 Index in rising markets and 10% worse in falling markets. |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 37 | |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
International Quality Dividend Defensive Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
During the 12 months ended October 31, 2019, prices on developed international investments generally traded higher. Over the course of the 12-month period, however, the U.S. dollar (“USD”) was volatile, but ultimately strengthened modestly against developed market currencies. This negatively impacted U.S. investors as returns in local currencies generally were diminished by the rising USD. Through Q4 of 2018 developed international markets declined on global trade concerns based on multiple factors including concerns over slowing global growth, the impact of U.S.-China tariff escalations and the potential for a “no deal” Brexit between the United Kingdom and the European Union. Developed international investments rebounded in Q1 and Q2 of 2019 as central banks signaled more accommodative monetary measures to combat stagnant growth and inflation. Investors, however, continued to react to the various fits and starts of trade tensions but remained optimistic for a resolution of the U.S.-China tariff dispute and that a delay in Brexit’s March deadline would lead to a negotiated agreement that would potentially avoid the most punitive “no deal” option. Developed international equities moved modestly lower in Q3 as the European Central Bank restarted quantitative easing in an effort to combat global growth concerns while renewed trade tensions continued to weigh on markets. Developed international markets moved higher at the beginning of October 2019, as firming economic data in the Eurozone, the diminished prospect of a “no deal” Brexit along with the potential thawing of trade tensions were viewed as positive developments by investors.
The exposure within the Underlying Index to equities that traditionally have derived some of their market value from their overall higher yield levels versus the broader market had a negative influence on performance, as the top dividend yielding stocks underperformed non-dividend paying stocks during the 12 months ended October 31, 2019. The quality factor3 focus on international equity markets of the Fund’s Underlying Index was a positive driver of performance for the 12-month period. We believe that in general international companies deemed higher quality outperformed those companies deemed to be lower quality. The Underlying Index’s lower beta exposure was a positive driver of performance as both lower volatility and higher volatility stocks outperformed stocks with market-like volatility. Overall, the positive performance derived from the quality and lower beta exposures was not enough to offset the negative performance derived from investor preference for non-dividend paying stocks. Consequently the Underlying Index underperformed the MSCI ACWI ex USA Index
PORTFOLIO ANALYSIS (cont.)
by 3.50%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the12-month period was -11 basis points (“bps”)4, which is reflective of the Fund’s management fee (-47 bps), stock selection/futures (+28 bps), securities lending (+7 bps), dividend tax differential (-1 bps) and performance calculation differences between the Underlying Index and the Fund (+2 bps).
| 3 | The quality factor is based on a belief that there are a set of clearly defined fundamental criteria that seek to identify companies with outstanding financial characteristics. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| 38 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
International Quality Dividend Dynamic Index Fund Ticker: IQDY
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
4/12/2013 | |
| | | | |
| | | | |
FlexShares International Quality Dividend Dynamic Index Fund (Based on Net Asset Value) | | | 11.30 | % | | | 6.48 | % | | | 3.15 | % | | | 4.09 | % |
| | | | |
FlexShares International Quality Dividend Dynamic Index Fund (Based on Market Price) | | | 12.23 | % | | | 6.63 | % | | | 3.00 | % | | | 4.14 | % |
| | | | |
Northern Trust International Quality Dividend Dynamic IndexSM | | | 11.59 | % | | | 6.72 | % | | | 3.60 | % | | | 4.54 | % |
| | | | |
MSCI ACWI ex USA Index | | | 11.27 | % | | | 8.08 | % | | | 3.82 | % | | | 4.30 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.47%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust International Quality Dividend Dynamic Index (the “Underlying Index”). The Underlying Index is designed to provide exposure to a high-quality, income-oriented portfolio of international equity securities issued by non-U.S.-based companies, with an emphasis on long-term capital growth and a targeted overall volatility that is greater than that of the Northern Trust International Large Cap Index (the “Parent Index”)1. Companies included in the Underlying Index are a subset of the Parent Index and are selected based on expected dividend payment and fundamental factors such as profitability, management expertise and cash flow, as determined by Northern Trust Investments, Inc. (“NTI”) in its capacity as the index provider (the “Index Provider”) pursuant to its index methodology.
The Underlying Index begins with the Parent Index, and then follows a rules-based methodology to calculate optimal weights for securities in the Underlying Index based upon a targeted overall beta2 generally between 1.0 and 1.5 times that of the Parent Index, dividend yield, quality factors and lower total risk. As of October 31, 2019, there were 169 issues in the Underlying Index. NTI uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the securities that are included in the Underlying Index.
| 1 | The Northern Trust International Large Cap Index is a float-adjusted market capitalization weighted index comprised of eligible large capitalization securities of developed or emerging market countries as determined by the Index Provider. |
| 2 | A statistical measure of the volatility, or sensitivity, of rates of return on a portfolio or security compared to a market index. The beta for an ETF measures the expected change in return of the ETF relative to the return of a designated index. By definition, the beta of the Standard & Poor’s (S&P) 500 Index is 1.00. Accordingly, a fund with a 1.10 beta is expected to perform 10% better than the S&P 500 Index in rising markets and 10% worse in falling markets. |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 39 | |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
International Quality Dividend Dynamic Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
During the 12 months ended October 31, 2019, prices on developed international investments generally traded higher. Over the course of the 12-month period, however, the U.S. dollar (“USD”) was volatile, but ultimately strengthened modestly against developed market currencies. This negatively impacted U.S. investors as returns in local currencies generally were diminished by the rising USD. Through Q4 of 2018 developed international markets declined on global trade concerns based on multiple factors including concerns over slowing global growth, the impact of U.S.-China tariff escalations and the potential for a “no deal” Brexit between the United Kingdom and the European Union. Developed international investments rebounded in Q1 and Q2 of 2019 as central banks signaled more accommodative monetary measures to combat stagnant growth and inflation. Investors, however, continued to react to the various fits and starts of trade tensions but remained optimistic for a resolution of the U.S.-China tariff dispute and that a delay in Brexit’s March deadline would lead to a negotiated agreement that would potentially avoid the most punitive “no deal” option. Developed international equities moved modestly lower in Q3 as the European Central Bank restarted quantitative easing in an effort to combat global growth concerns while renewed trade tensions continued to weigh on markets. Developed international markets moved higher at the beginning of October 2019, as firming economic data in the Eurozone, the diminished prospect of a “no deal” Brexit, along with the potential thawing of trade tensions were viewed as positive developments by investors.
The exposure within the Underlying Index to equities that traditionally have derived some of their market value from their overall higher yield levels versus the broader market had a negative influence on performance, as the top dividend yielding stocks underperformed non-dividend paying stocks during the 12 months ended October 31, 2019. The quality factor3 focus on international equity markets of the Fund’s Underlying Index was a positive driver of performance for the 12-month period. We believe that in general international companies deemed higher quality outperformed those companies deemed to be lower quality. The Underlying Index’s lower beta exposure was a positive driver of performance as both higher volatility and lower volatility stocks outperformed stocks with market-like volatility. Overall, the positive performance derived from the quality exposure and higher beta exposures was not enough to offset the negative performance derived from investor preference for non-dividend paying stocks and consequently the Underlying Index underperformed
PORTFOLIO ANALYSIS (cont.)
the MSCI ACWI ex USA Index by 0.32%. Tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12-month period was-29 basis points (“bps”)4, which is reflective of the Fund’s management fee (-47 bps), stock selection/futures (+11 bps) and securities lending (+7 bps).
| 3 | The quality factor is based on a belief that there are a set of clearly defined fundamental criteria that seek to identify companies with outstanding financial characteristics. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| 40 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® iBoxx® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
3-Year Target Duration TIPS Index Fund Ticker: TDTT
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
9/19/2011 | |
| | | | |
| | | | |
FlexShares iBoxx3-Year Target Duration TIPS
Index Fund (Based on Net Asset Value) | | | 5.30 | % | | | 1.74 | % | | | 1.28 | % | | | 0.92 | % |
| | | | |
FlexShares iBoxx3-Year Target Duration TIPS
Index Fund (Based on Market Price) | | | 5.35 | % | | | 1.74 | % | | | 1.25 | % | | | 0.92 | % |
| | | | |
iBoxx®3-Year Target Duration TIPS Index | | | 5.41 | % | | | 1.88 | % | | | 1.40 | % | | | 1.06 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset values (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.18%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the performance of the iBoxx3-Year Target Duration TIPS Index (the “Underlying Index”). The Underlying Index reflects the performance of a selection of inflation protected public obligations of the U.S. Treasury with a targeted average modified adjusted duration1 of approximately three years. The Underlying Index includes publicly issued Treasury Inflation Protected Securities (“TIPS”) that have maturity dates of at least one year but not more than ten years from an index rebalancing date. Under normal circumstances, the Fund will invest at least 80% of its total assets (exclusive of collateral from securities lending) in the securities of the Underlying Index. As of October 31, 2019, there were 19 issues in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to achieve the Fund’s investment objective. NTI uses replication to manage the Fund, but may use representative sampling in certain circumstances. This means the Fund may not hold all of the issues that are included in the Underlying Index.
Driven by slowing economic growth and the reversal of monetary policy by the U.S. Federal Reserve Bank (“Fed”) from tightening to easing, U.S. Treasury yields fell during the fiscal year ended October 31, 2019. As of October 31, 2019, the yield curve2 ended flatter as short-term rates had responded to one increase in the Federal funds rate in December 2018 followed by three interest rate declines in July, September and October of 2019.
Price increases as reported by the U.S. Labor Department in both shelter and medical care services were offset by falling energy prices, which drove the Consumer Price Index
| 1 | The duration calculated from the real modified duration of a TIPS security, adjusted for the market’s estimated beta for a TIPS security versus a nominal Treasury security due to the actual and expected changes in inflation. |
| 2 | A yield curve is constructed by plotting a session’s final yields for various maturities including 1-month, 3-month, 6-month, 1-year, 2-year, 3-year, 5-year,7-year, 10-year, 20-year and 30-year maturities. |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 41 | |
| | |
| FlexShares® iBoxx® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
3-Year Target Duration TIPS Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
(“CPI”), lower to 1.8% in fiscal year 2019 from 2.5% in fiscal year 2018. We believe that energy-related commodity prices were pressured throughout the year, as slowing global growth and falling prospects for future demand weighed on prices. Inflation expectations, as represented by the TIPS breakeven spread3, ended the fiscal year lower. Our research suggests that short-term expectations moved with volatile energy prices during the year, while longer-term inflation breakeven spreads fell on slowing economic growth.
We believe that the decline in real interest rates helped offset weakening inflation expectations during the fiscal year ended October 31, 2019, leading to positive total return performance for the Underlying Index. For the twelve-month period, the Underlying Index underperformed the Bloomberg Barclays U.S. TIPS 1-10 Year Index by 1.56% due mostly to the lower overall duration of the securities within the Underlying Index. Tracking difference between the Fund’s NAV and the Underlying Index for the twelve month period was-12 basis points (“bps”)4, reflective of the Fund’s management fee (-18 bps), duration and curve positioning (+12 bps), security and sector selection (-6 bps) intra-day trading and fees ( -1 bps), pricing differences (+2 bps) and other factors (-1 bps).
| 3 | The TIPS breakeven spread compares the yield of the TIPS and the yield of regular U.S. Treasury securities with the same maturity dates. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| 42 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® iBoxx® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
5-Year Target Duration TIPS Index Fund Ticker: TDTF
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
9/19/2011 | |
| | | | |
| | | | |
FlexShares iBoxx5-Year Target Duration TIPS
Index Fund (Based on Net Asset Value) | | | 8.53 | % | | | 2.27 | % | | | 2.11 | % | | | 1.60 | % |
| | | | |
FlexShares iBoxx5-Year Target Duration TIPS
Index Fund (Based on Market Price) | | | 8.45 | % | | | 2.25 | % | | | 2.05 | % | | | 1.59 | % |
| | | | |
iBoxx®5-Year Target Duration TIPS Index | | | 8.72 | % | | | 2.42 | % | | | 2.19 | % | | | 1.73 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset values (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.18%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the iBoxx 5-Year Target Duration TIPS Index (the “Underlying Index”). The Underlying Index reflects the performance of a selection of inflation protected public obligations of the U.S. Treasury with a targeted average modified adjusted duration1 of approximately five years. The Underlying Index includes publicly issued Treasury Inflation Protected Securities (“TIPS”) that have maturity dates of at least three years but not more than twenty years from an index rebalancing date. Under normal circumstances, the Fund will invest at least 80% of its total assets (exclusive of collateral from securities lending) in the securities of the Underlying Index. As of October 31, 2019, there were 23 issues in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses replication to manage the Fund, but may use representative sampling in certain circumstances. This means the Fund may not hold all of the issues that are included in the Underlying Index.
Driven by slowing economic growth and the reversal of monetary policy by the U.S. Federal Reserve Bank (“Fed”) from tightening to easing, U.S. Treasury yields fell during the fiscal year ended October 31, 2019. As of October 31, 2019, the yield curve2 ended flatter as short-term rates had responded to one increase in the Federal funds rate in December 2018 followed by three interest rate declines in July, September and October of 2019.
Price increases as reported by the U.S. Labor Department in both shelter and medical care services were offset by falling energy prices,
| 1 | The duration calculated from the real modified duration of a TIPS security, adjusted for the market’s estimated beta for a TIPS security versus a nominal Treasury security due to the actual and expected changes in inflation. |
| 2 | A yield curve is constructed by plotting a session’s final yields for various maturities including 1-month, 3-month, 6-month, 1-year, 2-year, 3-year, 5-year,7-year, 10-year, 20-year and 30-year maturities. |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 43 | |
| | |
| FlexShares® iBoxx® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
5-Year Target Duration TIPS Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
which drove the Consumer Price Index (“CPI”) lower to 1.8% in fiscal year 2019 from 2.5% in fiscal year 2018. We believe that energy-related commodity prices were pressured throughout the year as slowing global growth and falling prospects for future demand weighed on prices. Inflation expectations, as represented by the TIPS breakeven spread3, ended the fiscal year lower. Our research suggests that short-term expectations moved with volatile energy prices during the year, while longer-term inflation breakeven spreads fell on slowing economic growth.
We believe that the decline in real interest rates helped offset weakening inflation expectations during the fiscal year ended October 31, 2019, leading to positive total return performance for the Underlying Index. For the twelve-month period, the Underlying Index underperformed the Bloomberg Barclays U.S. TIPS Index by 0.24%, due mostly to the lower overall duration of the securities within the Underlying Index. Tracking difference between the Fund’s NAV and the Underlying Index for the twelve month period was -20 basis points (“bps”)4, reflective of the Fund’s management fee (-18 bps), duration and curve positioning (+3 bps), security and sector selection (-4 bps), intra-day trading and fees (-3 bps), pricing differences (+3 bps) and other factors (-1 bps).
| 3 | The TIPS breakeven spread compares the yield of the TIPS and the yield of regular U.S. Treasury securities with the same maturity dates. |
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| 44 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Disciplined Duration MBS Index Fund Ticker: MBSD
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
9/3/2014 | |
| | | | |
| | | | |
FlexShares Disciplined Duration MBS Index Fund (Based on Net Asset Value) | | | 7.36 | % | | | 1.68 | % | | | 1.96 | % | | | 2.04 | % |
| | | | |
FlexShares Disciplined Duration MBS Index Fund (Based on Market Price) | | | 7.07 | % | | | 1.68 | % | | | 1.95 | % | | | 2.04 | % |
| | | | |
ICE BofA Merrill Lynch® Constrained Duration US Mortgage Backed Securities IndexSM | | | 8.12 | % | | | 2.33 | % | | | 2.46 | % | | | 2.53 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.20%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the ICE BofA Merrill Lynch® Constrained Duration US Mortgage Backed Securities Index (the “Underlying Index”). The Underlying Index reflects the performance of a selection of investment-grade US agency residential mortgage-backed pass-through securities (“MBS”). Pursuant to the Underlying Index’s methodology, the average effective duration1 of the portfolio of MBS represented in the Underlying Index generally will range between 3.25 and 4.25 years. As of October 31, 2019, there were 190 securities in the Underlying Index. Northern Trust Investments, Inc. (“NTI”) uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the securities that are included in the Underlying Index.
Driven by slowing economic growth and the reversal of monetary policy by the U.S. Federal Reserve Bank (“Fed”) from tightening to easing, U.S. Treasury yields fell during the fiscal year ended October 31, 2019. As of October 31, 2019, the yield curve2 ended flatter as short-term rates had responded to one increase in the Federal funds rate in December 2018 followed by three interest rate declines in July, September and October of 2019.
The U.S. Treasury yield curve flattened significantly during the first quarter of the fiscal year as the Federal Open Market Committee (“FOMC”) raised the overnight Federal Funds rate by 25 basis points (“bps”)3 in
| 1 | Average effective duration provides a measure of a fund’s interest-rate sensitivity and the longer a fund’s duration, the more sensitive the fund is to shifts in interest rates. Duration also gives an indication of how a fund’s net asset value (NAV) will change as interest rates change. A fund with a five-year duration would be expected to lose 5% of its NAV if interest rates rose by 1 percentage point or gain 5%, if interest rates fell by 1 percentage point. |
| 2 | A yield curve is constructed by plotting a session’s final yields for various maturities including 1-month, 3-month, 6-month, 1-year, 2-year, 3-year, 5-year,7-year, 10-year, 20-year and 30-year maturities. |
| 3 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 45 | |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Disciplined Duration MBS Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
December 2018. We believe that the US Treasury yield curve continued to flatten through fiscal Q2 as investors grew concerned over global economic growth and international investors sought out U.S. Treasuries for their relative higher yields and “safe haven” status. Treasury yields then began a parallel shift lower in fiscal Q3 as the FOMC lowered the overnight rate at the end of July. At the beginning of fiscal Q4, our research suggests that the yield curve steepened slightly on investors’ expectations for more potential overnight rate reductions by the FOMC.
Our analysis shows that, prompted by lower interest rates, mortgage applications surged in February and March 2019, followed by another surge in September 2019, as average 30-year mortgage rates fell from 4.86% to 3.78% during the fiscal year4. We believe that years of strong housing price gains and increased economic uncertainty caused U.S. housing sales to slow. During the fiscal year ended October 31, 2019, existing home sales slipped -3.3%, while new home sales increased roughly 2.0%5. The Federal Housing Finance Agency Home Purchase Price Index saw a smaller increase at roughly 4.4% versus 6.1% and 6.7% in fiscal 2018 and 2017, respectively6.
During the fiscal year ended October 31, 2019, the Fund’s positive portfolio income was aided by increasing price performance as Treasury yields fell. For the 12- month period, the Underlying Index underperformed the market-weighted MBS market, as defined by the Bloomberg Barclays Capital U.S. MBS Index by -0.75 bps due primarily to shorter portfolio duration of the Underlying Index. The tracking difference between the Fund’s NAV and the Underlying Index’s total return for the 12- month period was -76 bps, reflective of the Fund’s management fee(-20 bps), trading costs and fees (-24 bps), pricing differences (-23 bps), yield curve positioning (-1 bps) sector allocation (-4 bps), security selection (-2 bps) and other factors(-2 bps).
| 4 | Source: Bloomberg. Federal Home Loan Mortgage Corp. Primary Mortgage Market Survey. 1 November 2018 through 31 October 2019. |
| 5 | Source: Bloomberg. National Association of Realtors. Existing Home Sales. 1 November 2018 through 31 October 2019. |
| 6 | Source: Bloomberg. Federal Housing Finance Agency Home Purchase Price Index. 1 November 2016 through 31 October 2019. |
| | |
| 46 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® Credit-Scored | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
US Corporate Bond Index Fund Ticker: SKOR
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | Fund
Inception
11/12/2014 | |
| | | | |
| | | |
FlexShares Credit-Scored US Corporate Bond Index Fund (Based on Net Asset Value) | | | 11.66 | % | | | 3.67 | % | | | 3.69 | % |
| | | |
FlexShares Credit-Scored US Corporate Bond Index Fund (Based on Market Price) | | | 11.56 | % | | | 3.62 | % | | | 3.69 | % |
| | | |
Northern Trust Credit-Scored US Corporate Bond IndexSM | | | 12.03 | % | | | 4.05 | % | | | 4.04 | % |
| | | |
Bloomberg Barclays Intermediate U.S. Corporate Index | | | 10.75 | % | | | 3.82 | % | | | 3.71 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset values (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.22%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Credit-Scored US Corporate Bond Index (the “Underlying Index”). The Underlying Index reflects the performance of a broad universe of US-dollar denominated bonds of companies that are considered by the index provider1 to have higher credit quality, lower risk of default and the potential for higher yield, price appreciation and liquidity relative to the universe of securities comprising the Northern Trust US Investment-Grade Corporate Bond Index (the “Parent Index”)2. The Underlying Index begins with the Parent Index and then follows a rules-based methodology to select and calculate optimal weights for securities in the Underlying Index based on liquidity and security issuers’ fundamental factors, as determined by Northern Trust Investments, Inc. (“NTI”), in its capacity as index provider (the “Index Provider”). As of October 31, 2019, there were 1,448 issues in the Underlying Index. NTI uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the securities that are included in the Underlying Index.
Driven by slowing economic growth and the reversal of monetary policy by the U.S. Federal Reserve Bank (“Fed”) from tightening to easing, U.S. Treasury yields fell during the fiscal year ended October 31, 2019. As of October 31, 2019, the yield curve3 ended flatter as short-term rates had responded to one increase in the Federal funds rate in December 2018 followed by three interest rate declines in July, September and October of 2019.
| 1 | Index Provider – Northern Trust Investments, Inc. |
| 2 | The Northern Trust US Investment Grade Corporate Bond Index is designed to measure the performance of a diversified universe of intermediate maturity, U.S.-dollar denominated bonds of companies with investment grade-like characteristics, and enhanced short-term and long-term solvency. |
| 3 | A yield curve is constructed by plotting a session’s final yields for various maturities including 1-month, 3-month, 6-month, 1-year, 2-year, 3-year, 5-year,7-year, 10-year, 20-year and 30-year maturities. |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 47 | |
| | |
| FlexShares® Credit-Scored | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
US Corporate Bond Index Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
The U.S. Treasury yield curve flattened significantly during first quarter of the fiscal year as the Federal Open Market Committee (“FOMC”) raised the overnight Federal Funds rate by 25 basis points (“bps”)4 in December 2018. We believe that the U.S. Treasury yield curve continued to flatten through fiscal Q2 as investors grew concerned over global economic growth and international investors sought out U.S. Treasuries for their relative higher yields and “safe haven” status. Treasury yields then began a parallel shift lower in fiscal Q3 as the FOMC lowered the overnight rate at the end of July 2019. At the beginning of fiscal Q4, our research suggests that the yield curve steepened slightly on investors’ expectations for more potential overnight rate reductions by the FOMC.
During the fiscal year ended October 31, 2019, the Underlying Index outperformed the Bloomberg Barclays Intermediate U.S. Corporate Bond Index by 1.28%, due to the Underlying Index’s longer duration5 positioning, sector allocation and security selection. The Underlying Index’s longer duration resulted in a greater positive price performance contribution with the decline in interest rates, while overweight allocations to the U.S. financial sector benefited performance. Security selection in the financials, technology and energy sectors was also additive to the Underlying Index performance. The tracking difference between the Fund’s NAV and the Underlying Index’s total return for the period was -40 bps, which is reflective of the Fund’s management fee (-22 bps), trading costs and fees (-5 bps), pricing differences (-9 bps), sector and security selection(-4 bps), yield curve positioning (+3 bps) and other factors (-3 bps).
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| 5 | Duration is the approximate measure of a bond’s price sensitivity to changes in interest rates. |
| | |
| 48 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® Credit-Scored | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
US Long Corporate Bond Index Fund Ticker: LKOR
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | Fund
Inception
9/23/2015 | |
| | | | |
| | | |
FlexShares Credit-Scored US Long Corp Bond Index Fund (Based on Net Asset Value) | | | 25.51 | %* | | | 7.13 | % | | | 8.17 | % |
| | | |
FlexShares Credit-Scored US Long Corp Bond Index Fund (Based on Market Price) | | | 25.51 | % | | | 6.43 | % | | | 8.07 | % |
| | | |
Northern Trust Credit-Scored US Long Corporate Bond IndexSM | | | 26.08 | % | | | 7.71 | % | | | 8.69 | % |
| | | |
Bloomberg Barclays Long U.S. Corporate Bond Index | | | 25.30 | % | | | 7.41 | % | | | 8.55 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset values (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.22%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Credit-Scored US Long Corporate Bond Index (the “Underlying Index”). The Underlying Index reflects the performance of a broad universe of US-dollar denominated bonds of companies that are considered by the index provider1 to have higher credit quality, lower risk of default and the potential for higher yield, price appreciation and liquidity relative to the universe of securities comprising the Northern Trust Investment-Grade US Long Corporate Bond Index (the “Parent Index”)2. The Underlying Index begins with the Parent Index and then follows a rules-based methodology to select and calculate optimal weights for securities in the Underlying Index based on liquidity and security issuers’ fundamental factors, as determined by Northern Trust Investments, Inc. (“NTI”) in its capacity as index provider (the “Index Provider”). As of October 31, 2019, there were 953 issues in the Underlying Index. NTI uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the securities that are included in the Underlying Index.
Driven by slowing economic growth and the reversal of monetary policy by the U.S. Federal Reserve Bank (“Fed”) from tightening to easing, U.S. Treasury yields fell during the fiscal year ended October 31, 2019. As of October 31, 2019, the yield curve3 ended flatter as short-term rates had responded to one increase in the Federal funds rate in December 2018 followed by three interest rate declines in July, September and October of 2019.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 49 | |
| 1 | Index Provider – Northern Trust Investments, Inc. |
| 2 | The Northern Trust Investment-Grade US Long Corporate Bond Index is designed to measure the performance of a diversified universe of intermediate maturity, U.S.-dollar denominated bonds of companies with investment grade-like characteristics, and enhanced short-term and long-term solvency. |
| 3 | A yield curve is constructed by plotting a session’s final yields for various maturities including 1-month, 3-month, 6-month, 1-year, 2-year, 3-year, 5-year,7-year, 10-year, 20-year and 30-year maturities. |
| | |
| FlexShares® Credit-Scored | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
US Long Corporate Bond Index Fund(cont.)
| * | The return shown is based on net asset value calculated for shareholder transactions and may differ from the return shown in the financial highlights, which reflects adjustments made to the net asset value in accordance with accounting principles generally accepted in the United States of America. The net asset value was $57.84 as of October 31, 2019. |
PORTFOLIO ANALYSIS (cont.)
The U.S. Treasury yield curve flattened significantly during the first quarter of the fiscal year as the Federal Open Market Committee (“FOMC”) raised the overnight Federal Funds rate by 25 basis points (“bps”)4 in December 2018. We believe that the U.S. Treasury yield curve continued to flatten through fiscal Q2 as investors grew concerned over global economic growth and international investors sought out U.S. Treasuries for their relative higher yields and “safe haven” status. Treasury yields then began a parallel shift lower in fiscal Q3 as the FOMC lowered the overnight rate at the end of July 2019. At the beginning of fiscal Q4, our research suggests that the yield curve steepened slightly on investors’ expectations for more potential overnight rate reductions by the FOMC.
During the fiscal year ended October 31, 2019, the Underlying Index outperformed the Bloomberg Barclays Long U.S. Corporate Bond Index by 78 bps. Positive return contribution for the Underlying Index came from slightly longer portfolio duration along with underweights to the utility and consumer non-cyclical sectors. Overweights to financial and communication sectors also contributed positively to performance, as did security selection in the financial, consumer non-cyclical and technology sectors. The tracking difference between the Fund’s NAV and the Underlying Index for the period was -62 bps, which is reflective of the Fund’s management fee (-22 bps), trading costs and fees (-2 bps), pricing differences (-56 bps), sector and security selection (+30 bps), yield curve positioning (-1 bps) and other factors (-11 bps).
| 4 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| 50 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® High Yield | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Value-Scored Bond Index Fund Ticker: HYGV
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | |
| | | 1 Year | | | Fund
Inception
7/17/2018 | |
| | | | |
| | |
FlexShares High Yield Value-Scored US Bond Index Fund (Based on Net Asset Value) | | | 7.44 | %* | | | 5.86 | % |
| | |
FlexShares High Yield Value-Scored US Bond Index Fund (Based on Market Price) | | | 7.64 | % | | | 5.98 | % |
| | |
Northern Trust High Yield Value-Scored US Corporate Bond IndexSM | | | 8.06 | % | | | 6.54 | % |
| | |
ICE BofA Merrill Lynch® US High Yield Index | | | 8.32 | % | | | 6.57 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset values (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.37%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust High Yield Value-Scored US Corporate Bond Index (the “Underlying Index”). The Underlying Index reflects the performance of a broad universe of US-dollar denominated high yield corporate bonds that seeks a higher yield than the overall high yield corporate bond market, as represented by the Northern Trust High Yield US Corporate Bond Index (the “Parent Index”)1. The Underlying Index begins with the Parent Index and then follows a rules-based methodology to select and weight securities, subject to certain constraints, to optimize exposure to a proprietary value score, as determined by Northern Trust Investments, Inc. (“NTI”) acting in its capacity as index provider (“Index Provider”). As of October 31, 2019, there were 983 issues in the Underlying Index. NTI uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. NTI uses a representative sampling strategy to manage the Fund. This means the Fund may or may not hold all of the securities that are included in the Underlying Index.
Driven by slowing economic growth and the reversal of monetary policy by the U.S. Federal Reserve Bank (“Fed”) from tightening to easing, U.S. Treasury yields fell during the fiscal year ended October 31, 2019. As of October 31, 2019, the yield curve2 ended flatter as short-term rates had responded to one increase in the Federal funds rate in December 2018 followed by three interest rate declines in July, September and October of 2019.
The U.S. Treasury yield curve flattened significantly during the first quarter of the fiscal year as the Federal Open Market Committee
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 51 | |
| 1 | The Northern Trust High Yield US Corporate Bond Index is designed to measure the performance of a diversified universe of high yield, US dollar denominated corporate bonds issued by companies who are members of the G12 or G10 Currencies. |
| 2 | A yield curve is constructed by plotting a session’s final yields for various maturities including 1-month, 3-month, 6-month, 1-year, 2-year, 3-year, 5-year,7-year, 10-year, 20-year and 30-year maturities. |
| | |
| FlexShares® High Yield | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Value-Scored Bond Index Fund(cont.)
| * | The return shown is based on net asset value calculated for shareholder transactions and may differ from the return shown in the financial highlights, which reflects adjustments made to the net asset value in accordance with accounting principles generally accepted in the United States of America. The net asset value was $47.85 as of October 31, 2019. |
PORTFOLIO ANALYSIS (cont.)
(“FOMC”) raised the overnight Federal Funds rate by 25 basis points (“bps”)3 in December 2018. We believe that the U.S. Treasury yield curve continued to flatten through fiscal Q2 as investors grew concerned over global economic growth and international investors sought out U.S. Treasuries for their relative higher yields and “safe haven” status. Treasury yields then began a parallel shift lower in fiscal Q3 as the FOMC lowered the overnight rate at the end of July 2019. At the beginning of fiscal Q4, our research suggests that the yield curve steepened slightly on investors’ expectations for more potential overnight rate reductions by the FOMC.
During the fiscal year ended October 31, 2019, the Underlying Index underperformed the ICE BofA Merrill US High Yield Index by -26 bps, as negative price performance and widening rates between bonds of differing credit quality impacted performance. The tracking difference between the Fund’s NAV and the Underlying Index’s total return for the period was -63 bps, which is reflective of the Fund’s management fee (-37 bps), trading costs and fees (-52 bps), pricing differences (+15 bps), yield curve positioning (+11 bps) sector and security selection (+3 bps), and other factors (-3 bps).
| 3 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| 52 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Ready Access Variable Income Fund Ticker: RAVI
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | 1 Year | | | 3 Year | | | 5 Year | | | Fund
Inception
10/9/2012 | |
| | | | |
| | | | |
FlexShares Ready Access Variable Income Fund (Based on Net Asset Value) | | | 3.21 | % | | | 2.06 | % | | | 1.54 | % | | | 1.34 | % |
| | | | |
FlexShares Ready Access Variable Income Fund (Based on Market Price) | | | 3.18 | % | | | 2.05 | % | | | 1.52 | % | | | 1.34 | % |
| | | | |
Bloomberg Barclays1-3 Month U.S. Treasury Bill Index | | | 2.32 | % | | | 1.54 | % | | | 0.97 | % | | | 0.70 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset values (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross and net expense ratios of the Fund are 0.25%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks maximum current income consistent with the preservation of capital and liquidity. The Fund attempts to achieve its investment objective by investing under normal circumstances at least 80% of its total assets in a non-diversified portfolio of fixed-income instruments, including bonds, debt securities and other similar instruments issued by U.S. and non-U.S. public and private sector entities. Such issuers include, without limitation, U.S. and non-U.S. governments and their agencies, instrumentalities or sponsored enterprises, U.S. state and local governments and U.S. and non-U.S. private-sector entities, such as corporations and banks. The average portfolio duration1 of the Fund will vary based on the Northern Trust Company Investment Policy Committee’s forecast for interest rates and will normally not exceed one year. The dollar-weighted average portfolio maturity of the Fund is normally not expected to exceed two years.
Driven by slowing economic growth and the reversal of monetary policy by the U.S. Federal Reserve Bank (“Fed”) from tightening to easing, U.S. Treasury yields fell during the fiscal year ended October 31, 2019. As of October 31, 2019, the yield curve2 ended flatter as short-term rates had responded to one increase in the Federal funds rate in December 2018 followed by three interest rate declines in July, September and October of 2019.
The U.S. Treasury yield curve flattened significantly during the first quarter of the fiscal year as the Federal Open Market Committee (“FOMC”) raised the overnight Federal
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 53 | |
| 1 | Average effective duration provides a measure of a fund’s interest-rate sensitivity and the longer a fund’s duration, the more sensitive the fund is to shifts in interest rates. Duration also gives an indication of how a fund’s net asset value (NAV) will change as interest rates change. A fund with a five-year duration would be expected to lose 5% of its NAV if interest rates rose by 1 percentage point, or gain 5%, if interest rates fell by 1 percentage point. |
| 2 | A yield curve is constructed by plotting a session’s final yields for various maturities including 1-month, 3-month, 6-month, 1-year, 2-year, 3-year, 5-year,7-year, 10-year, 20-year and 30-year maturities. |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Ready Access Variable Income Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
Funds rate by 25 basis points (“bps”)3 in December 2018. We believe that the U.S. Treasury yield curve continued to flatten through fiscal Q2 as investors grew concerned over global economic growth and international investors sought out U.S. Treasuries for their relative higher yields and “safe haven” status. Treasury yields then began a parallel shift lower in fiscal Q3 as the FOMC lowered the overnight rate at the end of July 2019. At the beginning of fiscal Q4, our research suggests that the yield curve steepened slightly on investors’ expectations for more potential overnight rate reductions by the FOMC. Both the Federal Funds rate and the three-month London Interbank Offer Rate (LIBOR) declined during the fiscal year.
We believe that Global Central Banks (“GCBs”) maintained accommodative monetary policy as geopolitical risks weighed on markets. The Bank of England and the Bank of Canada both paused their monetary tightening policies while holding policy rates stable during the fiscal year. In September 2019, the European Central bank lowered its deposit facility rate. United Kingdom 1-6 month sovereign yields were mostly flat, while1-year and intermediate yields moved lower as markets weighed the outcome of extended Brexit negotiations and potentially slowing economic growth. The German and Japan sovereign curves were both flatter by fiscal year-end as intermediate and long-term yields fell. Our research suggests that throughout the fiscal year, global investors may have sought out higher relative yields in the U.S. as uncertainties around global growth weighed on investor’s minds.
The Fund’s NAV outperformed its market benchmark, the Bloomberg Barclays 1-3 Month US Treasury Bill Index. Lower short-term rates led to positive contributions from the Fund’s longer average effective duration positioning and credit allocation decisions. The Fund’s average effective duration was generally managed in anticipation of lower potential interest rates balanced against other potentially attractive opportunities in short-term corporate securities. The Fund’s positioning in floating rate corporate securities was lowered during the fiscal year on expectations for lower short-term rates. Positioning in term fixed-rate credit detracted from performance as option adjusted spreads widened between November 2018 and early January 2019, and then became a significant contributor to performance as spreads declined for the balance of the fiscal year.
| 3 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| 54 | | FLEXSHARES ANNUAL REPORT |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Core Select Bond Fund Ticker: BNDC
CUMULATIVE PERFORMANCE
Through October 31, 2019
AVERAGE ANNUAL TOTAL RETURN
For the period ended October 31, 2019
| | | | | | | | |
| | | 1 Year | | | Fund
Inception
11/18/2016 | |
| | | | |
| | |
FlexShares Core Select Bond Fund (Based on Net Asset Value) | | | 11.38 | % | | | 3.74 | % |
| | |
FlexShares Core Select Bond Fund (Based on Market Price) | | | 11.41 | % | | | 3.79 | % |
| | |
Bloomberg Barclays U.S. Aggregate Bond Index | | | 11.51 | % | | | 4.18 | % |
All data as of 10/31/19. Total returns based on market price do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, these returns would be lower. Total returns based on market price and net asset value (“NAV”) assume that dividends and capital gain distributions have been reinvested in the Fund at market price and NAV, respectively. NAV is a fund’s net asset value per share, which is calculated by dividing the total value of all the securities in the fund’s portfolio plus cash, interest and receivables less any liabilities by the number of fund shares outstanding. Market price is determined by the midpoint of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market price returns may vary from NAV returns.
Performance quoted represents past performance and does not guarantee future results. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Unlike the Index, the Fund’s total returns are reduced by operating expenses, such as transaction costs and management fees. An investor cannot invest directly in an index.
Performance reflects contractual reimbursements in effect until March 1, 2020. In the absence of such reimbursements, performance would be reduced. The gross expense ratio of the Fund is 0.57% and the net expense ratio is 0.35%. The gross and net expense ratios disclosed are as reported in the Fund’s prospectus, which may differ from the gross and net expense ratios presented in the Fund’s financial reports. Current performance may be higher or lower than performance shown. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed or sold in the market.
FlexShares ETFs’ performance data current to the most recent month-end is available atwww.flexshares.com.
PORTFOLIO ANALYSIS
The Fund seeks total return and preservation of capital. The Fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets in U.S. dollar-denominated investment-grade fixed-income securities either directly or indirectly through exchange-traded funds (“ETFs”) and other registered investment companies (together with ETFs, “Underlying Funds”). The Fund primarily invests in fixed-rate securities of varying maturities, including bonds, debt securities and other similar instruments issued by U.S. public and U.S and non-U.S. private sector entities. Such issuers include, without limitation, U.S. governments and their agencies, instrumentalities or sponsored enterprises, and U.S. and non-U.S. private-sector entities, such as corporations and banks. The Fund may invest in fixed income securities of any maturity.
The Fund seeks to provide attractive risk-adjusted performance by investing in a portfolio of fixed-income securities that is designed to achieve optimal potential for total return after taking into account various sources of investment risk. The Fund adjusts its allocations to securities based on Northern Trust Investment Inc.’s assessment of potential changes in interest rate levels, the shape of the yield curve and credit spread relationships. The Fund also seeks to balance the potential for return and risk while emphasizing liquidity and diversification across a spectrum of U.S. dollar-denominated investment-grade fixed income securities.
The U.S. Treasury yield curve flattened significantly during Q1 of the calendar year as the Federal Open Market Committee (“FOMC”) raised the overnight Federal Funds rate by 25 basis points (“bps”)1 in December 2018. We believe that the U.S. Treasury yield curve continued to flatten through fiscal Q2 as investors grew concerned over global economic growth and international investors sought out U.S. Treasuries for their relative higher yields and “safe haven” status. Treasury yields then began a parallel shift lower in fiscal Q3 as the
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 55 | |
| 1 | A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument. |
| | |
| FlexShares® | | MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE |
Core Select Bond Fund(cont.)
PORTFOLIO ANALYSIS (cont.)
FOMC lowered the overnight rate at the end of July 2019. At the beginning of fiscal Q4, our research suggests that the yield curve steepened slightly on investors’ expectations for more potential overnight rate reductions by the FOMC.
We believe that Global Central Banks (“GCBs”) maintained accommodative monetary policy as geopolitical risks weighed on markets. The Bank of England and the Bank of Canada both paused their monetary tightening policies while holding policy rates stable during the fiscal year. In September 2019, the European Central bank lowered their deposit facility rate. United Kingdom 1-6 month sovereign yields were mostly flat, while 1-year and intermediate yields moved lower as markets weighed the outcome of extended Brexit negotiations and potentially slowing economic growth. The German and Japan sovereign curves were both flatter by fiscal year-end as intermediate and long-term yields fell. Our research suggests that throughout the year, global investors may have sought out higher relative yields in the U.S. as uncertainties around global growth weighed on investor’s minds.
The Fund was generally positioned with an overweight to corporate credit on expectations for slowing, but still positive, economic growth and corporate earnings. An overweight to mortgage-backed securities (“MBS”) was maintained during the fiscal year until the beginning of Q4 of 2019 and was based on what we believe could be declining market evaluations of MBS and our interest rate expectations. The Fund consequently allocated to Treasury Inflation Protected Securities (“TIPS”) at the beginning of fiscal Q4 as market expectations for economic growth and inflation weakened beyond our internal projections. Under this scenario, longer duration TIPS were deemed to represent value versus nominal Treasuries. Average effective duration2 positioning was generally long during the fiscal year, with the exception of the first quarter when duration was neutral due to our perceived view that investor sentiment was weak and Treasury bond prices were increasing due to geopolitical and restrictive FOMC monetary policy concerns. Our analysis showed that the difference in yields between the various credit levels of U.S. investment grade corporate bonds widened early in the fiscal year then narrowed to end the fiscal year below October 2018 levels. We also observed that spreads between different types of MBS investments also widened from October 2018 levels as falling Treasury yields may have led to increased refinancing activity leading to subsequent downward price pressures on MBS securities.
PORTFOLIO ANALYSIS (cont.)
The Fund underperformed its benchmark, the Bloomberg Barclays U.S. Aggregate Bond Index, during the fiscal year by -10 bps. Managing the Fund with respect to lowering the overall duration and positioning appropriately along the Treasury yield curve3 in its Underlying Funds provided the majority of positive performance contribution as overweight allocation to corporate credit and corporate security selection added to performance, while security selection within the MBS portion of the portfolio generally detracted from performance.
| 2 | Average effective duration provides a measure of a fund’s interest-rate sensitivity and the longer a fund’s duration, the more sensitive the fund is to shifts in interest rates. Duration also gives an indication of how a fund’s net asset value (NAV) will change as interest rates change. A fund with a five-year duration would be expected to lose 5% of its NAV if interest rates rose by 1 percentage point or gain 5%, if interest rates fell by 1 percentage point. |
| 3 | A yield curve is constructed by plotting a session’s final yields for various maturities including 1-month, 3-month, 6-month, 1-year, 2-year, 3-year, 5-year,7-year, 10-year, 20-year and 30-year maturities. |
| | |
| 56 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Trust
Statements of Assets and LiabilitiesOctober 31, 2019
| | | | | | | | | | | | | | | | |
| | | FlexShares®
US Quality
Low
Volatility
Index Fund | | | FlexShares®
Developed
Markets ex-US
Quality Low
Volatility
Index Fund | | | FlexShares®
Emerging
Markets
Quality Low
Volatility
Index Fund | | | FlexShares®
Morningstar
US Market
Factor Tilt
Index Fund | |
|
ASSETS | |
Securities, at cost | | $ | 5,996,281 | | | $ | 4,895,220 | | | $ | 4,972,741 | | | $ | 969,874,432 | |
Affiliate securities, at cost | | | — | | | | — | | | | — | | | | 540,803 | |
Securities Lending Reinvestments, at cost | | | — | | | | — | | | | — | | | | 107,467,207 | |
| | | | |
Securities, at value† | | | 6,049,132 | | | | 5,011,350 | | | | 4,968,808 | | | | 1,431,102,236 | |
Affiliate securities, at value | | | — | | | | — | | | | — | | | | 796,044 | |
Securities Lending Reinvestments, at value | | | — | | | | — | | | | — | | | | 107,466,113 | |
Cash | | | 13,726 | | | | 59,011 | | | | 16,560 | | | | 12,759,671 | |
Cash segregated at broker* | | | — | | | | 11,780 | | | | 4 | | | | 573,228 | |
Foreign cash†† | | | — | | | | 24,345 | | | | 3,788 | | | | — | |
Restricted cash** | | | — | | | | — | | | | — | | | | — | |
Unrealized appreciation on forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends and interest | | | 5,210 | | | | 12,222 | | | | 1,431 | | | | 1,172,270 | |
Securities lending income | | | — | | | | — | | | | — | | | | 53,693 | |
Capital shares issued | | | — | | | | — | | | | — | | | | — | |
Investment adviser | | | 27 | | | | 6 | | | | 6 | | | | 1,610 | |
Securities sold | | | — | | | | — | | | | — | | | | 5,943,969 | |
Variation margin on futures contracts | | | — | | | | 2,935 | | | | — | | | | 144,710 | |
| | | | |
Total Assets | | | 6,068,095 | | | | 5,121,649 | | | | 4,990,597 | | | | 1,560,013,544 | |
| | | | |
|
LIABILITIES | |
Unrealized depreciation on forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Payables: | | | | | | | | | | | | | | | | |
Cash collateral received from securities loaned | | | — | | | | — | | | | — | | | | 107,470,616 | |
Deferred compensation (Note 7) | | | 29 | | | | 25 | | | | 23 | | | | 86,631 | |
Investment advisory fees (Note 4) | | | 1,124 | | | | 1,367 | | | | 1,658 | | | | 302,218 | |
Trustee fees (Note 7) | | | 24 | | | | 6 | | | | 6 | | | | 5,579 | |
Securities purchased | | | — | | | | — | | | | — | | | | — | |
Deferrednon-US capital gains taxes | | | — | | | | — | | | | — | | | | — | |
Due to Authorized Participant | | | — | | | | — | | | | — | | | | — | |
Variation margin on futures contracts | | | — | | | | — | | | | — | | | | — | |
Capital shares redeemed | | | — | | | | — | | | | — | | | | 6,004,421 | |
Other | | | 350 | | | | — | | | | — | | | | 7,500 | |
| | | | |
Total Liabilities | | | 1,527 | | | | 1,398 | | | | 1,687 | | | | 113,876,965 | |
| | | | |
Net Assets | | $ | 6,066,568 | | | $ | 5,120,251 | | | $ | 4,988,910 | | | $ | 1,446,136,579 | |
| | | | |
|
NET ASSETS CONSIST OF: | |
Paid-in capital | | $ | 6,004,406 | | | $ | 5,000,414 | | | $ | 5,006,906 | | | $ | 1,038,778,199 | |
Distributable earnings (loss) | | | 62,162 | | | | 119,837 | | | | (17,996 | ) | | | 407,358,380 | |
| | | | |
Net Assets | | $ | 6,066,568 | | | $ | 5,120,251 | | | $ | 4,988,910 | | | $ | 1,446,136,579 | |
| | | | |
| | | | |
Shares Outstanding (unlimited number of shares authorized $ 0.0001 par value) | | | 150,001 | | | | 200,001 | | | | 200,001 | | | | 12,100,001 | |
Net Asset Value | | $ | 40.44 | | | $ | 25.60 | | | $ | 24.94 | | | $ | 119.52 | |
| | | | |
† Securities on loan, at value | | $ | — | | | $ | — | | | $ | — | | | $ | 132,627,652 | |
†† Cost of foreign cash | | $ | — | | | $ | 24,184 | | | $ | 3,745 | | | $ | — | |
| * | Includes cash pledged by the Fund to cover margin requirements for open futures contracts as of 10/31. |
| ** | Includes cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 57 | |
Statements of Assets and Liabilities (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
Morningstar
Developed
Markets
ex-US Factor
Tilt Index
Fund | | | FlexShares®
Morningstar
Emerging
Markets
Factor Tilt
Index Fund | | | FlexShares®
Currency
Hedged
Morningstar
DMex-US
Factor Tilt
Index Fund | | | FlexShares®
Currency
Hedged
Morningstar
EM Factor
Tilt Index
Fund | |
|
ASSETS | |
Securities, at cost | | $ | 855,614,823 | | | $ | 370,417,526 | | | $ | — | | | $ | — | |
Affiliate securities, at cost | | | — | | | | — | | | | 8,774,830 | | | | 5,858,919 | |
Securities Lending Reinvestments, at cost | | | 12,460,503 | | | | 2,144,475 | | | | — | | | | — | |
| | | | |
Securities, at value† | | | 948,634,593 | | | | 410,943,565 | | | | — | | | | — | |
Affiliate securities, at value | | | — | | | | — | | | | 8,481,240 | | | | 5,409,036 | |
Securities Lending Reinvestments, at value | | | 12,460,503 | | | | 2,144,475 | | | | — | | | | — | |
Cash | | | 1,352,972 | | | | 949,452 | | | | 1,147 | | | | 49,521 | |
Cash segregated at broker* | | | 1,057,285 | | | | 217,909 | | | | 3 | | | | 6,285 | |
Foreign cash†† | | | 6,399,321 | | | | 1,368,765 | | | | — | | | | — | |
Restricted cash** | | | — | | | | — | | | | — | | | | — | |
Unrealized appreciation on forward foreign currency contracts | | | 94,300 | | | | 4,167 | | | | 1,369 | | | | 6,479 | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends and interest | | | 5,062,485 | | | | 292,253 | | | | — | | | | — | |
Securities lending income | | | 59,928 | | | | 12,566 | | | | — | | | | — | |
Capital shares issued | | | — | | | | — | | | | — | | | | — | |
Investment adviser | | | 1,050 | | | | 507 | | | | 9 | | | | 6 | |
Securities sold | | | 2,659,904 | | | | 16,119 | | | | — | | | | — | |
Variation margin on futures contracts | | | 315,300 | | | | 40,954 | | | | — | | | | 945 | |
| | | | |
Total Assets | | | 978,097,641 | | | | 415,990,732 | | | | 8,483,768 | | | | 5,472,272 | |
| | | | |
|
LIABILITIES | |
Unrealized depreciation on forward foreign currency contracts | | | 25,986 | | | | 45,867 | | | | 16,284 | | | | 27,585 | |
Payables: | | | | | | | | | | | | | | | | |
Cash collateral received from securities loaned | | | 12,460,503 | | | | 2,144,475 | | | | — | | | | — | |
Deferred compensation (Note 7) | | | 62,690 | | | | 31,975 | | | | 612 | | | | 1,429 | |
Investment advisory fees (Note 4) | | | 310,964 | | | | 202,852 | | | | 356 | | | | 251 | |
Trustee fees (Note 7) | | | 3,283 | | | | 1,400 | | | | 345 | | | | 277 | |
Securities purchased | | | 51,734 | | | | — | | | | — | | | | — | |
Deferrednon-US capital gains taxes | | | — | | | | — | | | | — | | | | — | |
Due to Authorized Participant | | | — | | | | — | | | | — | | | | — | |
Variation margin on futures contracts | | | — | | | | — | | | | — | | | | — | |
Capital shares redeemed | | | — | | | | — | | | | — | | | | — | |
Other | | | 40,000 | | | | 150,000 | | | | — | | | | — | |
| | | | |
Total Liabilities | | | 12,955,160 | | | | 2,576,569 | | | | 17,597 | | | | 29,542 | |
| | | | |
Net Assets | | $ | 965,142,481 | | | $ | 413,414,163 | | | $ | 8,466,171 | | | $ | 5,442,730 | |
| | | | |
|
NET ASSETS CONSIST OF: | |
Paid-in capital | | $ | 966,417,193 | | | $ | 442,524,628 | | | $ | 9,641,866 | | | $ | 7,720,538 | |
Distributable earnings (loss) | | | (1,274,712 | ) | | | (29,110,465 | ) | | | (1,175,695 | ) | | | (2,277,808 | ) |
| | | | |
Net Assets | | $ | 965,142,481 | | | $ | 413,414,163 | | | $ | 8,466,171 | | | $ | 5,442,730 | |
| | | | |
| | | | |
Shares Outstanding (unlimited number of shares authorized $ 0.0001 par value) | | | 15,400,001 | | | | 8,200,001 | | | | 300,001 | | | | 200,001 | |
Net Asset Value | | $ | 62.67 | | | $ | 50.42 | | | $ | 28.22 | | | $ | 27.21 | |
| | | | |
† Securities on loan, at value | | $ | 68,189,593 | | | $ | 12,983,050 | | | $ | — | | | $ | — | |
†† Cost of foreign cash | | $ | 6,342,065 | | | $ | 1,358,821 | | | $ | — | | | $ | — | |
| * | Includes cash pledged by the Fund to cover margin requirements for open futures contracts as of 10/31. |
| ** | Includes cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units. |
See Accompanying Notes to the Financial Statements.
| | |
| 58 | | FLEXSHARES ANNUAL REPORT |
Statements of Assets and Liabilities (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
US Quality
Large Cap
Index Fund | | | FlexShares®
STOXX® US
ESG Impact
Index Fund | | | FlexShares®
STOXX®
Global ESG
Impact
Index Fund | | | FlexShares®
Morningstar
Global
Upstream
Natural
Resources
Index Fund | |
|
ASSETS | |
Securities, at cost | | $ | 48,035,697 | | | $ | 48,292,417 | | | $ | 79,710,932 | | | $ | 5,006,398,912 | |
Affiliate securities, at cost | | | — | | | | — | | | | — | | | | — | |
Securities Lending Reinvestments, at cost | | | 989,345 | | | | 151,550 | | | | 436,049 | | | | 91,270,785 | |
| | | | |
Securities, at value† | | | 50,915,799 | | | | 55,361,534 | | | | 90,133,715 | | | | 5,495,480,171 | |
Affiliate securities, at value | | | — | | | | — | | | | — | | | | — | |
Securities Lending Reinvestments, at value | | | 989,345 | | | | 151,550 | | | | 436,049 | | | | 91,267,777 | |
Cash | | | 177,614 | | | | 513,759 | | | | 957,804 | | | | 5,722,383 | |
Cash segregated at broker* | | | 32,936 | | | | 83,631 | | | | 72,937 | | | | 1,332,148 | |
Foreign cash†† | | | — | | | | — | | | | 245,766 | | | | 3,166,264 | |
Restricted cash** | | | — | | | | — | | | | — | | | | — | |
Unrealized appreciation on forward foreign currency contracts | | | — | | | | — | | | | — | | | | 339,507 | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends and interest | | | 37,958 | | | | 73,780 | | | | 196,132 | | | | 6,975,561 | |
Securities lending income | | | 566 | | | | 510 | | | | 480 | | | | 41,848 | |
Capital shares issued | | | 2,601,895 | | | | — | | | | — | | | | — | |
Investment adviser | | | 57 | | | | 57 | | | | 95 | | | | 6,174 | |
Securities sold | | | — | | | | — | | | | — | | | | — | |
Variation margin on futures contracts | | | 2,783 | | | | 8,317 | | | | 25,439 | | | | — | |
| | | | |
Total Assets | | | 54,758,953 | | | | 56,193,138 | | | | 92,068,417 | | | | 5,604,331,833 | |
| | | | |
|
LIABILITIES | |
Unrealized depreciation on forward foreign currency contracts | | | — | | | | — | | | | — | | | | 344,724 | |
Payables: | | | | | | | | | | | | | | | | |
Cash collateral received from securities loaned | | | 989,345 | | | | 151,550 | | | | 436,049 | | | | 91,272,813 | |
Deferred compensation (Note 7) | | | 1,680 | | | | 999 | | | | 2,019 | | | | 342,822 | |
Investment advisory fees (Note 4) | | | 13,340 | | | | 14,368 | �� | | | 31,879 | | | | 2,113,965 | |
Trustee fees (Note 7) | | | 458 | | | | 361 | | | | 565 | | | | 17,880 | |
Securities purchased | | | 2,581,021 | | | | — | | | | — | | | | 171 | |
Deferrednon-US capital gains taxes | | | — | | | | — | | | | — | | | | — | |
Due to Authorized Participant | | | — | | | | — | | | | — | | | | — | |
Variation margin on futures contracts | | | — | | | | — | | | | — | | | | 18,836 | |
Capital shares redeemed | | | — | | | | — | | | | — | | | | — | |
Other | | | 2,500 | | | | 1,750 | | | | 7,500 | | | | 19,500 | |
| | | | |
Total Liabilities | | | 3,588,344 | | | | 169,028 | | | | 478,012 | | | | 94,130,711 | |
| | | | |
Net Assets | | $ | 51,170,609 | | | $ | 56,024,110 | | | $ | 91,590,405 | | | $ | 5,510,201,122 | |
| | | | |
|
NET ASSETS CONSIST OF: | |
Paid-in capital | | $ | 51,222,364 | | | $ | 49,436,537 | | | $ | 84,695,622 | | | $ | 5,818,207,228 | |
Distributable earnings (loss) | | | (51,755 | ) | | | 6,587,573 | | | | 6,894,783 | | | | (308,006,106 | ) |
| | | | |
Net Assets | | $ | 51,170,609 | | | $ | 56,024,110 | | | $ | 91,590,405 | | | $ | 5,510,201,122 | |
| | | | |
| | | | |
Shares Outstanding (unlimited number of shares authorized $ 0.0001 par value) | | | 1,475,001 | | | | 775,001 | | | | 900,001 | | | | 175,500,001 | |
Net Asset Value | | $ | 34.69 | | | $ | 72.29 | | | $ | 101.77 | | | $ | 31.40 | |
| | | | |
† Securities on loan, at value | | $ | 3,581,360 | | | $ | 1,466,386 | | | $ | 769,515 | | | $ | 220,889,254 | |
†† Cost of foreign cash | | $ | — | | | $ | — | | | $ | 242,348 | | | $ | 3,127,052 | |
| * | Includes cash pledged by the Fund to cover margin requirements for open futures contracts as of 10/31. |
| ** | Includes cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 59 | |
Statements of Assets and Liabilities (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
STOXX®
Global Broad
Infrastructure
Index Fund | | | FlexShares®
Global
Quality Real
Estate Index
Fund | | | FlexShares®
Real Assets
Allocation
Index Fund | | | FlexShares®
Quality
Dividend
Index Fund | |
|
ASSETS | |
Securities, at cost | | $ | 1,276,195,611 | | | $ | 313,756,196 | | | $ | — | | | $ | 1,378,719,056 | |
Affiliate securities, at cost | | | — | | | | — | | | | 10,681,337 | | | | — | |
Securities Lending Reinvestments, at cost | | | 32,790,554 | | | | 14,662,391 | | | | — | | | | 106,017,809 | |
| | | | |
Securities, at value† | | | 1,465,275,918 | | | | 372,388,154 | | | | — | | | | 1,685,254,955 | |
Affiliate securities, at value | | | — | | | | — | | | | 11,358,029 | | | | — | |
Securities Lending Reinvestments, at value | | | 32,790,554 | | | | 14,662,391 | | | | — | | | | 106,016,014 | |
Cash | | | 3,910,418 | | | | 2,104,724 | | | | 5,019 | | | | 19,264,407 | |
Cash segregated at broker* | | | 715,670 | | | | 363,934 | | | | — | | | | 1,031,659 | |
Foreign cash†† | | | 4,508,554 | | | | 1,061,261 | | | | — | | | | — | |
Restricted cash** | | | — | | | | — | | | | — | | | | — | |
Unrealized appreciation on forward foreign currency contracts | | | 41,458 | | | | 763 | | | | — | | | | — | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends and interest | | | 3,535,986 | | | | 458,700 | | | | — | | | | 1,695,935 | |
Securities lending income | | | 10,089 | | | | 2,458 | | | | — | | | | 27,390 | |
Capital shares issued | | | — | | | | — | | | | — | | | | — | |
Investment adviser | | | 1,548 | | | | 399 | | | | 12 | | | | 1,866 | |
Securities sold | | | 13,758 | | | | 3,322 | | | | — | | | | 67,167,319 | |
Variation margin on futures contracts | | | 245,180 | | | | 46,748 | | | | — | | | | 290,706 | |
| | | | |
Total Assets | | | 1,511,049,133 | | | | 391,092,854 | | | | 11,363,060 | | | | 1,880,750,251 | |
| | | | |
|
LIABILITIES | |
Unrealized depreciation on forward foreign currency contracts | | | 29,935 | | | | 1,477 | | | | — | | | | — | |
Payables: | | | | | | | | | | | | | | | | |
Cash collateral received from securities loaned | | | 32,790,554 | | | | 14,662,391 | | | | — | | | | 106,021,374 | |
Deferred compensation (Note 7) | | | 53,562 | | | | 15,343 | | | | 351 | | | | 104,944 | |
Investment advisory fees (Note 4) | | | 577,010 | | | | 141,994 | | | | 1,040 | | | | 525,676 | |
Trustee fees (Note 7) | | | 4,343 | | | | 1,252 | | | | 334 | | | | 6,445 | |
Securities purchased | | | 493,677 | | | | — | | | | — | | | | 66,739,587 | |
Deferrednon-US capital gains taxes | | | 45,928 | | | | — | | | | — | | | | — | |
Due to Authorized Participant | | | — | | | | — | | | | — | | | | — | |
Variation margin on futures contracts | | | — | | | | — | | | | — | | | | — | |
Capital shares redeemed | | | — | | | | — | | | | — | | | | — | |
Other | | | 24,000 | | | | 6,000 | | | | — | | | | 8,250 | |
| | | | |
Total Liabilities | | | 34,019,009 | | | | 14,828,457 | | | | 1,725 | | | | 173,406,276 | |
| | | | |
Net Assets | | $ | 1,477,030,124 | | | $ | 376,264,397 | | | $ | 11,361,335 | | | $ | 1,707,343,975 | |
| | | | |
|
NET ASSETS CONSIST OF: | |
Paid-in capital | | $ | 1,335,105,848 | | | $ | 324,692,367 | | | $ | 10,706,832 | | | $ | 1,387,646,797 | |
Distributable earnings (loss) | | | 141,924,276 | | | | 51,572,030 | | | | 654,503 | | | | 319,697,178 | |
| | | | |
Net Assets | | $ | 1,477,030,124 | | | $ | 376,264,397 | | | $ | 11,361,335 | | | $ | 1,707,343,975 | |
| | | | |
| | | | |
Shares Outstanding (unlimited number of shares authorized $ 0.0001 par value) | | | 28,100,001 | | | | 5,650,001 | | | | 375,001 | | | | 36,850,001 | |
Net Asset Value | | $ | 52.56 | | | $ | 66.60 | | | $ | 30.30 | | | $ | 46.33 | |
| | | | |
† Securities on loan, at value | | $ | 88,042,081 | | | $ | 26,368,677 | | | $ | — | | | $ | 120,902,643 | |
†† Cost of foreign cash | | $ | 4,464,103 | | | $ | 1,049,988 | | | $ | — | | | $ | — | |
| * | Includes cash pledged by the Fund to cover margin requirements for open futures contracts as of 10/31. |
| ** | Includes cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units. |
See Accompanying Notes to the Financial Statements.
| | |
| 60 | | FLEXSHARES ANNUAL REPORT |
Statements of Assets and Liabilities (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
Quality
Dividend
Defensive
Index Fund | | | FlexShares®
Quality
Dividend
Dynamic
Index Fund | | | FlexShares®
International
Quality
Dividend
Index Fund | | | FlexShares®
International
Quality
Dividend
Defensive
Index Fund | |
|
ASSETS | |
Securities, at cost | | $ | 367,466,211 | | | $ | 44,279,045 | | | $ | 734,373,572 | | | $ | 75,609,651 | |
Affiliate securities, at cost | | | — | | | | — | | | | — | | | | — | |
Securities Lending Reinvestments, at cost | | | 31,997,408 | | | | 1,936,741 | | | | 687,246 | | | | — | |
| | | | |
Securities, at value† | | | 442,948,036 | | | | 51,625,406 | | | | 758,807,569 | | | | 77,814,489 | |
Affiliate securities, at value | | | — | | | | — | | | | — | | | | — | |
Securities Lending Reinvestments, at value | | | 31,997,408 | | | | 1,936,741 | | | | 687,246 | | | | — | |
Cash | | | 7,143,102 | | | | 481,288 | | | | 2,926,330 | | | | 183,534 | |
Cash segregated at broker* | | | 627,278 | | | | 136,365 | | | | 1,515,915 | | | | 44,990 | |
Foreign cash†† | | | — | | | | — | | | | 8,170,750 | | | | 370,931 | |
Restricted cash** | | | — | | | | — | | | | 587,696 | | | | — | |
Unrealized appreciation on forward foreign currency contracts | | | — | | | | — | | | | 40,078 | | | | — | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends and interest | | | 590,429 | | | | 74,221 | | | | 3,346,766 | | | | 328,292 | |
Securities lending income | | | 5,855 | | | | 514 | | | | 37,954 | | | | 1,365 | |
Capital shares issued | | | — | | | | — | | | | — | | | | — | |
Investment adviser | | | 475 | | | | 59 | | | | 865 | | | | 88 | |
Securities sold | | | 37,288,512 | | | | 6,016 | | | | — | | | | — | |
Variation margin on futures contracts | | | 94,375 | | | | 7,457 | | | | 328,275 | | | | 23,684 | |
| | | | |
Total Assets | | | 520,695,470 | | | | 54,268,067 | | | | 776,449,444 | | | | 78,767,373 | |
| | | | |
|
LIABILITIES | |
Unrealized depreciation on forward foreign currency contracts | | | — | | | | — | | | | 112,663 | | | | 936 | |
Payables: | | | | | | | | | | | | | | | | |
Cash collateral received from securities loaned | | | 31,997,408 | | | | 1,936,741 | | | | 687,246 | | | | — | |
Deferred compensation (Note 7) | | | 20,248 | | | | 5,193 | | | | 46,254 | | | | 6,375 | |
Investment advisory fees (Note 4) | | | 139,012 | | | | 16,007 | | | | 298,299 | | | | 30,677 | |
Trustee fees (Note 7) | | | 1,658 | | | | 585 | | | | 2,660 | | | | 530 | |
Securities purchased | | | 37,564,670 | | | | — | | | | — | | | | — | |
Deferrednon-US capital gains taxes | | | — | | | | — | | | | — | | | | — | |
Due to Authorized Participant | | | — | | | | — | | | | 587,696 | | | | — | |
Variation margin on futures contracts | | | — | | | | — | | | | — | | | | — | |
Capital shares redeemed | | | — | | | | — | | | | — | | | | — | |
Other | | | 9,750 | | | | 1,500 | | | | 30,000 | | | | 10,000 | |
| | | | |
Total Liabilities | | | 69,732,746 | | | | 1,960,026 | | | | 1,764,818 | | | | 48,518 | |
| | | | |
Net Assets | | $ | 450,962,724 | | | $ | 52,308,041 | | | $ | 774,684,626 | | | $ | 78,718,855 | |
| | | | |
|
NET ASSETS CONSIST OF: | |
Paid-in capital | | $ | 371,391,859 | | | $ | 45,185,410 | | | $ | 889,019,014 | | | $ | 98,433,557 | |
Distributable earnings (loss) | | | 79,570,865 | | | | 7,122,631 | | | | (114,334,388 | ) | | | (19,714,702 | ) |
| | | | |
Net Assets | | $ | 450,962,724 | | | $ | 52,308,041 | | | $ | 774,684,626 | | | $ | 78,718,855 | |
| | | | |
| | | | |
Shares Outstanding (unlimited number of shares authorized $ 0.0001 par value) | | | 9,750,001 | | | | 1,150,001 | | | | 33,600,001 | | | | 3,600,001 | |
Net Asset Value | | $ | 46.25 | | | $ | 45.49 | | | $ | 23.06 | | | $ | 21.87 | |
| | | | |
† Securities on loan, at value | | $ | 31,493,594 | | | $ | 4,425,163 | | | $ | 24,830,474 | | | $ | 3,787,100 | |
†† Cost of foreign cash | | $ | — | | | $ | — | | | $ | 7,977,213 | | | $ | 363,287 | |
| * | Includes cash pledged by the Fund to cover margin requirements for open futures contracts as of 10/31. |
| ** | Includes cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 61 | |
Statements of Assets and Liabilities (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
International
Quality
Dividend
Dynamic
Index Fund | | | FlexShares®
iBoxx 3-Year
Target
Duration TIPS
Index Fund | | | FlexShares®
iBoxx 5-Year
Target
Duration
TIPS Index
Fund | | | FlexShares®
Disciplined
Duration
MBS Index
Fund | |
|
ASSETS | |
Securities, at cost | | $ | 44,394,073 | | | $ | 1,165,440,138 | | | $ | 544,264,351 | | | $ | 34,503,562 | |
Affiliate securities, at cost | | | — | | | | — | | | | — | | | | — | |
Securities Lending Reinvestments, at cost | | | — | | | | — | | | | — | | | | — | |
| | | | |
Securities, at value† | | | 46,827,441 | | | | 1,177,285,005 | | | | 556,179,873 | | | | 35,075,032 | |
Affiliate securities, at value | | | — | | | | — | | | | — | | | | — | |
Securities Lending Reinvestments, at value | | | — | | | | — | | | | — | | | | — | |
Cash | | | 255,595 | | | | 297,999 | | | | 74,114 | | | | 2,376,012 | |
Cash segregated at broker* | | | 59,203 | | | | — | | | | — | | | | — | |
Foreign cash†† | | | 71,918 | | | | — | | | | — | | | | — | |
Restricted cash** | | | — | | | | — | | | | — | | | | — | |
Unrealized appreciation on forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends and interest | | | 192,007 | | | | 1,490,533 | | | | 1,076,942 | | | | 103,349 | |
Securities lending income | | | 261 | | | | 20,563 | | | | 6,487 | | | | — | |
Capital shares issued | | | — | | | | — | | | | — | | | | — | |
Investment adviser | | | 49 | | | | 1,349 | | | | 631 | | | | 37 | |
Securities sold | | | — | | | | — | | | | — | | | | — | |
Variation margin on futures contracts | | | 12,205 | | | | — | | | | — | | | | — | |
| | | | |
Total Assets | | | 47,418,679 | | | | 1,179,095,449 | | | | 557,338,047 | | | | 37,554,430 | |
| | | | |
|
LIABILITIES | |
Unrealized depreciation on forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Payables: | | | | | | | | | | | | | | | | |
Cash collateral received from securities loaned | | | — | | | | — | | | | — | | | | — | |
Deferred compensation (Note 7) | | | 3,789 | | | | 188,352 | | | | 64,356 | | | | 2,530 | |
Investment advisory fees (Note 4) | | | 18,372 | | | | 181,331 | | | | 86,367 | | | | 5,843 | |
Trustee fees (Note 7) | | | 495 | | | | 3,552 | | | | 2,596 | | | | 389 | |
Securities purchased | | | — | | | | — | | | | — | | | | 2,215,247 | |
Deferrednon-US capital gains taxes | | | — | | | | — | | | | — | | | | — | |
Due to Authorized Participant | | | — | | | | — | | | | — | | | | — | |
Variation margin on futures contracts | | | — | | | | — | | | | — | | | | — | |
Capital shares redeemed | | | — | | | | — | | | | — | | | | — | |
Other | | | 5,000 | | | | — | | | | — | | | | 800 | |
| | | | |
Total Liabilities | | | 27,656 | | | | 373,235 | | | | 153,319 | | | | 2,224,809 | |
| | | | |
Net Assets | | $ | 47,391,023 | | | $ | 1,178,722,214 | | | $ | 557,184,728 | | | $ | 35,329,621 | |
| | | | |
|
NET ASSETS CONSIST OF: | |
Paid-in capital | | $ | 58,661,976 | | | $ | 1,231,729,457 | | | $ | 560,360,837 | | | $ | 37,401,972 | |
Distributable earnings (loss) | | | (11,270,953 | ) | | | (53,007,243 | ) | | | (3,176,109 | ) | | | (2,072,351 | ) |
| | | | |
Net Assets | | $ | 47,391,023 | | | $ | 1,178,722,214 | | | $ | 557,184,728 | | | $ | 35,329,621 | |
| | | | |
| | | | |
Shares Outstanding (unlimited number of shares authorized $ 0.0001 par value) | | | 1,900,001 | | | | 47,954,000 | | | | 21,850,001 | | | | 1,500,001 | |
Net Asset Value | | $ | 24.94 | | | $ | 24.58 | | | $ | 25.50 | | | $ | 23.55 | |
| | | | |
† Securities on loan, at value | | $ | 846,352 | | | $ | 67,113,452 | | | $ | 70,072,472 | | | $ | — | |
†† Cost of foreign cash | | $ | 71,117 | | | $ | — | | | $ | — | | | $ | — | |
| * | Includes cash pledged by the Fund to cover margin requirements for open futures contracts as of 10/31. |
| ** | Includes cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units. |
See Accompanying Notes to the Financial Statements.
| | |
| 62 | | FLEXSHARES ANNUAL REPORT |
Statements of Assets and Liabilities (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
Credit-
Scored US
Corporate
Bond Index
Fund | | | FlexShares®
Credit-
Scored US
Long
Corporate
Bond Index
Fund | | | FlexShares®
High Yield
Value-
Scored
Bond Index
Fund | | | FlexShares®
Ready
Access
Variable
Income Fund | |
|
ASSETS | |
Securities, at cost | | $ | 91,943,843 | | | $ | 15,362,121 | | | $ | 98,656,586 | | | $ | 274,317,928 | |
Affiliate securities, at cost | | | — | | | | — | | | | — | | | | — | |
Securities Lending Reinvestments, at cost | | | — | | | | — | | | | — | | | | — | |
| | | | |
Securities, at value† | | | 96,316,502 | | | | 17,064,176 | | | | 98,088,178 | | | | 275,450,179 | |
Affiliate securities, at value | | | — | | | | — | | | | — | | | | — | |
Securities Lending Reinvestments, at value | | | — | | | | — | | | | — | | | | — | |
Cash | | | 279,797 | | | | 252,760 | | | | 10,246,565 | | | | 252,314 | |
Cash segregated at broker* | | | — | | | | — | | | | — | | | | — | |
Foreign cash†† | | | — | | | | — | | | | — | | | | — | |
Restricted cash** | | | — | | | | — | | | | — | | | | — | |
Unrealized appreciation on forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Receivables: | | | | | | | | | | | | | | | | |
Dividends and interest | | | 824,717 | | | | 193,524 | | | | 1,556,654 | | | | 1,464,815 | |
Securities lending income | | | — | | | | — | | | | — | | | | — | |
Capital shares issued | | | — | | | | — | | | | 7,195,069 | | | | — | |
Investment adviser | | | 105 | | | | 20 | | | | 56 | | | | 298 | |
Securities sold | | | 1,539,943 | | | | 482,492 | | | | — | | | | — | |
Variation margin on futures contracts | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total Assets | | | 98,961,064 | | | | 17,992,972 | | | | 117,086,522 | | | | 277,167,606 | |
| | | | |
|
LIABILITIES | |
Unrealized depreciation on forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Payables: | | | | | | | | | | | | | | | | |
Cash collateral received from securities loaned | | | — | | | | — | | | | — | | | | — | |
Deferred compensation (Note 7) | | | 3,104 | | | | 969 | | | | 782 | | | | 11,545 | |
Investment advisory fees (Note 4) | | | 17,966 | | | | 3,212 | | | | 22,145 | | | | 57,233 | |
Trustee fees (Note 7) | | | 401 | | | | 304 | | | | 303 | | | | 824 | |
Securities purchased | | | 1,664,025 | | | | 635,866 | | | | 16,580,053 | | | | 1,999,880 | |
Deferrednon-US capital gains taxes | | | — | | | | — | | | | — | | | | — | |
Due to Authorized Participant | | | — | | | | — | | | | — | | | | — | |
Variation margin on futures contracts | | | — | | | | — | | | | — | | | | — | |
Capital shares redeemed | | | — | | | | — | | | | — | | | | — | |
Other | | | 500 | | | | 500 | | | | 3,000 | | | | 1,225 | |
| | | | |
Total Liabilities | | | 1,685,996 | | | | 640,851 | | | | 16,606,283 | | | | 2,070,707 | |
| | | | |
Net Assets | | $ | 97,275,068 | | | $ | 17,352,121 | | | $ | 100,480,239 | | | $ | 275,096,899 | |
| | | | |
|
NET ASSETS CONSIST OF: | |
Paid-in capital | | $ | 92,182,522 | | | $ | 15,787,673 | | | $ | 101,614,917 | | | $ | 273,398,299 | |
Distributable earnings (loss) | | | 5,092,546 | | | | 1,564,448 | | | | (1,134,678 | ) | | | 1,698,600 | |
| | | | |
Net Assets | | $ | 97,275,068 | | | $ | 17,352,121 | | | $ | 100,480,239 | | | $ | 275,096,899 | |
| | | | |
| | | | |
Shares Outstanding (unlimited number of shares authorized $ 0.0001 par value) | | | 1,850,001 | | | | 300,001 | | | | 2,100,001 | | | | 3,625,001 | |
Net Asset Value | | $ | 52.58 | | | $ | 57.84 | | | $ | 47.85 | | | $ | 75.89 | |
| | | | |
† Securities on loan, at value | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
†† Cost of foreign cash | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| * | Includes cash pledged by the Fund to cover margin requirements for open futures contracts as of 10/31. |
| ** | Includes cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 63 | |
Statements of Assets and Liabilities (cont.)
| | | | |
| | | FlexShares®
Core Select
Bond Fund | |
|
ASSETS | |
Securities, at cost | | $ | 15,876,942 | |
Affiliate securities, at cost | | | 9,150,127 | |
Securities Lending Reinvestments, at cost | | | — | |
| | | | |
Securities, at value† | | | 16,631,279 | |
Affiliate securities, at value | | | 9,443,340 | |
Securities Lending Reinvestments, at value | | | — | |
Cash | | | 226,131 | |
Cash segregated at broker* | | | 516 | |
Foreign cash†† | | | — | |
Restricted cash** | | | — | |
Unrealized appreciation on forward foreign currency contracts | | | — | |
Receivables: | | | | |
Dividends and interest | | | — | |
Securities lending income | | | — | |
Capital shares issued | | | — | |
Investment adviser | | | 25 | |
Securities sold | | | — | |
Variation margin on futures contracts | | | 3,438 | |
| | | | |
Total Assets | | | 26,304,729 | |
| | | | |
|
LIABILITIES | |
Unrealized depreciation on forward foreign currency contracts | | | — | |
Payables: | | | | |
Cash collateral received from securities loaned | | | — | |
Deferred compensation (Note 7) | | | 724 | |
Investment advisory fees (Note 4) | | | 4,977 | |
Trustee fees (Note 7) | | | 337 | |
Securities purchased | | | — | |
Deferrednon-US capital gains taxes | | | — | |
Due to Authorized Participant | | | — | |
Variation margin on futures contracts | | | — | |
Capital shares redeemed | | | — | |
Other | | | — | |
| | | | |
Total Liabilities | | | 6,038 | |
| | | | |
Net Assets | | $ | 26,298,691 | |
| | | | |
|
NET ASSETS CONSIST OF: | |
Paid-in capital | | $ | 25,650,379 | |
Distributable earnings (loss) | | | 648,312 | |
| | | | |
Net Assets | | $ | 26,298,691 | |
| | | | |
| |
Shares Outstanding (unlimited number of shares authorized $ 0.0001 par value) | | | 1,025,001 | |
Net Asset Value | | $ | 25.66 | |
| |
† Securities on loan, at value | | $ | — | |
†† Cost of foreign cash | | $ | — | |
| * | Includes cash pledged by the Fund to cover margin requirements for open futures contracts as of 10/31. |
| ** | Includes cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units. |
See Accompanying Notes to the Financial Statements.
| | |
| 64 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Trust
Statements of Operations
For the year or period ended October 31, 2019
| | | | | | | | | | | | | | | | |
| | | FlexShares®
US Quality
Low
Volatility
Index Fund | | | FlexShares®
Developed
Marketsex-US
Quality Low
Volatility Index
Fund | | | FlexShares®
Emerging
Markets
Quality Low
Volatility Index
Fund | | | FlexShares®
Morningstar
US Market
Factor Tilt
Index Fund | |
| | | July 15,
2019* through
October 31,
2019 | | | July 15,
2019* through
October 31,
2019 | | | July 15,
2019* through
October 31,
2019 | | | | |
|
INVESTMENT INCOME | |
Dividend income | | $ | 25,355 | | | $ | 41,490 | | | $ | 56,350 | | | $ | 27,221,218 | |
Dividend income received from affiliate | | | — | | | | — | | | | — | | | | 17,820 | |
Interest income | | | 27 | | | | — | | | | — | | | | — | |
Securities lending income (net of fees) (Note 2) | | | — | | | | — | | | | — | | | | 583,554 | |
Foreign withholding tax on dividends | | | (86 | ) | | | (3,878 | ) | | | (4,436 | ) | | | (4,339 | ) |
Foreign withholding tax on interest | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total Investment Income | | | 25,296 | | | | 37,612 | | | | 51,914 | | | | 27,818,253 | |
| | | | |
|
EXPENSES | |
Deferred compensation (Note 7) | | | 14 | | | | 13 | | | | 13 | | | | 6,809 | |
Investment advisory fees | | | 3,305 | | | | 4,704 | | | | 5,743 | | | | 3,515,806 | |
Trustee fees (Note 7) | | | 87 | | | | 66 | | | | 65 | | | | 75,434 | |
Other expenses (Note 4) | | | 14 | | | | 17 | | | | 17 | | | | 84,806 | |
| | | | |
Total Gross Expenses Before Fees Reimbursed | | | 3,420 | | | | 4,800 | | | | 5,838 | | | | 3,682,855 | |
| | | | |
|
Less: | |
Deferred compensation reimbursed (Note 7) | | | (7 | ) | | | (7 | ) | | | (7 | ) | | | (5,700 | ) |
Expenses waived and/or reimbursed by Advisor (Note 4) | | | (21 | ) | | | — | | | | (1 | ) | | | — | |
Investment advisory fees reimbursed (Note 4) | | | — | | | | — | | | | — | | | | — | |
Trustee fees reimbursed (Note 7) | | | — | | | | — | | | | — | | | | (20,878 | ) |
Other expenses reimbursed (Note 4) | | | (14 | ) | | | (17 | ) | | | (17 | ) | | | (84,806 | ) |
| | | | |
Total Net Expenses | | | 3,378 | | | | 4,776 | | | | 5,813 | | | | 3,571,471 | |
| | | | |
Net Investment Income (Loss) | | | 21,918 | | | | 32,836 | | | | 46,101 | | | | 24,246,782 | |
| | | | |
|
NET REALIZED GAIN (LOSS) FROM: | |
Transactions in investment securities of affiliated issuers | | | — | | | | — | | | | — | | | | (29,916 | ) |
Transactions in investment securities | | | 4,178 | | | | (13,184 | ) | | | (29,162 | )(1) | | | (40,778,779 | ) |
In-kind redemptions on investments in affiliated securities | | | — | | | | — | | | | — | | | | 30,650 | |
In-kind redemptions on investments in securities | | | — | | | | — | | | | — | | | | 68,967,036 | |
Expiration or closing of futures contracts | | | (4,706 | ) | | | (1,249 | ) | | | (7,276 | ) | | | (1,507,772 | ) |
Settlement of forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Foreign currency transactions | | | — | | | | (14 | ) | | | (2,513 | ) | | | — | |
| | | | |
Net Realized Gain (Loss) | | | (528 | ) | | | (14,447 | ) | | | (38,951 | ) | | | 26,681,219 | |
| | | | |
|
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON: | |
Investments in securities | | | 52,851 | | | | 116,130 | | | | (3,933 | ) | | | 89,408,943 | (2) |
Securities lending | | | — | | | | — | | | | — | | | | (2,399 | ) |
Futures contracts | | | — | | | | 2,933 | | | | — | | | | 1,376,463 | |
Forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Translation of other assets and liabilities denominated in foreign currencies | | | — | | | | 185 | | | | 46 | | | | — | |
| | | | |
Net Change in Unrealized Appreciation (Depreciation) | | | 52,851 | | | | 119,248 | | | | (3,887 | ) | | | 90,783,007 | |
| | | | |
Net Realized and Unrealized Gain (Loss) | | | 52,323 | | | | 104,801 | | | | (42,838 | ) | | | 117,464,226 | |
| | | | |
Net Increase (Decrease) in Net Assets Resulting from Operations | | $ | 74,241 | | | $ | 137,637 | | | $ | 3,263 | | | $ | 141,711,008 | |
| | | | |
| * | Commencement of investment operations. |
| (1) | Net ofnon-US capital gains tax of $(184). |
| (2) | Includes $25,402 change in unrealized appreciation on investments in affiliates. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 65 | |
Statements of Operations (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
Morningstar
Developed
Markets
ex-US Factor
Tilt Index
Fund | | | FlexShares®
Morningstar
Emerging
Markets
Factor Tilt
Index Fund | | | FlexShares®
Currency
Hedged
Morningstar
DMex-US
Factor Tilt
Index Fund | | | FlexShares®
Currency
Hedged
Morningstar
EM Factor
Tilt Index
Fund | |
|
INVESTMENT INCOME | |
Dividend income | | $ | 35,707,028 | | | $ | 19,478,016 | | | $ | — | | | $ | — | |
Dividend income received from affiliate | | | — | | | | — | | | | 250,684 | | | | 155,422 | |
Interest income | | | — | | | | 713 | | | | — | | | | — | |
Securities lending income (net of fees) (Note 2) | | | 1,038,260 | | | | 215,463 | | | | — | | | | — | |
Foreign withholding tax on dividends | | | (3,221,754 | ) | | | (1,918,799 | ) | | | — | | | | — | |
Foreign withholding tax on interest | | | — | | | | (11 | ) | | | — | | | | — | |
| | | | |
Total Investment Income | | | 33,523,534 | | | | 17,775,382 | | | | 250,684 | | | | 155,422 | |
| | | | |
|
EXPENSES | |
Deferred compensation (Note 7) | | | 4,583 | | | | 2,296 | | | | 39 | | | | 26 | |
Investment advisory fees | | | 3,748,131 | | | | 2,979,564 | | | | 35,854 | | | | 34,572 | |
Trustee fees (Note 7) | | | 51,245 | | | | 26,471 | | | | 367 | | | | 233 | |
Other expenses (Note 4) | | | 59,483 | | | | 32,294 | | | | 547 | | | | 356 | |
| | | | |
Total Gross Expenses Before Fees Reimbursed | | | 3,863,442 | | | | 3,040,625 | | | | 36,807 | | | | 35,187 | |
| | | | |
|
Less: | |
Deferred compensation reimbursed (Note 7) | | | (3,719 | ) | | | (2,067 | ) | | | (29 | ) | | | (26 | ) |
Expenses waived and/or reimbursed by Advisor (Note 4) | | | — | | | | — | | | | — | | | | — | |
Investment advisory fees reimbursed (Note 4) | | | — | | | | — | | | | (31,724 | ) | | | (31,523 | ) |
Trustee fees reimbursed (Note 7) | | | (14,546 | ) | | | (7,641 | ) | | | (120 | ) | | | (72 | ) |
Other expenses reimbursed (Note 4) | | | (59,483 | ) | | | (32,294 | ) | | | (547 | ) | | | (356 | ) |
| | | | |
Total Net Expenses | | | 3,785,694 | | | | 2,998,623 | | | | 4,387 | | | | 3,210 | |
| | | | |
Net Investment Income (Loss) | | | 29,737,840 | | | | 14,776,759 | | | | 246,297 | | | | 152,212 | |
| | | | |
|
NET REALIZED GAIN (LOSS) FROM: | |
Transactions in investment securities of affiliated issuers | | | — | | | | — | | | | (53,618 | ) | | | (52,078 | ) |
Transactions in investment securities | | | (30,512,996 | ) | | | (34,518,306 | )(1) | | | — | | | | — | |
In-kind redemptions on investments in affiliated securities | | | — | | | | — | | | | (3,143 | ) | | | — | |
In-kind redemptions on investments in securities | | | 21,035,972 | | | | 2,310,647 | | | | — | | | | — | |
Expiration or closing of futures contracts | | | (88,940 | ) | | | (158,930 | ) | | | — | | | | 411 | |
Settlement of forward foreign currency contracts | | | (186,801 | ) | | | 44,437 | | | | 183,080 | | | | 52,664 | |
Foreign currency transactions | | | (59,883 | ) | | | (324,807 | ) | | | 36,840 | | | | (14,521 | ) |
| | | | |
Net Realized Gain (Loss) | | | (9,812,648 | ) | | | (32,646,959 | ) | | | 163,159 | | | | (13,524 | ) |
| | | | |
|
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON: | |
Investments in securities | | | 50,937,130 | | | | 47,245,005 | | | | 450,101 | (2) | | | 312,519 | (3) |
Securities lending | | | — | | | | — | | | | — | | | | — | |
Futures contracts | | | 908,875 | | | | 177,026 | | | | — | | | | 3,724 | |
Forward foreign currency contracts | | | 216,278 | | | | (8,318 | ) | | | (100,459 | ) | | | (58,310 | ) |
Translation of other assets and liabilities denominated in foreign currencies | | | 178,241 | | | | 14,542 | | | | — | | | | — | |
| | | | |
Net Change in Unrealized Appreciation (Depreciation) | | | 52,240,524 | | | | 47,428,255 | | | | 349,642 | | | | 257,933 | |
| | | | |
Net Realized and Unrealized Gain (Loss) | | | 42,427,876 | | | | 14,781,296 | | | | 512,801 | | | | 244,409 | |
| | | | |
Net Increase (Decrease) in Net Assets Resulting from Operations | | $ | 72,165,716 | | | $ | 29,558,055 | | | $ | 759,098 | | | $ | 396,621 | |
| | | | |
| (1) | Net ofnon-US capital gains tax of $(63,575). |
| (2) | Includes $450,101 change in unrealized appreciation on investments in affiliates. |
| (3) | Includes $312,519 change in unrealized appreciation on investments in affiliates. |
See Accompanying Notes to the Financial Statements.
| | |
| 66 | | FLEXSHARES ANNUAL REPORT |
Statements of Operations (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
US Quality
Large Cap
Index Fund | | | FlexShares®
STOXX® US
ESG Impact
Index Fund | | | FlexShares®
STOXX®
Global ESG
Impact
Index Fund | | | FlexShares®
Morningstar
Global
Upstream
Natural
Resources
Index Fund | |
|
INVESTMENT INCOME | |
Dividend income | | $ | 1,460,059 | | | $ | 903,187 | | | $ | 2,112,607 | | | $ | 219,685,625 | |
Dividend income received from affiliate | | | — | | | | 211 | | | | 211 | | | | — | |
Interest income | | | — | | | | — | | | | — | | | | — | |
Securities lending income (net of fees) (Note 2) | | | 4,881 | | | | 4,382 | | | | 9,371 | | | | 2,396,377 | |
Foreign withholding tax on dividends | | | (264 | ) | | | — | | | | (100,692 | ) | | | (10,961,950 | ) |
Foreign withholding tax on interest | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total Investment Income | | | 1,464,676 | | | | 907,780 | | | | 2,021,497 | | | | 211,120,052 | |
| | | | |
|
EXPENSES | |
Deferred compensation (Note 7) | | | 280 | | | | 219 | | | | 391 | | | | 26,296 | |
Investment advisory fees | | | 197,710 | | | | 137,266 | | | | 328,202 | | | | 25,101,239 | |
Trustee fees (Note 7) | | | 3,226 | | | | 2,190 | | | | 4,092 | | | | 294,254 | |
Other expenses (Note 4) | | | 4,163 | | | | 2,277 | | | | 4,552 | | | | 335,290 | |
| | | | |
Total Gross Expenses Before Fees Reimbursed | | | 205,379 | | | | 141,952 | | | | 337,237 | | | | 25,757,079 | |
| | | | |
|
Less: | |
Deferred compensation reimbursed (Note 7) | | | (304 | ) | | | (199 | ) | | | (302 | ) | | | (21,134 | ) |
Expenses waived and/or reimbursed by Advisor (Note 4) | | | — | | | | — | | | | — | | | | — | |
Investment advisory fees reimbursed (Note 4) | | | — | | | | — | | | | — | | | | — | |
Trustee fees reimbursed (Note 7) | | | (985 | ) | | | (516 | ) | | | (1,166 | ) | | | (81,529 | ) |
Other expenses reimbursed (Note 4) | | | (4,163 | ) | | | (2,277 | ) | | | (4,552 | ) | | | (335,290 | ) |
| | | | |
Total Net Expenses | | | 199,927 | | | | 138,960 | | | | 331,217 | | | | 25,319,126 | |
| | | | |
Net Investment Income (Loss) | | | 1,264,749 | | | | 768,820 | | | | 1,690,280 | | | | 185,800,926 | |
| | | | |
|
NET REALIZED GAIN (LOSS) FROM: | |
Transactions in investment securities of affiliated issuers | | | — | | | | (2,830 | ) | | | (2,786 | ) | | | — | |
Transactions in investment securities | | | (2,336,459 | ) | | | (505,018 | ) | | | (2,849,059 | ) | | | (174,620,323 | )(1) |
In-kind redemptions on investments in affiliated securities | | | — | | | | — | | | | — | | | | — | |
In-kind redemptions on investments in securities | | | 4,142,326 | | | | 946,277 | | | | 1,787,706 | | | | 50,514,769 | |
Expiration or closing of futures contracts | | | 86,319 | | | | 2,281 | | | | 5,108 | | | | 3,905,828 | |
Settlement of forward foreign currency contracts | | | — | | | | — | | | | — | | | | (753,480 | ) |
Foreign currency transactions | | | — | | | | — | | | | (10,080 | ) | | | (1,025,929 | ) |
| | | | |
Net Realized Gain (Loss) | | | 1,892,186 | | | | 440,710 | | | | (1,069,111 | ) | | | (121,979,135 | ) |
| | | | |
|
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON: | |
Investments in securities | | | 123,304 | | | | 4,796,926 | | | | 9,273,246 | | | | 95,760,206 | |
Securities lending | | | — | | | | — | | | | — | | | | (4,511 | ) |
Futures contracts | | | 13,952 | | | | 36,636 | | | | 94,406 | | | | 1,835,269 | |
Forward foreign currency contracts | | | — | | | | — | | | | — | | | | 226,301 | |
Translation of other assets and liabilities denominated in foreign currencies | | | — | | | | — | | | | 13,120 | | | | 143,042 | |
| | | | |
Net Change in Unrealized Appreciation (Depreciation) | | | 137,256 | | | | 4,833,562 | | | | 9,380,772 | | | | 97,960,307 | |
| | | | |
Net Realized and Unrealized Gain (Loss) | | | 2,029,442 | | | | 5,274,272 | | | | 8,311,661 | | | | (24,018,828 | ) |
| | | | |
Net Increase (Decrease) in Net Assets Resulting from Operations | | $ | 3,294,191 | | | $ | 6,043,092 | | | $ | 10,001,941 | | | $ | 161,782,098 | |
| | | | |
| (1) | Net ofnon-US capital gains tax of $(30,329). |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 67 | |
Statements of Operations (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
STOXX®
Global Broad
Infrastructure
Index Fund | | | FlexShares®
Global
Quality Real
Estate Index
Fund | | | FlexShares®
Real Assets
Allocation
Index Fund | | | FlexShares®
Quality
Dividend
Index Fund | |
|
INVESTMENT INCOME | |
Dividend income | | $ | 35,223,509 | | | $ | 11,053,149 | | | $ | — | | | $ | 53,621,127 | |
Dividend income received from affiliate | | | — | | | | — | | | | 317,095 | | | | — | |
Interest income | | | — | | | | — | | | | — | | | | — | |
Securities lending income (net of fees) (Note 2) | | | 267,286 | | | | 58,034 | | | | — | | | | 589,883 | |
Foreign withholding tax on dividends | | | (2,021,520 | ) | | | (468,443 | ) | | | — | | | | — | |
Foreign withholding tax on interest | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total Investment Income | | | 33,469,275 | | | | 10,642,740 | | | | 317,095 | | | | 54,211,010 | |
| | | | |
|
EXPENSES | |
Deferred compensation (Note 7) | | | 5,568 | | | | 1,628 | | | | 54 | | | | 8,155 | |
Investment advisory fees | | | 4,890,835 | | | | 1,467,399 | | | | 64,390 | | | | 6,300,020 | |
Trustee fees (Note 7) | | | 56,239 | | | | 17,275 | | | | 539 | | | | 91,129 | |
Other expenses (Note 4) | | | 53,441 | | | | 18,825 | | | | 725 | | | | 106,123 | |
| | | | |
Total Gross Expenses Before Fees Reimbursed | | | 5,006,083 | | | | 1,505,127 | | | | 65,708 | | | | 6,505,427 | |
| | | | |
|
Less: | |
Deferred compensation reimbursed (Note 7) | | | (4,281 | ) | | | (1,456 | ) | | | (34 | ) | | | (6,440 | ) |
Expenses waived and/or reimbursed by Advisor (Note 4) | | | — | | | | — | | | | — | | | | — | |
Investment advisory fees reimbursed (Note 4) | | | — | | | | — | | | | (52,113 | ) | | | — | |
Trustee fees reimbursed (Note 7) | | | (12,238 | ) | | | (4,412 | ) | | | (201 | ) | | | (26,094 | ) |
Other expenses reimbursed (Note 4) | | | (53,441 | ) | | | (18,825 | ) | | | (725 | ) | | | (106,123 | ) |
| | | | |
Total Net Expenses | | | 4,936,123 | | | | 1,480,434 | | | | 12,635 | | | | 6,366,770 | |
| | | | |
Net Investment Income (Loss) | | | 28,533,152 | | | | 9,162,306 | | | | 304,460 | | | | 47,844,240 | |
| | | | |
|
NET REALIZED GAIN (LOSS) FROM: | |
Transactions in investment securities of affiliated issuers | | | — | | | | — | | | | (20,400 | ) | | | — | |
Transactions in investment securities | | | (15,600,135 | )(1) | | | (3,747,554 | ) | | | — | | | | 9,383,004 | |
In-kind redemptions on investments in affiliated securities | | | — | | | | — | | | | 392,697 | | | | — | |
In-kind redemptions on investments in securities | | | — | | | | — | | | | — | | | | 50,604,043 | |
Expiration or closing of futures contracts | | | 627,613 | | | | (215,572 | ) | | | — | | | | 48,190 | |
Settlement of forward foreign currency contracts | | | (55,143 | ) | | | 3,301 | | | | — | | | | — | |
Foreign currency transactions | | | (134,900 | ) | | | (33,375 | ) | | | — | | | | — | |
| | | | |
Net Realized Gain (Loss) | | | (15,162,565 | ) | | | (3,993,200 | ) | | | 372,297 | | | | 60,035,237 | |
| | | | |
|
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON: | |
Investments in securities | | | 161,865,666 | (2) | | | 48,963,420 | | | | 1,224,066 | (3) | | | 28,173,181 | |
Securities lending | | | (692 | ) | | | — | | | | — | | | | (3,420 | ) |
Futures contracts | | | 549,410 | | | | 476,157 | | | | — | | | | 1,204,521 | |
Forward foreign currency contracts | | | 25,842 | | | | (12,675 | ) | | | — | | | | — | |
Translation of other assets and liabilities denominated in foreign currencies | | | 68,485 | | | | 58,559 | | | | — | | | | — | |
| | | | |
Net Change in Unrealized Appreciation (Depreciation) | | | 162,508,711 | | | | 49,485,461 | | | | 1,224,066 | | | | 29,374,282 | |
| | | | |
Net Realized and Unrealized Gain (Loss) | | | 147,346,146 | | | | 45,492,261 | | | | 1,596,363 | | | | 89,409,519 | |
| | | | |
Net Increase (Decrease) in Net Assets Resulting from Operations | | $ | 175,879,298 | | | $ | 54,654,567 | | | $ | 1,900,823 | | | $ | 137,253,759 | |
| | | | |
| (1) | Net ofnon-US capital gains tax of $(33,684). |
| (2) | Net of deferrednon-US capital gains tax of $45,928. |
| (3) | Includes $1,224,066 change in unrealized appreciation on investments in affiliates. |
See Accompanying Notes to the Financial Statements.
| | |
| 68 | | FLEXSHARES ANNUAL REPORT |
Statements of Operations (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
Quality
Dividend
Defensive
Index Fund | | | FlexShares®
Quality
Dividend
Dynamic
Index Fund | | | FlexShares®
International
Quality
Dividend
Index Fund | | | FlexShares®
International
Quality
Dividend
Defensive
Index Fund | |
|
INVESTMENT INCOME | |
Dividend income | | $ | 11,733,717 | | | $ | 1,617,754 | | | $ | 45,847,028 | | | $ | 5,198,473 | |
Dividend income received from affiliate | | | — | | | | — | | | | — | | | | — | |
Interest income | | | — | | | | — | | | | — | | | | — | |
Securities lending income (net of fees) (Note 2) | | | 56,973 | | | | 9,816 | | | | 591,160 | | | | 58,128 | |
Foreign withholding tax on dividends | | | (2,576 | ) | | | (994 | ) | | | (4,721,658 | ) | | | (515,382 | ) |
Foreign withholding tax on interest | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total Investment Income | | | 11,788,114 | | | | 1,626,576 | | | | 41,716,530 | | | | 4,741,219 | |
| | | | |
|
EXPENSES | |
Deferred compensation (Note 7) | | | 1,903 | | | | 246 | | | | 3,652 | | | | 398 | |
Investment advisory fees | | | 1,389,725 | | | | 188,333 | | | | 3,592,793 | | | | 404,712 | |
Trustee fees (Note 7) | | | 20,040 | | | | 2,644 | | | | 40,862 | | | | 4,509 | |
Other expenses (Note 4) | | | 21,359 | | | | 3,075 | | | | 47,083 | | | | 5,507 | |
| | | | |
Total Gross Expenses Before Fees Reimbursed | | | 1,433,027 | | | | 194,298 | | | | 3,684,390 | | | | 415,126 | |
| | | | |
|
Less: | |
Deferred compensation reimbursed (Note 7) | | | (1,568 | ) | | | (222 | ) | | | (2,874 | ) | | | (368 | ) |
Expenses waived and/or reimbursed by Advisor (Note 4) | | | — | | | | — | | | | — | | | | — | |
Investment advisory fees reimbursed (Note 4) | | | — | | | | — | | | | — | | | | — | |
Trustee fees reimbursed (Note 7) | | | (5,018 | ) | | | (751 | ) | | | (10,971 | ) | | | (1,313 | ) |
Other expenses reimbursed (Note 4) | | | (21,359 | ) | | | (3,075 | ) | | | (47,083 | ) | | | (5,507 | ) |
| | | | |
Total Net Expenses | | | 1,405,082 | | | | 190,250 | | | | 3,623,462 | | | | 407,938 | |
| | | | |
Net Investment Income (Loss) | | | 10,383,032 | | | | 1,436,326 | | | | 38,093,068 | | | | 4,333,281 | |
| | | | |
|
NET REALIZED GAIN (LOSS) FROM: | |
Transactions in investment securities of affiliated issuers | | | — | | | | — | | | | — | | | | — | |
Transactions in investment securities | | | 2,560,022 | | | | (211,929 | ) | | | (69,938,100 | )(1) | | | (6,915,943 | )(2) |
In-kind redemptions on investments in affiliated securities | | | — | | | | — | | | | — | | | | — | |
In-kind redemptions on investments in securities | | | — | | | | 2,766,106 | | | | 2,993,336 | | | | 1,096,052 | |
Expiration or closing of futures contracts | | | 10,056 | | | | 24,573 | | | | 950,572 | | | | 55,699 | |
Settlement of forward foreign currency contracts | | | — | | | | — | | | | 190,624 | | | | 3,317 | |
Foreign currency transactions | | | — | | | | — | | | | (767,412 | ) | | | (65,754 | ) |
| | | | |
Net Realized Gain (Loss) | | | 2,570,078 | | | | 2,578,750 | | | | (66,570,980 | ) | | | (5,826,629 | ) |
| | | | |
|
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON: | |
Investments in securities | | | 27,861,941 | | | | 2,680,659 | | | | 78,429,579 | | | | 8,054,507 | |
Securities lending | | | 2 | | | | — | | | | — | | | | — | |
Futures contracts | | | 257,602 | | | | 39,726 | | | | 676,327 | | | | 101,383 | |
Forward foreign currency contracts | | | — | | | | — | | | | (55,730 | ) | | | 547 | |
Translation of other assets and liabilities denominated in foreign currencies | | | — | | | | — | | | | 228,477 | | | | 17,610 | |
| | | | |
Net Change in Unrealized Appreciation (Depreciation) | | | 28,119,545 | | | | 2,720,385 | | | | 79,278,653 | | | | 8,174,047 | |
| | | | |
Net Realized and Unrealized Gain (Loss) | | | 30,689,623 | | | | 5,299,135 | | | | 12,707,673 | | | | 2,347,418 | |
| | | | |
Net Increase (Decrease) in Net Assets Resulting from Operations | | $ | 41,072,655 | | | $ | 6,735,461 | | | $ | 50,800,741 | | | $ | 6,680,699 | |
| | | | |
| (1) | Net ofnon-US capital gains tax of $(2,088). |
| (2) | Net ofnon-US capital gains tax of $(224). |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 69 | |
Statements of Operations (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
International
Quality
Dividend
Dynamic
Index Fund | | | FlexShares®
iBoxx 3-Year
Target
Duration TIPS
Index Fund | | | FlexShares®
iBoxx 5-Year
Target
Duration
TIPS Index
Fund | | | FlexShares®
Disciplined
Duration
MBS Index
Fund | |
|
INVESTMENT INCOME | |
Dividend income | | $ | 2,365,115 | | | $ | — | | | $ | — | | | $ | — | |
Dividend income received from affiliate | | | — | | | | — | | | | — | | | | — | |
Interest income | | | — | | | | 27,240,077 | | | | 12,317,079 | | | | 1,504,073 | |
Securities lending income (net of fees) (Note 2) | | | 30,593 | | | | 63,701 | | | | 35,074 | | | | — | |
Foreign withholding tax on dividends | | | (232,152 | ) | | | — | | | | — | | | | — | |
Foreign withholding tax on interest | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total Investment Income | | | 2,163,556 | | | | 27,303,778 | | | | 12,352,153 | | | | 1,504,073 | |
| | | | |
|
EXPENSES | |
Deferred compensation (Note 7) | | | 214 | | | | 6,141 | | | | 2,890 | | | | 228 | |
Investment advisory fees | | | 210,044 | | | | 2,365,358 | | | | 1,130,076 | | | | 105,448 | |
Trustee fees (Note 7) | | | 2,311 | | | | 69,018 | | | | 32,776 | | | | 2,681 | |
Other expenses (Note 4) | | | 3,077 | | | | 85,872 | | | | 42,239 | | | | 3,935 | |
| | | | |
Total Gross Expenses Before Fees Reimbursed | | | 215,646 | | | | 2,526,389 | | | | 1,207,981 | | | | 112,292 | |
| | | | |
|
Less: | |
Deferred compensation reimbursed (Note 7) | | | (141 | ) | | | (3,456 | ) | | | (1,377 | ) | | | (184 | ) |
Expenses waived and/or reimbursed by Advisor (Note 4) | | | — | | | | — | | | | — | | | | — | |
Investment advisory fees reimbursed (Note 4) | | | — | | | | — | | | | — | | | | — | |
Trustee fees reimbursed (Note 7) | | | (692 | ) | | | (22,705 | ) | | | (11,772 | ) | | | (1,133 | ) |
Other expenses reimbursed (Note 4) | | | (3,077 | ) | | | (85,872 | ) | | | (42,239 | ) | | | (3,935 | ) |
| | | | |
Total Net Expenses | | | 211,736 | | | | 2,414,356 | | | | 1,152,593 | | | | 107,040 | |
| | | | |
Net Investment Income (Loss) | | | 1,951,820 | | | | 24,889,422 | | | | 11,199,560 | | | | 1,397,033 | |
| | | | |
|
NET REALIZED GAIN (LOSS) FROM: | |
Transactions in investment securities of affiliated issuers | | | — | | | | — | | | | — | | | | — | |
Transactions in investment securities | | | (4,154,924 | ) | | | (4,690,129 | ) | | | (502,200 | ) | | | (91,883 | ) |
In-kind redemptions on investments in affiliated securities | | | — | | | | — | | | | — | | | | — | |
In-kind redemptions on investments in securities | | | (1,693,816 | ) | | | (2,837,460 | ) | | | (4,257,534 | ) | | | — | |
Expiration or closing of futures contracts | | | 5,165 | | | | — | | | | — | | | | — | |
Settlement of forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Foreign currency transactions | | | (5,801 | ) | | | — | | | | — | | | | — | |
| | | | |
Net Realized Gain (Loss) | | | (5,849,376 | ) | | | (7,527,589 | ) | | | (4,759,734 | ) | | | (91,883 | ) |
| | | | |
|
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON: | |
Investments in securities | | | 7,107,052 | | | | 50,089,357 | | | | 43,952,592 | | | | 2,642,747 | |
Securities lending | | | — | | | | — | | | | — | | | | — | |
Futures contracts | | | 42,894 | | | | — | | | | — | | | | — | |
Forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Translation of other assets and liabilities denominated in foreign currencies | | | (145 | ) | | | — | | | | — | | | | — | |
| | | | |
Net Change in Unrealized Appreciation (Depreciation) | | | 7,149,801 | | | | 50,089,357 | | | | 43,952,592 | | | | 2,642,747 | |
| | | | |
Net Realized and Unrealized Gain (Loss) | | | 1,300,425 | | | | 42,561,768 | | | | 39,192,858 | | | | 2,550,864 | |
| | | | |
Net Increase (Decrease) in Net Assets Resulting from Operations | | $ | 3,252,245 | | | $ | 67,451,190 | | | $ | 50,392,418 | | | $ | 3,947,897 | |
| | | | |
See Accompanying Notes to the Financial Statements.
| | |
| 70 | | FLEXSHARES ANNUAL REPORT |
Statements of Operations (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares®
Credit-
Scored US
Corporate
Bond Index
Fund | | | FlexShares®
Credit-
Scored US
Long
Corporate
Bond Index
Fund | | | FlexShares®
High Yield
Value-
Scored
Bond Index
Fund | | | FlexShares®
Ready
Access
Variable
Income Fund | |
|
INVESTMENT INCOME | |
Dividend income | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Dividend income received from affiliate | | | — | | | | — | | | | — | | | | — | |
Interest income | | | 3,144,536 | | | | 1,003,592 | | | | 2,696,926 | | | | 7,401,559 | |
Securities lending income (net of fees) (Note 2) | | | — | | | | — | | | | — | | | | — | |
Foreign withholding tax on dividends | | | — | | | | — | | | | — | | | | — | |
Foreign withholding tax on interest | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total Investment Income | | | 3,144,536 | | | | 1,003,592 | | | | 2,696,926 | | | | 7,401,559 | |
| | | | |
|
EXPENSES | |
Deferred compensation (Note 7) | | | 448 | | | | 104 | | | | 228 | | | | 1,262 | |
Investment advisory fees | | | 201,475 | | | | 51,363 | | | | 168,017 | | | | 643,664 | |
Trustee fees (Note 7) | | | 4,761 | | | | 1,128 | | | | 2,506 | | | | 13,471 | |
Other expenses (Note 4) | | | 5,228 | | | | 1,603 | | | | 2,585 | | | | 14,834 | |
| | | | |
Total Gross Expenses Before Fees Reimbursed | | | 211,912 | | | | 54,198 | | | | 173,336 | | | | 673,231 | |
| | | | |
|
Less: | |
Deferred compensation reimbursed (Note 7) | | | (459 | ) | | | (86 | ) | | | (129 | ) | | | (1,106 | ) |
Expenses waived and/or reimbursed by Advisor (Note 4) | | | — | | | | — | | | | — | | | | — | |
Investment advisory fees reimbursed (Note 4) | | | — | | | | — | | | | — | | | | — | |
Trustee fees reimbursed (Note 7) | | | (1,301 | ) | | | (410 | ) | | | (611 | ) | | | (4,003 | ) |
Other expenses reimbursed (Note 4) | | | (5,228 | ) | | | (1,603 | ) | | | (2,585 | ) | | | (14,834 | ) |
| | | | |
Total Net Expenses | | | 204,924 | | | | 52,099 | | | | 170,011 | | | | 653,288 | |
| | | | |
Net Investment Income (Loss) | | | 2,939,612 | | | | 951,493 | | | | 2,526,915 | | | | 6,748,271 | |
| | | | |
|
NET REALIZED GAIN (LOSS) FROM: | |
Transactions in investment securities of affiliated issuers | | | — | | | | — | | | | — | | | | — | |
Transactions in investment securities | | | 1,212,835 | | | | 476,208 | | | | (549,666 | ) | | | 126,422 | |
In-kind redemptions on investments in affiliated securities | | | — | | | | — | | | | — | | | | — | |
In-kind redemptions on investments in securities | | | — | | | | 409,085 | | | | (152,752 | ) | | | (142,215 | ) |
Expiration or closing of futures contracts | | | — | | | | — | | | | — | | | | — | |
Settlement of forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Foreign currency transactions | | | — | | | | — | | | | — | | | | — | |
| | | | |
Net Realized Gain (Loss) | | | 1,212,835 | | | | 885,293 | | | | (702,418 | ) | | | (15,793 | ) |
| | | | |
|
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON: | |
Investments in securities | | | 6,097,066 | | | | 3,495,491 | | | | 996,832 | | | | 1,260,684 | |
Securities lending | | | — | | | | — | | | | — | | | | — | |
Futures contracts | | | — | | | | — | | | | — | | | | — | |
Forward foreign currency contracts | | | — | | | | — | | | | — | | | | — | |
Translation of other assets and liabilities denominated in foreign currencies | | | — | | | | — | | | | — | | | | — | |
| | | | |
Net Change in Unrealized Appreciation (Depreciation) | | | 6,097,066 | | | | 3,495,491 | | | | 996,832 | | | | 1,260,684 | |
| | | | |
Net Realized and Unrealized Gain (Loss) | | | 7,309,901 | | | | 4,380,784 | | | | 294,414 | | | | 1,244,891 | |
| | | | |
Net Increase (Decrease) in Net Assets Resulting from Operations | | $ | 10,249,513 | | | $ | 5,332,277 | | | $ | 2,821,329 | | | $ | 7,993,162 | |
| | | | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 71 | |
Statements of Operations (cont.)
| | | | |
| | | FlexShares®
Core Select
Bond Fund | |
|
INVESTMENT INCOME | |
Dividend income | | $ | 437,377 | |
Dividend income received from affiliate | | | 615,130 | |
Interest income | | | 3,833 | |
Securities lending income (net of fees) (Note 2) | | | — | |
Foreign withholding tax on dividends | | | — | |
Foreign withholding tax on interest | | | — | |
| | | | |
Total Investment Income | | | 1,056,340 | |
| | | | |
|
EXPENSES | |
Deferred compensation (Note 7) | | | 148 | |
Investment advisory fees | | | 117,069 | |
Trustee fees (Note 7) | | | 1,669 | |
Other expenses (Note 4) | | | 2,348 | |
| | | | |
Total Gross Expenses Before Fees Reimbursed | | | 121,234 | |
| | | | |
|
Less: | |
Deferred compensation reimbursed (Note 7) | | | (122 | ) |
Expenses waived and/or reimbursed by Advisor (Note 4) | | | — | |
Investment advisory fees reimbursed (Note 4) | | | (55,095 | ) |
Trustee fees reimbursed (Note 7) | | | (657 | ) |
Other expenses reimbursed (Note 4) | | | (2,348 | ) |
| | | | |
Total Net Expenses | | | 63,012 | |
| | | | |
Net Investment Income (Loss) | | | 993,328 | |
| | | | |
|
NET REALIZED GAIN (LOSS) FROM: | |
Transactions in investment securities of affiliated issuers | | | (421,153 | ) |
Transactions in investment securities | | | 157,899 | |
In-kind redemptions on investments in affiliated securities | | | 268,361 | |
In-kind redemptions on investments in securities | | | 564,615 | |
Expiration or closing of futures contracts | | | 35,178 | |
Settlement of forward foreign currency contracts | | | — | |
Foreign currency transactions | | | — | |
| | | | |
Net Realized Gain (Loss) | | | 604,900 | |
| | | | |
|
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON: | |
Investments in securities | | | 1,960,929 | (1) |
Securities lending | | | — | |
Futures contracts | | | 3,412 | |
Forward foreign currency contracts | | | — | |
Translation of other assets and liabilities denominated in foreign currencies | | | — | |
| | | | |
Net Change in Unrealized Appreciation (Depreciation) | | | 1,964,341 | |
| | | | |
Net Realized and Unrealized Gain (Loss) | | | 2,569,241 | |
| | | | |
Net Increase (Decrease) in Net Assets Resulting from Operations | | $ | 3,562,569 | |
| | | | |
| (1) | Includes $1,160,428 change in unrealized appreciation on investments in affiliates. |
See Accompanying Notes to the Financial Statements.
| | |
| 72 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Trust
Statements of Changes in Net Assets
| | | | | | | | | | | | |
| | | FlexShares®
US Quality
Low
Volatility
Index Fund | | | FlexShares®
Developed
Markets ex-US
Quality Low
Volatility
Index Fund | | | FlexShares®
Emerging
Markets
Quality Low
Volatility
Index Fund | |
| | | July 15,
2019*
through
October 31,
2019 | | | July 15,
2019*
through
October 31,
2019 | | | July 15,
2019*
through
October 31,
2019 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 21,918 | | | $ | 32,836 | | | $ | 46,101 | |
Net realized gain (loss) | | | (528 | ) | | | (14,447 | ) | | | (38,951 | ) |
Net change in unrealized appreciation (depreciation) | | | 52,851 | | | | 119,248 | | | | (3,887 | ) |
| | | | |
| | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | |
Resulting from Operations | | | 74,241 | | | | 137,637 | | | | 3,263 | |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (12,079 | ) | | | (17,800 | ) | | | (21,259 | ) |
Tax return of capital | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (12,079 | ) | | | (17,800 | ) | | | (21,259 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 2,004,366 | | | | — | | | | — | |
Cost of shares redeemed | | | — | | | | — | | | | — | |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | 2,004,366 | | | | — | | | | — | |
| | | | |
Total Increase (Decrease) in Net Assets | | | 2,066,528 | | | | 119,837 | | | | (17,996 | ) |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 4,000,040 | (2) | | $ | 5,000,414 | (2),(3) | | $ | 5,006,906 | (2),(3) |
| | | | |
End of Period | | $ | 6,066,568 | | | $ | 5,120,251 | | | $ | 4,988,910 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 100,001 | (2) | | | 200,001 | (2) | | | 200,001 | (2) |
Shares issued | | | — | | | | — | | | | — | |
Shares issuedin-kind | | | 50,000 | | | | — | | | | — | |
Shares redeemed | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | — | | | | — | | | | — | |
| | | | |
Shares Outstanding, End of Period | | | 150,001 | | | | 200,001 | | | | 200,001 | |
| | | | |
| * | Commencement of investment operations. |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
| (2) | Amount includes the initial subscription. |
| (3) | Includes amounts paid in capital from the Authorized Participant in addition to the order’s original cash component. This amount is made to offset taxes, commissions, and price differences from the NAV that would otherwise impact the fund on these order trades. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 73 | |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® Morningstar US
Market Factor Tilt Index Fund | | | FlexShares® Morningstar
Developed Markets ex-US
Factor Tilt Index Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 24,246,782 | | | $ | 22,290,316 | | | $ | 29,737,840 | | | $ | 28,117,912 | |
Net realized gain (loss) | | | 26,681,219 | | | | 17,176,243 | | | | (9,812,648 | ) | | | (11,314,930 | ) |
Net change in unrealized appreciation (depreciation) | | | 90,783,007 | | | | 4,166,755 | | | | 52,240,524 | | | | (110,045,785 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 141,711,008 | | | | 43,633,314 | | | | 72,165,716 | | | | (93,242,803 | ) |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (23,379,823 | ) | | | (21,895,299 | ) | | | (29,033,991 | ) | | | (33,761,589 | ) |
Tax return of capital | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (23,379,823 | ) | | | (21,895,299 | ) | | | (29,033,991 | ) | | | (33,761,589 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 75,936,865 | | | | 244,086,962 | | | | 96,879,059 | | | | 122,745,608 | |
Cost of shares redeemed | | | (135,796,153 | ) | | | (28,359,353 | ) | | | (142,964,021 | ) | | | (13,253,045 | ) |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | (59,859,288 | ) | | | 215,727,609 | | | | (46,084,962 | ) | | | 109,492,563 | |
| | | | |
Total Increase (Decrease) in Net Assets | | | 58,471,897 | | | | 237,465,624 | | | | (2,953,237 | ) | | | (17,511,829 | ) |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 1,387,664,682 | | | $ | 1,150,199,058 | | | $ | 968,095,718 | | | $ | 985,607,547 | |
| | | | |
End of Period | | $ | 1,446,136,579 | | | $ | 1,387,664,682 | | | $ | 965,142,481 | | | $ | 968,095,718 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 12,600,001 | | | | 10,700,001 | | | | 16,200,001 | | | | 14,600,001 | |
Shares issued | | | — | | | | — | | | | — | | | | — | |
Shares issuedin-kind | | | 700,000 | | | | 2,150,000 | | | | 1,600,000 | | | | 1,800,000 | |
Shares redeemed | | | — | | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | (1,200,000 | ) | | | (250,000 | ) | | | (2,400,000 | ) | | | (200,000 | ) |
| | | | |
Shares Outstanding, End of Period | | | 12,100,001 | | | | 12,600,001 | | | | 15,400,001 | | | | 16,200,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | |
| 74 | | FLEXSHARES ANNUAL REPORT |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® Morningstar
Emerging Markets Factor Tilt
Index Fund | | | FlexShares® Currency
Hedged Morningstar DM
ex-US Factor Tilt Index Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 14,776,759 | | | $ | 16,442,905 | | | $ | 246,297 | | | $ | 441,038 | |
Net realized gain (loss) | | | (32,646,959 | ) | | | (4,649,466 | ) | | | 163,159 | | | | 2,153,874 | |
Net change in unrealized appreciation (depreciation) | | | 47,428,255 | | | | (106,291,005 | ) | | | 349,642 | | | | (3,308,915 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 29,558,055 | | | | (94,497,566 | ) | | | 759,098 | | | | (714,003 | ) |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (13,630,561 | ) | | | (17,566,133 | ) | | | (247,071 | ) | | | (413,050 | ) |
Tax return of capital | | | — | | | | — | | | | — | | | | (152,741 | ) |
| | | | |
Total distributions | | | (13,630,561 | ) | | | (17,566,133 | ) | | | (247,071 | ) | | | (565,791 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 64,094,605 | | | | 143,643,883 | | | | 663,704 | | | | 8,486,631 | |
Cost of shares redeemed | | | (155,343,981 | ) | | | (110,914,729 | ) | | | (642,632 | ) | | | (18,214,928 | ) |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | (91,249,376 | ) | | | 32,729,154 | | | | 21,072 | | | | (9,728,297 | ) |
| | | | |
Total Increase (Decrease) in Net Assets | | | (75,321,882 | ) | | | (79,334,545 | ) | | | 533,099 | | | | (11,008,091 | ) |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 488,736,045 | | | $ | 568,070,590 | | | $ | 7,933,072 | | | $ | 18,941,163 | |
| | | | |
End of Period | | $ | 413,414,163 | | | $ | 488,736,045 | | | $ | 8,466,171 | | | $ | 7,933,072 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 10,200,001 | | | | 9,900,001 | | | | 300,001 | | | | 650,001 | |
Shares issued | | | — | | | | — | | | | — | | | | — | |
Shares issuedin-kind | | | 1,200,000 | | | | 2,400,000 | | | | 25,000 | | | | 300,000 | |
Shares redeemed | | | — | | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | (3,200,000 | ) | | | (2,100,000 | ) | | | (25,000 | ) | | | (650,000 | ) |
| | | | |
Shares Outstanding, End of Period | | | 8,200,001 | | | | 10,200,001 | | | | 300,001 | | | | 300,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 75 | |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® Currency
Hedged Morningstar EM
Factor Tilt Index Fund | | | FlexShares® US Quality
Large Cap Index Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 152,212 | | | $ | 641,605 | | | $ | 1,264,749 | | | $ | 719,965 | |
Net realized gain (loss) | | | (13,524 | ) | | | 7,159,919 | | | | 1,892,186 | | | | 101,624 | |
Net change in unrealized appreciation (depreciation) | | | 257,933 | | | | (10,069,410 | ) | | | 137,256 | | | | 280,817 | |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 396,621 | | | | (2,267,886 | ) | | | 3,294,191 | | | | 1,102,406 | |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (152,761 | ) | | | (616,733 | ) | | | (1,241,265 | ) | | | (695,332 | ) |
Tax return of capital | | | — | | | | (32,884 | ) | | | — | | | | — | |
| | | | |
Total distributions | | | (152,761 | ) | | | (649,617 | ) | | | (1,241,265 | ) | | | (695,332 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 641,441 | | | | — | | | | 25,305,729 | | | | 37,735,567 | |
Cost of shares redeemed | | | — | | | | (33,809,843 | ) | | | (38,046,783 | ) | | | (3,339,109 | ) |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | 641,441 | | | | (33,809,843 | ) | | | (12,741,054 | ) | | | 34,396,458 | |
| | | | |
Total Increase (Decrease) in Net Assets | | | 885,301 | | | | (36,727,346 | ) | | | (10,688,128 | ) | | | 34,803,532 | |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 4,557,429 | | | $ | 41,284,775 | | | $ | 61,858,737 | | | $ | 27,055,205 | |
| | | | |
End of Period | | $ | 5,442,730 | | | $ | 4,557,429 | | | $ | 51,170,609 | | | $ | 61,858,737 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 175,001 | | | | 1,350,001 | | | | 1,850,001 | | | | 850,001 | |
Shares issued | | | — | | | | — | | | | — | | | | — | |
Shares issuedin-kind | | | 25,000 | | | | — | | | | 775,000 | | | | 1,100,000 | |
Shares redeemed | | | — | | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | — | | | | (1,175,000 | ) | | | (1,150,000 | ) | | | (100,000 | ) |
| | | | |
Shares Outstanding, End of Period | | | 200,001 | | | | 175,001 | | | | 1,475,001 | | | | 1,850,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | |
| 76 | | FLEXSHARES ANNUAL REPORT |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® STOXX® US
ESG Impact Index Fund | | | FlexShares® STOXX®
Global ESG Impact Index
Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 768,820 | | | $ | 369,768 | | | $ | 1,690,280 | | | $ | 1,333,987 | |
Net realized gain (loss) | | | 440,710 | | | | 325,506 | | | | (1,069,111 | ) | | | (836,669 | ) |
Net change in unrealized appreciation (depreciation) | | | 4,833,562 | | | | 723,737 | | | | 9,380,772 | | | | (1,135,942 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 6,043,092 | | | | 1,419,011 | | | | 10,001,941 | | | | (638,624 | ) |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (688,327 | ) | | | (364,337 | ) | | | (1,626,069 | ) | | | (1,253,536 | ) |
Tax return of capital | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (688,327 | ) | | | (364,337 | ) | | | (1,626,069 | ) | | | (1,253,536 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 25,211,577 | | | | 15,899,635 | | | | 19,292,286 | | | | 42,987,562 | |
Cost of shares redeemed | | | (3,488,613 | ) | | | (1,617,494 | ) | | | (9,361,860 | ) | | | — | |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | 21,722,964 | | | | 14,282,141 | | | | 9,930,426 | | | | 42,987,562 | |
| | | | |
Total Increase (Decrease) in Net Assets | | | 27,077,729 | | | | 15,336,815 | | | | 18,306,298 | | | | 41,095,402 | |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 28,946,381 | | | $ | 13,609,566 | | | $ | 73,284,107 | | | $ | 32,188,705 | |
| | | | |
End of Period | | $ | 56,024,110 | | | $ | 28,946,381 | | | $ | 91,590,405 | | | $ | 73,284,107 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 450,001 | | | | 225,001 | | | | 800,001 | | | | 350,001 | |
Shares issued | | | — | | | | — | | | | — | | | | — | |
Shares issuedin-kind | | | 375,000 | | | | 250,000 | | | | 200,000 | | | | 450,000 | |
Shares redeemed | | | — | | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | (50,000 | ) | | | (25,000 | ) | | | (100,000 | ) | | | — | |
| | | | |
Shares Outstanding, End of Period | | | 775,001 | | | | 450,001 | | | | 900,001 | | | | 800,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 77 | |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® Morningstar
Global Upstream Natural
Resources Index Fund | | | FlexShares® STOXX® Global
Broad Infrastructure Index
Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 185,800,926 | | | $ | 148,910,559 | | | $ | 28,533,152 | | | $ | 24,176,292 | |
Net realized gain (loss) | | | (121,979,135 | ) | | | (100,926,806 | ) | | | (15,162,565 | ) | | | 13,872,043 | |
Net change in unrealized appreciation (depreciation) | | | 97,960,307 | | | | 40,251,675 | | | | 162,508,711 | | | | (59,962,710 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 161,782,098 | | | | 88,235,428 | | | | 175,879,298 | | | | (21,914,375 | ) |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (190,017,355 | ) | | | (142,689,396 | ) | | | (26,640,580 | ) | | | (25,040,675 | ) |
Tax return of capital | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (190,017,355 | ) | | | (142,689,396 | ) | | | (26,640,580 | ) | | | (25,040,675 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 336,876,123 | | | | 729,840,347 | | | | 554,428,651 | | | | 44,339,305 | |
Cost of shares redeemed | | | (234,222,804 | ) | | | — | | | | — | | | | (99,649,945 | ) |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | 102,653,319 | | | | 729,840,347 | | | | 554,428,651 | | | | (55,310,640 | ) |
| | | | |
Total Increase (Decrease) in Net Assets | | | 74,418,062 | | | | 675,386,379 | | | | 703,667,369 | | | | (102,265,690 | ) |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 5,435,783,060 | | | $ | 4,760,396,681 | | | $ | 773,362,755 | | | $ | 875,628,445 | |
| | | | |
End of Period | | $ | 5,510,201,122 | | | $ | 5,435,783,060 | | | $ | 1,477,030,124 | | | $ | 773,362,755 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 172,500,001 | | | | 150,700,001 | | | | 17,150,001 | | | | 18,300,001 | |
Shares issued | | | — | | | | — | | | | — | | | | — | |
Shares issuedin-kind | | | 10,700,000 | | | | 21,800,000 | | | | 10,950,000 | | | | 950,000 | |
Shares redeemed | | | — | | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | (7,700,000 | ) | | | — | | | | — | | | | (2,100,000 | ) |
| | | | |
Shares Outstanding, End of Period | | | 175,500,001 | | | | 172,500,001 | | | | 28,100,001 | | | | 17,150,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | |
| 78 | | FLEXSHARES ANNUAL REPORT |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® Global Quality
Real Estate Index Fund | | | FlexShares® Real Assets
Allocation Index Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 9,162,306 | | | $ | 7,920,873 | | | $ | 304,460 | | | $ | 329,020 | |
Net realized gain (loss) | | | (3,993,200 | ) | | | (737,193 | ) | | | 372,297 | | | | (21,526 | ) |
Net change in unrealized appreciation (depreciation) | | | 49,485,461 | | | | (18,406,740 | ) | | | 1,224,066 | | | | (839,345 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 54,654,567 | | | | (11,223,060 | ) | | | 1,900,823 | | | | (531,851 | ) |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (9,305,846 | ) | | | (8,103,123 | ) | | | (306,154 | ) | | | (331,490 | ) |
Tax return of capital | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (9,305,846 | ) | | | (8,103,123 | ) | | | (306,154 | ) | | | (331,490 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 55,583,944 | | | | 49,688,173 | | | | 2,204,805 | | | | 8,432,070 | |
Cost of shares redeemed | | | — | | | | — | | | | (6,325,152 | ) | | | — | |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | 55,583,944 | | | | 49,688,173 | | | | (4,120,347 | ) | | | 8,432,070 | |
| | | | |
Total Increase (Decrease) in Net Assets | | | 100,932,665 | | | | 30,361,990 | | | | (2,525,678 | ) | | | 7,568,729 | |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 275,331,732 | | | $ | 244,969,742 | | | $ | 13,887,013 | | | $ | 6,318,284 | |
| | | | |
End of Period | | $ | 376,264,397 | | | $ | 275,331,732 | | | $ | 11,361,335 | | | $ | 13,887,013 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 4,750,001 | | | | 3,950,001 | | | | 525,001 | | | | 225,001 | |
Shares issued | | | — | | | | — | | | | — | | | | — | |
Shares issuedin-kind | | | 900,000 | | | | 800,000 | | | | 75,000 | | | | 300,000 | |
Shares redeemed | | | — | | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | — | | | | — | | | | (225,000 | ) | | | — | |
| | | | |
Shares Outstanding, End of Period | | | 5,650,001 | | | | 4,750,001 | | | | 375,001 | | | | 525,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 79 | |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® Quality Dividend
Index Fund | | | FlexShares® Quality
Dividend Defensive Index
Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 47,844,240 | | | $ | 49,327,187 | | | $ | 10,383,032 | | | $ | 8,636,341 | |
Net realized gain (loss) | | | 60,035,237 | | | | 111,017,426 | | | | 2,570,078 | | | | 20,094,542 | |
Net change in unrealized appreciation (depreciation) | | | 29,374,282 | | | | (23,808,241 | ) | | | 28,119,545 | | | | (2,502,203 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 137,253,759 | | | | 136,536,372 | | | | 41,072,655 | | | | 26,228,680 | |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (67,157,435 | ) | | | (50,127,940 | ) | | | (22,292,740 | ) | | | (8,856,044 | ) |
Tax return of capital | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (67,157,435 | ) | | | (50,127,940 | ) | | | (22,292,740 | ) | | | (8,856,044 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 114,588,613 | | | | 139,288,073 | | | | 112,091,834 | | | | 11,354,790 | |
Cost of shares redeemed | | | (236,448,686 | ) | | | (282,253,367 | ) | | | — | | | | (21,803,484 | ) |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | (121,860,073 | ) | | | (142,965,294 | ) | | | 112,091,834 | | | | (10,448,694 | ) |
| | | | |
Total Increase (Decrease) in Net Assets | | | (51,763,749 | ) | | | (56,556,862 | ) | | | 130,871,749 | | | | 6,923,942 | |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 1,759,107,724 | | | $ | 1,815,664,586 | | | $ | 320,090,975 | | | $ | 313,167,033 | |
| | | | |
End of Period | | $ | 1,707,343,975 | | | $ | 1,759,107,724 | | | $ | 450,962,724 | | | $ | 320,090,975 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 39,500,001 | | | | 42,650,001 | | | | 7,200,001 | | | | 7,450,001 | |
Shares issued | | | — | | | | — | | | | — | | | | — | |
Shares issuedin-kind | | | 2,700,000 | | | | 3,100,000 | | | | 2,550,000 | | | | 250,000 | |
Shares redeemed | | | — | | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | (5,350,000 | ) | | | (6,250,000 | ) | | | — | | | | (500,000 | ) |
| | | | |
Shares Outstanding, End of Period | | | 36,850,001 | | | | 39,500,001 | | | | 9,750,001 | | | | 7,200,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | |
| 80 | | FLEXSHARES ANNUAL REPORT |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® Quality
Dividend Dynamic Index
Fund | | | FlexShares® International
Quality Dividend Index Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 1,436,326 | | | $ | 1,372,096 | | | $ | 38,093,068 | | | $ | 47,688,403 | |
Net realized gain (loss) | | | 2,578,750 | | | | 4,811,218 | | | | (66,570,980 | ) | | | (13,541,341 | ) |
Net change in unrealized appreciation (depreciation) | | | 2,720,385 | | | | (3,581,227 | ) | | | 79,278,653 | | | | (135,941,569 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 6,735,461 | | | | 2,602,087 | | | | 50,800,741 | | | | (101,794,507 | ) |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (1,341,578 | ) | | | (1,451,340 | ) | | | (38,665,442 | ) | | | (48,549,571 | ) |
Tax return of capital | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (1,341,578 | ) | | | (1,451,340 | ) | | | (38,665,442 | ) | | | (48,549,571 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 15,702,806 | | | | 2,093,800 | | | | 167,508,000 | | | | 127,597,477 | |
Cost of shares redeemed | | | (13,094,067 | ) | | | (17,509,790 | ) | | | (170,125,412 | ) | | | (191,787,732 | ) |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | 2,608,739 | | | | (15,415,990 | ) | | | (2,617,412 | ) | | | (64,190,255 | ) |
| | | | |
Total Increase (Decrease) in Net Assets | | | 8,002,622 | | | | (14,265,243 | ) | | | 9,517,887 | | | | (214,534,333 | ) |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 44,305,419 | | | $ | 58,570,662 | | | $ | 765,166,739 | | | $ | 979,701,072 | |
| | | | |
End of Period | | $ | 52,308,041 | | | $ | 44,305,419 | | | $ | 774,684,626 | | | $ | 765,166,739 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 1,050,001 | | | | 1,400,001 | | | | 34,200,001 | | | | 37,300,001 | |
Shares issued | | | — | | | | — | | | | — | | | | — | |
Shares issuedin-kind | | | 400,000 | | | | 50,000 | | | | 7,200,000 | | | | 4,800,000 | |
Shares redeemed | | | — | | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | (300,000 | ) | | | (400,000 | ) | | | (7,800,000 | ) | | | (7,900,000 | ) |
| | | | |
Shares Outstanding, End of Period | | | 1,150,001 | | | | 1,050,001 | | | | 33,600,001 | | | | 34,200,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 81 | |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® International
Quality Dividend Defensive
Index Fund | | | FlexShares® International
Quality Dividend Dynamic
Index Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 4,333,281 | | | $ | 4,563,748 | | | $ | 1,951,820 | | | $ | 4,005,554 | |
Net realized gain (loss) | | | (5,826,629 | ) | | | (1,641,123 | ) | | | (5,849,376 | ) | | | (1,562,754 | ) |
Net change in unrealized appreciation (depreciation) | | | 8,174,047 | | | | (12,944,730 | ) | | | 7,149,801 | | | | (11,833,097 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 6,680,699 | | | | (10,022,105 | ) | | | 3,252,245 | | | | (9,390,297 | ) |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (4,343,474 | ) | | | (5,084,444 | ) | | | (2,113,234 | ) | | | (3,934,883 | ) |
Tax return of capital | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (4,343,474 | ) | | | (5,084,444 | ) | | | (2,113,234 | ) | | | (3,934,883 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 20,897,031 | | | | 7,592,082 | | | | 11,826,312 | | | | 5,669,259 | |
Cost of shares redeemed | | | (32,218,082 | ) | | | — | | | | (29,055,029 | ) | | | (20,658,934 | ) |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | (11,321,051 | ) | | | 7,592,082 | | | | (17,228,717 | ) | | | (14,989,675 | ) |
| | | | |
Total Increase (Decrease) in Net Assets | | | (8,983,826 | ) | | | (7,514,467 | ) | | | (16,089,706 | ) | | | (28,314,855 | ) |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 87,702,681 | | | $ | 95,217,148 | | | $ | 63,480,729 | | | $ | 91,795,584 | |
| | | | |
End of Period | | $ | 78,718,855 | | | $ | 87,702,681 | | | $ | 47,391,023 | | | $ | 63,480,729 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 4,100,001 | | | | 3,800,001 | | | | 2,700,001 | | | | 3,300,001 | |
Shares issued | | | — | | | | — | | | | — | | | | — | |
Shares issuedin-kind | | | 1,000,000 | | | | 300,000 | | | | 500,000 | | | | 200,000 | |
Shares redeemed | | | — | | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | (1,500,000 | ) | | | — | | | | (1,300,000 | ) | | | (800,000 | ) |
| | | | |
Shares Outstanding, End of Period | | | 3,600,001 | | | | 4,100,001 | | | | 1,900,001 | | | | 2,700,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | |
| 82 | | FLEXSHARES ANNUAL REPORT |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® iBoxx 3-Year
Target Duration TIPS Index
Fund | | | FlexShares® iBoxx 5-Year
Target Duration TIPS Index
Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 24,889,422 | | | $ | 56,165,230 | | | $ | 11,199,560 | | | $ | 26,492,467 | |
Net realized gain (loss) | | | (7,527,589 | ) | | | (25,507,752 | ) | | | (4,759,734 | ) | | | (8,785,489 | ) |
Net change in unrealized appreciation (depreciation) | | | 50,089,357 | | | | (35,763,699 | ) | | | 43,952,592 | | | | (31,104,417 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 67,451,190 | | | | (5,106,221 | ) | | | 50,392,418 | | | | (13,397,439 | ) |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (25,965,622 | ) | | | (58,646,589 | ) | | | (11,908,603 | ) | | | (27,570,542 | ) |
Tax return of capital | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (25,965,622 | ) | | | (58,646,589 | ) | | | (11,908,603 | ) | | | (27,570,542 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 54,204,646 | | | | 204,979,683 | | | | 66,398,177 | | | | 218,359,896 | |
Cost of shares redeemed | | | (558,578,038 | ) | | | (612,747,018 | ) | | | (451,724,487 | ) | | | (92,736,712 | ) |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | (504,373,392 | ) | | | (407,767,335 | ) | | | (385,326,310 | ) | | | 125,623,184 | |
| | | | |
Total Increase (Decrease) in Net Assets | | | (462,887,824 | ) | | | (471,520,145 | ) | | | (346,842,495 | ) | | | 84,655,203 | |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 1,641,610,038 | | | $ | 2,113,130,183 | | | $ | 904,027,223 | | | $ | 819,372,020 | |
| | | | |
End of Period | | $ | 1,178,722,214 | | | $ | 1,641,610,038 | | | $ | 557,184,728 | | | $ | 904,027,223 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 68,954,000 | | | | 85,904,000 | | | | 37,750,001 | | | | 32,700,001 | |
Shares issued | | | — | | | | — | | | | — | | | | — | |
Shares issuedin-kind | | | 2,250,000 | | | | 8,450,000 | | | | 2,700,000 | | | | 8,850,000 | |
Shares redeemed | | | — | | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | (23,250,000 | ) | | | (25,400,000 | ) | | | (18,600,000 | ) | | | (3,800,000 | ) |
| | | | |
Shares Outstanding, End of Period | | | 47,954,000 | | | | 68,954,000 | | | | 21,850,001 | | | | 37,750,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 83 | |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® Disciplined
Duration MBS Index Fund | | | FlexShares® Credit-Scored
US Corporate Bond Index
Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 1,397,033 | | | $ | 1,043,740 | | | $ | 2,939,612 | | | $ | 1,598,796 | |
Net realized gain (loss) | | | (91,883 | ) | | | (186,319 | ) | | | 1,212,835 | | | | (709,479 | ) |
Net change in unrealized appreciation (depreciation) | | | 2,642,747 | | | | (1,657,657 | ) | | | 6,097,066 | | | | (1,967,302 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 3,947,897 | | | | (800,236 | ) | | | 10,249,513 | | | | (1,077,985 | ) |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (1,969,840 | ) | | | (1,511,413 | ) | | | (2,860,050 | ) | | | (1,546,217 | ) |
Tax return of capital | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (1,969,840 | ) | | | (1,511,413 | ) | | | (2,860,050 | ) | | | (1,546,217 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 11,597,196 | | | | 39,295,437 | | | | 46,878,290 | | | | 12,378,133 | |
Cost of shares redeemed | | | (49,873,216 | ) | | | (3,539,176 | ) | | | (17,728,455 | ) | | | — | |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | (38,276,020 | ) | | | 35,756,261 | | | | 29,149,835 | | | | 12,378,133 | |
| | | | |
Total Increase (Decrease) in Net Assets | | | (36,297,963 | ) | | | 33,444,612 | | | | 36,539,298 | | | | 9,753,931 | |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 71,627,584 | | | $ | 38,182,972 | | | $ | 60,735,770 | | | $ | 50,981,839 | |
| | | | |
End of Period | | $ | 35,329,621 | | | $ | 71,627,584 | | | $ | 97,275,068 | | | $ | 60,735,770 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 3,150,001 | | | | 1,600,001 | | | | 1,250,001 | | | | 1,000,001 | |
Shares issued | | | 500,000 | | | | 1,700,000 | | | | 950,000 | | | | 250,000 | |
Shares issuedin-kind | | | — | | | | — | | | | — | | | | — | |
Shares redeemed | | | (2,150,000 | ) | | | (150,000 | ) | | | (350,000 | ) | | | — | |
Shares redeemedin-kind | | | — | | | | — | | | | — | | | | — | |
| | | | |
Shares Outstanding, End of Period | | | 1,500,001 | | | | 3,150,001 | | | | 1,850,001 | | | | 1,250,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | |
| 84 | | FLEXSHARES ANNUAL REPORT |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® Credit-Scored
US Long Corporate Bond
Index Fund | | | FlexShares® High Yield
Value-Scored Bond Index
Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | July 17,
2018*
through
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 951,493 | | | $ | 977,431 | | | $ | 2,526,915 | | | $ | 1,676,609 | |
Net realized gain (loss) | | | 885,293 | | | | (624,604 | ) | | | (702,418 | ) | | | (22,286 | ) |
Net change in unrealized appreciation (depreciation) | | | 3,495,491 | | | | (2,315,008 | ) | | | 996,832 | | | | (1,565,240 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 5,332,277 | | | | (1,962,181 | ) | | | 2,821,329 | | | | 89,083 | |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (997,024 | ) | | | (940,216 | ) | | | (3,203,781 | ) | | | (1,244,147 | ) |
Tax return of capital | | | — | | | | — | | | | (826,269 | ) | | | — | |
| | | | |
Total distributions | | | (997,024 | ) | | | (940,216 | ) | | | (4,030,050 | ) | | | (1,244,147 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | — | | | | 10,468,015 | | | | 86,540,196 | | | | — | |
Cost of shares redeemed | | | (13,407,104 | ) | | | — | | | | (33,696,222 | ) | | | — | |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | (13,407,104 | ) | | | 10,468,015 | | | | 52,843,974 | | | | — | |
| | | | |
Total Increase (Decrease) in Net Assets | | | (9,071,851 | ) | | | 7,565,618 | | | | 51,635,253 | | | | (1,155,064 | ) |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 26,423,972 | | | $ | 18,858,354 | | | $ | 48,844,986 | | | $ | 50,000,050 | (2) |
| | | | |
End of Period | | $ | 17,352,121 | | | $ | 26,423,972 | | | $ | 100,480,239 | | | $ | 48,844,986 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 550,001 | | | | 350,001 | | | | 1,000,001 | | | | 1,000,001 | (2) |
Shares issued | | | — | | | | 150,000 | | | | 1,800,000 | | | | — | |
Shares issuedin-kind | | | — | | | | 50,000 | | | | — | | | | — | |
Shares redeemed | | | (200,000 | ) | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | (50,000 | ) | | | — | | | | (700,000 | ) | | | — | |
| | | | |
Shares Outstanding, End of Period | | | 300,001 | | | | 550,001 | | | | 2,100,001 | | | | 1,000,001 | |
| | | | |
| * | Commencement of investment operations. |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
| (2) | Amount includes the initial subscription. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 85 | |
Statements of Changes in Net Assets (cont.)
| | | | | | | | | | | | | | | | |
| | | FlexShares® Ready Access
Variable Income Fund | | | FlexShares® Core Select
Bond Fund | |
| | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | | | Year Ended
October 31,
2019 | | | Year Ended
October 31,
2018 | |
|
OPERATIONS | |
Net investment income (loss) | | $ | 6,748,271 | | | $ | 3,366,031 | | | $ | 993,328 | | | $ | 582,951 | |
Net realized gain (loss) | | | (15,793 | ) | | | 10,046 | | | | 604,900 | | | | (179,538 | ) |
Net change in unrealized appreciation (depreciation) | | | 1,260,684 | | | | (425,090 | ) | | | 1,964,341 | | | | (933,867 | ) |
| | | | |
| | | | |
Net Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | |
Resulting from Operations | | | 7,993,162 | | | | 2,950,987 | | | | 3,562,569 | | | | (530,454 | ) |
| | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS | |
Distributable earnings | | | (6,639,458 | ) | | | (3,138,154 | ) | | | (998,241 | ) | | | (583,175 | ) |
Tax return of capital | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (6,639,458 | ) | | | (3,138,154 | ) | | | (998,241 | ) | | | (583,175 | ) |
| | | | |
|
CAPITAL TRANSACTIONS(1) | |
Proceeds from shares issued | | | 139,613,701 | | | | 94,240,235 | | | | 14,123,739 | | | | 36,542,513 | |
Cost of shares redeemed | | | (77,220,187 | ) | | | (45,260,520 | ) | | | (28,972,275 | ) | | | (608,373 | ) |
| | | | |
Net Increase (Decrease) from Capital Transactions | | | 62,393,514 | | | | 48,979,715 | | | | (14,848,536 | ) | | | 35,934,140 | |
| | | | |
Total Increase (Decrease) in Net Assets | | | 63,747,218 | | | | 48,792,548 | | | | (12,284,208 | ) | | | 34,820,511 | |
| | | | |
|
NET ASSETS | |
Beginning of Period | | $ | 211,349,681 | | | $ | 162,557,133 | | | $ | 38,582,899 | | | $ | 3,762,388 | |
| | | | |
End of Period | | $ | 275,096,899 | | | $ | 211,349,681 | | | $ | 26,298,691 | | | $ | 38,582,899 | |
| | | | |
|
SHARE TRANSACTIONS | |
Beginning of period | | | 2,800,001 | | | | 2,150,001 | | | | 1,625,001 | | | | 150,001 | |
Shares issued | | | 1,850,000 | | | | 1,250,000 | | | | — | | | | — | |
Shares issuedin-kind | | | — | | | | — | | | | 575,000 | | | | 1,500,000 | |
Shares redeemed | | | (325,000 | ) | | | — | | | | — | | | | — | |
Shares redeemedin-kind | | | (700,000 | ) | | | (600,000 | ) | | | (1,175,000 | ) | | | (25,000 | ) |
| | | | |
Shares Outstanding, End of Period | | | 3,625,001 | | | | 2,800,001 | | | | 1,025,001 | | | | 1,625,001 | |
| | | | |
| (1) | Capital transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements. |
See Accompanying Notes to the Financial Statements.
| | |
| 86 | | FLEXSHARES ANNUAL REPORT |
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| | | | |
| FLEXSHARES ANNUAL REPORT | | | 87 | |
FlexShares® Trust
Financial Highlights
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® US Quality Low Volatility Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
For the period 07/15/19* through 10/31/19 | | $ | 40.00 | | | $ | 0.17 | (a) | | $ | 0.35 | | | $ | 0.52 | | | $ | (0.08 | ) | | $ | — | | | $ | — | | | $ | (0.08 | ) |
| | | | | | | | |
FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
For the period 07/15/19* through 10/31/19 | | | 25.00 | | | | 0.16 | (a) | | | 0.53 | | | | 0.69 | | | | (0.09 | ) | | | — | | | | — | | | | (0.09 | ) |
| | | | | | | | |
FlexShares® Emerging Markets Quality Low Volatility Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
For the period 07/15/19* through 10/31/19 | | | 25.00 | | | | 0.23 | (a) | | | (0.18 | ) | | | 0.05 | | | | (0.11 | ) | | | — | | | | — | | | | (0.11 | ) |
| | | | | | | | |
FlexShares® Morningstar US Market Factor Tilt Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 110.13 | | | | 1.95 | (a) | | | 9.33 | | | | 11.28 | | | | (1.89 | ) | | | — | | | | — | | | | (1.89 | ) |
Year ended October 31, 2018 | | | 107.50 | | | | 2.02 | (a) | | | 2.59 | | | | 4.61 | | | | (1.98 | ) | | | — | | | | — | | | | (1.98 | ) |
Year ended October 31, 2017 | | | 88.32 | | | | 1.74 | (a) | | | 19.13 | | | | 20.87 | | | | (1.69 | ) | | | — | | | | — | | | | (1.69 | ) |
Year ended October 31, 2016 | | | 87.02 | | | | 1.65 | (a) | | | 2.33 | | | | 3.98 | | | | (2.68 | ) | | | — | | | | — | | | | (2.68 | ) |
Year ended October 31, 2015 | | | 86.19 | | | | 1.58 | (a) | | | 0.42 | | | | 2.00 | | | | (1.17 | ) | | | — | | | | — | | | | (1.17 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 88 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
$ |
40.44 |
| | | 1.30 | % | | | 1.43 | % | | | 0.23 | % | | | 0.22 | % | | | 1.45 | % | | | 1.45 | % | | | 9 | % | | $ | 6,067 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
25.60 |
| | | 2.76 | | | | 3.04 | | | | 0.32 | | | | 0.32 | | | | 2.21 | | | | 2.21 | | | | 14 | | | | 5,120 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
24.94 |
| | | 0.19 | | | | 0.31 | | | | 0.40 | | | | 0.40 | | | | 3.18 | | | | 3.18 | | | | 12 | | | | 4,989 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 119.52 | | | | 10.41 | | | | 10.41 | | | | 0.26 | | | | 0.25 | | | | 1.72 | | | | 1.72 | | | | 28 | | | | 1,446,137 | |
| | 110.13 | | | | 4.22 | | | | 4.19 | | | | 0.25 | | | | 0.25 | | | | 1.77 | | | | 1.77 | | | | 15 | | | | 1,387,665 | |
| | 107.50 | | | | 23.77 | | | | 23.72 | | | | 0.26 | | | | 0.25 | | | | 1.73 | | | | 1.74 | | | | 22 | | | | 1,150,199 | |
| | 88.32 | | | | 4.70 | | | | 4.77 | | | | 0.28 | | | | 0.27 | | | | 1.92 | | | | 1.93 | | | | 26 | | | | 830,253 | |
| | 87.02 | | | | 2.30 | | | | 2.30 | | | | 0.28 | | | | 0.27 | | | | 1.81 | | | | 1.81 | | | | 51 | | | | 761,457 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 89 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 59.76 | | | $ | 1.85 | (a) | | $ | 2.89 | | | $ | 4.74 | | | $ | (1.83 | ) | | $ | — | | | $ | — | | | $ | (1.83 | ) |
Year ended October 31, 2018 | | | 67.51 | | | | 1.78 | (a) | | | (7.39 | ) | | | (5.61 | ) | | | (2.14 | ) | | | — | | | | — | | | | (2.14 | ) |
Year ended October 31, 2017 | | | 55.62 | | | | 1.58 | (a) | | | 11.91 | (k) | | | 13.49 | | | | (1.60 | ) | | | — | | | | — | | | | (1.60 | ) |
Year ended October 31, 2016 | | | 58.18 | | | | 1.59 | (a) | | | (1.55 | ) | | | 0.04 | | | | (2.60 | ) | | | — | | | | — | | | | (2.60 | ) |
Year ended October 31, 2015 | | | 60.74 | | | | 1.51 | (a) | | | (2.27 | ) | | | (0.76 | ) | | | (1.80 | ) | | | — | | | | — | | | | (1.80 | ) |
| | | | | | | | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 47.92 | | | | 1.49 | (a) | | | 2.46 | | | | 3.95 | | | | (1.45 | ) | | | — | | | | — | | | | (1.45 | ) |
Year ended October 31, 2018 | | | 57.38 | | | | 1.46 | (a) | | | (9.34 | ) | | | (7.88 | ) | | | (1.58 | ) | | | — | | | | — | | | | (1.58 | ) |
Year ended October 31, 2017 | | | 47.52 | | | | 1.28 | (a) | | | 9.80 | | | | 11.08 | | | | (1.22 | ) | | | — | | | | — | | | | (1.22 | ) |
Year ended October 31, 2016 | | | 45.02 | | | | 0.97 | (a) | | | 3.10 | | | | 4.07 | | | | (1.57 | ) | | | — | | | | — | | | | (1.57 | ) |
Year ended October 31, 2015 | | | 52.75 | | | | 0.92 | (a) | | | (7.65 | ) | | | (6.73 | ) | | | (1.00 | ) | | | — | | | | — | | | | (1.00 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 90 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 62.67 | | | | 8.13 | % | | | 8.16 | % | | | 0.40 | % | | | 0.39 | % | | | 3.09 | % | | | 3.09 | % | | | 25 | % | | $ | 965,142 | |
| | 59.76 | | | | (8.61 | ) | | | (9.48 | ) | | | 0.39 | | | | 0.39 | | | | 2.65 | | | | 2.65 | | | | 34 | | | | 968,096 | |
| | 67.51 | | | | 24.58 | (k) | | | 25.38 | | | | 0.40 | | | | 0.39 | | | | 2.57 | | | | 2.57 | | | | 22 | | | | 985,608 | |
| | 55.62 | | | | 0.20 | | | | 0.80 | | | | 0.43 | | | | 0.42 | | | | 2.91 | | | | 2.92 | | | | 35 | | | | 622,898 | |
| | 58.18 | | | | (1.26 | ) | | | (2.34 | ) | | | 0.43 | | | | 0.42 | | | | 2.52 | | | | 2.53 | | | | 26 | | | | 570,188 | |
|
| | |
| | 50.42 | | | | 8.29 | | | | 8.08 | | | | 0.60 | | | | 0.59 | | | | 2.92 | | | | 2.93 | | | | 45 | | | | 413,414 | |
| | 47.92 | | | | (14.05 | ) | | | (15.22 | ) | | | 0.59 | | | | 0.59 | | | | 2.56 | | | | 2.56 | | | | 49 | | | | 488,736 | |
| | 57.38 | | | | 23.56 | | | | 23.47 | | | | 0.60 | | | | 0.59 | | | | 2.44 | | | | 2.44 | | | | 34 | | | | 568,071 | |
| | 47.52 | | | | 9.41 | | | | 10.65 | | | | 0.66 | | | | 0.65 | | | | 2.23 | | | | 2.23 | | | | 34 | | | | 299,351 | |
| | 45.02 | | | | (12.91 | ) | | | (13.43 | ) | | | 0.66 | | | | 0.65 | | | | 1.86 | | | | 1.87 | | | | 30 | | | | 198,073 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 91 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 26.44 | | | $ | 0.81 | (a) | | $ | 1.78 | | | $ | 2.59 | | | $ | (0.81 | ) | | $ | — | | | $ | — | | | $ | (0.81 | ) |
Year ended October 31, 2018 | | | 29.14 | | | | 0.93 | (a) | | | (2.53 | ) | | | (1.60 | ) | | | (0.78 | ) | | | — | | | | (0.32 | ) | | | (1.10 | ) |
Year ended October 31, 2017 | | | 23.97 | | | | 0.59 | (a) | | | 5.27 | | | | 5.86 | | | | (0.69 | ) | | | — | | | | — | | | | (0.69 | ) |
For the period 11/09/15* through 10/31/16 | | | 25.00 | | | | 1.04 | (a) | | | (0.96 | ) | | | 0.08 | | | | (0.98 | ) | | | — | | | | (0.13 | ) | | | (1.11 | ) |
| | | | | | | | |
FlexShares® Currency Hedged Morningstar EM Factor Tilt Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 26.04 | | | | 0.78 | (a) | | | 1.17 | | | | 1.95 | | | | (0.78 | ) | | | — | | | | — | | | | (0.78 | ) |
Year ended October 31, 2018 | | | 30.58 | | | | 0.63 | (a) | | | (4.35 | ) | | | (3.72 | ) | | | (0.79 | ) | | | — | | | | (0.03 | ) | | | (0.82 | ) |
Year ended October 31, 2017 | | | 25.82 | | | | 0.63 | (a) | | | 4.77 | | | | 5.40 | | | | (0.64 | ) | | | — | | | | — | | | | (0.64 | ) |
For the period 11/09/15* through 10/31/16 | | | 25.00 | | | | 0.59 | (a) | | | 1.10 | | | | 1.69 | | | | (0.87 | ) | | | — | | | | — | | | | (0.87 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 92 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 28.22 | | | | 10.02 | % | | | 10.61 | % | | | 0.45 | %(i) | | | 0.05 | %(i) | | | 2.62 | % | | | 3.02 | % | | | 4 | % | | $ | 8,466 | |
| | 26.44 | | | | (5.73 | ) | | | (6.19 | ) | | | 0.46 | (i) | | | 0.05 | (i) | | | 2.84 | | | | 3.25 | | | | 9 | | | | 7,933 | |
| | 29.14 | | | | 24.75 | | | | 24.84 | | | | 0.46 | (i) | | | 0.05 | (i) | | | 1.78 | | | | 2.18 | | | | 6 | | | | 18,941 | |
|
23.97 |
| | | 0.59 | | | | 0.97 | | | | 0.55 | (i) | | | 0.05 | (i) | | | 4.12 | | | | 4.62 | | | | 11 | | | | 3,595 | |
|
| | |
| | 27.21 | | | | 7.52 | | | | 7.89 | | | | 0.65 | (i) | | | 0.06 | (i) | | | 2.23 | | | | 2.82 | | | | 5 | | | | 5,443 | |
| | 26.04 | | | | (12.40 | ) | | | (12.44 | ) | | | 0.65 | (i) | | | 0.05 | (i) | | | 1.45 | | | | 2.05 | | | | 6 | | | | 4,557 | |
| | 30.58 | | | | 21.16 | | | | 20.75 | | | | 0.65 | (i) | | | 0.05 | (i) | | | 1.67 | | | | 2.27 | | | | 4 | | | | 41,285 | |
|
25.82 |
| | | 7.04 | | | | 7.12 | | | | 0.72 | (i) | | | 0.05 | (i) | | | 1.81 | | | | 2.47 | | | | 4 | | | | 33,567 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 93 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® US Quality Large Cap Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 33.44 | | | $ | 0.68 | (a) | | $ | 1.29 | | | $ | 1.97 | | | $ | (0.72 | ) | | $ | — | | | $ | — | | | $ | (0.72 | ) |
Year ended October 31, 2018 | | | 31.83 | | | | 0.54 | (a) | | | 1.58 | | | | 2.12 | | | | (0.51 | ) | | | — | | | | — | | | | (0.51 | ) |
Year ended October 31, 2017 | | | 26.15 | | | | 0.49 | (a) | | | 5.65 | | | | 6.14 | | | | (0.46 | ) | | | — | | | | — | | | | (0.46 | ) |
Year ended October 31, 2016 | | | 26.62 | | | | 0.50 | (a) | | | (0.47 | ) | | | 0.03 | | | | (0.50 | ) | | | — | | | | — | | | | (0.50 | ) |
For the period 09/23/15* through 10/31/15 | | | 25.00 | | | | 0.03 | (a) | | | 1.59 | | | | 1.62 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | |
FlexShares® STOXX® US ESG Impact Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 64.33 | | | | 1.21 | (a) | | | 7.83 | | | | 9.04 | | | | (1.08 | ) | | | — | | | | — | | | | (1.08 | ) |
Year ended October 31, 2018 | | | 60.49 | | | | 1.09 | (a) | | | 3.84 | | | | 4.93 | | | | (1.09 | ) | | | — | | | | — | | | | (1.09 | ) |
Year ended October 31, 2017 | | | 49.96 | | | | 1.05 | (a) | | | 10.45 | | | | 11.50 | | | | (0.97 | ) | | | — | | | | — | | | | (0.97 | ) |
For the period 07/13/16* through 10/31/16 | | | 50.00 | | | | 0.27 | (a) | | | (0.15 | ) | | | 0.12 | | | | (0.16 | ) | | | — | | | | — | | | | (0.16 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 94 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 34.69 | | | | 6.04 | % | | | 6.01 | % | | | 0.33 | % | | | 0.32 | % | | | 2.04 | % | | | 2.05 | % | | | 69 | % | | $ | 51,171 | |
| | 33.44 | | | | 6.63 | | | | 6.30 | | | | 0.33 | | | | 0.32 | | | | 1.56 | | | | 1.57 | | | | 94 | | | | 61,859 | |
| | 31.83 | | | | 23.65 | | | | 24.08 | | | | 0.34 | | | | 0.32 | | | | 1.65 | | | | 1.67 | | | | 64 | | | | 27,055 | |
| | 26.15 | | | | 0.12 | | | | 0.12 | | | | 0.38 | | | | 0.32 | | | | 1.87 | | | | 1.93 | | | | 59 | | | | 6,538 | |
|
26.62 |
| | | 6.48 | | | | 6.48 | | | | 0.42 | | | | 0.32 | | | | 1.10 | | | | 1.20 | | | | 3 | | | | 2,662 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 72.29 | | | | 14.21 | | | | 14.26 | | | | 0.33 | | | | 0.32 | | | | 1.78 | | | | 1.79 | | | | 75 | | | | 56,024 | |
| | 64.33 | | | | 8.13 | | | | 7.97 | | | | 0.33 | | | | 0.32 | | | | 1.66 | | | | 1.67 | | | | 110 | | | | 28,946 | |
| | 60.49 | | | | 23.19 | | | | 23.30 | | | | 0.35 | | | | 0.32 | | | | 1.82 | | | | 1.85 | | | | 67 | | | | 13,610 | |
|
49.96 |
| | | 0.24 | | | | 0.28 | | | | 0.37 | | | | 0.32 | | | | 1.75 | | | | 1.80 | | | | 20 | | | | 4,996 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 95 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® STOXX® Global ESG Impact Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 91.61 | | | $ | 2.05 | (a) | | $ | 10.12 | | | $ | 12.17 | | | $ | (2.01 | ) | | $ | — | | | $ | — | | | $ | (2.01 | ) |
Year ended October 31, 2018 | | | 91.97 | | | | 1.95 | (a) | | | (0.61 | ) | | | 1.34 | | | | (1.70 | ) | | | — | | | | — | | | | (1.70 | ) |
Year ended October 31, 2017 | | | 75.52 | | | | 1.56 | (a) | | | 16.67 | (k) | | | 18.23 | | | | (1.78 | ) | | | — | | | | — | | | | (1.78 | ) |
For the period 07/13/16* through 10/31/16 | | | 75.00 | | | | 0.41 | (a) | | | 0.34 | | | | 0.75 | | | | (0.23 | ) | | | — | | | | — | | | | (0.23 | ) |
| | | | | | | | |
FlexShares® Morningstar Global Upstream Natural Resources Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 31.51 | | | | 1.08 | (a) | | | (0.09 | ) | | | 0.99 | | | | (1.10 | ) | | | — | | | | — | | | | (1.10 | ) |
Year ended October 31, 2018 | | | 31.59 | | | | 0.91 | (a) | | | (0.13 | ) | | | 0.78 | | | | (0.86 | ) | | | — | | | | — | | | | (0.86 | ) |
Year ended October 31, 2017 | | | 27.40 | | | | 0.70 | (a) | | | 4.13 | (k) | | | 4.83 | | | | (0.64 | ) | | | — | | | | — | | | | (0.64 | ) |
Year ended October 31, 2016 | | | 25.52 | | | | 0.55 | (a) | | | 2.73 | | | | 3.28 | | | | (1.40 | ) | | | — | | | | — | | | | (1.40 | ) |
Year ended October 31, 2015 | | | 33.18 | | | | 0.94 | (a) | | | (7.74 | ) | | | (6.80 | ) | | | (0.86 | ) | | | — | | | | — | | | | (0.86 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 96 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 101.77 | | | | 13.49 | % | | | 12.96 | % | | | 0.43 | % | | | 0.42 | % | | | 2.15 | % | | | 2.16 | % | | | 66 | % | | $ | 91,590 | |
| | 91.61 | | | | 1.38 | | | | 1.71 | | | | 0.43 | | | | 0.42 | | | | 2.03 | | | | 2.04 | | | | 78 | | | | 73,284 | |
| | 91.97 | | | | 24.37 | (k) | | | 24.55 | | | | 0.45 | | | | 0.42 | | | | 1.81 | | | | 1.83 | | | | 64 | | | | 32,189 | |
|
75.52 |
| | | 1.00 | | | | 1.03 | | | | 0.45 | | | | 0.42 | | | | 1.74 | | | | 1.77 | | | | 22 | | | | 7,552 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 31.40 | | | | 3.16 | | | | 3.06 | | | | 0.47 | | | | 0.46 | | | | 3.40 | | | | 3.41 | | | | 24 | | | | 5,510,201 | |
| | 31.51 | | | | 2.33 | | | | 2.01 | | | | 0.46 | | | | 0.46 | | | | 2.72 | | | | 2.72 | | | | 30 | | | | 5,435,783 | |
| | 31.59 | | | | 17.81 | (k) | | | 17.97 | | | | 0.47 | | | | 0.46 | | | | 2.36 | | | | 2.36 | | | | 18 | | | | 4,760,397 | |
| | 27.40 | | | | 13.84 | | | | 14.05 | | | | 0.49 | | | | 0.48 | | | | 2.20 | | | | 2.20 | | | | 18 | | | | 2,822,012 | |
| | 25.52 | | | | (20.97 | ) | | | (21.05 | ) | | | 0.49 | | | | 0.48 | | | | 3.17 | | | | 3.17 | | | | 13 | | | | 2,004,234 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 97 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® STOXX® Global Broad Infrastructure Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 45.09 | | | $ | 1.35 | (a) | | $ | 7.34 | | | $ | 8.69 | | | $ | (1.22 | ) | | $ | — | | | $ | — | | | $ | (1.22 | ) |
Year ended October 31, 2018 | | | 47.85 | | | | 1.36 | (a) | | | (2.71 | ) | | | (1.35 | ) | | | (1.41 | ) | | | — | | | | — | | | | (1.41 | ) |
Year ended October 31, 2017 | | | 43.49 | | | | 1.37 | (a) | | | 4.40 | | | | 5.77 | | | | (1.41 | ) | | | — | | | | — | | | | (1.41 | ) |
Year ended October 31, 2016 | | | 43.30 | | | | 1.34 | (a) | | | (0.02 | )(g) | | | 1.32 | | | | (1.13 | ) | | | — | | | | — | | | | (1.13 | ) |
Year ended October 31, 2015 | | | 45.84 | | | | 1.13 | (a) | | | (2.67 | ) | | | (1.54 | ) | | | (1.00 | ) | | | — | | | | — | | | | (1.00 | ) |
| | | | | | | | |
FlexShares® Global Quality Real Estate Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 57.96 | | | | 1.76 | (a) | | | 8.68 | | | | 10.44 | | | | (1.80 | ) | | | — | | | | — | | | | (1.80 | ) |
Year ended October 31, 2018 | | | 62.02 | | | | 1.80 | (a) | | | (3.99 | ) | | | (2.19 | ) | | | (1.87 | ) | | | — | | | | — | | | | (1.87 | ) |
Year ended October 31, 2017 | | | 57.12 | | | | 0.99 | (a) | | | 5.54 | | | | 6.53 | | | | (1.63 | ) | | | — | | | | — | | | | (1.63 | ) |
Year ended October 31, 2016 | | | 57.47 | | | | 1.90 | (a) | | | (0.58 | ) | | | 1.32 | | | | (1.67 | ) | | | — | | | | — | | | | (1.67 | ) |
Year ended October 31, 2015 | | | 55.24 | | | | 1.36 | (a) | | | 2.25 | | | | 3.61 | | | | (1.38 | ) | | | — | | | | — | | | | (1.38 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 98 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 52.56 | | | | 19.52 | % | | | 19.99 | % | | | 0.48 | % | | | 0.47 | % | | | 2.73 | % | | | 2.74 | % | | | 12 | % | | $ | 1,477,030 | |
| | 45.09 | | | | (2.90 | ) | | | (3.25 | ) | | | 0.47 | | | | 0.47 | | | | 2.88 | | | | 2.89 | | | | 13 | | | | 773,363 | |
| | 47.85 | | | | 13.44 | | | | 13.23 | | | | 0.48 | | | | 0.47 | | | | 2.97 | | | | 2.98 | | | | 12 | | | | 875,628 | |
| | 43.49 | | | | 3.09 | | | | 3.26 | | | | 0.48 | | | | 0.47 | | | | 3.09 | | | | 3.10 | | | | 14 | | | | 669,676 | |
| | 43.30 | | | | (3.40 | ) | | | (4.03 | ) | | | 0.48 | | | | 0.47 | | | | 2.52 | | | | 2.53 | | | | 15 | | | | 467,681 | |
|
| | |
| | 66.60 | | | | 18.37 | | | | 18.65 | | | | 0.46 | | | | 0.45 | | | | 2.80 | | | | 2.81 | | | | 53 | | | | 376,264 | |
| | 57.96 | | | | (3.69 | ) | | | (3.95 | ) | | | 0.46 | | | | 0.45 | | | | 2.92 | | | | 2.92 | | | | 61 | | | | 275,332 | |
| | 62.02 | | | | 11.71 | | | | 11.71 | | | | 0.46 | | | | 0.45 | | | | 1.67 | | | | 1.67 | | | | 64 | | | | 244,970 | |
| | 57.12 | | | | 2.28 | | | | 2.44 | | | | 0.46 | | | | 0.45 | | | | 3.26 | | | | 3.27 | | | | 57 | | | | 197,049 | |
| | 57.47 | | | | 6.60 | | | | 5.93 | | | | 0.46 | | | | 0.45 | | | | 2.39 | | | | 2.40 | | | | 81 | | | | 132,184 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 99 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® Real Assets Allocation Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 26.45 | | | $ | 0.76 | (a) | | $ | 3.85 | | | $ | 4.61 | | | $ | (0.76 | ) | | $ | — | | | $ | — | | | $ | (0.76 | ) |
Year ended October 31, 2018 | | | 28.08 | | | | 0.80 | (a) | | | (1.64 | ) | | | (0.84 | ) | | | (0.79 | ) | | | 0.00 | (h) | | | — | | | | (0.79 | ) |
Year ended October 31, 2017 | | | 25.63 | | | | 0.66 | (a) | | | 2.54 | | | | 3.20 | | | | (0.75 | ) | | | — | | | | — | | | | (0.75 | ) |
For the period 11/23/15* through 10/31/16 | | | 25.00 | | | | 0.86 | (a) | | | 0.51 | (g) | | | 1.37 | | | | (0.74 | ) | | | — | | | | — | | | | (0.74 | ) |
| | | | | | | | |
FlexShares® Quality Dividend Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 44.53 | | | | 1.24 | (a) | | | 2.29 | | | | 3.53 | | | | (1.19 | ) | | | (0.54 | ) | | | — | | | | (1.73 | ) |
Year ended October 31, 2018 | | | 42.57 | | | | 1.20 | (a) | | | 1.98 | | | | 3.18 | | | | (1.22 | ) | | | — | | | | — | | | | (1.22 | ) |
Year ended October 31, 2017 | | | 37.11 | | | | 1.23 | (a) | | | 5.43 | | | | 6.66 | | | | (1.20 | ) | | | — | | | | — | | | | (1.20 | ) |
Year ended October 31, 2016 | | | 35.99 | | | | 1.23 | (a) | | | 1.03 | | | | 2.26 | | | | (1.14 | ) | | | — | | | | — | | | | (1.14 | ) |
Year ended October 31, 2015 | | | 35.77 | | | | 1.08 | (a) | | | 0.14 | | | | 1.22 | | | | (1.00 | ) | | | — | | | | — | | | | (1.00 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 100 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 30.30 | | | | 17.69 | % | | | 17.72 | % | | | 0.58 | %(i) | | | 0.11 | %(i) | | | 2.22 | % | | | 2.69 | % | | | 4 | % | | $ | 11,361 | |
| | 26.45 | | | | (3.09 | ) | | | (3.32 | ) | | | 0.59 | (i) | | | 0.11 | (i) | | | 2.39 | | | | 2.87 | | | | 5 | | | | 13,887 | |
| | 28.08 | | | | 12.73 | | | | 13.05 | | | | 0.65 | (i) | | | 0.11 | (i) | | | 1.88 | | | | 2.42 | | | | 11 | | | | 6,318 | |
|
25.63 |
| | | 5.56 | | | | 5.60 | | | | 0.72 | (i) | | | 0.11 | (i) | | | 3.03 | | | | 3.64 | | | | 11 | | | | 1,282 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 46.33 | | | | 8.45 | | | | 8.52 | | | | 0.38 | | | | 0.37 | | | | 2.80 | | | | 2.81 | | | | 95 | | | | 1,707,344 | |
| | 44.53 | | | | 7.42 | | | | 7.40 | | | | 0.37 | | | | 0.37 | | | | 2.64 | | | | 2.64 | | | | 76 | | | | 1,759,108 | |
| | 42.57 | | | | 18.10 | | | | 18.03 | | | | 0.38 | | | | 0.37 | | | | 3.00 | | | | 3.00 | | | | 89 | | | | 1,815,665 | |
| | 37.11 | | | | 6.41 | | | | 6.43 | | | | 0.38 | | | | 0.37 | | | | 3.38 | | | | 3.38 | | | | 85 | | | | 1,438,149 | |
| | 35.99 | | | | 3.43 | | | | 3.52 | | | | 0.38 | | | | 0.37 | | | | 2.99 | | | | 2.99 | | | | 86 | | | | 703,615 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 101 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® Quality Dividend Defensive Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 44.46 | | | $ | 1.22 | (a) | | $ | 3.35 | | | $ | 4.57 | | | $ | (1.14 | ) | | $ | (1.64 | ) | | $ | — | | | $ | (2.78 | ) |
Year ended October 31, 2018 | | | 42.04 | | | | 1.21 | (a) | | | 2.45 | | | | 3.66 | | | | (1.24 | ) | | | — | | | | — | | | | (1.24 | ) |
Year ended October 31, 2017 | | | 36.82 | | | | 1.18 | (a) | | | 5.18 | | | | 6.36 | | | | (1.14 | ) | | | — | | | | — | | | | (1.14 | ) |
Year ended October 31, 2016 | | | 35.81 | | | | 1.11 | (a) | | | 0.99 | | | | 2.10 | | | | (1.09 | ) | | | — | | | | — | | | | (1.09 | ) |
Year ended October 31, 2015 | | | 34.99 | | | | 1.03 | (a) | | | 0.72 | | | | 1.75 | | | | (0.93 | ) | | | — | | | | — | | | | (0.93 | ) |
| | | | | | | | |
FlexShares® Quality Dividend Dynamic Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 42.20 | | | | 1.21 | (a) | | | 3.26 | | | | 4.47 | | | | (1.18 | ) | | | — | | | | — | | | | (1.18 | ) |
Year ended October 31, 2018 | | | 41.84 | | | | 1.15 | (a) | | | 0.40 | | | | 1.55 | | | | (1.19 | ) | | | — | | | | — | | | | (1.19 | ) |
Year ended October 31, 2017 | | | 35.32 | | | | 1.19 | (a) | | | 6.45 | | | | 7.64 | | | | (1.12 | ) | | | — | | | | — | | | | (1.12 | ) |
Year ended October 31, 2016 | | | 35.14 | | | | 1.11 | (a) | | | 0.31 | (g) | | | 1.42 | | | | (1.24 | ) | | | — | | | | — | | | | (1.24 | ) |
Year ended October 31, 2015 | | | 35.83 | | | | 1.14 | (a) | | | (0.82 | ) | | | 0.32 | | | | (1.01 | ) | | | — | | | | — | | | | (1.01 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 102 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 46.25 | | | | 11.40 | % | | | 11.40 | % | | | 0.38 | % | | | 0.37 | % | | | 2.76 | % | | | 2.76 | % | | | 91 | % | | $ | 450,963 | |
| | 44.46 | | | | 8.69 | | | | 8.74 | | | | 0.38 | | | | 0.37 | | | | 2.70 | | | | 2.71 | | | | 94 | | | | 320,091 | |
| | 42.04 | | | | 17.44 | | | | 17.41 | | | | 0.38 | | | | 0.37 | | | | 2.94 | | | | 2.95 | | | | 74 | | | | 313,167 | |
| | 36.82 | | | | 5.96 | | | | 5.96 | | | | 0.38 | | | | 0.37 | | | | 3.09 | | | | 3.10 | | | | 72 | | | | 252,223 | |
| | 35.81 | | | | 5.04 | | | | 5.13 | | | | 0.38 | | | | 0.37 | | | | 2.87 | | | | 2.88 | | | | 92 | | | | 191,606 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 45.49 | | | | 10.86 | | | | 10.89 | | | | 0.38 | | | | 0.37 | | | | 2.81 | | | | 2.82 | | | | 77 | | | | 52,308 | |
| | 42.20 | | | | 3.59 | | | | 3.67 | | | | 0.38 | | | | 0.37 | | | | 2.61 | | | | 2.62 | | | | 77 | | | | 44,305 | |
| | 41.84 | | | | 21.81 | | | | 21.59 | | | | 0.38 | | | | 0.37 | | | | 2.99 | | | | 3.00 | | | | 63 | | | | 58,571 | |
| | 35.32 | | | | 4.16 | | | | 4.43 | | | | 0.38 | | | | 0.37 | | | | 3.23 | | | | 3.25 | | | | 69 | | | | 52,979 | |
| | 35.14 | | | | 0.89 | | | | 0.78 | | | | 0.38 | | | | 0.37 | | | | 3.15 | | | | 3.16 | | | | 87 | | | | 73,804 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 103 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® International Quality Dividend Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 22.37 | | | $ | 1.13 | (a) | | $ | 0.70 | | | $ | 1.83 | | | $ | (1.14 | ) | | $ | — | | | $ | — | | | $ | (1.14 | ) |
Year ended October 31, 2018 | | | 26.27 | | | | 1.22 | (a) | | | (3.86 | ) | | | (2.64 | ) | | | (1.26 | ) | | | — | | | | — | | | | (1.26 | ) |
Year ended October 31, 2017 | | | 22.45 | | | | 1.06 | (a) | | | 3.69 | | | | 4.75 | | | | (0.93 | ) | | | — | | | | — | | | | (0.93 | ) |
Year ended October 31, 2016 | | | 23.03 | | | | 0.92 | (a) | | | (0.68 | ) | | | 0.24 | | | | (0.82 | ) | | | — | | | | — | | | | (0.82 | ) |
Year ended October 31, 2015 | | | 26.15 | | | | 1.01 | (a) | | | (3.18 | ) | | | (2.17 | ) | | | (0.95 | ) | | | — | | | | — | | | | (0.95 | ) |
| | | | | | | | |
FlexShares® International Quality Dividend Defensive Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 21.39 | | | | 1.09 | (a) | | | 0.51 | | | | 1.60 | | | | (1.12 | ) | | | — | | | | — | | | | (1.12 | ) |
Year ended October 31, 2018 | | | 25.06 | | | | 1.14 | (a) | | | (3.54 | ) | | | (2.40 | ) | | | (1.27 | ) | | | — | | | | — | | | | (1.27 | ) |
Year ended October 31, 2017 | | | 22.16 | | | | 0.99 | (a) | | | 2.81 | | | | 3.80 | | | | (0.90 | ) | | | — | | | | — | | | | (0.90 | ) |
Year ended October 31, 2016 | | | 22.54 | | | | 0.83 | (a) | | | (0.35 | ) | | | 0.48 | | | | (0.86 | ) | | | — | | | | — | | | | (0.86 | ) |
Year ended October 31, 2015 | | | 25.55 | | | | 0.94 | (a) | | | (3.04 | ) | | | (2.10 | ) | | | (0.91 | ) | | | — | | | | — | | | | (0.91 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 104 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 23.06 | | | | 8.41 | % | | | 9.09 | % | | | 0.48 | % | | | 0.47 | % | | | 4.98 | % | | | 4.98 | % | | | 71 | % | | $ | 774,685 | |
| | 22.37 | | | | (10.48 | ) | | | (11.30 | ) | | | 0.47 | | | | 0.47 | | | | 4.77 | | | | 4.78 | | | | 71 | | | | 765,167 | |
| | 26.27 | | | | 21.50 | | | | 21.80 | | | | 0.48 | | | | 0.47 | | | | 4.27 | | | | 4.28 | | | | 69 | | | | 979,701 | |
| | 22.45 | | | | 1.16 | | | | 2.05 | | | | 0.48 | | | | 0.47 | | | | 4.17 | | | | 4.18 | | | | 68 | | | | 496,050 | |
| | 23.03 | | | | (8.45 | ) | | | (9.95 | ) | | | 0.48 | | | | 0.47 | | | | 4.08 | | | | 4.09 | | | | 77 | | | | 430,590 | |
|
| | |
| | 21.87 | | | | 7.66 | | | | 8.12 | | | | 0.48 | | | | 0.47 | | | | 5.02 | | | | 5.03 | | | | 63 | | | | 78,719 | |
| | 21.39 | | | | (10.03 | ) | | | (10.91 | ) | | | 0.48 | | | | 0.47 | | | | 4.68 | | | | 4.68 | | | | 69 | | | | 87,703 | |
| | 25.06 | | | | 17.45 | | | | 17.69 | | | | 0.48 | | | | 0.47 | | | | 4.18 | | | | 4.19 | | | | 72 | | | | 95,217 | |
| | 22.16 | | | | 2.24 | | | | 3.39 | | | | 0.48 | | | | 0.47 | | | | 3.78 | | | | 3.79 | | | | 73 | | | | 77,561 | |
| | 22.54 | | | | (8.37 | ) | | | (9.81 | ) | | | 0.48 | | | | 0.47 | | | | 3.86 | | | | 3.87 | | | | 77 | | | | 87,893 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 105 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® International Quality Dividend Dynamic Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 23.51 | | | $ | 1.05 | (a) | | $ | 1.52 | | | $ | 2.57 | | | $ | (1.14 | ) | | $ | — | | | $ | — | | | $ | (1.14 | ) |
Year ended October 31, 2018 | | | 27.82 | | | | 1.32 | (a) | | | (4.34 | ) | | | (3.02 | ) | | | (1.29 | ) | | | — | | | | — | | | | (1.29 | ) |
Year ended October 31, 2017 | | | 23.47 | | | | 1.11 | (a) | | | 4.08 | | | | 5.19 | | | | (0.84 | ) | | | — | | | | — | | | | (0.84 | ) |
Year ended October 31, 2016 | | | 23.82 | | | | 0.83 | (a) | | | (0.13 | ) | | | 0.70 | | | | (0.98 | ) | | | — | | | | (0.07 | ) | | | (1.05 | ) |
Year ended October 31, 2015 | | | 26.50 | | | | 0.88 | (a) | | | (2.50 | ) | | | (1.62 | ) | | | (1.06 | ) | | | — | | | | — | | | | (1.06 | ) |
| | | | | | | | |
FlexShares® iBoxx3-Year Target Duration TIPS Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 23.81 | | | | 0.46 | (a) | | | 0.79 | | | | 1.25 | | | | (0.48 | ) | | | — | | | | — | | | | (0.48 | ) |
Year ended October 31, 2018 | | | 24.60 | | | | 0.68 | (a) | | | (0.78 | ) | | | (0.10 | ) | | | (0.69 | ) | | | — | | | | — | | | | (0.69 | ) |
Year ended October 31, 2017 | | | 24.82 | | | | 0.37 | (a) | | | (0.27 | ) | | | 0.10 | | | | (0.32 | ) | | | — | | | | — | | | | (0.32 | ) |
Year ended October 31, 2016 | | | 24.38 | | | | 0.15 | (a) | | | 0.47 | | | | 0.62 | | | | (0.16 | ) | | | — | | | | (0.02 | ) | | | (0.18 | ) |
Year ended October 31, 2015 | | | 24.73 | | | | (0.10 | )(a) | | | (0.23 | ) | | | (0.33 | ) | | | — | | | | — | | | | (0.02 | ) | | | (0.02 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 106 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 24.94 | | | | 11.30 | % | | | 12.23 | % | | | 0.48 | % | | | 0.47 | % | | | 4.36 | % | | | 4.37 | % | | | 88 | % | | $ | 47,391 | |
| | 23.51 | | | | (11.34 | ) | | | (12.11 | ) | | | 0.48 | | | | 0.47 | | | | 4.83 | | | | 4.83 | | | | 75 | | | | 63,481 | |
| | 27.82 | | | | 22.37 | | | | 22.91 | | | | 0.48 | | | | 0.47 | | | | 4.19 | | | | 4.20 | | | | 76 | | | | 91,796 | |
| | 23.47 | | | | 3.17 | | | | 3.96 | | | | 0.49 | | | | 0.47 | | | | 3.70 | | | | 3.72 | | | | 75 | | | | 18,777 | |
| | 23.82 | | | | (6.28 | ) | | | (8.00 | ) | | | 0.48 | | | | 0.47 | | | | 3.43 | | | | 3.43 | | | | 89 | | | | 35,726 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 24.58 | | | | 5.30 | | | | 5.35 | | | | 0.19 | | | | 0.18 | | | | 1.89 | | | | 1.89 | | | | 52 | | | | 1,178,722 | |
| | 23.81 | | | | (0.41 | ) | | | (0.49 | ) | | | 0.18 | | | | 0.18 | | | | 2.79 | | | | 2.80 | | | | 85 | | | | 1,641,610 | |
| | 24.60 | | | | 0.42 | | | | 0.46 | | | | 0.21 | | | | 0.20 | | | | 1.49 | | | | 1.50 | | | | 134 | | | | 2,113,130 | |
| | 24.82 | | | | 2.55 | | | | 2.55 | | | | 0.21 | | | | 0.20 | | | | 0.62 | | | | 0.63 | | | | 105 | | | | 1,841,902 | |
| | 24.38 | | | | (1.34 | ) | | | (1.46 | ) | | | 0.21 | | | | 0.20 | | | | (0.40 | ) | | | (0.39 | ) | | | 83 | | | | 1,978,311 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 107 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® iBoxx5-Year Target Duration TIPS Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 23.95 | | | $ | 0.44 | (a) | | $ | 1.59 | | | $ | 2.03 | | | $ | (0.48 | ) | | $ | — | | | $ | — | | | $ | (0.48 | ) |
Year ended October 31, 2018 | | | 25.06 | | | | 0.71 | (a) | | | (1.08 | ) | | | (0.37 | ) | | | (0.74 | ) | | | — | | | | — | | | | (0.74 | ) |
Year ended October 31, 2017 | | | 25.45 | | | | 0.47 | (a) | | | (0.45 | ) | | | 0.02 | | | | (0.41 | ) | | | — | | | | — | | | | (0.41 | ) |
Year ended October 31, 2016 | | | 24.56 | | | | 0.30 | (a) | | | 0.88 | | | | 1.18 | | | | (0.27 | ) | | | — | | | | (0.02 | ) | | | (0.29 | ) |
Year ended October 31, 2015 | | | 24.87 | | | | 0.05 | (a) | | | (0.30 | ) | | | (0.25 | ) | | | (0.05 | ) | | | — | | | | (0.01 | ) | | | (0.06 | ) |
| | | | | | | | |
FlexShares® Disciplined Duration MBS Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 22.74 | | | | 0.61 | (a) | | | 1.03 | | | | 1.64 | | | | (0.83 | ) | | | — | | | | — | | | | (0.83 | ) |
Year ended October 31, 2018 | | | 23.86 | | | | 0.49 | (a) | | | (0.88 | ) | | | (0.39 | ) | | | (0.73 | ) | | | — | | | | — | | | | (0.73 | ) |
Year ended October 31, 2017 | | | 24.74 | | | | 0.39 | (a) | | | (0.50 | ) | | | (0.11 | ) | | | (0.77 | ) | | | — | | | | — | | | | (0.77 | ) |
Year ended October 31, 2016 | | | 24.87 | | | | 0.45 | (a) | | | 0.29 | | | | 0.74 | | | | (0.87 | ) | | | — | | | | — | | | | (0.87 | ) |
Year ended October 31, 2015 | | | 25.12 | | | | 0.37 | (a) | | | 0.06 | (g) | | | 0.43 | | | | (0.68 | ) | | | 0.00 | (h) | | | — | | | | (0.68 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 108 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 25.50 | | | | 8.53 | % | | | 8.45 | % | | | 0.19 | % | | | 0.18 | % | | | 1.77 | % | | | 1.78 | % | | | 41 | % | | $ | 557,185 | |
| | 23.95 | | | | (1.51 | ) | | | (1.51 | ) | | | 0.18 | | | | 0.18 | | | | 2.88 | | | | 2.88 | | | | 65 | | | | 904,027 | |
| | 25.06 | | | | 0.08 | | | | 0.08 | | | | 0.21 | | | | 0.20 | | | | 1.86 | | | | 1.87 | | | | 87 | | | | 819,372 | |
| | 25.45 | | | | 4.81 | | | | 4.64 | | | | 0.21 | | | | 0.20 | | | | 1.18 | | | | 1.19 | | | | 72 | | | | 651,605 | |
| | 24.56 | | | | (1.00 | ) | | | (1.04 | ) | | | 0.21 | | | | 0.20 | | | | 0.19 | | | | 0.20 | | | | 113 | | | | 432,210 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 23.55 | | | | 7.36 | | | | 7.07 | | | | 0.21 | | | | 0.20 | | | | 2.64 | | | | 2.65 | | | | 61 | | | | 35,330 | |
| | 22.74 | | | | (1.65 | ) | | | (1.31 | ) | | | 0.21 | | | | 0.20 | | | | 2.09 | | | | 2.10 | | | | 160 | | | | 71,628 | |
| | 23.86 | | | | (0.44 | ) | | | (0.53 | ) | | | 0.21 | | | | 0.20 | | | | 1.61 | | | | 1.62 | | | | 61 | | | | 38,183 | |
| | 24.74 | | | | 3.02 | | | | 2.69 | | | | 0.21 | | | | — | (j) | | | 1.62 | | | | 1.83 | (j) | | | 89 | | | | 42,063 | |
| | 24.87 | | | | 1.74 | | | | 2.02 | | | | 0.22 | | | | 0.20 | | | | 1.44 | | | | 1.46 | | | | 179 | | | | 23,627 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 109 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® Credit-Scored US Corporate Bond Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 48.59 | | | $ | 1.63 | (a) | | $ | 3.94 | | | $ | 5.57 | | | $ | (1.58 | ) | | $ | — | | | $ | — | | | $ | (1.58 | ) |
Year ended October 31, 2018 | | | 50.98 | | | | 1.40 | (a) | | | (2.43 | ) | | | (1.03 | ) | | | (1.36 | ) | | | — | | | | — | | | | (1.36 | ) |
Year ended October 31, 2017 | | | 51.49 | | | | 1.26 | (a) | | | (0.34 | ) | | | 0.92 | | | | (1.23 | ) | | | (0.20 | ) | | | — | | | | (1.43 | ) |
Year ended October 31, 2016 | | | 50.32 | | | | 1.21 | (a) | | | 1.13 | | | | 2.34 | | | | (1.17 | ) | | | — | | | | — | | | | (1.17 | ) |
For the period 11/12/14* through 10/31/15 | | | 50.00 | | | | 1.12 | (a) | | | 0.18 | | | | 1.30 | | | | (0.98 | ) | | | — | | | | — | | | | (0.98 | ) |
| | | | | | | | |
FlexShares® Credit-Scored US Long Corporate Bond Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 48.04 | | | | 2.11 | (a) | | | 9.89 | | | | 12.00 | | | | (2.20 | ) | | | — | | | | — | | | | (2.20 | ) |
Year ended October 31, 2018 | | | 53.88 | | | | 2.07 | (a) | | | (5.87 | ) | | | (3.80 | ) | | | (2.04 | ) | | | — | | | | — | | | | (2.04 | ) |
Year ended October 31, 2017 | | | 53.83 | | | | 2.06 | (a) | | | 0.74 | | | | 2.80 | | | | (2.07 | ) | | | (0.68 | ) | | | — | | | | (2.75 | ) |
Year ended October 31, 2016 | | | 50.29 | | | | 2.14 | (a) | | | 3.56 | | | | 5.70 | | | | (2.16 | ) | | | — | | | | — | | | | (2.16 | ) |
For the period 09/23/15* through 10/31/15 | | | 50.00 | | | | 0.23 | (a) | | | 0.06 | | | | 0.29 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | |
FlexShares® High Yield Value-Scored Bond Index Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 48.84 | | | | 2.67 | (a) | | | 0.78 | | | | 3.45 | | | | (3.57 | ) | | | — | | | | (0.87 | ) | | | (4.44 | ) |
For the period 07/17/18* through 10/31/18 | | | 50.00 | | | | 1.68 | (a) | | | (1.60 | ) | | | 0.08 | | | | (1.24 | ) | | | — | | | | — | | | | (1.24 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 110 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 52.58 | | | | 11.66 | % | | | 11.56 | % | | | 0.23 | % | | | 0.22 | % | | | 3.20 | % | | | 3.21 | % | | | 65 | % | | $ | 97,275 | |
| | 48.59 | | | | (2.05 | ) | | | (2.23 | ) | | | 0.23 | | | | 0.22 | | | | 2.83 | | | | 2.84 | | | | 76 | | | | 60,736 | |
| | 50.98 | | | | 1.85 | | | | 1.99 | | | | 0.23 | | | | 0.22 | | | | 2.48 | | | | 2.49 | | | | 65 | | | | 50,982 | |
| | 51.49 | | | | 4.71 | | | | 4.70 | | | | 0.24 | | | | 0.22 | | | | 2.34 | | | | 2.36 | | | | 59 | | | | 36,041 | |
|
50.32 |
| | | 2.61 | | | | 2.78 | | | | 0.26 | | | | 0.22 | | | | 2.26 | | | | 2.30 | | | | 69 | | | | 12,581 | |
|
| | |
| | 57.84 | | | | 25.57 | | | | 25.51 | | | | 0.23 | | | | 0.22 | | | | 4.06 | | | | 4.07 | | | | 44 | | | | 17,352 | |
| | 48.04 | | | | (7.24 | ) | | | (7.86 | ) | | | 0.23 | | | | 0.22 | | | | 4.05 | | | | 4.06 | | | | 93 | | | | 26,424 | |
| | 53.88 | | | | 5.58 | | | | 4.25 | | | | 0.24 | | | | 0.22 | | | | 3.92 | | | | 3.94 | | | | 91 | | | | 18,858 | |
| | 53.83 | | | | 11.60 | | | | 12.75 | | | | 0.25 | | | | 0.22 | | | | 4.01 | | | | 4.04 | | | | 80 | | | | 13,457 | |
|
50.29 |
| | | 0.56 | | | | 1.16 | | | | 0.27 | | | | 0.22 | | | | 4.38 | | | | 4.43 | | | | — | | | | 5,029 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 47.85 | | | | 7.48 | | | | 7.64 | | | | 0.38 | | | | 0.37 | | | | 5.56 | | | | 5.57 | | | | 44 | | | | 100,480 | |
|
48.84 |
| | | 0.13 | | | | 0.13 | | | | 0.38 | | | | 0.37 | | | | 11.56 | | | | 11.57 | | | | 18 | | | | 48,845 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 111 | |
Financial Highlights (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | PER SHARE | |
| | | | | | Investment Operations | | | Distributions | |
| | | Net asset value, beginning of period | | | Net Investment Income | | | Net Realized and Unrealized Gain (Loss) | | | Total from Operations | | | Net Investment Income | | | From Net Realized Gains | | | Tax return of capital | | | Total | |
| | | | | | | | |
FlexShares® Ready Access Variable Income Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | $ | 75.48 | | | $ | 1.98 | (a) | | $ | 0.41 | | | $ | 2.39 | | | $ | (1.98 | ) | | $ | — | | | $ | — | | | $ | (1.98 | ) |
Year ended October 31, 2018 | | | 75.61 | | | | 1.58 | (a) | | | (0.24 | ) | | | 1.34 | | | | (1.47 | ) | | | — | | | | — | | | | (1.47 | ) |
Year ended October 31, 2017 | | | 75.56 | | | | 0.89 | (a) | | | 0.00 | (h) | | | 0.89 | | | | (0.84 | ) | | | — | | | | — | | | | (0.84 | ) |
Year ended October 31, 2016 | | | 75.36 | | | | 0.65 | (a) | | | 0.23 | | | | 0.88 | | | | (0.63 | ) | | | (0.05 | ) | | | — | | | | (0.68 | ) |
Year ended October 31, 2015 | | | 75.61 | | | | 0.43 | (a) | | | (0.15 | ) | | | 0.28 | | | | (0.42 | ) | | | (0.11 | ) | | | — | | | | (0.53 | ) |
| | | | | | | | |
FlexShares® Core Select Bond Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ended October 31, 2019 | | | 23.74 | | | | 0.73 | (a) | | | 1.93 | | | | 2.66 | | | | (0.74 | ) | | | — | | | | — | | | | (0.74 | ) |
Year ended October 31, 2018 | | | 25.08 | | | | 0.63 | (a) | | | (1.31 | ) | | | (0.68 | ) | | | (0.66 | ) | | | — | | | | — | | | | (0.66 | ) |
For the period 11/18/16* through 10/31/17 | | | 25.00 | | | | 0.55 | (a) | | | 0.15 | | | | 0.70 | | | | (0.62 | ) | | | — | | | | — | | | | (0.62 | ) |
| * | Commencement of investment operations. |
| (a) | Net investment income per share is based on average shares outstanding. |
| (b) | Not annualized for periods less than one year. |
| (c) | Annualized for periods less than one year. |
| (d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value. |
| (e) | Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns. |
| (f) | In-kind transactions are not included in portfolio turnover calculations. |
| (g) | The amount shown for a share outstanding throughout the period is directionally inconsistent with aggregate net realized and unrealized gain (loss) for the period as presented in the financial statements. |
| (h) | Per share amount is less than $0.005. |
| (i) | The Fund indirectly bears its proportionate share of fees and expenses incurred by the Underlying Fund(s) in which the Fund is invested. This ratio does not include these indirect fees and expenses. |
| (j) | The Expenses net of reimbursements and Net investment Income (Loss) net of reimbursement ratios include a voluntary reimbursement of advisory fees made by JPMorgan Chase Bank, N.A. Absent this additional reimbursement, Expenses net of reimbursements would have increased by 0.20% and the Net investment Income (Loss) net of reimbursement would have decreased by 0.20%. |
| (k) | Northern Trust Investments, Inc. reimbursed the Funds for losses incurred related to an error. The impact was an increase of $0.02 to the net realized and unrealized gain (loss) on investments per share and an increase of 0.06% to the total return of the FlexShares Morningstar Global Upstream Natural Resources Index Fund. For the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund and FlexShares STOXX Global ESG Impact Index Fund, the impact to the net realized and unrealized gain (loss) on investments per share amount is less than $0.005 and the total returns are less than 0.005%. Had these reimbursements not been made, the total returns would have been lower. |
See Accompanying Notes to the Financial Statements.
| | |
| 112 | | FLEXSHARES ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | RATIOS/SUPPLEMENTAL DATA | |
| | | | Total Return(b) | | | Ratios to Average Net Assets(c) | | | Supplemental Data | |
Net Asset
Value,
end of
period | | | Net Asset
Value(d) | | | Market Value
(Unaudited)(e) | | | Expenses | | | Expenses net of
reimbursements | | | Net investment
Income before
reimbursements | | | Net investment
Income net of
reimbursements | | | Portfolio
Turnover
Rate(b)(f) | | | Net assets, end
of period
(thousands) | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 75.89 | | | | 3.21 | % | | | 3.18 | % | | | 0.26 | % | | | 0.25 | % | | | 2.61 | % | | | 2.62 | % | | | 73 | % | | $ | 275,097 | |
| | 75.48 | | | | 1.80 | | | | 1.91 | | | | 0.26 | | | | 0.25 | | | | 2.09 | | | | 2.10 | | | | 131 | | | | 211,350 | |
| | 75.61 | | | | 1.18 | | | | 1.06 | | | | 0.26 | | | | 0.25 | | | | 1.17 | | | | 1.18 | | | | 71 | | | | 162,557 | |
| | 75.56 | | | | 1.19 | | | | 1.18 | | | | 0.26 | | | | 0.25 | | | | 0.86 | | | | 0.87 | | | | 59 | | | | 109,564 | |
| | 75.36 | | | | 0.36 | | | | 0.28 | | | | 0.26 | | | | 0.25 | | | | 0.56 | | | | 0.57 | | | | 38 | | | | 97,962 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 25.66 | | | | 11.38 | | | | 11.41 | | | | 0.36 | (i) | | | 0.19 | (i) | | | 2.80 | | | | 2.97 | | | | 135 | | | | 26,299 | |
| | 23.74 | | | | (2.73 | ) | | | (2.92 | ) | | | 0.36 | (i) | | | 0.16 | (i) | | | 2.41 | | | | 2.61 | | | | 53 | | | | 38,583 | |
|
25.08 |
| | | 2.86 | | | | 3.19 | | | | 0.43 | (i) | | | 0.16 | (i) | | | 2.08 | | | | 2.35 | | | | 99 | | | | 3,762 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 113 | |
Schedule of Investments
FlexShares® US Quality Low Volatility Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 99.7% | |
|
| Aerospace & Defense – 1.9% | |
| | |
Lockheed Martin Corp. | | | 252 | | | $ | 94,923 | |
| | |
Raytheon Co. | | | 78 | | | | 16,552 | |
| | |
Teledyne Technologies, Inc.* | | | 6 | | | | 1,978 | |
| | | | | | | | 113,453 | |
|
| Banks – 3.3% | |
| | |
Commerce Bancshares, Inc. | | | 660 | | | | 42,477 | |
| | |
First Citizens BancShares, Inc., Class A | | | 102 | | | | 50,176 | |
| | |
Investors Bancorp, Inc. | | | 2,760 | | | | 33,258 | |
| | |
JPMorgan Chase & Co. | | | 204 | | | | 25,484 | |
| | |
M&T Bank Corp. | | | 6 | | | | 939 | |
| | |
Popular, Inc. | | | 885 | | | | 48,197 | |
| | | | | | | | 200,531 | |
|
| Beverages – 6.2% | |
| | |
Coca-Cola Co. (The) | | | 2,307 | | | | 125,570 | |
| | |
Coca-Cola European Partners plc | | | 870 | | | | 46,554 | |
| | |
PepsiCo, Inc. | | | 1,494 | | | | 204,932 | |
| | | | | | | | 377,056 | |
|
| Capital Markets – 1.5% | |
| | |
Intercontinental Exchange, Inc. | | | 609 | | | | 57,441 | |
| | |
Nasdaq, Inc. | | | 312 | | | | 31,128 | |
| | | | | | | | 88,569 | |
|
| Chemicals – 0.7% | |
| | |
Ecolab, Inc. | | | 204 | | | | 39,182 | |
| | |
NewMarket Corp. | | | 3 | | | | 1,457 | |
| | | | | | | | 40,639 | |
|
| Commercial Services & Supplies – 2.5% | |
| | |
Advanced Disposal Services, Inc.* | | | 930 | | | | 30,486 | |
| | |
Cintas Corp. | | | 15 | | | | 4,030 | |
| | |
Clean Harbors, Inc.* | | | 57 | | | | 4,700 | |
| | |
Republic Services, Inc. | | | 372 | | | | 32,554 | |
| | |
Tetra Tech, Inc. | | | 573 | | | | 50,120 | |
| | |
UniFirst Corp. | | | 150 | | | | 30,126 | |
| | | | | | | | 152,016 | |
|
| Communications Equipment – 0.5% | |
| | |
EchoStar Corp., Class A* | | | 762 | | | | 29,718 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Consumer Finance – 0.7% | |
| | |
Credit Acceptance Corp.* | | | 99 | | | $ | 43,343 | |
|
| Distributors – 0.6% | |
| | |
Pool Corp. | | | 168 | | | | 34,843 | |
|
| Diversified Consumer Services – 1.1% | |
| | |
Graham Holdings Co., Class B | | | 42 | | | | 26,446 | |
| | |
H&R Block, Inc. | | | 1,635 | | | | 40,858 | |
| | | | | | | | 67,304 | |
|
| Diversified Financial Services – 0.6% | |
| | |
Berkshire Hathaway, Inc., Class B* | | | 159 | | | | 33,800 | |
|
| Diversified Telecommunication Services – 4.5% | |
| | |
AT&T, Inc. | | | 3,699 | | | | 142,375 | |
| | |
Verizon Communications, Inc. | | | 2,184 | | | | 132,066 | |
| | | | | | | | 274,441 | |
|
| Electric Utilities – 3.5% | |
| | |
American Electric Power Co., Inc. | | | 435 | | | | 41,060 | |
| | |
IDACORP, Inc. | | | 426 | | | | 45,846 | |
| | |
Pinnacle West Capital Corp. | | | 468 | | | | 44,048 | |
| | |
Portland General Electric Co. | | | 735 | | | | 41,807 | |
| | |
Southern Co. (The) | | | 102 | | | | 6,391 | |
| | |
Xcel Energy, Inc. | | | 507 | | | | 32,200 | |
| | | | | | | | 211,352 | |
|
| Electronic Equipment, Instruments & Components – 0.5% | |
| | |
Dolby Laboratories, Inc., Class A | | | 507 | | | | 32,615 | |
|
| Entertainment – 0.5% | |
| | |
Madison Square Garden Co. (The), Class A* | | | 114 | | | | 30,429 | |
|
| Equity Real Estate Investment Trusts (REITs) – 7.1% | |
| | |
AvalonBay Communities, Inc. | | | 234 | | | | 50,932 | |
| | |
Camden Property Trust | | | 291 | | | | 33,282 | |
| | |
Crown Castle International Corp. | | | 258 | | | | 35,808 | |
| | |
Equinix, Inc. | | | 18 | | | | 10,202 | |
| | |
Equity LifeStyle Properties, Inc. | | | 714 | | | | 49,937 | |
| | |
Equity Residential | | | 96 | | | | 8,511 | |
| | |
Essex Property Trust, Inc. | | | 114 | | | | 37,293 | |
| | |
Extra Space Storage, Inc. | | | 36 | | | | 4,042 | |
| | |
Federal Realty Investment Trust | | | 207 | | | | 28,154 | |
See Accompanying Notes to the Financial Statements.
| | |
| 114 | | FLEXSHARES ANNUAL REPORT |
FlexShares® US Quality Low Volatility Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Life Storage, Inc. | | | 417 | | | $ | 45,420 | |
| | |
PS Business Parks, Inc. | | | 261 | | | | 47,123 | |
| | |
Public Storage | | | 210 | | | | 46,801 | |
| | |
Sun Communities, Inc. | | | 213 | | | | 34,644 | |
| | | | | | | | 432,149 | |
|
| Food & Staples Retailing – 0.9% | |
| | |
Casey’s General Stores, Inc. | | | 18 | | | | 3,075 | |
| | |
Sysco Corp. | | | 660 | | | | 52,714 | |
| | | | | | | | 55,789 | |
|
| Food Products – 2.3% | |
| | |
Flowers Foods, Inc. | | | 279 | | | | 6,060 | |
| | |
Hershey Co. (The) | | | 231 | | | | 33,927 | |
| | |
Hormel Foods Corp. | | | 780 | | | | 31,894 | |
| | |
Kellogg Co. | | | 147 | | | | 9,339 | |
| | |
McCormick & Co., Inc.(Non-Voting) | | | 207 | | | | 33,263 | |
| | |
Post Holdings, Inc.* | | | 246 | | | | 25,313 | |
| | | | | | | | 139,796 | |
|
| Health Care Equipment & Supplies – 0.8% | |
| | |
Stryker Corp. | | | 222 | | | | 48,012 | |
|
| Health Care Providers & Services – 2.8% | |
| | |
Chemed Corp. | | | 75 | | | | 29,543 | |
| | |
Encompass Health Corp. | | | 510 | | | | 32,650 | |
| | |
UnitedHealth Group, Inc. | | | 432 | | | | 109,167 | |
| | | | | | | | 171,360 | |
|
| Hotels, Restaurants & Leisure – 5.6% | |
| | |
Cracker Barrel Old Country Store, Inc. | | | 273 | | | | 42,451 | |
| | |
Darden Restaurants, Inc. | | | 399 | | | | 44,796 | |
| | |
Dunkin’ Brands Group, Inc. | | | 369 | | | | 29,011 | |
| | |
Restaurant Brands International, Inc. | | | 465 | | | | 30,430 | |
| | |
Starbucks Corp. | | | 1,296 | | | | 109,590 | |
| | |
Wendy’s Co. (The) | | | 1,590 | | | | 33,676 | |
| | |
Yum! Brands, Inc. | | | 462 | | | | 46,990 | |
| | | | | | | | 336,944 | |
|
| Household Products – 0.6% | |
| | |
Clorox Co. (The) | | | 216 | | | | 31,901 | |
| | |
Procter & Gamble Co. (The) | | | 30 | | | | 3,735 | |
| | | | | | | | 35,636 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Industrial Conglomerates – 1.0% | |
| | |
Honeywell International, Inc. | | | 357 | | | $ | 61,665 | |
|
| Insurance – 7.5% | |
| | |
Alleghany Corp.* | | | 42 | | | | 32,688 | |
| | |
American Financial Group, Inc. | | | 468 | | | | 48,691 | |
| | |
Arthur J Gallagher & Co. | | | 378 | | | | 34,481 | |
| | |
Assured Guaranty Ltd. | | | 1,041 | | | | 48,844 | |
| | |
Chubb Ltd. | | | 291 | | | | 44,354 | |
| | |
Hanover Insurance Group, Inc. (The) | | | 348 | | | | 45,835 | |
| | |
Markel Corp.* | | | 15 | | | | 17,565 | |
| | |
Marsh & McLennan Cos., Inc. | | | 123 | | | | 12,745 | |
| | |
Progressive Corp. (The) | | | 672 | | | | 46,838 | |
| | |
RenaissanceRe Holdings Ltd. | | | 171 | | | | 32,008 | |
| | |
Travelers Cos., Inc. (The) | | | 345 | | | | 45,216 | |
| | |
WR Berkley Corp. | | | 645 | | | | 45,086 | |
| | | | | | | | 454,351 | |
|
| Interactive Media & Services – 1.7% | |
| | |
Alphabet, Inc., Class A* | | | 24 | | | | 30,211 | |
| | |
Alphabet, Inc., Class C* | | | 27 | | | | 34,023 | |
| | |
Facebook, Inc., Class A* | | | 189 | | | | 36,222 | |
| | | | | | | | 100,456 | |
|
| Internet & Direct Marketing Retail – 1.7% | |
| | |
Amazon.com, Inc.* | | | 57 | | | | 101,270 | |
|
| IT Services – 10.4% | |
| | |
Accenture plc, Class A | | | 510 | | | | 94,564 | |
| | |
Amdocs Ltd. | | | 732 | | | | 47,726 | |
| | |
Automatic Data Processing, Inc. | | | 105 | | | | 17,034 | |
| | |
Genpact Ltd. | | | 1,125 | | | | 44,066 | |
| | |
Jack Henry & Associates, Inc. | | | 246 | | | | 34,824 | |
| | |
Mastercard, Inc., Class A | | | 768 | | | | 212,590 | |
| | |
Visa, Inc., Class A | | | 954 | | | | 170,633 | |
| | |
Western Union Co. (The) | | | 324 | | | | 8,120 | |
| | | | | | | | 629,557 | |
|
| Life Sciences Tools & Services – 1.1% | |
| | |
ICON plc* | | | 303 | | | | 44,511 | |
| | |
QIAGEN NV* | | | 813 | | | | 24,235 | |
| | | | | | | | 68,746 | |
|
| Media – 0.5% | |
| | |
Cable One, Inc. | | | 24 | | | | 31,809 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 115 | |
FlexShares® US Quality Low Volatility Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Metals & Mining – 0.7% | |
| | |
Royal Gold, Inc. | | | 375 | | | $ | 43,290 | |
|
| Multi-Utilities – 2.3% | |
| | |
Consolidated Edison, Inc. | | | 402 | | | | 37,073 | |
| | |
DTE Energy Co. | | | 267 | | | | 33,994 | |
| | |
NorthWestern Corp. | | | 201 | | | | 14,577 | |
| | |
WEC Energy Group, Inc. | | | 558 | | | | 52,675 | |
| | | | | | | | 138,319 | |
|
| Oil, Gas & Consumable Fuels – 2.9% | |
| | |
Chevron Corp. | | | 561 | | | | 65,155 | |
| | |
Exxon Mobil Corp. | | | 1,683 | | | | 113,720 | |
| | | | | | | | 178,875 | |
|
| Pharmaceuticals – 8.8% | |
| | |
Eli Lilly & Co. | | | 933 | | | | 106,315 | |
| | |
Jazz Pharmaceuticals plc* | | | 324 | | | | 40,704 | |
| | |
Johnson & Johnson | | | 2,013 | | | | 265,797 | |
| | |
Merck & Co., Inc. | | | 1,167 | | | | 101,132 | |
| | |
Pfizer, Inc. | | | 459 | | | | 17,612 | |
| | |
Zoetis, Inc. | | | 27 | | | | 3,454 | |
| | | | | | | | 535,014 | |
|
| Professional Services – 0.5% | |
| | |
Verisk Analytics, Inc. | | | 228 | | | | 32,992 | |
|
| Semiconductors & Semiconductor Equipment – 0.5% | |
| | |
Mellanox Technologies Ltd.* | | | 282 | | | | 31,781 | |
|
| Software – 4.7% | |
| | |
Appfolio, Inc., Class A* | | | 99 | | | | 9,626 | |
| | |
Check Point Software Technologies Ltd.* | | | 438 | | | | 49,235 | |
| | |
Globant SA* | | | 45 | | | | 4,197 | |
| | |
Intuit, Inc. | | | 45 | | | | 11,587 | |
| | |
j2 Global, Inc. | | | 549 | | | | 52,133 | |
| | |
Microsoft Corp. | | | 1,116 | | | | 160,001 | |
| | | | | | | | 286,779 | |
|
| Specialty Retail – 1.8% | |
| | |
Home Depot, Inc. (The) | | | 159 | | | | 37,298 | |
| | |
Ross Stores, Inc. | | | 204 | | | | 22,373 | |
| | |
TJX Cos., Inc. (The) | | | 810 | | | | 46,696 | |
| | | | | | | | 106,367 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Technology Hardware, Storage & Peripherals – 2.8% | |
| | |
Apple, Inc. | | | 684 | | | $ | 170,152 | |
|
| Thrifts & Mortgage Finance – 0.8% | |
| | |
Essent Group Ltd. | | | 957 | | | | 49,850 | |
|
| Transportation Infrastructure – 0.6% | |
| | |
Macquarie Infrastructure Corp. | | | 804 | | | | 34,685 | |
|
| Water Utilities – 0.7% | |
| | |
American States Water Co. | | | 456 | | | | 43,379 | |
Total Common Stocks
(Cost $5,996,281) | | | | | | | 6,049,132 | |
| | | | | | | | | |
Total Investments – 99.7%
(Cost $5,996,281) | | | | 6,049,132 | |
| |
Other Assets Less Liabilities – 0.3% | | | | 17,436 | |
| NET ASSETS – 100.0% | | | | | | $ | 6,066,568 | |
| * | Non-income producing security. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 169,449 | |
Aggregate gross unrealized depreciation | | | (116,598 | ) |
Net unrealized appreciation | | $ | 52,851 | |
Federal income tax cost | | $ | 5,996,281 | |
See Accompanying Notes to the Financial Statements.
| | |
| 116 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 97.9% | |
|
| Aerospace & Defense – 0.3% | |
| | |
Thales SA | | | 140 | | | $ | 13,689 | |
|
| Air Freight & Logistics – 0.6% | |
| | |
SG Holdings Co. Ltd. | | | 600 | | | | 14,924 | |
| | |
Yamato Holdings Co. Ltd. | | | 1,000 | | | | 16,873 | |
| | | | | | | | 31,797 | |
|
| Airlines – 1.0% | |
| | |
Deutsche Lufthansa AG (Registered) | | | 672 | | | | 11,654 | |
| | |
Japan Airlines Co. Ltd. | | | 1,200 | | | | 37,453 | |
| | | | | | | | 49,107 | |
|
| Auto Components – 0.2% | |
| | |
Bridgestone Corp. | | | 200 | | | | 8,368 | |
|
| Automobiles – 0.4% | |
| | |
Subaru Corp. | | | 200 | | | | 5,778 | |
| | |
Toyota Motor Corp. | | | 200 | | | | 13,953 | |
| | | | | | | | 19,731 | |
|
| Banks – 9.5% | |
| | |
Bank Hapoalim BM | | | 1,972 | | | | 15,777 | |
| | |
Bank LeumiLe-Israel BM | | | 5,530 | | | | 40,272 | |
| | |
Bank of Nova Scotia (The) | | | 1,170 | | | | 67,244 | |
| | |
Bendigo & Adelaide Bank Ltd. | | | 1,800 | | | | 13,207 | |
| | |
Canadian Imperial Bank of Commerce | | | 440 | | | | 37,598 | |
| | |
Commonwealth Bank of Australia | | | 1,744 | | | | 94,512 | |
| | |
Hang Seng Bank Ltd. | | | 2,000 | | | | 41,798 | |
| | |
HSBC Holdings plc | | | 1,740 | | | | 13,126 | |
| | |
Lloyds Banking Group plc | | | 7,672 | | | | 5,639 | |
| | |
National Australia Bank Ltd. | | | 2,764 | | | | 54,481 | |
| | |
Royal Bank of Canada | | | 856 | | | | 69,191 | |
| | |
Sumitomo Mitsui Financial Group, Inc. | | | 200 | | | | 7,178 | |
| | |
Swedbank AB, Class A | | | 176 | | | | 2,467 | |
| | |
Westpac Banking Corp. | | | 1,226 | | | | 23,828 | |
| | | | | | | | 486,318 | |
|
| Beverages – 1.7% | |
| | |
Diageo plc | | | 786 | | | | 32,186 | |
| | |
Pernod Ricard SA | | | 208 | | | | 38,405 | |
| | |
Suntory Beverage & Food Ltd. | | | 400 | | | | 17,094 | |
| | | | | | | | 87,685 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Capital Markets – 0.9% | |
| | |
Deutsche Boerse AG | | | 314 | | | $ | 48,676 | |
|
| Chemicals – 3.1% | |
| | |
Air Liquide SA | | | 464 | | | | 61,654 | |
| | |
Akzo Nobel NV | | | 472 | | | | 43,470 | |
| | |
Chr Hansen Holding A/S | | | 148 | | | | 11,366 | |
| | |
Givaudan SA (Registered) | | | 8 | | | | 23,487 | |
| | |
Symrise AG | | | 176 | | | | 16,941 | |
| | | | | | | | 156,918 | |
|
| Commercial Services & Supplies – 2.6% | |
| | |
Brambles Ltd. | | | 4,518 | | | | 37,259 | |
| | |
Secom Co. Ltd. | | | 500 | | | | 46,552 | |
| | |
Securitas AB, Class B | | | 588 | | | | 9,423 | |
| | |
Societe BIC SA | | | 572 | | | | 39,725 | |
| | | | | | | | 132,959 | |
|
| Containers & Packaging – 0.2% | |
| | |
Toyo Seikan Group Holdings Ltd. | | | 800 | | | | 12,780 | |
|
| Diversified Telecommunication Services – 4.1% | |
| | |
BCE, Inc. | | | 584 | | | | 27,762 | |
| | |
Deutsche Telekom AG (Registered) | | | 2,626 | | | | 46,195 | |
| | |
Elisa OYJ | | | 768 | | | | 41,958 | |
| | |
HKT Trust & HKT Ltd. | | | 8,000 | | | | 12,453 | |
| | |
Nippon Telegraph & Telephone Corp. | | | 600 | | | | 29,838 | |
| | |
Proximus SADP | | | 766 | | | | 23,527 | |
| | |
Singapore Telecommunications Ltd. | | | 5,800 | | | | 14,064 | |
| | |
Spark New Zealand Ltd. | | | 658 | | | | 1,890 | |
| | |
TELUS Corp. | | | 388 | | | | 13,830 | |
| | | | | | | | 211,517 | |
|
| Electric Utilities – 2.9% | |
| | |
CLP Holdings Ltd. | | | 4,000 | | | | 41,517 | |
| | |
Emera, Inc. | | | 300 | | | | 12,446 | |
| | |
Fortis, Inc. | | | 483 | | | | 20,109 | |
| | |
Hydro One Ltd.(a) | | | 2,072 | | | | 38,607 | |
| | |
Orsted A/S(a) | | | 222 | | | | 19,483 | |
| | |
Power Assets Holdings Ltd. | | | 2,000 | | | | 14,277 | |
| | |
Red Electrica Corp. SA | | | 166 | | | | 3,343 | |
| | | | | | | | 149,782 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 117 | |
FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Electrical Equipment – 0.8% | |
| | |
Vestas Wind Systems A/S | | | 528 | | | $ | 43,119 | |
|
| Equity Real Estate Investment Trusts (REITs) – 3.8% | |
| | |
Covivio | | | 104 | | | | 11,777 | |
| | |
Derwent London plc | | | 316 | | | | 14,516 | |
| | |
GPT Group (The) | | | 3,500 | | | | 14,347 | |
| | |
Japan Real Estate Investment Corp. | | | 2 | | | | 13,635 | |
| | |
Japan Retail Fund Investment Corp. | | | 6 | | | | 13,986 | |
| | |
Link REIT | | | 3,500 | | | | 38,159 | |
| | |
Nippon Building Fund, Inc. | | | 2 | | | | 15,170 | |
| | |
RioCan REIT | | | 732 | | | | 14,720 | |
| | |
Scentre Group | | | 6,172 | | | | 16,286 | |
| | |
United Urban Investment Corp. | | | 20 | | | | 40,331 | |
| | | | | | | | 192,927 | |
|
| Food & Staples Retailing – 4.6% | |
| | |
Colruyt SA | | | 734 | | | | 40,813 | |
| | |
ICA Gruppen AB | | | 276 | | | | 12,233 | |
| | |
Kesko OYJ, Class B | | | 28 | | | | 1,864 | |
| | |
Koninklijke Ahold Delhaize NV | | | 1,958 | | | | 48,768 | |
| | |
Lawson, Inc. | | | 200 | | | | 11,063 | |
| | |
Loblaw Cos. Ltd. | | | 720 | | | | 38,477 | |
| | |
Seven & i Holdings Co. Ltd. | | | 800 | | | | 30,341 | |
| | |
Wm Morrison Supermarkets plc | | | 1,596 | | | | 4,107 | |
| | |
Woolworths Group Ltd. | | | 1,864 | | | | 47,927 | |
| | | | | | | | 235,593 | |
|
| Food Products – 3.7% | |
| | |
MEIJI Holdings Co. Ltd. | | | 200 | | | | 14,468 | |
| | |
Nestle SA (Registered) | | | 1,654 | | | | 176,538 | |
| | | | | | | | 191,006 | |
|
| Gas Utilities – 1.5% | |
| | |
Enagas SA | | | 808 | | | | 20,003 | |
| | |
Hong Kong & China Gas Co. Ltd. | | | 10,000 | | | | 19,419 | |
| | |
Snam SpA | | | 152 | | | | 780 | |
| | |
Tokyo Gas Co. Ltd. | | | 1,600 | | | | 39,162 | |
| | | | | | | | 79,364 | |
|
| Health Care Equipment & Supplies – 2.0% | |
| | |
Alcon, Inc.* | | | 408 | | | | 24,089 | |
| | |
Carl Zeiss Meditec AG | | | 10 | | | | 1,091 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Health Care Equipment & Supplies – (continued) | |
| | |
Coloplast A/S, Class B | | | 328 | | | $ | 39,543 | |
| | |
Fisher & Paykel Healthcare Corp. Ltd. | | | 186 | | | | 2,284 | |
| | |
Siemens Healthineers AG(a) | | | 342 | | | | 14,535 | |
| | |
Smith & Nephew plc | | | 882 | | | | 18,860 | |
| | | | | | | | 100,402 | |
|
| Health Care Providers & Services – 0.3% | |
| | |
Sonic Healthcare Ltd. | | | 766 | | | | 15,062 | |
|
| Hotels, Restaurants & Leisure – 3.9% | |
| | |
Compass Group plc | | | 1,964 | | | | 52,252 | |
| | |
Crown Resorts Ltd. | | | 4,766 | | | | 40,913 | |
| | |
Flutter Entertainment plc | | | 178 | | | | 18,330 | |
| | |
McDonald’s Holdings Co. Japan Ltd. | | | 800 | | | | 40,183 | |
| | |
Oriental Land Co. Ltd. | | | 200 | | | | 29,388 | |
| | |
Sodexo SA | | | 134 | | | | 14,740 | |
| | |
Whitbread plc | | | 88 | | | | 4,624 | |
| | | | | | | | 200,430 | |
|
| Household Durables – 1.7% | |
| | |
Barratt Developments plc | | | 1,194 | | | | 9,752 | |
| | |
Bellway plc | | | 396 | | | | 16,193 | |
| | |
Berkeley Group Holdings plc | | | 802 | | | | 45,673 | |
| | |
Sekisui House Ltd. | | | 800 | | | | 17,331 | |
| | | | | | | | 88,949 | |
|
| Household Products – 1.1% | |
| | |
Reckitt Benckiser Group plc | | | 700 | | | | 54,022 | |
|
| Insurance – 8.8% | |
| | |
Admiral Group plc | | | 1,428 | | | | 37,363 | |
| | |
Ageas | | | 728 | | | | 41,942 | |
| | |
Assicurazioni Generali SpA | | | 2,340 | | | | 47,448 | |
| | |
Direct Line Insurance Group plc | | | 10,626 | | | | 37,414 | |
| | |
Gjensidige Forsikring ASA | | | 1,956 | | | | 36,622 | |
| | |
Great-West Lifeco, Inc. | | | 658 | | | | 16,035 | |
| | |
Hannover Rueck SE | | | 242 | | | | 42,874 | |
| | |
Helvetia Holding AG (Registered) | | | 120 | | | | 16,831 | |
| | |
Japan Post Holdings Co. Ltd. | | | 1,800 | | | | 16,584 | |
| | |
Mapfre SA | | | 4,384 | | | | 12,227 | |
| | |
MS&AD Insurance Group Holdings, Inc. | | | 200 | | | | 6,492 | |
| | |
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Registered) | | | 196 | | | | 54,448 | |
See Accompanying Notes to the Financial Statements.
| | |
| 118 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Insurance – (continued) | |
| | |
Power Financial Corp. | | | 664 | | | $ | 15,560 | |
| | |
RSA Insurance Group plc | | | 1,988 | | | | 13,433 | |
| | |
Sampo OYJ, Class A | | | 678 | | | | 27,791 | |
| | |
SCOR SE | | | 344 | | | | 14,499 | |
| | |
Tryg A/S | | | 236 | | | | 6,595 | |
| | |
Zurich Insurance Group AG | | | 22 | | | | 8,595 | |
| | | | | | | | 452,753 | |
|
| IT Services – 1.1% | |
| | |
CGI, Inc.* | | | 538 | | | | 41,907 | |
| | |
Nexi SpA* (a) | | | 1,180 | | | | 12,206 | |
| | | | | | | | 54,113 | |
|
| Leisure Products – 0.4% | |
| | |
Bandai Namco Holdings, Inc. | | | 300 | | | | 18,504 | |
|
| Machinery – 1.5% | |
| | |
Alstom SA | | | 892 | | | | 38,562 | |
| | |
Mitsubishi Heavy Industries Ltd. | | | 1,000 | | | | 40,720 | |
| | | | | | | | 79,282 | |
|
| Marine – 0.3% | |
| | |
Kuehne + Nagel International AG (Registered) | | | 82 | | | | 13,242 | |
|
| Media – 0.2% | |
| | |
Shaw Communications, Inc., Class B | | | 424 | | | | 8,671 | |
|
| Metals & Mining – 1.7% | |
| | |
Barrick Gold Corp. | | | 1,725 | | | | 30,029 | |
| | |
JFE Holdings, Inc. | | | 400 | | | | 5,058 | |
| | |
Newcrest Mining Ltd. | | | 762 | | | | 16,432 | |
| | |
Nippon Steel Corp. | | | 1,200 | | | | 17,666 | |
| | |
Polymetal International plc | | | 1,012 | | | | 16,565 | |
| | |
Rio Tinto Ltd. | | | 14 | | | | 877 | |
| | | | | | | | 86,627 | |
|
| Multiline Retail – 1.1% | |
| | |
Canadian Tire Corp. Ltd., Class A | | | 140 | | | | 15,124 | |
| | |
Marks & Spencer Group plc | | | 3,740 | | | | 8,784 | |
| | |
Wesfarmers Ltd. | | | 1,122 | | | | 30,735 | |
| | | | | | | | 54,643 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Multi-Utilities – 0.0%(b) | |
| | |
Canadian Utilities Ltd., Class A | | | 42 | | | $ | 1,227 | |
|
| Oil, Gas & Consumable Fuels – 4.3% | |
| | |
BP plc | | | 1,386 | | | | 8,776 | |
| | |
Imperial Oil Ltd. | | | 504 | | | | 12,577 | |
| | |
Neste OYJ | | | 1,174 | | | | 42,384 | |
| | |
Royal Dutch Shell plc, Class A | | | 1,046 | | | | 30,224 | |
| | |
Royal Dutch Shell plc, Class B | | | 138 | | | | 3,961 | |
| | |
TOTAL SA | | | 2,352 | | | | 123,683 | |
| | | | | | | | 221,605 | |
|
| Personal Products – 0.4% | |
| | |
Beiersdorf AG | | | 130 | | | | 15,395 | |
| | |
Unilever plc | | | 60 | | | | 3,589 | |
| | | | | | | | 18,984 | |
|
| Pharmaceuticals – 9.7% | |
| | |
AstraZeneca plc | | | 290 | | | | 28,148 | |
| | |
GlaxoSmithKline plc | | | 4,916 | | | | 112,506 | |
| | |
Merck KGaA | | | 204 | | | | 24,330 | |
| | |
Novartis AG (Registered) | | | 308 | | | | 26,872 | |
| | |
Novo Nordisk A/S, Class B | | | 952 | | | | 52,018 | |
| | |
Roche Holding AG | | | 692 | | | | 208,143 | |
| | |
Roche Holding AG – BR | | | 8 | | | | 2,382 | |
| | |
UCB SA | | | 520 | | | | 41,921 | |
| | | | | | | | 496,320 | |
|
| Professional Services – 1.3% | |
| | |
RELX plc | | | 2,178 | | | | 52,365 | |
| | |
Wolters Kluwer NV | | | 206 | | | | 15,173 | |
| | | | | | | | 67,538 | |
|
| Real Estate Management & Development – 1.5% | |
| | |
Deutsche Wohnen SE | | | 710 | | | | 26,710 | |
| | |
Hongkong Land Holdings Ltd. | | | 2,200 | | | | 12,100 | |
| | |
PSP Swiss Property AG (Registered) | | | 288 | | | | 38,089 | |
| | | | | | | | 76,899 | |
|
| Road & Rail – 3.0% | |
| | |
Aurizon Holdings Ltd. | | | 1,996 | | | | 8,113 | |
| | |
Central Japan Railway Co. | | | 100 | | | | 20,624 | |
| | |
East Japan Railway Co. | | | 500 | | | | 45,553 | |
| | |
Keio Corp. | | | 200 | | | | 12,414 | |
| | |
Kintetsu Group Holdings Co. Ltd. | | | 300 | | | | 16,401 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 119 | |
FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Road & Rail – (continued) | |
| | |
MTR Corp. Ltd. | | | 2,000 | | | $ | 11,483 | |
| | |
Nagoya Railroad Co. Ltd. | | | 400 | | | | 12,765 | |
| | |
Seibu Holdings, Inc. | | | 400 | | | | 7,078 | |
| | |
West Japan Railway Co. | | | 200 | | | | 17,422 | |
| | | | | | | | 151,853 | |
|
| Software – 1.5% | |
| | |
Nice Ltd.* | | | 98 | | | | 15,497 | |
| | |
Open Text Corp. | | | 1,020 | | | | 41,301 | |
| | |
Oracle Corp. Japan | | | 200 | | | | 17,724 | |
| | |
SAP SE | | | 26 | | | | 3,446 | |
| | | | | | | | 77,968 | |
|
| Specialty Retail – 1.1% | |
| | |
ABC-Mart, Inc. | | | 600 | | | | 41,182 | |
| | |
Yamada Denki Co. Ltd. | | | 2,800 | | | | 13,546 | |
| | | | | | | | 54,728 | |
|
| Technology Hardware, Storage & Peripherals – 1.8% | |
| | |
Canon, Inc. | | | 1,800 | | | | 49,319 | |
| | |
FUJIFILM Holdings Corp. | | | 1,000 | | | | 44,216 | |
| | | | | | | | 93,535 | |
|
| Textiles, Apparel & Luxury Goods – 1.2% | |
| | |
adidas AG | | | 20 | | | | 6,177 | |
| | |
Hermes International | | | 64 | | | | 46,054 | |
| | |
LVMH Moet Hennessy Louis Vuitton SE | | | 2 | | | | 854 | |
| | |
Pandora A/S | | | 128 | | | | 6,297 | |
| | | | | | | | 59,382 | |
|
| Tobacco – 0.9% | |
| | |
Japan Tobacco, Inc. | | | 2,000 | | | | 45,437 | |
|
| Trading Companies & Distributors – 0.9% | |
| | |
ITOCHU Corp. | | | 2,200 | | | | 46,216 | |
|
| Transportation Infrastructure – 0.3% | |
| | |
Aeroports de Paris | | | 74 | | | | 14,068 | |
| | |
Auckland International Airport Ltd. | | | 313 | | | | 1,867 | |
| | | | | | | | 15,935 | |
|
| Water Utilities – 1.1% | |
| | |
Severn Trent plc | | | 436 | | | | 12,722 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Water Utilities – (continued) | |
| | |
United Utilities Group plc | | | 4,050 | | | $ | 45,605 | |
| | | | | | | | 58,327 | |
|
| Wireless Telecommunication Services – 2.9% | |
| | |
KDDI Corp. | | | 2,000 | | | | 55,483 | |
| | |
NTT DOCOMO, Inc. | | | 1,800 | | | | 49,535 | |
| | |
Rogers Communications, Inc., Class B | | | 24 | | | | 1,132 | |
| | |
Softbank Corp. | | | 3,000 | | | | 41,210 | |
| | | | | | | | 147,360 | |
Total Common Stocks
(Cost $4,895,220) | | | | | | | 5,011,350 | |
| | | | | | | | | |
Total Investments – 97.9%
(Cost $4,895,220) | | | | 5,011,350 | |
| |
Other Assets Less Liabilities – 2.1% | | | | 108,901 | |
| NET ASSETS – 100.0% | | | | | | $ | 5,120,251 | |
| * | Non-income producing security. |
| (a) | Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States and as such may have restrictions on resale. |
| (b) | Represents less than 0.05% of net assets. |
Percentages shown are based on Net Assets.
Abbreviations
OYJ – Public Limited Company
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 221,428 | |
Aggregate gross unrealized depreciation | | | (115,349 | ) |
Net unrealized appreciation | | $ | 106,079 | |
Federal income tax cost | | $ | 4,908,204 | |
See Accompanying Notes to the Financial Statements.
| | |
| 120 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund (cont.)
Futures Contracts
FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund had the following open futures contract as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | | | | | |
MSCI EAFEE-Mini Index | | | 1 | | | | 12/20/2019 | | | | USD | | | $ | 97,860 | | | $ | 2,933 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Abbreviations:
USD – US Dollar
FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Australia | | | 8.1 | % |
Belgium | | | 2.9 | |
Canada | | | 10.2 | |
Denmark | | | 3.5 | |
Finland | | | 2.2 | |
France | | | 8.2 | |
Germany | | | 6.1 | |
Hong Kong | | | 3.5 | |
Israel | | | 1.4 | |
Italy | | | 1.2 | |
Japan | | | 21.8 | |
Netherlands | | | 2.1 | |
New Zealand | | | 0.1 | |
Norway | | | 0.7 | |
Singapore | | | 0.5 | |
Spain | | | 0.7 | |
Sweden | | | 0.5 | |
Switzerland | | | 10.5 | |
United Kingdom | | | 13.7 | |
Other1 | | | 2.1 | |
| | | | 100.0 | % |
| 1 | Includes anynon-equity securities and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 121 | |
Schedule of Investments
FlexShares® Emerging Markets Quality Low Volatility Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 99.6% | |
|
| Air Freight & Logistics – 0.4% | |
| | |
ZTO Express Cayman, Inc., ADR | | | 868 | | | $ | 19,096 | |
|
| Airlines – 0.7% | |
| | |
Eva Airways Corp. | | | 70,028 | | | | 32,782 | |
| | |
InterGlobe Aviation Ltd.(a) | | | 78 | | | | 1,602 | |
| | | | | | | | 34,384 | |
|
| Banks – 18.6% | |
| | |
Attijariwafa Bank | | | 526 | | | | 25,717 | |
| | |
Banco BBVA Peru SA | | | 37,596 | | | | 39,338 | |
| | |
Banco Bradesco SA (Preference) | | | 2,000 | | | | 17,522 | |
| | |
Banco de Chile | | | 273,028 | | | | 35,187 | |
| | |
Bank Central Asia Tbk. PT | | | 46,400 | | | | 103,959 | |
| | |
Bank of China Ltd., Class H | | | 116,000 | | | | 47,509 | |
| | |
Bank of Communications Co. Ltd., Class H | | | 56,000 | | | | 38,297 | |
| | |
Bank Rakyat Indonesia Persero Tbk. PT | | | 4,800 | | | | 1,440 | |
| | |
Banque Centrale Populaire | | | 844 | | | | 23,354 | |
| | |
BDO Unibank, Inc. | | | 8,260 | | | | 25,214 | |
| | |
Chang Hwa Commercial Bank Ltd. | | | 42,000 | | | | 32,769 | |
| | |
China CITIC Bank Corp. Ltd., Class H | | | 6,000 | | | | 3,483 | |
| | |
China Construction Bank Corp., Class H | | | 42,000 | | | | 33,813 | |
| | |
China Merchants Bank Co. Ltd., Class H | | | 1,000 | | | | 4,785 | |
| | |
Commercial International Bank Egypt SAE | | | 6,554 | | | | 32,892 | |
| | |
Credicorp Ltd. | | | 154 | | | | 32,962 | |
| | |
E.Sun Financial Holding Co. Ltd. | | | 24,000 | | | | 21,721 | |
| | |
First Financial Holding Co. Ltd. | | | 44,000 | | | | 32,306 | |
| | |
Hong Leong Bank Bhd. | | | 5,800 | | | | 23,902 | |
| | |
Hua Nan Financial Holdings Co. Ltd. | | | 48,000 | | | | 34,533 | |
| | |
Industrial & Commercial Bank of China Ltd., Class H | | | 66,000 | | | | 47,493 | |
| | |
Industrial Bank of Korea | | | 532 | | | | 5,396 | |
| | |
ING Bank Slaski SA | | | 386 | | | | 19,629 | |
| | |
Intercorp Financial Services, Inc.* (a) | | | 560 | | | | 23,352 | |
| | |
Itau Unibanco Holding SA (Preference) | | | 3,000 | | | | 27,075 | |
| | |
Komercni banka A/S | | | 1,080 | | | | 36,538 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – (continued) | |
| | |
Krung Thai Bank PCL | | | 26,600 | | | $ | 14,624 | |
| | |
Malayan Banking Bhd. | | | 1,400 | | | | 2,881 | |
| | |
Mega Financial Holding Co. Ltd. | | | 36,000 | | | | 35,361 | |
| | |
Public Bank Bhd. | | | 7,800 | | | | 37,894 | |
| | |
Sberbank of Russia PJSC | | | 5,666 | | | | 20,772 | |
| | |
SinoPac Financial Holdings Co. Ltd. | | | 34,000 | | | | 13,962 | |
| | |
Taiwan Cooperative Financial Holding Co. Ltd. | | | 46,000 | | | | 31,658 | |
| | | | | | | | 927,338 | |
|
| Beverages – 0.1% | |
| | |
Ambev SA* | | | 1,400 | | | | 6,061 | |
|
| Biotechnology – 0.6% | |
| | |
China Biologic Products Holdings, Inc.* | | | 240 | | | | 27,370 | |
|
| Capital Markets – 0.6% | |
| | |
Macquarie Korea Infrastructure Fund | | | 2,872 | | | | 29,252 | |
|
| Chemicals – 3.2% | |
| | |
Acron PJSC | | | 504 | | | | 38,828 | |
| | |
Formosa Plastics Corp. | | | 8,000 | | | | 25,702 | |
| | |
Nan Ya Plastics Corp. | | | 10,000 | | | | 23,653 | |
| | |
Petronas Chemicals Group Bhd. | | | 19,000 | | | | 33,967 | |
| | |
Pidilite Industries Ltd. | | | 1,986 | | | | 39,244 | |
| | | | | | | | 161,394 | |
|
| Commercial Services & Supplies – 0.7% | |
| | |
S-1 Corp. | | | 420 | | | | 33,825 | |
|
| Construction Materials – 1.0% | |
| | |
LafargeHolcim Maroc SA | | | 76 | | | | 13,243 | |
| | |
Siam Cement PCL (The) | | | 300 | | | | 3,676 | |
| | |
Siam Cement PCL (The), NVDR | | | 900 | | | | 10,939 | |
| | |
Ssangyong Cement Industrial Co. Ltd. | | | 4,162 | | | | 20,963 | |
| | | | | | | | 48,821 | |
|
| Diversified Financial Services – 0.0%(b) | |
| | |
FirstRand Ltd. | | | 524 | | | | 2,272 | |
|
| Diversified Telecommunication Services – 3.6% | |
| | |
China Telecom Corp. Ltd., Class H | | | 64,000 | | | | 27,273 | |
| | |
China Tower Corp. Ltd., Class H(a) | | | 28,000 | | | | 6,180 | |
See Accompanying Notes to the Financial Statements.
| | |
| 122 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Emerging Markets Quality Low Volatility Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Diversified Telecommunication Services – (continued) | |
| | |
Chunghwa Telecom Co. Ltd. | | | 10,000 | | | $ | 36,793 | |
| | |
Magyar Telekom Telecommunications plc | | | 24,964 | | | | 37,255 | |
| | |
Maroc Telecom | | | 2,526 | | | | 37,708 | |
| | |
O2 Czech Republic A/S | | | 3,770 | | | | 35,617 | |
| | |
Telekomunikasi Indonesia Persero Tbk. PT | | | 1,400 | | | | 410 | |
| | | | | | | | 181,236 | |
|
| Electric Utilities – 2.3% | |
| | |
CEZ A/S | | | 1,236 | | | | 28,220 | |
| | |
CPFL Energia SA | | | 200 | | | | 1,645 | |
| | |
Equatorial Energia SA | | | 1,200 | | | | 30,454 | |
| | |
Manila Electric Co. | | | 5,260 | | | | 35,077 | |
| | |
Transmissora Alianca de Energia Eletrica SA | | | 2,600 | | | | 18,705 | |
| | | | | | | | 114,101 | |
|
| Electronic Equipment, Instruments & Components – 0.5% | |
| | |
WPG Holdings Ltd. | | | 20,000 | | | | 25,361 | |
|
| Equity Real Estate Investment Trusts (REITs) – 1.1% | |
| | |
Embassy Office Parks REIT | | | 4,800 | | | | 27,952 | |
| | |
Hui Xian REIT | | | 54,000 | | | | 25,099 | |
| | |
Redefine Properties Ltd. | | | 5,652 | | | | 2,829 | |
| | | | | | | | 55,880 | |
|
| Food & Staples Retailing – 2.5% | |
| | |
Clicks Group Ltd. | | | 870 | | | | 14,195 | |
| | |
Pick n Pay Stores Ltd. | | | 4,730 | | | | 20,756 | |
| | |
President Chain Store Corp. | | | 1,000 | | | | 9,987 | |
| | |
Puregold Price Club, Inc. | | | 27,600 | | | | 22,218 | |
| | |
Sun Art Retail Group Ltd. | | | 31,000 | | | | 31,681 | |
| | |
Wal-Mart de Mexico SAB de CV | | | 8,200 | | | | 24,692 | |
| | | | | | | | 123,529 | |
|
| Food Products – 3.9% | |
| | |
Alicorp SAA | | | 8,280 | | | | 22,699 | |
| | |
AVI Ltd. | | | 5,008 | | | | 28,798 | |
| | |
Dali Foods Group Co. Ltd.(a) | | | 34,000 | | | | 23,295 | |
| | |
GlaxoSmithKline Consumer Healthcare Ltd. | | | 6 | | | | 780 | |
| | |
Indofood CBP Sukses Makmur Tbk. PT | | | 4,400 | | | | 3,644 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Food Products – (continued) | |
| | |
Nestle Malaysia Bhd. | | | 1,100 | | | $ | 38,092 | |
| | |
Ottogi Corp. | | | 48 | | | | 23,310 | |
| | |
PPB Group Bhd. | | | 5,800 | | | | 25,124 | |
| | |
Uni-President China Holdings Ltd. | | | 30,000 | | | | 31,004 | |
| | | | | | | | 196,746 | |
|
| Gas Utilities – 1.0% | |
| | |
China Gas Holdings Ltd. | | | 3,200 | | | | 13,657 | |
| | |
China Resources Gas Group Ltd. | | | 4,000 | | | | 24,140 | |
| | |
ENN Energy Holdings Ltd. | | | 1,200 | | | | 13,749 | |
| | | | | | | | 51,546 | |
|
| Health Care Providers & Services – 3.1% | |
| | |
Bangkok Dusit Medical Services PCL, NVDR | | | 39,200 | | | | 31,157 | |
| | |
Bangkok Dusit Medical Services PCL, Class F | | | 17,400 | | | | 13,830 | |
| | |
Bumrungrad Hospital PCL | | | 1,800 | | | | 7,183 | |
| | |
Bumrungrad Hospital PCL, NVDR | | | 6,400 | | | | 25,541 | |
| | |
Hapvida Participacoes e Investimentos SA(a) | | | 2,200 | | | | 30,854 | |
| | |
Odontoprev SA | | | 4,800 | | | | 17,684 | |
| | |
Sinopharm Group Co. Ltd., Class H | | | 7,200 | | | | 25,860 | |
| | | | | | | | 152,109 | |
|
| Hotels, Restaurants & Leisure – 0.7% | |
| | |
Kangwon Land, Inc. | | | 1,126 | | | | 30,341 | |
| | |
Yum China Holdings, Inc. | | | 116 | | | | 4,930 | |
| | | | | | | | 35,271 | |
|
| Household Durables – 1.3% | |
| | |
PIK Group PJSC | | | 6,410 | | | | 34,816 | |
| | |
Woongjin Coway Co. Ltd. | | | 378 | | | | 29,825 | |
| | | | | | | | 64,641 | |
|
| Household Products – 0.5% | |
| | |
Hindustan Unilever Ltd. | | | 58 | | | | 1,779 | |
| | |
Unilever Indonesia Tbk. PT | | | 8,000 | | | | 24,920 | |
| | | | | | | | 26,699 | |
|
Independent Power and Renewable Electricity
Producers –1.3% | |
| | |
Aboitiz Power Corp. | | | 19,400 | | | | 15,273 | |
| | |
Electricity Generating PCL | | | 2,400 | | | | 27,581 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 123 | |
FlexShares® Emerging Markets Quality Low Volatility Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
Independent Power and Renewable Electricity
Producers – (continued) | |
| | |
Ratch Group PCL | | | 600 | | | $ | 1,460 | |
| | |
Ratch Group PCL, NVDR | | | 7,200 | | | | 17,526 | |
| | |
Unipro PJSC | | | 118,000 | | | | 4,862 | |
| | | | | | | | 66,702 | |
|
| Industrial Conglomerates – 0.3% | |
| | |
HAP Seng Consolidated Bhd. | | | 6,400 | | | | 15,286 | |
|
| Insurance – 4.2% | |
| | |
DB Insurance Co. Ltd. | | | 662 | | | | 28,734 | |
| | |
IRB Brasil Resseguros S/A | | | 4,800 | | | | 45,185 | |
| | |
Ping An Insurance Group Co. of China Ltd., Class H | | | 4,000 | | | | 46,315 | |
| | |
Samsung Fire & Marine Insurance Co. Ltd. | | | 150 | | | | 27,913 | |
| | |
Santam Ltd. | | | 1,684 | | | | 31,570 | |
| | |
SBI Life Insurance Co. Ltd.(a) | | | 2,276 | | | | 31,816 | |
| | | | | | | | 211,533 | |
|
| Interactive Media & Services – 3.8% | |
| | |
Tencent Holdings Ltd. | | | 4,600 | | | | 188,280 | |
|
| Internet & Direct Marketing Retail – 5.1% | |
| | |
Alibaba Group Holding Ltd., ADR* | | | 1,152 | | | | 203,524 | |
| | |
Naspers Ltd., Class N | | | 252 | | | | 35,895 | |
| | |
Prosus NV* | | | 252 | | | | 17,383 | |
| | | | | | | | 256,802 | |
|
| IT Services – 4.2% | |
| | |
HCL Technologies Ltd. | | | 2,116 | | | | 34,688 | |
| | |
Infosys Ltd. | | | 3,068 | | | | 29,656 | |
| | |
Larsen & Toubro Infotech Ltd.(a) | | | 1,528 | | | | 37,093 | |
| | |
Mphasis Ltd. | | | 56 | | | | 750 | |
| | |
Samsung SDS Co. Ltd. | | | 58 | | | | 10,045 | |
| | |
Tata Consultancy Services Ltd. | | | 1,176 | | | | 37,631 | |
| | |
Tech Mahindra Ltd. | | | 1,628 | | | | 16,962 | |
| | |
Wipro Ltd. | | | 10,994 | | | | 40,192 | |
| | | | | | | | 207,017 | |
|
| Life Sciences Tools & Services – 0.6% | |
| | |
WuXi AppTec Co. Ltd., Class H(a) | | | 2,400 | | | | 28,998 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Media – 0.1% | |
| | |
Cheil Worldwide, Inc. | | | 340 | | | $ | 7,233 | |
|
| Metals & Mining – 0.6% | |
| | |
AngloGold Ashanti Ltd. | | | 508 | | | | 11,142 | |
| | |
Vale SA* | | | 1,600 | | | | 18,812 | |
| | | | | | | | 29,954 | |
|
| Multiline Retail – 1.9% | |
| | |
Golden Eagle Retail Group Ltd. | | | 32,000 | | | | 35,276 | |
| | |
Grupo Sanborns SAB de CV | | | 2,600 | | | | 3,119 | |
| | |
Lojas Renner SA | | | 1,600 | | | | 20,227 | |
| | |
Lotte Shopping Co. Ltd. | | | 74 | | | | 7,919 | |
| | |
Robinson PCL | | | 600 | | | | 1,296 | |
| | |
Robinson PCL, NVDR | | | 6,000 | | | | 12,966 | |
| | |
Woolworths Holdings Ltd. | | | 3,690 | | | | 14,083 | |
| | | | | | | | 94,886 | |
|
| Oil, Gas & Consumable Fuels – 5.7% | |
| | |
China Coal Energy Co. Ltd., Class H | | | 60,000 | | | | 23,961 | |
| | |
China Shenhua Energy Co. Ltd., Class H | | | 16,000 | | | | 32,540 | |
| | |
CNOOC Ltd. | | | 8,000 | | | | 12,004 | |
| | |
Coal India Ltd. | | | 9,084 | | | | 26,581 | |
| | |
Exxaro Resources Ltd. | | | 912 | | | | 7,466 | |
| | |
Formosa Petrochemical Corp. | | | 3,000 | | | | 9,550 | |
| | |
LUKOIL PJSC | | | 286 | | | | 26,423 | |
| | |
MOL Hungarian Oil & Gas plc | | | 2,492 | | | | 24,668 | |
| | |
Novatek PJSC | | | 742 | | | | 15,750 | |
| | |
Petroleo Brasileiro SA* | | | 800 | | | | 6,517 | |
| | |
Petroleo Brasileiro SA (Preference) | | | 1,400 | | | | 10,598 | |
| | |
Petronas Dagangan Bhd. | | | 4,400 | | | | 24,809 | |
| | |
Petronet LNG Ltd. | | | 11,216 | | | | 45,289 | |
| | |
Surgutneftegas PJSC | | | 22,000 | | | | 14,765 | |
| | |
Tatneft PJSC | | | 92 | | | | 1,074 | |
| | | | | | | | 281,995 | |
|
| Personal Products – 0.9% | |
| | |
Colgate-Palmolive India Ltd. | | | 1,942 | | | | 42,417 | |
| | |
Procter & Gamble Hygiene & Health Care Ltd. | | | 4 | | | | 690 | |
| | | | | | | | 43,107 | |
See Accompanying Notes to the Financial Statements.
| | |
| 124 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Emerging Markets Quality Low Volatility Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Pharmaceuticals – 0.7% | |
| | |
China Resources Pharmaceutical Group Ltd.(a) | | | 22,000 | | | $ | 20,350 | |
| | |
Hypera SA* | | | 1,400 | | | | 11,969 | |
| | | | | | | | 32,319 | |
|
| Real Estate Management & Development – 0.2% | |
| | |
Megaworld Corp. | | | 108,000 | | | | 10,280 | |
| | |
Plaza SA | | | 788 | | | | 1,669 | |
| | | | | | | | 11,949 | |
|
| Road & Rail – 0.5% | |
| | |
CAR, Inc.* | | | 30,000 | | | | 24,497 | |
|
| Semiconductors & Semiconductor Equipment – 4.3% | |
| | |
Taiwan Semiconductor Manufacturing Co. Ltd. | | | 22,000 | | | | 215,731 | |
|
| Specialty Retail – 1.6% | |
| | |
Home Product Center PCL | | | 4,400 | | | | 2,492 | |
| | |
Home Product Center PCL, NVDR | | | 65,200 | | | | 37,140 | |
| | |
Petrobras Distribuidora SA | | | 5,600 | | | | 39,450 | |
| | | | | | | | 79,082 | |
|
| Technology Hardware, Storage & Peripherals – 4.7% | |
| | |
Chicony Electronics Co. Ltd. | | | 14,000 | | | | 43,554 | |
| | |
Samsung Electronics Co. Ltd. | | | 4,180 | | | | 181,075 | |
| | |
Samsung Electronics Co. Ltd. (Preference) | | | 234 | | | | 8,256 | |
| | | | | | | | 232,885 | |
|
| Textiles, Apparel & Luxury Goods – 1.5% | |
| | |
Fila Korea Ltd. | | | 438 | | | | 21,685 | |
| | |
Formosa Taffeta Co. Ltd. | | | 4,000 | | | | 4,553 | |
| | |
Grendene SA | | | 16,800 | | | | 41,724 | |
| | |
Shenzhou International Group Holdings Ltd. | | | 400 | | | | 5,542 | |
| | | | | | | | 73,504 | |
|
| Tobacco – 0.7% | |
| | |
KT&G Corp. | | | 384 | | | | 33,005 | |
|
| Transportation Infrastructure – 4.1% | |
| | |
Airports of Thailand PCL, NVDR | | | 16,000 | | | | 41,464 | |
| | |
COSCO SHIPPING Ports Ltd. | | | 8,000 | | | | 6,298 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Transportation Infrastructure – (continued) | |
| | |
Dalian Port PDA Co. Ltd., Class H | | | 184,000 | | | $ | 23,241 | |
| | |
Jiangsu Expressway Co. Ltd., Class H | | | 28,000 | | | | 37,225 | |
| | |
Promotora y Operadora de Infraestructura SAB de CV | | | 2,980 | | | | 27,658 | |
| | |
Shenzhen Expressway Co. Ltd., Class H | | | 32,000 | | | | 42,870 | |
| | |
Shenzhen International Holdings Ltd. | | | 13,000 | | | | 26,472 | |
| | | | | | | | 205,228 | |
|
| Water Utilities – 0.6% | |
| | |
Guangdong Investment Ltd. | | | 14,000 | | | | 30,366 | |
|
| Wireless Telecommunication Services – 5.6% | |
| | |
America Movil SAB de CV, Series L | | | 9,600 | | | | 7,631 | |
| | |
China Mobile Ltd. | | | 20,500 | | | | 166,873 | |
| | |
Far EasTone Telecommunications Co. Ltd. | | | 16,000 | | | | 38,370 | |
| | |
PLDT, Inc. | | | 50 | | | | 1,084 | |
| | |
SK Telecom Co. Ltd. | | | 112 | | | | 22,815 | |
| | |
Taiwan Mobile Co. Ltd. | | | 12,000 | | | | 44,743 | |
| | | | | | | | 281,516 | |
Total Common Stocks
(Cost $4,972,740) | | | | | | | 4,968,807 | |
| | | Principal
Amount | | | | |
|
| CORPORATE BONDS – 0.0%(b) | |
|
| Food Products – 0.0%(b) | |
| | |
Britannia Industries Ltd.
8.00%, 8/28/2022
(Cost $1) | | | INR 78 | | | | 1 | |
Total Investments – 99.6%
(Cost $4,972,741) | | | | 4,968,808 | |
| |
Other Assets Less Liabilities – 0.4% | | | | 20,102 | |
| NET ASSETS – 100.0% | | | $ | 4,988,910 | |
| * | Non-income producing security. |
| (a) | Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States and as such may have restrictions on resale. |
| (b) | Represents less than 0.05% of net assets. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 125 | |
FlexShares® Emerging Markets Quality Low Volatility Index Fund (cont.)
Percentages shown are based on Net Assets.
Abbreviations
ADR – American Depositary Receipt
INR – Indian Rupee
NVDR –Non-Voting Depositary Receipt
PJSC – Public Joint Stock Company
Preference – A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 209,143 | |
Aggregate gross unrealized depreciation | | | (220,138 | ) |
Net unrealized depreciation | | $ | (10,995 | ) |
Federal income tax cost | | $ | 4,979,803 | |
FlexShares® Emerging Markets Quality Low Volatility Index Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Brazil | | | 6.9 | % |
Chile | | | 0.7 | |
China | | | 28.1 | |
Czech Republic | �� | | 2.0 | |
Egypt | | | 0.7 | |
Hungary | | | 1.2 | |
India | | | 8.3 | |
Indonesia | | | 2.7 | |
Malaysia | | | 4.0 | |
Mexico | | | 1.3 | |
Morocco | | | 2.0 | |
Peru | | | 2.4 | |
Philippines | | | 2.2 | |
Poland | | | 0.4 | |
Russia | | | 3.2 | |
South Africa | | | 3.7 | |
South Korea | | | 10.5 | |
Taiwan | | | 14.3 | |
Thailand | | | 5.0 | |
Other1 | | | 0.4 | |
| | | | 100.0 | % |
| 1 | Includes anynon-equity securities and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | |
| 126 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® Morningstar US Market Factor Tilt Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 99.0% | |
|
| Aerospace & Defense – 1.9% | |
| | |
AAR Corp. | | | 5,324 | | | $ | 222,277 | |
| | |
Aerojet Rocketdyne Holdings, Inc.* | | | 7,502 | | | | 324,311 | |
| | |
AeroVironment, Inc.* | | | 1,452 | | | | 84,187 | |
| | |
Arconic, Inc. | | | 14,762 | | | | 405,512 | |
| | |
Astronics Corp.* | | | 726 | | | | 21,010 | |
| | |
Axon Enterprise, Inc.* | | | 4,840 | | | | 247,469 | |
| | |
Boeing Co. (The) | | | 19,118 | | | | 6,498,399 | |
| | |
BWX Technologies, Inc.(a) | | | 1,452 | | | | 84,361 | |
| | |
Cubic Corp.(a) | | | 1,210 | | | | 89,225 | |
| | |
Curtiss-Wright Corp. | | | 2,662 | | | | 360,036 | |
| | |
Ducommun, Inc.* | | | 242 | | | | 11,998 | |
| | |
General Dynamics Corp. | | | 7,744 | | | | 1,369,139 | |
| | |
HEICO Corp. | | | 4,356 | | | | 537,269 | |
| | |
Hexcel Corp.(a) | | | 4,840 | | | | 361,161 | |
| | |
Huntington Ingalls Industries, Inc. | | | 2,178 | | | | 491,487 | |
| | |
Kratos Defense & Security Solutions, Inc.* | | | 12,342 | | | | 233,017 | |
| | |
L3Harris Technologies, Inc. | | | 7,260 | | | | 1,497,811 | |
| | |
Lockheed Martin Corp. | | | 8,712 | | | | 3,281,636 | |
| | |
Maxar Technologies, Inc. | | | 19,360 | | | | 164,366 | |
| | |
Mercury Systems, Inc.* | | | 3,630 | | | | 267,386 | |
| | |
Moog, Inc., Class A | | | 3,872 | | | | 324,125 | |
| | |
National Presto Industries, Inc. | | | 242 | | | | 20,834 | |
| | |
Northrop Grumman Corp. | | | 5,566 | | | | 1,961,904 | |
| | |
Raytheon Co. | | | 9,438 | | | | 2,002,838 | |
| | |
Spirit AeroSystems Holdings, Inc., Class A | | | 5,324 | | | | 435,610 | |
| | |
Teledyne Technologies, Inc.* | | | 1,694 | | | | 558,342 | |
| | |
Textron, Inc. | | | 8,954 | | | | 412,690 | |
| | |
TransDigm Group, Inc. | | | 1,452 | | | | 764,159 | |
| | |
Triumph Group, Inc. | | | 8,954 | | | | 185,975 | |
| | |
United Technologies Corp. | | | 28,556 | | | | 4,100,071 | |
| | |
Vectrus, Inc.* | | | 2,420 | | | | 110,618 | |
| | |
Wesco Aircraft Holdings, Inc.* | | | 18,634 | | | | 205,347 | |
| | | | | | | | 27,634,570 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Air Freight & Logistics – 0.5% | |
| | |
Air Transport Services Group, Inc.* | | | 9,922 | | | $ | 207,469 | |
| | |
Atlas Air Worldwide Holdings, Inc.* | | | 2,662 | | | | 58,378 | |
| | |
CH Robinson Worldwide, Inc.(a) | | | 4,114 | | | | 311,183 | |
| | |
Echo Global Logistics, Inc.* | | | 8,470 | | | | 168,638 | |
| | |
Expeditors International of Washington, Inc. | | | 4,356 | | | | 317,727 | |
| | |
FedEx Corp. | | | 10,890 | | | | 1,662,467 | |
| | |
Forward Air Corp. | | | 2,662 | | | | 184,130 | |
| | |
Hub Group, Inc., Class A* | | | 9,438 | | | | 432,260 | |
| | |
Radiant Logistics, Inc.* | | | 8,470 | | | | 45,653 | |
| | |
United Parcel Service, Inc., Class B | | | 30,734 | | | | 3,539,635 | |
| | |
XPO Logistics, Inc.* (a) | | | 5,324 | | | | 406,754 | |
| | | | | | | | 7,334,294 | |
|
| Airlines – 0.5% | |
| | |
Alaska Air Group, Inc.(a) | | | 4,356 | | | | 302,437 | |
| | |
Allegiant Travel Co.(a) | | | 3,146 | | | | 526,420 | |
| | |
American Airlines Group, Inc.(a) | | | 12,826 | | | | 385,550 | |
| | |
Delta Air Lines, Inc. | | | 28,314 | | | | 1,559,535 | |
| | |
Hawaiian Holdings, Inc.(a) | | | 13,552 | | | | 387,723 | |
| | |
JetBlue Airways Corp.* | | | 17,908 | | | | 345,624 | |
| | |
SkyWest, Inc. | | | 18,392 | | | | 1,095,244 | |
| | |
Southwest Airlines Co. | | | 20,086 | | | | 1,127,427 | |
| | |
Spirit Airlines, Inc.* | | | 21,296 | | | | 799,878 | |
| | |
United Airlines Holdings, Inc.* | | | 11,374 | | | | 1,033,214 | |
| | | | | | | | 7,563,052 | |
|
| Auto Components – 0.6% | |
| | |
Adient plc* (a) | | | 28,314 | | | | 599,974 | |
| | |
American Axle & Manufacturing Holdings, Inc.* (a) | | | 39,204 | | | | 327,745 | |
| | |
Aptiv plc | | | 10,164 | | | | 910,186 | |
| | |
Autoliv, Inc.(a) | | | 4,114 | | | | 320,234 | |
| | |
BorgWarner, Inc. | | | 10,164 | | | | 423,636 | |
| | |
Cooper Tire & Rubber Co. | | | 16,456 | | | | 464,718 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 127 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Auto Components – (continued) | |
| | |
Cooper-Standard Holdings, Inc.* | | | 5,808 | | | $ | 185,043 | |
| | |
Dana, Inc. | | | 35,816 | | | | 581,294 | |
| | |
Delphi Technologies plc | | | 18,392 | | | | 224,566 | |
| | |
Dorman Products, Inc.* (a) | | | 1,936 | | | | 139,295 | |
| | |
Fox Factory Holding Corp.* (a) | | | 2,420 | | | | 147,475 | |
| | |
Garrett Motion, Inc.* | | | 11,132 | | | | 105,754 | |
| | |
Gentex Corp. | | | 9,438 | | | | 264,736 | |
| | |
Gentherm, Inc.* | | | 3,388 | | | | 141,517 | |
| | |
Goodyear Tire & Rubber Co. (The) | | | 62,436 | | | | 990,859 | |
| | |
LCI Industries(a) | | | 7,502 | | | | 728,594 | |
| | |
Lear Corp. | | | 3,630 | | | | 427,505 | |
| | |
Modine Manufacturing Co.* | | | 23,474 | | | | 268,308 | |
| | |
Motorcar Parts of America, Inc.* (a) | | | 4,840 | | | | 92,250 | |
| | |
Standard Motor Products, Inc. | | | 2,904 | | | | 152,053 | |
| | |
Stoneridge, Inc.* | | | 6,534 | | | | 201,770 | |
| | |
Tenneco, Inc., Class A(a) | | | 16,698 | | | | 210,228 | |
| | |
Veoneer, Inc.* (a) | | | 23,232 | | | | 369,853 | |
| | |
Visteon Corp.* (a) | | | 1,936 | | | | 180,087 | |
| | | | | | | | 8,457,680 | |
|
| Automobiles – 0.5% | |
| | |
Ford Motor Co. | | | 180,774 | | | | 1,552,849 | |
| | |
General Motors Co. | | | 57,838 | | | | 2,149,260 | |
| | |
Harley-Davidson, Inc. | | | 2,904 | | | | 112,995 | |
| | |
Tesla, Inc.* (a) | | | 5,082 | | | | 1,600,423 | |
| | |
Thor Industries, Inc.(a) | | | 16,698 | | | | 1,056,315 | |
| | |
Winnebago Industries, Inc. | | | 9,196 | | | | 442,052 | |
| | | | | | | | 6,913,894 | |
|
| Banks – 8.1% | |
| | |
1st Source Corp. | | | 2,904 | | | | 148,627 | |
| | |
Ameris Bancorp | | | 19,118 | | | | 819,206 | |
| | |
Associated Banc-Corp. | | | 53,724 | | | | 1,080,390 | |
| | |
Atlantic Union Bankshares Corp.(a) | | | 23,474 | | | | 865,252 | |
| | |
Banc of California, Inc. | | | 8,712 | | | | 119,964 | |
| | |
BancFirst Corp. | | | 3,146 | | | | 182,122 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – (continued) | |
| | |
Bancorp, Inc. (The)* | | | 17,182 | | | $ | 187,284 | |
| | |
BancorpSouth Bank | | | 26,862 | | | | 823,858 | |
| | |
Bank of America Corp. | | | 378,972 | | | | 11,850,454 | |
| | |
Bank of Hawaii Corp. | | | 2,662 | | | | 232,419 | |
| | |
Bank OZK(a) | | | 41,624 | | | | 1,167,969 | |
| | |
BankUnited, Inc. | | | 29,524 | | | | 1,012,673 | |
| | |
Banner Corp. | | | 9,922 | | | | 535,590 | |
| | |
BB&T Corp. | | | 32,912 | | | | 1,745,982 | |
| | |
Berkshire Hills Bancorp, Inc. | | | 13,552 | | | | 420,519 | |
| | |
BOK Financial Corp. | | | 3,146 | | | | 242,714 | |
| | |
Boston Private Financial Holdings, Inc. | | | 20,812 | | | | 234,135 | |
| | |
Bridge Bancorp, Inc. | | | 5,082 | | | | 164,657 | |
| | |
Brookline Bancorp, Inc. | | | 10,648 | | | | 167,174 | |
| | |
Bryn Mawr Bank Corp. | | | 1,694 | | | | 64,558 | |
| | |
Byline Bancorp, Inc.* | | | 1,936 | | | | 33,570 | |
| | |
Cadence Bancorp | | | 44,528 | | | | 684,841 | |
| | |
Camden National Corp. | | | 2,178 | | | | 96,507 | |
| | |
Cathay General Bancorp | | | 22,022 | | | | 783,323 | |
| | |
CBTX, Inc. | | | 484 | | | | 13,867 | |
| | |
CenterState Bank Corp. | | | 36,784 | | | | 932,842 | |
| | |
Central Pacific Financial Corp. | | | 3,388 | | | | 97,981 | |
| | |
CIT Group, Inc. | | | 7,018 | | | | 301,002 | |
| | |
Citigroup, Inc. | | | 102,608 | | | | 7,373,411 | |
| | |
Citizens Financial Group, Inc. | | | 22,264 | | | | 782,802 | |
| | |
City Holding Co.(a) | | | 2,420 | | | | 192,003 | |
| | |
Columbia Banking System, Inc. | | | 5,808 | | | | 228,254 | |
| | |
Comerica, Inc. | | | 7,986 | | | | 522,444 | |
| | |
Commerce Bancshares, Inc. | | | 1,452 | | | | 93,451 | |
| | |
Community Bank System, Inc.(a) | | | 5,082 | | | | 344,458 | |
| | |
Community Trust Bancorp, Inc. | | | 2,420 | | | | 106,020 | |
| | |
ConnectOne Bancorp, Inc. | | | 4,840 | | | | 117,515 | |
| | |
Cullen/Frost Bankers, Inc.(a) | | | 1,452 | | | | 130,796 | |
| | |
Customers Bancorp, Inc.* | | | 8,712 | | | | 205,429 | |
| | |
CVB Financial Corp.(a) | | | 11,132 | | | | 231,323 | |
| | |
Eagle Bancorp, Inc. | | | 1,694 | | | | 76,467 | |
| | |
East West Bancorp, Inc. | | | 9,680 | | | | 415,466 | |
| | |
Enterprise Financial Services Corp. | | | 726 | | | | 31,799 | |
See Accompanying Notes to the Financial Statements.
| | |
| 128 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Banks – (continued) | |
| | |
Equity Bancshares, Inc., Class A* | | | 726 | | | $ | 20,154 | |
| | |
FB Financial Corp. | | | 1,210 | | | | 45,581 | |
| | |
Fifth Third Bancorp | | | 37,268 | | | | 1,083,753 | |
| | |
Financial Institutions, Inc. | | | 2,178 | | | | 68,455 | |
| | |
First Bancorp | | | 28,556 | | | | 300,409 | |
| | |
First Busey Corp. | | | 11,374 | | | | 299,932 | |
| | |
First Citizens BancShares, Inc., Class A | | | 2,420 | | | | 1,190,446 | |
| | |
First Commonwealth Financial Corp. | | | 9,196 | | | | 129,572 | |
| | |
First Financial Bancorp | | | 30,492 | | | | 714,732 | |
| | |
First Financial Bankshares, Inc. | | | 7,744 | | | | 257,720 | |
| | |
First Financial Corp. | | | 2,662 | | | | 116,782 | |
| | |
First Foundation, Inc. | | | 4,114 | | | | 65,865 | |
| | |
First Hawaiian, Inc. | | | 36,784 | | | | 1,005,307 | |
| | |
First Horizon National Corp. | | | 97,042 | | | | 1,549,761 | |
| | |
First Interstate BancSystem, Inc., Class A | | | 7,986 | | | | 335,093 | |
| | |
First Merchants Corp. | | | 16,456 | | | | 650,835 | |
| | |
First Midwest Bancorp, Inc. | | | 36,058 | | | | 740,631 | |
| | |
First of Long Island Corp. (The) | | | 3,146 | | | | 73,742 | |
| | |
First Republic Bank(a) | | | 5,566 | | | | 592,000 | |
| | |
Flushing Financial Corp. | | | 4,114 | | | | 89,027 | |
| | |
FNB Corp. | | | 101,156 | | | | 1,219,941 | |
| | |
Franklin Financial Network, Inc.(a) | | | 3,388 | | | | 112,719 | |
| | |
Fulton Financial Corp. | | | 43,802 | | | | 747,262 | |
| | |
Glacier Bancorp, Inc.(a) | | | 5,082 | | | | 215,070 | |
| | |
Great Southern Bancorp, Inc. | | | 968 | | | | 58,487 | |
| | |
Great Western Bancorp, Inc. | | | 17,908 | | | | 624,452 | |
| | |
Hancock Whitney Corp.(a) | | | 29,040 | | | | 1,132,560 | |
| | |
Hanmi Financial Corp. | | | 2,178 | | | | 41,926 | |
| | |
Heartland Financial USA, Inc. | | | 9,922 | | | | 464,151 | |
| | |
Heritage Commerce Corp. | | | 7,260 | | | | 87,265 | |
| | |
Hilltop Holdings, Inc. | | | 20,812 | | | | 486,168 | |
| | |
Home BancShares, Inc.(a) | | | 55,418 | | | | 1,024,125 | |
| | |
Hope Bancorp, Inc.(a) | | | 37,268 | | | | 531,814 | |
| | |
Horizon Bancorp, Inc. | | | 8,228 | | | | 150,202 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – (continued) | |
| | |
Huntington Bancshares, Inc. | | | 56,144 | | | $ | 793,315 | |
| | |
IBERIABANK Corp. | | | 16,456 | | | | 1,207,706 | |
| | |
Independent Bank Corp. – MA | | | 4,114 | | | | 337,677 | |
| | |
Independent Bank Corp. – MI | | | 968 | | | | 21,790 | |
| | |
Independent Bank Group, Inc. | | | 8,954 | | | | 478,770 | |
| | |
International Bancshares Corp. | | | 16,456 | | | | 674,038 | |
| | |
Investors Bancorp, Inc. | | | 12,100 | | | | 145,805 | |
| | |
JPMorgan Chase & Co. | | | 143,990 | | | | 17,987,231 | |
| | |
KeyCorp | | | 52,998 | | | | 952,374 | |
| | |
Lakeland Bancorp, Inc. | | | 11,616 | | | | 192,245 | |
| | |
Lakeland Financial Corp.(a) | | | 4,114 | | | | 191,507 | |
| | |
LegacyTexas Financial Group, Inc. | | | 6,534 | | | | 277,956 | |
| | |
Live Oak Bancshares, Inc.(a) | | | 6,776 | | | | 122,984 | |
| | |
M&T Bank Corp. | | | 5,324 | | | | 833,366 | |
| | |
Midland States Bancorp, Inc. | | | 4,840 | | | | 129,712 | |
| | |
NBT Bancorp, Inc.(a) | | | 5,808 | | | | 230,868 | |
| | |
OFG Bancorp | | | 20,570 | | | | 417,777 | |
| | |
Old National Bancorp | | | 46,464 | | | | 836,120 | |
| | |
Opus Bank | | | 3,630 | | | | 89,988 | |
| | |
Pacific Premier Bancorp, Inc.(a) | | | 17,908 | | | | 604,484 | |
| | |
PacWest Bancorp(a) | | | 33,396 | | | | 1,235,318 | |
| | |
Park National Corp.(a) | | | 3,388 | | | | 343,035 | |
| | |
Peoples Bancorp, Inc. | | | 2,178 | | | | 71,242 | |
| | |
People’s United Financial, Inc.(a) | | | 25,168 | | | | 406,967 | |
| | |
Pinnacle Financial Partners, Inc.(a) | | | 21,296 | | | | 1,252,631 | |
| | |
PNC Financial Services Group, Inc. (The) | | | 19,602 | | | | 2,875,613 | |
| | |
Popular, Inc. | | | 7,018 | | | | 382,200 | |
| | |
Preferred Bank | | | 1,452 | | | | 77,406 | |
| | |
Prosperity Bancshares, Inc. | | | 5,082 | | | | 350,760 | |
| | |
RBB Bancorp | | | 3,146 | | | | 63,360 | |
| | |
Regions Financial Corp. | | | 44,770 | | | | 720,797 | |
| | |
Renasant Corp. | | | 16,456 | | | | 571,023 | |
| | |
Republic First Bancorp, Inc.* | | | 484 | | | | 1,960 | |
| | |
S&T Bancorp, Inc.(a) | | | 5,808 | | | | 218,700 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 129 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Banks – (continued) | |
| | |
Sandy Spring Bancorp, Inc. | | | 9,438 | | | $ | 325,611 | |
| | |
Seacoast Banking Corp. of Florida* | | | 2,662 | | | | 74,536 | |
| | |
ServisFirst Bancshares, Inc.(a) | | | 2,662 | | | | 93,170 | |
| | |
Signature Bank | | | 3,146 | | | | 372,235 | |
| | |
Simmons First National Corp., Class A | | | 30,250 | | | | 723,580 | |
| | |
South State Corp. | | | 3,146 | | | | 248,094 | |
| | |
Southern National Bancorp of Virginia, Inc. | | | 1,936 | | | | 30,666 | |
| | |
Southside Bancshares, Inc.(a) | | | 2,904 | | | | 100,043 | |
| | |
Sterling Bancorp | | | 71,390 | | | | 1,402,813 | |
| | |
Stock Yards Bancorp, Inc. | | | 3,872 | | | | 154,648 | |
| | |
SunTrust Banks, Inc. | | | 21,780 | | | | 1,488,445 | |
| | |
SVB Financial Group* | | | 2,178 | | | | 482,383 | |
| | |
Synovus Financial Corp. | | | 10,648 | | | | 360,648 | |
| | |
TCF Financial Corp. | | | 47,917 | | | | 1,897,020 | |
| | |
Texas Capital Bancshares, Inc.* | | | 17,424 | | | | 941,941 | |
| | |
Tompkins Financial Corp.(a) | | | 2,178 | | | | 190,597 | |
| | |
Towne Bank(a) | | | 5,082 | | | | 142,753 | |
| | |
TriCo Bancshares | | | 1,694 | | | | 63,745 | |
| | |
TriState Capital Holdings, Inc.* | | | 484 | | | | 11,190 | |
| | |
Triumph Bancorp, Inc.* | | | 726 | | | | 23,559 | |
| | |
Trustmark Corp.(a) | | | 8,712 | | | | 298,996 | |
| | |
UMB Financial Corp.(a) | | | 2,178 | | | | 142,136 | |
| | |
Umpqua Holdings Corp. | | | 66,308 | | | | 1,048,993 | |
| | |
United Bankshares, Inc.(a) | | | 28,556 | | | | 1,129,104 | |
| | |
United Community Banks, Inc. | | | 22,264 | | | | 672,595 | |
| | |
Univest Financial Corp. | | | 7,018 | | | | 180,713 | |
| | |
US Bancorp | | | 64,614 | | | | 3,684,290 | |
| | |
Valley National Bancorp(a) | | | 95,590 | | | | 1,106,932 | |
| | |
Veritex Holdings, Inc. | | | 6,534 | | | | 160,867 | |
| | |
Washington Trust Bancorp, Inc. | | | 2,662 | | | | 136,002 | |
| | |
Webster Financial Corp. | | | 6,292 | | | | 277,477 | |
| | |
Wells Fargo & Co. | | | 176,176 | | | | 9,095,967 | |
| | |
WesBanco, Inc.(a) | | | 14,762 | | | | 554,904 | |
| | |
Westamerica Bancorp(a) | | | 242 | | | | 15,977 | |
| | |
Western Alliance Bancorp | | | 5,324 | | | | 262,633 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – (continued) | |
| | |
Wintrust Financial Corp. | | | 18,150 | | | $ | 1,158,333 | |
| | |
Zions Bancorp NA | | | 11,132 | | | | 539,568 | |
| | | | | | | | 116,776,946 | |
|
| Beverages – 1.2% | |
| | |
Boston Beer Co., Inc. (The), Class A* | | | 484 | | | | 181,239 | |
| | |
Brown-Forman Corp., Class B(a) | | | 9,680 | | | | 634,233 | |
| | |
Coca-Cola Co. (The) | | | 136,246 | | | | 7,415,870 | |
| | |
Coca-Cola Consolidated, Inc. | | | 726 | | | | 199,185 | |
| | |
Constellation Brands, Inc., Class A | | | 6,050 | | | | 1,151,496 | |
| | |
Keurig Dr Pepper, Inc.(a) | | | 7,260 | | | | 204,441 | |
| | |
MGP Ingredients, Inc.(a) | | | 726 | | | | 31,138 | |
| | |
Molson Coors Brewing Co., Class B | | | 5,808 | | | | 306,198 | |
| | |
Monster Beverage Corp.* | | | 14,762 | | | | 828,591 | |
| | |
National Beverage Corp.(a) | | | 1,210 | | | | 53,192 | |
| | |
New Age Beverages Corp.* (a) | | | 14,278 | | | | 38,408 | |
| | |
PepsiCo, Inc. | | | 51,304 | | | | 7,037,370 | |
| | |
Primo Water Corp.* (a) | | | 1,694 | | | | 20,489 | |
| | | | | | | | 18,101,850 | |
|
| Biotechnology – 2.7% | |
| | |
AbbVie, Inc. | | | 66,066 | | | | 5,255,550 | |
| | |
Abeona Therapeutics, Inc.* (a) | | | 8,954 | | | | 21,221 | |
| | |
ACADIA Pharmaceuticals, Inc.* (a) | | | 7,986 | | | | 338,686 | |
| | |
Acceleron Pharma, Inc.* (a) | | | 2,904 | | | | 130,303 | |
| | |
Achillion Pharmaceuticals, Inc.* | | | 44,528 | | | | 285,425 | |
| | |
Aduro Biotech, Inc.* | | | 5,082 | | | | 5,794 | |
| | |
Agenus, Inc.* | | | 2,904 | | | | 7,521 | |
| | |
Agios Pharmaceuticals, Inc.* | | | 4,598 | | | | 138,308 | |
| | |
Aimmune Therapeutics, Inc.* (a) | | | 2,904 | | | | 80,789 | |
| | |
Akcea Therapeutics, Inc.* | | | 1,694 | | | | 31,051 | |
| | |
Akebia Therapeutics, Inc.* (a) | | | 41,140 | | | | 153,452 | |
| | |
Albireo Pharma, Inc.* | | | 1,936 | | | | 35,564 | |
See Accompanying Notes to the Financial Statements.
| | |
| 130 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Biotechnology – (continued) | |
| | |
Alector, Inc.* (a) | | | 1,452 | | | $ | 24,452 | |
| | |
Alexion Pharmaceuticals, Inc.* | | | 8,228 | | | | 867,231 | |
| | |
Alkermes plc* | | | 3,872 | | | | 75,620 | |
| | |
Alnylam Pharmaceuticals, Inc.* | | | 3,872 | | | | 335,857 | |
| | |
AMAG Pharmaceuticals, Inc.* (a) | | | 4,114 | | | | 39,926 | |
| | |
Amgen, Inc. | | | 27,588 | | | | 5,883,141 | |
| | |
Amicus Therapeutics, Inc.* | | | 19,118 | | | | 161,165 | |
| | |
Anika Therapeutics, Inc.* (a) | | | 726 | | | | 51,103 | |
| | |
Arcus Biosciences, Inc.* | | | 242 | | | | 1,900 | |
| | |
Arena Pharmaceuticals, Inc.* | | | 15,488 | | | | 754,498 | |
| | |
ArQule, Inc.* | | | 7,986 | | | | 80,738 | |
| | |
Arrowhead Pharmaceuticals, Inc.* (a) | | | 5,566 | | | | 222,918 | |
| | |
Assembly Biosciences, Inc.* | | | 2,178 | | | | 35,959 | |
| | |
Atara Biotherapeutics, Inc.* | | | 6,534 | | | | 71,351 | |
| | |
Athenex, Inc.* (a) | | | 3,146 | | | | 34,732 | |
| | |
Audentes Therapeutics, Inc.* | | | 2,904 | | | | 78,118 | |
| | |
Biogen, Inc.* | | | 7,502 | | | | 2,240,922 | |
| | |
Biohaven Pharmaceutical Holding Co. Ltd.* (a) | | | 2,420 | | | | 111,126 | |
| | |
BioMarin Pharmaceutical, Inc.* | | | 6,534 | | | | 478,354 | |
| | |
Bluebird Bio, Inc.* | | | 2,420 | | | | 196,020 | |
| | |
Blueprint Medicines Corp.* (a) | | | 3,388 | | | | 233,230 | |
| | |
Calyxt, Inc.* (a) | | | 726 | | | | 3,325 | |
| | |
CareDx, Inc.* | | | 2,662 | | | | 69,771 | |
| | |
CASI Pharmaceuticals, Inc.* | | | 15,246 | | | | 50,007 | |
| | |
Catalyst Pharmaceuticals, Inc.* | | | 4,598 | | | | 21,749 | |
| | |
Celgene Corp.* | | | 32,912 | | | | 3,555,483 | |
| | |
Cellular Biomedicine Group, Inc.* | | | 484 | | | | 8,852 | |
| | |
Clovis Oncology, Inc.* (a) | | | 7,744 | | | | 24,549 | |
| | |
Coherus Biosciences, Inc.* | | | 9,438 | | | | 163,938 | |
| | |
Crinetics Pharmaceuticals, Inc.* (a) | | | 242 | | | | 4,262 | |
| | |
CRISPR Therapeutics AG* (a) | | | 2,178 | | | | 109,706 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Biotechnology – (continued) | |
| | |
Cytokinetics, Inc.* | | | 2,904 | | | $ | 33,832 | |
| | |
CytomX Therapeutics, Inc.* | | | 4,356 | | | | 26,702 | |
| | |
Dicerna Pharmaceuticals, Inc.* | | | 2,904 | | | | 47,887 | |
| | |
Dynavax Technologies Corp.* (a) | | | 7,986 | | | | 40,649 | |
| | |
Eagle Pharmaceuticals, Inc.* (a) | | | 484 | | | | 30,347 | |
| | |
Editas Medicine, Inc.* (a) | | | 3,630 | | | | 75,649 | |
| | |
Emergent BioSolutions, Inc.* | | | 2,904 | | | | 165,993 | |
| | |
Epizyme, Inc.* | | | 7,986 | | | | 91,919 | |
| | |
Esperion Therapeutics, Inc.* (a) | | | 4,356 | | | | 173,238 | |
| | |
Exact Sciences Corp.* | | | 4,114 | | | | 357,918 | |
| | |
Exelixis, Inc.* | | | 13,552 | | | | 209,378 | |
| | |
FibroGen, Inc.* (a) | | | 5,082 | | | | 198,960 | |
| | |
Five Prime Therapeutics, Inc.* | | | 7,744 | | | | 30,589 | |
| | |
Flexion Therapeutics, Inc.* (a) | | | 12,100 | | | | 207,757 | |
| | |
Genomic Health, Inc.* | | | 1,210 | | | | 80,683 | |
| | |
Geron Corp.* (a) | | | 242 | | | | 346 | |
| | |
Gilead Sciences, Inc. | | | 56,870 | | | | 3,623,188 | |
| | |
Global Blood Therapeutics, Inc.* (a) | | | 4,114 | | | | 197,266 | |
| | |
Halozyme Therapeutics, Inc.* | | | 9,438 | | | | 144,590 | |
| | |
Heron Therapeutics, Inc.* (a) | | | 1,210 | | | | 25,713 | |
| | |
ImmunoGen, Inc.* | | | 10,406 | | | | 24,766 | |
| | |
Immunomedics, Inc.* (a) | | | 12,100 | | | | 193,600 | |
| | |
Incyte Corp.* | | | 6,776 | | | | 568,642 | |
| | |
Insmed, Inc.* (a) | | | 5,566 | | | | 103,472 | |
| | |
Intellia Therapeutics, Inc.* (a) | | | 3,872 | | | | 48,342 | |
| | |
Intercept Pharmaceuticals, Inc.* (a) | | | 1,936 | | | | 140,902 | |
| | |
Invitae Corp.* (a) | | | 5,082 | | | | 81,871 | |
| | |
Ionis Pharmaceuticals, Inc.* | | | 5,082 | | | | 283,169 | |
| | |
Iovance Biotherapeutics, Inc.* (a) | | | 29,040 | | | | 613,615 | |
| | |
Ironwood Pharmaceuticals, Inc.* (a) | | | 10,890 | | | | 109,336 | |
| | |
Kadmon Holdings, Inc.* | | | 16,214 | | | | 46,858 | |
| | |
KalVista Pharmaceuticals, Inc.* | | | 1,210 | | | | 12,826 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 131 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Biotechnology – (continued) | |
| | |
Karyopharm Therapeutics, Inc.* (a) | | | 3,388 | | | $ | 39,640 | |
| | |
Kindred Biosciences, Inc.* (a) | | | 3,388 | | | | 27,680 | |
| | |
Kura Oncology, Inc.* | | | 2,178 | | | | 32,626 | |
| | |
Lexicon Pharmaceuticals, Inc.* (a) | | | 2,904 | | | | 10,774 | |
| | |
Ligand Pharmaceuticals, Inc.* (a) | | | 4,598 | | | | 500,308 | |
| | |
MacroGenics, Inc.* | | | 5,566 | | | | 47,311 | |
| | |
Madrigal Pharmaceuticals, Inc.* (a) | | | 1,210 | | | | 111,840 | |
| | |
MannKind Corp.* (a) | | | 8,712 | | | | 11,369 | |
| | |
Minerva Neurosciences, Inc.* | | | 2,420 | | | | 11,471 | |
| | |
Mirati Therapeutics, Inc.* | | | 726 | | | | 68,375 | |
| | |
Momenta Pharmaceuticals, Inc.* (a) | | | 8,228 | | | | 127,369 | |
| | |
Myriad Genetics, Inc.* | | | 5,082 | | | | 171,111 | |
| | |
Natera, Inc.* | | | 3,388 | | | | 130,506 | |
| | |
Neurocrine Biosciences, Inc.* | | | 3,872 | | | | 385,225 | |
| | |
OPKO Health, Inc.* (a) | | | 135,036 | | | | 191,751 | |
| | |
PDL BioPharma, Inc.* | | | 50,094 | | | | 141,265 | |
| | |
Portola Pharmaceuticals, Inc.* | | | 4,598 | | | | 132,928 | |
| | |
Precision BioSciences, Inc.* | | | 1,210 | | | | 7,853 | |
| | |
Progenics Pharmaceuticals, Inc.* (a) | | | 4,840 | | | | 25,700 | |
| | |
Prothena Corp. plc* | | | 4,598 | | | | 41,842 | |
| | |
PTC Therapeutics, Inc.* | | | 4,114 | | | | 168,221 | |
| | |
Puma Biotechnology, Inc.* | | | 3,388 | | | | 23,038 | |
| | |
Ra Pharmaceuticals, Inc.* | | | 1,936 | | | | 91,128 | |
| | |
Radius Health, Inc.* | | | 5,808 | | | | 165,180 | |
| | |
Regeneron Pharmaceuticals, Inc.* | | | 2,904 | | | | 889,437 | |
| | |
REGENXBIO, Inc.* | | | 2,662 | | | | 95,007 | |
| | |
Repligen Corp.* | | | 2,662 | | | | 211,602 | |
| | |
Retrophin, Inc.* | | | 5,808 | | | | 69,696 | |
| | |
Rigel Pharmaceuticals, Inc.* | | | 24,442 | | | | 50,106 | |
| | |
Sage Therapeutics, Inc.* | | | 2,178 | | | | 295,446 | |
| | |
Sangamo Therapeutics, Inc.* (a) | | | 12,584 | | | | 113,885 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Biotechnology – (continued) | |
| | |
Sarepta Therapeutics, Inc.* (a) | | | 3,630 | | | $ | 301,508 | |
| | |
Seattle Genetics, Inc.* (a) | | | 4,114 | | | | 441,844 | |
| | |
Sorrento Therapeutics, Inc.* (a) | | | 31,460 | | | | 47,819 | |
| | |
Spark Therapeutics, Inc.* | | | 1,452 | | | | 158,515 | |
| | |
Spectrum Pharmaceuticals, Inc.* (a) | | | 9,922 | | | | 76,995 | |
| | |
Stemline Therapeutics, Inc.* (a) | | | 4,114 | | | | 41,140 | |
| | |
Syros Pharmaceuticals, Inc.* (a) | | | 1,936 | | | | 10,019 | |
| | |
TG Therapeutics, Inc.* (a) | | | 3,388 | | | | 23,140 | |
| | |
Ultragenyx Pharmaceutical, Inc.* (a) | | | 4,356 | | | | 174,850 | |
| | |
United Therapeutics Corp.* | | | 13,794 | | | | 1,239,253 | |
| | |
Vanda Pharmaceuticals, Inc.* | | | 4,598 | | | | 62,119 | |
| | |
Vertex Pharmaceuticals, Inc.* | | | 9,196 | | | | 1,797,634 | |
| | |
Viking Therapeutics, Inc.* (a) | | | 24,442 | | | | 158,140 | |
| | |
Voyager Therapeutics, Inc.* | | | 4,114 | | | | 63,314 | |
| | |
XBiotech, Inc.* | | | 726 | | | | 7,892 | |
| | |
Xencor, Inc.* (a) | | | 2,904 | | | | 99,346 | |
| | |
Y-mAbs Therapeutics, Inc.* | | | 242 | | | | 7,538 | |
| | |
ZIOPHARM Oncology, Inc.* (a) | | | 15,972 | | | | 67,402 | |
| | | | | | | | 39,631,828 | |
|
| Building Products – 0.7% | |
| | |
AAON, Inc.(a) | | | 4,840 | | | | 235,514 | |
| | |
Advanced Drainage Systems, Inc. | | | 1,452 | | | | 53,753 | |
| | |
Allegion plc | | | 1,936 | | | | 224,653 | |
| | |
American Woodmark Corp.* | | | 6,534 | | | | 647,911 | |
| | |
AO Smith Corp. | | | 6,050 | | | | 300,564 | |
| | |
Apogee Enterprises, Inc. | | | 4,840 | | | | 181,694 | |
| | |
Armstrong World Industries, Inc. | | | 1,694 | | | | 158,440 | |
| | |
Builders FirstSource, Inc.* | | | 34,122 | | | | 771,498 | |
| | |
Continental Building Products, Inc.* | | | 1,452 | | | | 43,429 | |
| | |
Cornerstone Building Brands, Inc.* (a) | | | 15,488 | | | | 96,800 | |
See Accompanying Notes to the Financial Statements.
| | |
| 132 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Building Products – (continued) | |
| | |
Fortune Brands Home & Security, Inc. | | | 7,502 | | | $ | 450,495 | |
| | |
Gibraltar Industries, Inc.* | | | 1,936 | | | | 103,053 | |
| | |
Griffon Corp.(a) | | | 9,438 | | | | 201,124 | |
| | |
Insteel Industries, Inc. | | | 484 | | | | 9,230 | |
| | |
JELD-WEN Holding, Inc.* | | | 13,794 | | | | 235,740 | |
| | |
Johnson Controls International plc | | | 34,606 | | | | 1,499,478 | |
| | |
Lennox International, Inc. | | | 1,694 | | | | 419,028 | |
| | |
Masco Corp. | | | 14,036 | | | | 649,165 | |
| | |
Masonite International Corp.* | | | 6,534 | | | | 401,253 | |
| | |
Owens Corning | | | 4,356 | | | | 266,936 | |
| | |
Patrick Industries, Inc.* | | | 8,954 | | | | 442,417 | |
| | |
PGT Innovations, Inc.* | | | 17,182 | | | | 303,434 | |
| | |
Quanex Building Products Corp. | | | 10,164 | | | | 196,064 | |
| | |
Resideo Technologies, Inc.* | | | 43,076 | | | | 410,514 | |
| | |
Simpson Manufacturing Co., Inc. | | | 1,936 | | | | 159,991 | |
| | |
Trex Co., Inc.* (a) | | | 5,566 | | | | 489,196 | |
| | |
Universal Forest Products, Inc. | | | 18,150 | | | | 914,034 | |
| | | | | | | | 9,865,408 | |
|
| Capital Markets – 2.6% | |
| | |
Affiliated Managers Group, Inc. | | | 2,420 | | | | 193,310 | |
| | |
Ameriprise Financial, Inc. | | | 6,776 | | | | 1,022,431 | |
| | |
Ares Management Corp. | | | 1,694 | | | | 50,092 | |
| | |
Artisan Partners Asset Management, Inc., Class A | | | 13,794 | | | | 377,266 | |
| | |
Ashford, Inc.* | | | 103 | | | | 2,458 | |
| | |
Bank of New York Mellon Corp. (The) | | | 38,236 | | | | 1,787,533 | |
| | |
BGC Partners, Inc., Class A | | | 81,796 | | | | 425,339 | |
| | |
BlackRock, Inc. | | | 4,598 | | | | 2,122,897 | |
| | |
Blucora, Inc.* | | | 7,744 | | | | 167,503 | |
| | |
Brightsphere Investment Group, Inc. | | | 20,328 | | | | 199,621 | |
| | |
Charles Schwab Corp. (The) | | | 40,656 | | | | 1,655,106 | |
| | |
CME Group, Inc. | | | 12,584 | | | | 2,589,158 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Capital Markets – (continued) | |
| | |
Cohen & Steers, Inc.(a) | | | 968 | | | $ | 63,346 | |
| | |
Cowen, Inc., Class A* (a) | | | 13,794 | | | | 206,496 | |
| | |
E*TRADE Financial Corp. | | | 11,858 | | | | 495,546 | |
| | |
Eaton Vance Corp. | | | 10,648 | | | | 485,549 | |
| | |
Evercore, Inc., Class A | | | 1,694 | | | | 124,746 | |
| | |
FactSet Research Systems, Inc.(a) | | | 968 | | | | 245,407 | |
| | |
Federated Investors, Inc., Class B | | | 28,072 | | | | 896,620 | |
| | |
Franklin Resources, Inc.(a) | | | 10,890 | | | | 300,019 | |
| | |
Goldman Sachs Group, Inc. (The) | | | 15,004 | | | | 3,201,554 | |
| | |
Greenhill & Co., Inc.(a) | | | 2,178 | | | | 35,284 | |
| | |
Hamilton Lane, Inc., Class A | | | 242 | | | | 14,428 | |
| | |
Houlihan Lokey, Inc. | | | 2,420 | | | | 114,369 | |
| | |
Intercontinental Exchange, Inc. | | | 18,634 | | | | 1,757,604 | |
| | |
INTL. FCStone, Inc.* | | | 7,018 | | | | 280,720 | |
| | |
Invesco Ltd. | | | 24,684 | | | | 415,185 | |
| | |
Janus Henderson Group plc(a) | | | 51,304 | | | | 1,186,661 | |
| | |
KKR & Co., Inc., Class A | | | 23,958 | | | | 690,709 | |
| | |
Legg Mason, Inc. | | | 26,378 | | | | 982,844 | |
| | |
LPL Financial Holdings, Inc. | | | 4,598 | | | | 371,702 | |
| | |
MarketAxess Holdings, Inc. | | | 1,694 | | | | 624,391 | |
| | |
Moelis & Co., Class A | | | 3,146 | | | | 112,249 | |
| | |
Moody’s Corp. | | | 6,534 | | | | 1,441,988 | |
| | |
Morgan Stanley | | | 58,322 | | | | 2,685,728 | |
| | |
Morningstar, Inc. | | | 242 | | | | 39,165 | |
| | |
MSCI, Inc. | | | 2,662 | | | | 624,399 | |
| | |
Nasdaq, Inc. | | | 2,904 | | | | 289,732 | |
| | |
Northern Trust Corp.(a) (b) | | | 7,986 | | | | 796,044 | |
| | |
Oppenheimer Holdings, Inc., Class A | | | 1,210 | | | | 32,912 | |
| | |
Piper Jaffray Cos. | | | 5,566 | | | | 437,154 | |
| | |
PJT Partners, Inc., Class A | | | 968 | | | | 40,201 | |
| | |
Raymond James Financial, Inc. | | | 7,018 | | | | 585,933 | |
| | |
S&P Global, Inc. | | | 8,954 | | | | 2,310,042 | |
| | |
SEI Investments Co. | | | 7,018 | | | | 420,519 | |
| | |
State Street Corp. | | | 17,182 | | | | 1,135,215 | |
| | |
Stifel Financial Corp. | | | 21,054 | | | | 1,178,604 | |
| | |
T. Rowe Price Group, Inc. | | | 7,986 | | | | 924,779 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 133 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Capital Markets – (continued) | |
| | |
TD Ameritrade Holding Corp. | | | 8,954 | | | $ | 343,654 | |
| | |
Virtu Financial, Inc., Class A(a) | | | 22,022 | | | | 373,493 | |
| | |
Virtus Investment Partners, Inc. | | | 2,904 | | | | 315,026 | |
| | |
Waddell & Reed Financial, Inc., Class A(a) | | | 22,264 | | | | 368,692 | |
| | |
WisdomTree Investments, Inc. | | | 10,164 | | | | 51,938 | |
| | | | | | | | 37,593,361 | |
|
| Chemicals – 1.8% | |
| | |
AdvanSix, Inc.* (a) | | | 8,712 | | | | 198,285 | |
| | |
Air Products & Chemicals, Inc. | | | 7,260 | | | | 1,548,268 | |
| | |
Albemarle Corp.(a) | | | 3,630 | | | | 220,486 | |
| | |
American Vanguard Corp. | | | 242 | | | | 3,383 | |
| | |
Amyris, Inc.* (a) | | | 3,388 | | | | 11,231 | |
| | |
Ashland Global Holdings, Inc. | | | 2,178 | | | | 168,512 | |
| | |
Axalta Coating Systems Ltd.* | | | 6,292 | | | | 185,551 | |
| | |
Balchem Corp. | | | 1,936 | | | | 195,943 | |
| | |
Cabot Corp.(a) | | | 18,150 | | | | 791,158 | |
| | |
Celanese Corp. | | | 5,324 | | | | 645,003 | |
| | |
CF Industries Holdings, Inc. | | | 7,744 | | | | 351,190 | |
| | |
Chemours Co. (The)(a) | | | 10,648 | | | | 174,734 | |
| | |
Dow, Inc. | | | 30,250 | | | | 1,527,322 | |
| | |
DuPont de Nemours, Inc. | | | 27,588 | | | | 1,818,325 | |
| | |
Eastman Chemical Co. | | | 5,808 | | | | 441,640 | |
| | |
Ecolab, Inc. | | | 8,228 | | | | 1,580,352 | |
| | |
Element Solutions, Inc.* (a) | | | 21,780 | | | | 236,531 | |
| | |
Ferro Corp.* | | | 14,278 | | | | 158,914 | |
| | |
FMC Corp. | | | 6,292 | | | | 575,718 | |
| | |
FutureFuel Corp. | | | 968 | | | | 11,935 | |
| | |
Hawkins, Inc. | | | 2,178 | | | | 93,109 | |
| | |
HB Fuller Co. | | | 3,146 | | | | 153,525 | |
| | |
Huntsman Corp. | | | 15,488 | | | | 342,749 | |
| | |
Ingevity Corp.* | | | 1,936 | | | | 163,031 | |
| | |
Innophos Holdings, Inc. | | | 5,566 | | | | 181,563 | |
| | |
Innospec, Inc. | | | 3,146 | | | | 287,419 | |
| | |
International Flavors & Fragrances, Inc.(a) | | | 3,872 | | | | 472,423 | |
| | |
Intrepid Potash, Inc.* | | | 18,392 | | | | 56,831 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Chemicals – (continued) | |
| | |
Koppers Holdings, Inc.* | | | 6,292 | | | $ | 201,973 | |
| | |
Kraton Corp.* (a) | | | 10,406 | | | | 233,303 | |
| | |
Kronos Worldwide, Inc. | | | 10,164 | | | | 128,880 | |
| | |
Linde plc | | | 19,602 | | | | 3,888,057 | |
| | |
Livent Corp.* | | | 8,470 | | | | 58,104 | |
| | |
LyondellBasell Industries NV, Class A | | | 12,584 | | | | 1,128,785 | |
| | |
Minerals Technologies, Inc. | | | 10,164 | | | | 502,610 | |
| | |
Mosaic Co. (The) | | | 9,196 | | | | 182,816 | |
| | |
NewMarket Corp. | | | 484 | | | | 234,977 | |
| | |
Olin Corp.(a) | | | 44,044 | | | | 807,767 | |
| | |
OMNOVA Solutions, Inc.* | | | 17,666 | | | | 178,603 | |
| | |
PolyOne Corp. | | | 24,684 | | | | 791,122 | |
| | |
PPG Industries, Inc. | | | 8,228 | | | | 1,029,487 | |
| | |
PQ Group Holdings, Inc.* | | | 9,680 | | | | 159,430 | |
| | |
Quaker Chemical Corp.(a) | | | 1,694 | | | | 258,979 | |
| | |
Rayonier Advanced Materials, Inc. | | | 19,602 | | | | 81,740 | |
| | |
RPM International, Inc. | | | 3,388 | | | | 245,393 | |
| | |
ScottsMiracle-Gro Co. (The) | | | 2,420 | | | | 242,944 | |
| | |
Sensient Technologies Corp. | | | 2,662 | | | | 166,535 | |
| | |
Sherwin-Williams Co. (The) | | | 2,904 | | | | 1,662,017 | |
| | |
Stepan Co. | | | 2,904 | | | | 283,779 | |
| | |
Tredegar Corp. | | | 4,840 | | | | 96,219 | |
| | |
Trinseo SA | | | 13,068 | | | | 555,390 | |
| | |
Tronox Holdings plc, Class A(a) | | | 30,008 | | | | 254,768 | |
| | |
Valvoline, Inc.(a) | | | 13,068 | | | | 278,871 | |
| | |
Venator Materials plc* | | | 242 | | | | 598 | |
| | |
Westlake Chemical Corp. | | | 3,630 | | | | 229,380 | |
| | |
WR Grace & Co. | | | 1,694 | | | | 112,566 | |
| | | | | | | | 26,590,224 | |
|
| Commercial Services & Supplies – 0.9% | |
| | |
ABM Industries, Inc. | | | 19,602 | | | | 714,689 | |
| | |
ACCO Brands Corp. | | | 35,332 | | | | 323,288 | |
| | |
ADT, Inc.(a) | | | 242 | | | | 1,873 | |
| | |
Advanced Disposal Services, Inc.* | | | 3,146 | | | | 103,126 | |
| | |
Brady Corp., Class A | | | 5,808 | | | | 327,223 | |
| | |
BrightView Holdings, Inc.* | | | 13,552 | | | | 241,226 | |
| | |
Brink’s Co. (The) | | | 5,082 | | | | 431,767 | |
| | |
Casella Waste Systems, Inc., Class A* | | | 1,210 | | | | 52,744 | |
See Accompanying Notes to the Financial Statements.
| | |
| 134 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Commercial Services & Supplies – (continued) | |
| | |
Cimpress NV* | | | 2,178 | | | $ | 287,757 | |
| | |
Cintas Corp.(a) | | | 2,662 | | | | 715,200 | |
| | |
Clean Harbors, Inc.* | | | 2,420 | | | | 199,553 | |
| | |
Copart, Inc.* | | | 6,292 | | | | 519,971 | |
| | |
Covanta Holding Corp. | | | 15,488 | | | | 223,647 | |
| | |
Deluxe Corp.(a) | | | 15,730 | | | | 815,286 | |
| | |
Ennis, Inc. | | | 6,534 | | | | 128,001 | |
| | |
Healthcare Services Group, Inc.(a) | | | 2,662 | | | | 64,846 | |
| | |
Herman Miller, Inc. | | | 17,424 | | | | 810,216 | |
| | |
HNI Corp. | | | 9,438 | | | | 358,644 | |
| | |
IAA, Inc.* | | | 4,114 | | | | 156,949 | |
| | |
Interface, Inc. | | | 7,502 | | | | 124,758 | |
| | |
KAR Auction Services, Inc.(a) | | | 7,018 | | | | 174,467 | |
| | |
Kimball International, Inc., Class B | | | 6,292 | | | | 128,105 | |
| | |
Knoll, Inc. | | | 11,858 | | | | 317,083 | |
| | |
Matthews International Corp., Class A(a) | | | 10,164 | | | | 375,865 | |
| | |
McGrath RentCorp | | | 726 | | | | 55,401 | |
| | |
Mobile Mini, Inc. | | | 1,936 | | | | 72,832 | |
| | |
MSA Safety, Inc.(a) | | | 1,694 | | | | 203,399 | |
| | |
Pitney Bowes, Inc.(a) | | | 57,354 | | | | 252,358 | |
| | |
Quad/Graphics, Inc.(a) | | | 14,278 | | | | 64,679 | |
| | |
Republic Services, Inc. | | | 8,712 | | | | 762,387 | |
| | |
Rollins, Inc.(a) | | | 4,356 | | | | 166,007 | |
| | |
RR Donnelley & Sons Co. | | | 20,086 | | | | 87,575 | |
| | |
SP Plus Corp.* | | | 4,598 | | | | 203,094 | |
| | |
Steelcase, Inc., Class A | | | 25,410 | | | | 443,913 | |
| | |
Stericycle, Inc.* (a) | | | 8,712 | | | | 501,811 | |
| | |
Team, Inc.* | | | 1,936 | | | | 35,158 | |
| | |
Tetra Tech, Inc.(a) | | | 5,324 | | | | 465,690 | |
| | |
UniFirst Corp. | | | 1,452 | | | | 291,620 | |
| | |
US Ecology, Inc.(a) | | | 1,936 | | | | 120,477 | |
| | |
Viad Corp. | | | 1,452 | | | | 88,601 | |
| | |
VSE Corp. | | | 2,420 | | | | 92,976 | |
| | |
Waste Management, Inc. | | | 12,826 | | | | 1,439,205 | |
| | | | | | | | 12,943,467 | |
|
| Communications Equipment – 0.9% | |
| | |
Acacia Communications, Inc.* | | | 1,694 | | | | 111,228 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Communications Equipment – (continued) | |
| | |
ADTRAN, Inc. | | | 4,356 | | | $ | 38,376 | |
| | |
Arista Networks, Inc.* (a) | | | 1,694 | | | | 414,302 | |
| | |
CalAmp Corp.* | | | 2,420 | | | | 27,152 | |
| | |
Calix, Inc.* | | | 242 | | | | 1,851 | |
| | |
Casa Systems, Inc.* | | | 2,420 | | | | 16,262 | |
| | |
Ciena Corp.* | | | 8,228 | | | | 305,423 | |
| | |
Cisco Systems, Inc. | | | 155,848 | | | | 7,404,339 | |
| | |
CommScope Holding Co., Inc.* (a) | | | 49,368 | | | | 552,922 | |
| | |
Comtech Telecommunications Corp. | | | 726 | | | | 25,374 | |
| | |
EchoStar Corp., Class A* (a) | | | 4,114 | | | | 160,446 | |
| | |
Extreme Networks, Inc.* | | | 6,292 | | | | 40,521 | |
| | |
F5 Networks, Inc.* | | | 1,210 | | | | 174,337 | |
| | |
Harmonic, Inc.* | | | 27,104 | | | | 210,869 | |
| | |
Infinera Corp.* (a) | | | 46,948 | | | | 262,439 | |
| | |
InterDigital, Inc. | | | 2,662 | | | | 142,763 | |
| | |
Juniper Networks, Inc. | | | 9,438 | | | | 234,251 | |
| | |
Lumentum Holdings, Inc.* (a) | | | 4,840 | | | | 303,274 | |
| | |
Motorola Solutions, Inc. | | | 5,082 | | | | 845,238 | |
| | |
NETGEAR, Inc.* | | | 9,680 | | | | 263,006 | |
| | |
Plantronics, Inc.(a) | | | 6,292 | | | | 248,031 | |
| | |
Ribbon Communications, Inc.* | | | 14,520 | | | | 62,291 | |
| | |
Ubiquiti, Inc.(a) | | | 968 | | | | 122,539 | |
| | |
ViaSat, Inc.* | | | 3,146 | | | | 216,571 | |
| | |
Viavi Solutions, Inc.* (a) | | | 25,168 | | | | 401,681 | |
| | | | | | | | 12,585,486 | |
|
| Construction & Engineering – 0.3% | |
| | |
AECOM* | | | 6,534 | | | | 261,425 | |
| | |
Aegion Corp.* | | | 1,210 | | | | 26,221 | |
| | |
Argan, Inc.(a) | | | 1,694 | | | | 64,118 | |
| | |
Comfort Systems USA, Inc. | | | 3,630 | | | | 182,988 | |
| | |
Dycom Industries, Inc.* | | | 2,178 | | | | 99,295 | |
| | |
EMCOR Group, Inc. | | | 3,630 | | | | 318,387 | |
| | |
Fluor Corp. | | | 7,018 | | | | 113,060 | |
| | |
Granite Construction, Inc.(a) | | | 14,520 | | | | 341,801 | |
| | |
Jacobs Engineering Group, Inc. | | | 4,598 | | | | 430,281 | |
| | |
MasTec, Inc.* | | | 19,844 | | | | 1,248,981 | |
| | |
MYR Group, Inc.* | | | 1,936 | | | | 66,618 | |
| | |
NV5 Global, Inc.* (a) | | | 242 | | | | 17,528 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 135 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Construction & Engineering – (continued) | |
| | |
Primoris Services Corp. | | | 2,178 | | | $ | 44,518 | |
| | |
Quanta Services, Inc. | | | 6,534 | | | | 274,755 | |
| | |
Sterling Construction Co., Inc.* | | | 7,018 | | | | 114,008 | |
| | |
Tutor Perini Corp.* (a) | | | 14,520 | | | | 224,624 | |
| | |
Valmont Industries, Inc. | | | 1,452 | | | | 199,200 | |
| | |
WillScot Corp.* (a) | | | 12,100 | | | | 190,696 | |
| | | | | | | | 4,218,504 | |
|
| Construction Materials – 0.2% | |
| | |
Eagle Materials, Inc. | | | 4,356 | | | | 397,877 | |
| | |
Forterra, Inc.* (a) | | | 13,794 | | | | 113,249 | |
| | |
Martin Marietta Materials, Inc. | | | 1,936 | | | | 507,058 | |
| | |
Summit Materials, Inc., Class A* | | | 41,624 | | | | 954,438 | |
| | |
US Concrete, Inc.* | | | 1,936 | | | | 101,176 | |
| | |
Vulcan Materials Co. | | | 5,082 | | | | 726,065 | |
| | | | | | | | 2,799,863 | |
|
| Consumer Finance – 0.9% | |
| | |
Ally Financial, Inc. | | | 20,812 | | | | 637,472 | |
| | |
American Express Co. | | | 23,716 | | | | 2,781,412 | |
| | |
Capital One Financial Corp. | | | 20,328 | | | | 1,895,586 | |
| | |
Credit Acceptance Corp.* (a) | | | 726 | | | | 317,850 | |
| | |
Curo Group Holdings Corp.* (a) | | | 4,840 | | | | 67,712 | |
| | |
Discover Financial Services | | | 15,972 | | | | 1,281,913 | |
| | |
Encore Capital Group, Inc.* (a) | | | 8,712 | | | | 289,151 | |
| | |
Enova International, Inc.* | | | 10,648 | | | | 250,121 | |
| | |
EZCORP, Inc., Class A* (a) | | | 16,456 | | | | 86,558 | |
| | |
FirstCash, Inc. | | | 4,356 | | | | 367,603 | |
| | |
Green Dot Corp., Class A* | | | 4,114 | | | | 118,648 | |
| | |
LendingClub Corp.* (a) | | | 6,292 | | | | 79,531 | |
| | |
Navient Corp. | | | 53,240 | | | | 733,115 | |
| | |
Nelnet, Inc., Class A | | | 7,744 | | | | 474,475 | |
| | |
OneMain Holdings, Inc. | | | 23,474 | | | | 938,960 | |
| | |
PRA Group, Inc.* | | | 1,936 | | | | 65,688 | |
| | |
Regional Management Corp.* | | | 3,630 | | | | 105,016 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Consumer Finance – (continued) | |
| | |
Santander Consumer USA Holdings, Inc. | | | 9,922 | | | $ | 248,844 | |
| | |
SLM Corp. | | | 124,388 | | | | 1,049,835 | |
| | |
Synchrony Financial | | | 22,990 | | | | 813,156 | |
| | |
World Acceptance Corp.* | | | 1,210 | | | | 125,610 | |
| | | | | | | | 12,728,256 | |
|
| Containers & Packaging – 0.5% | |
| | |
Amcor plc(a) | �� | | 94,380 | | | | 898,498 | |
| | |
AptarGroup, Inc.(a) | | | 1,210 | | | | 142,961 | |
| | |
Avery Dennison Corp. | | | 2,420 | | | | 309,421 | |
| | |
Ball Corp. | | | 10,890 | | | | 761,973 | |
| | |
Berry Global Group, Inc.* | | | 7,018 | | | | 291,317 | |
| | |
Crown Holdings, Inc.* | | | 4,840 | | | | 352,546 | |
| | |
Graphic Packaging Holding Co. | | | 16,940 | | | | 265,280 | |
| | |
Greif, Inc., Class A | | | 8,470 | | | | 331,770 | |
| | |
International Paper Co. | | | 15,488 | | | | 676,516 | |
| | |
Myers Industries, Inc. | | | 484 | | | | 8,194 | |
| | |
Owens-Illinois, Inc. | | | 51,788 | | | | 440,198 | |
| | |
Packaging Corp. of America | | | 5,566 | | | | 609,254 | |
| | |
Sealed Air Corp. | | | 7,744 | | | | 323,467 | |
| | |
Silgan Holdings, Inc. | | | 28,314 | | | | 871,222 | |
| | |
Sonoco Products Co. | | | 2,178 | | | | 125,671 | |
| | |
Westrock Co. | | | 12,100 | | | | 452,177 | |
| | | | | | | | 6,860,465 | |
|
| Distributors – 0.1% | |
| | |
Core-Mark Holding Co., Inc. | | | 4,356 | | | | 132,945 | |
| | |
Genuine Parts Co.(a) | | | 3,872 | | | | 397,190 | |
| | |
LKQ Corp.* | | | 18,150 | | | | 616,919 | |
| | |
Pool Corp. | | | 2,178 | | | | 451,717 | |
| | | | | | | | 1,598,771 | |
|
| Diversified Consumer Services – 0.3% | |
| | |
Adtalem Global Education, Inc.* | | | 6,776 | | | | 201,789 | |
| | |
American Public Education, Inc.* | | | 484 | | | | 10,513 | |
| | |
Bright Horizons Family Solutions, Inc.* | | | 2,904 | | | | 431,302 | |
| | |
Career Education Corp.* | | | 11,616 | | | | 164,483 | |
| | |
Chegg, Inc.* (a) | | | 6,534 | | | | 200,333 | |
| | |
frontdoor, Inc.* | | | 4,598 | | | | 221,762 | |
See Accompanying Notes to the Financial Statements.
| | |
| 136 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Diversified Consumer Services – (continued) | |
| | |
Graham Holdings Co., Class B | | | 1,210 | | | $ | 761,889 | |
| | |
Grand Canyon Education, Inc.* (a) | | | 2,904 | | | | 267,052 | |
| | |
H&R Block, Inc.(a) | | | 7,260 | | | | 181,427 | |
| | |
Houghton Mifflin Harcourt Co.* | | | 7,744 | | | | 50,026 | |
| | |
Laureate Education, Inc., Class A* | | | 13,310 | | | | 205,706 | |
| | |
Service Corp. International(a) | | | 9,438 | | | | 429,240 | |
| | |
ServiceMaster Global Holdings, Inc.* | | | 3,872 | | | | 156,351 | |
| | |
Strategic Education, Inc. | | | 2,178 | | | | 267,959 | |
| | |
WW International, Inc.* | | | 7,260 | | | | 253,156 | |
| | | | | | | | 3,802,988 | |
|
| Diversified Financial Services – 1.4% | |
| | |
AXA Equitable Holdings, Inc. | | | 13,794 | | | | 297,951 | |
| | |
Berkshire Hathaway, Inc., Class B* | | | 87,120 | | | | 18,519,970 | |
| | |
Cannae Holdings, Inc.* | | | 9,196 | | | | 268,523 | |
| | |
FGL Holdings | | | 23,474 | | | | 211,970 | |
| | |
Jefferies Financial Group, Inc. | | | 15,730 | | | | 293,679 | |
| | |
On Deck Capital, Inc.* | | | 242 | | | | 1,079 | |
| | |
Voya Financial, Inc. | | | 8,954 | | | | 483,158 | |
| | | | | | | | 20,076,330 | |
|
| Diversified Telecommunication Services – 1.8% | |
| | |
AT&T, Inc. | | | 323,796 | | | | 12,462,908 | |
| | |
ATN International, Inc. | | | 1,452 | | | | 86,002 | |
| | |
Bandwidth, Inc., Class A* | | | 484 | | | | 27,177 | |
| | |
CenturyLink, Inc. | | | 45,980 | | | | 594,981 | |
| | |
Cincinnati Bell, Inc.* (a) | | | 17,424 | | | | 89,037 | |
| | |
Cogent Communications Holdings, Inc. | | | 3,630 | | | | 212,863 | |
| | |
Consolidated Communications Holdings, Inc.(a) | | | 26,378 | | | | 105,512 | |
| | |
Frontier Communications Corp.* (a) | | | 46,948 | | | | 42,723 | |
| | |
GCI Liberty, Inc., Class A* | | | 6,534 | | | | 457,249 | |
| | |
Globalstar, Inc.* (a) | | | 242 | | | | 92 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Diversified Telecommunication Services – (continued) | |
| | |
Iridium Communications, Inc.* (a) | | | 12,342 | | | $ | 302,009 | |
| | |
ORBCOMM, Inc.* | | | 1,936 | | | | 7,763 | |
| | |
Pareteum Corp.* | | | 10,406 | | | | 3,850 | |
| | |
Verizon Communications, Inc. | | | 186,582 | | | | 11,282,614 | |
| | |
Vonage Holdings Corp.* | | | 26,620 | | | | 260,077 | |
| | |
Zayo Group Holdings, Inc.* | | | 8,712 | | | | 297,428 | |
| | | | | | | | 26,232,285 | |
|
| Electric Utilities – 1.7% | |
| | |
ALLETE, Inc. | | | 5,082 | | | | 437,357 | |
| | |
Alliant Energy Corp. | | | 5,808 | | | | 309,799 | |
| | |
American Electric Power Co., Inc. | | | 20,570 | | | | 1,941,602 | |
| | |
Duke Energy Corp. | | | 32,912 | | | | 3,102,285 | |
| | |
Edison International | | | 15,488 | | | | 974,195 | |
| | |
El Paso Electric Co. | | | 4,840 | | | | 322,876 | |
| | |
Entergy Corp. | | | 9,922 | | | | 1,205,325 | |
| | |
Evergy, Inc. | | | 10,648 | | | | 680,514 | |
| | |
Eversource Energy | | | 12,342 | | | | 1,033,519 | |
| | |
Exelon Corp. | | | 45,254 | | | | 2,058,604 | |
| | |
FirstEnergy Corp. | | | 21,296 | | | | 1,029,023 | |
| | |
Hawaiian Electric Industries, Inc. | | | 10,164 | | | | 458,905 | |
| | |
IDACORP, Inc. | | | 3,146 | | | | 338,572 | |
| | |
MGE Energy, Inc. | | | 2,662 | | | | 205,080 | |
| | |
NextEra Energy, Inc. | | | 16,940 | | | | 4,037,480 | |
| | |
OGE Energy Corp. | | | 5,808 | | | | 250,092 | |
| | |
Otter Tail Corp. | | | 1,694 | | | | 96,016 | |
| | |
Pinnacle West Capital Corp. | | | 3,630 | | | | 341,656 | |
| | |
PNM Resources, Inc. | | | 7,986 | | | | 416,470 | |
| | |
Portland General Electric Co. | | | 8,470 | | | | 481,774 | |
| | |
PPL Corp. | | | 29,766 | | | | 996,863 | |
| | |
Southern Co. (The) | | | 44,286 | | | | 2,774,961 | |
| | |
Xcel Energy, Inc. | | | 25,168 | | | | 1,598,420 | |
| | | | | | | | 25,091,388 | |
|
| Electrical Equipment – 0.6% | |
| | |
Acuity Brands, Inc. | | | 1,452 | | | | 181,195 | |
| | |
AMETEK, Inc. | | | 6,534 | | | | 598,841 | |
| | |
Atkore International Group, Inc.* | | | 12,826 | | | | 445,062 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 137 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Electrical Equipment – (continued) | |
| | |
AZZ, Inc. | | | 1,210 | | | $ | 46,936 | |
| | |
Bloom Energy Corp., Class A* (a) | | | 8,228 | | | | 25,178 | |
| | |
Eaton Corp. plc | | | 20,086 | | | | 1,749,691 | |
| | |
Emerson Electric Co. | | | 20,086 | | | | 1,409,033 | |
| | |
Encore Wire Corp. | | | 1,452 | | | | 81,602 | |
| | |
EnerSys | | | 2,662 | | | | 177,981 | |
| | |
Generac Holdings, Inc.* (a) | | | 5,808 | | | | 560,937 | |
| | |
GrafTech International Ltd.(a) | | | 21,296 | | | | 257,256 | |
| | |
Hubbell, Inc. | | | 2,178 | | | | 308,623 | |
| | |
nVent Electric plc | | | 11,858 | | | | 273,446 | |
| | |
Plug Power, Inc.* (a) | | | 13,068 | | | | 34,630 | |
| | |
Regal Beloit Corp. | | | 12,826 | | | | 949,765 | |
| | |
Rockwell Automation, Inc. | | | 4,114 | | | | 707,567 | |
| | |
Sensata Technologies Holding plc* | | | 6,534 | | | | 334,475 | |
| | |
Sunrun, Inc.* (a) | | | 13,310 | | | | 206,837 | |
| | |
TPI Composites, Inc.* (a) | | | 1,936 | | | | 39,746 | |
| | |
Vicor Corp.* (a) | | | 968 | | | | 35,187 | |
| | |
Vivint Solar, Inc.* (a) | | | 968 | | | | 6,786 | |
| | | | | | | | 8,430,774 | |
|
| Electronic Equipment, Instruments & Components – 1.4% | |
| | |
Amphenol Corp., Class A | | | 9,680 | | | | 971,194 | |
| | |
Anixter International, Inc.* | | | 8,712 | | | | 720,918 | |
| | |
Arlo Technologies, Inc.* | | | 242 | | | | 825 | |
| | |
Arrow Electronics, Inc.* | | | 3,146 | | | | 249,415 | |
| | |
Avnet, Inc.(a) | | | 2,420 | | | | 95,735 | |
| | |
AVX Corp.(a) | | | 11,858 | | | | 181,665 | |
| | |
Badger Meter, Inc. | | | 2,904 | | | | 167,851 | |
| | |
Belden, Inc. | | | 9,438 | | | | 483,981 | |
| | |
Benchmark Electronics, Inc. | | | 7,502 | | | | 254,318 | |
| | |
CDW Corp. | | | 4,356 | | | | 557,176 | |
| | |
Cognex Corp. | | | 8,954 | | | | 461,041 | |
| | |
Coherent, Inc.* (a) | | | 1,694 | | | | 252,270 | |
| | |
Corning, Inc. | | | 39,446 | | | | 1,168,785 | |
| | |
CTS Corp. | | | 6,050 | | | | 161,414 | |
| | |
Daktronics, Inc. | | | 1,210 | | | | 8,301 | |
| | |
Dolby Laboratories, Inc., Class A | | | 3,146 | | | | 202,382 | |
| | |
ePlus, Inc.* | | | 2,662 | | | | 207,982 | |
| | |
Fabrinet* (a) | | | 5,082 | | | | 285,761 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
Electronic Equipment, Instruments & Components –
(continued) | |
| | |
FARO Technologies, Inc.* | | | 726 | | | $ | 34,616 | |
| | |
Fitbit, Inc., Class A* | | | 14,520 | | | | 89,734 | |
| | |
Flex Ltd.* | | | 36,300 | | | | 426,525 | |
| | |
FLIR Systems, Inc. | | | 3,388 | | | | 174,685 | |
| | |
II-VI, Inc.* | | | 12,105 | | | | 401,281 | |
| | |
Insight Enterprises, Inc.* | | | 12,342 | | | | 757,552 | |
| | |
IPG Photonics Corp.* (a) | | | 2,420 | | | | 324,958 | |
| | |
Itron, Inc.* | | | 2,178 | | | | 166,094 | |
| | |
Jabil, Inc. | | | 41,140 | | | | 1,514,775 | |
| | |
KEMET Corp. | | | 18,150 | | | | 394,581 | |
| | |
Keysight Technologies, Inc.* | | | 6,050 | | | | 610,505 | |
| | |
Knowles Corp.* | | | 1,452 | | | | 31,334 | |
| | |
Littelfuse, Inc. | | | 1,694 | | | | 297,416 | |
| | |
Methode Electronics, Inc. | | | 10,648 | | | | 366,291 | |
| | |
National Instruments Corp. | | | 1,210 | | | | 50,082 | |
| | |
nLight, Inc.* | | | 484 | | | | 6,466 | |
| | |
Novanta, Inc.* | | | 3,630 | | | | 323,251 | |
| | |
PC Connection, Inc. | | | 4,114 | | | | 200,928 | |
| | |
Plexus Corp.* | | | 4,114 | | | | 304,189 | |
| | |
Rogers Corp.* | | | 1,452 | | | | 196,717 | |
| | |
Sanmina Corp.* | | | 21,296 | | | | 654,426 | |
| | |
ScanSource, Inc.* | | | 7,986 | | | | 257,948 | |
| | |
SYNNEX Corp. | | | 12,342 | | | | 1,453,147 | |
| | |
TE Connectivity Ltd. | | | 15,972 | | | | 1,429,494 | |
| | |
Tech Data Corp.* | | | 11,616 | | | | 1,411,344 | |
| | |
Trimble, Inc.* | | | 7,502 | | | | 298,880 | |
| | |
TTM Technologies, Inc.* (a) | | | 31,218 | | | | 365,563 | |
| | |
Vishay Intertechnology, Inc. | | | 42,108 | | | | 848,476 | |
| | |
Zebra Technologies Corp., Class A* | | | 2,662 | | | | 633,210 | |
| | | | | | | | 20,455,482 | |
|
| Energy Equipment & Services – 0.6% | |
| | |
Apergy Corp.* | | | 3,388 | | | | 85,276 | |
| | |
Archrock, Inc. | | | 43,076 | | | | 415,253 | |
| | |
Baker Hughes Co. | | | 19,360 | | | | 414,304 | |
| | |
Core Laboratories NV(a) | | | 3,388 | | | | 149,208 | |
| | |
Covia Holdings Corp.* (a) | | | 15,730 | | | | 21,707 | |
| | |
Diamond Offshore Drilling, Inc.* (a) | | | 2,178 | | | | 11,522 | |
| | |
Dril-Quip, Inc.* | | | 2,662 | | | | 109,195 | |
| | |
Exterran Corp.* (a) | | | 11,132 | | | | 141,042 | |
See Accompanying Notes to the Financial Statements.
| | |
| 138 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Energy Equipment & Services – (continued) | |
| | |
Forum Energy Technologies, Inc.* | | | 44,044 | | | $ | 51,091 | |
| | |
Halliburton Co. | | | 35,574 | | | | 684,799 | |
| | |
Helix Energy Solutions Group, Inc.* | | | 25,410 | | | | 218,272 | |
| | |
Helmerich & Payne, Inc. | | | 5,082 | | | | 190,575 | |
| | |
Liberty Oilfield Services, Inc., Class A(a) | | | 18,392 | | | | 169,390 | |
| | |
Matrix Service Co.* | | | 8,954 | | | | 167,977 | |
| | |
Nabors Industries Ltd. | | | 49,126 | | | | 90,883 | |
| | |
National Oilwell Varco, Inc. | | | 20,086 | | | | 454,345 | |
| | |
Newpark Resources, Inc.* | | | 8,470 | | | | 50,820 | |
| | |
NexTier Oilfield Solutions, Inc.* | | | 56,635 | | | | 244,663 | |
| | |
Noble Corp. plc* (a) | | | 108,900 | | | | 133,947 | |
| | |
Oil States International, Inc.* | | | 22,264 | | | | 317,707 | |
| | |
Patterson-UTI Energy, Inc. | | | 68,244 | | | | 567,790 | |
| | |
ProPetro Holding Corp.* (a) | | | 28,072 | | | | 217,558 | |
| | |
Schlumberger Ltd. | | | 52,030 | | | | 1,700,861 | |
| | |
SEACOR Holdings, Inc.* | | | 2,662 | | | | 114,226 | |
| | |
Select Energy Services, Inc., Class A* (a) | | | 26,136 | | | | 198,634 | |
| | |
Solaris Oilfield Infrastructure, Inc., Class A(a) | | | 5,808 | | | | 61,797 | |
| | |
TETRA Technologies, Inc.* | | | 52,998 | | | | 90,097 | |
| | |
Transocean Ltd.* (a) | | | 191,906 | | | | 911,554 | |
| | |
US Silica Holdings, Inc.(a) | | | 25,410 | | | | 113,329 | |
| | |
Valaris plc(a) | | | 16,214 | | | | 66,640 | |
| | | | | | | | 8,164,462 | |
|
| Entertainment – 1.3% | |
| | |
Activision Blizzard, Inc. | | | 28,314 | | | | 1,586,433 | |
| | |
AMC Entertainment Holdings, Inc., Class A(a) | | | 3,146 | | | | 29,478 | |
| | |
Cinemark Holdings, Inc.(a) | | | 10,648 | | | | 389,717 | |
| | |
Electronic Arts, Inc.* | | | 10,890 | | | | 1,049,796 | |
| | |
Glu Mobile, Inc.* | | | 26,862 | | | | 159,292 | |
| | |
Liberty Media Corp.-Liberty Formula One, Class C* | | | 6,050 | | | | 257,125 | |
| | |
Liberty Media Corp-Liberty Braves, Class C* | | | 6,050 | | | | 177,930 | |
| | |
Lions Gate Entertainment Corp., Class A* (a) | | | 31,944 | | | | 255,233 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Entertainment – (continued) | |
| | |
Lions Gate Entertainment Corp., Class B* | | | 4,114 | | | $ | 30,814 | |
| | |
Live Nation Entertainment, Inc.* (a) | | | 6,776 | | | | 477,708 | |
| | |
Madison Square Garden Co. (The), Class A* | | | 484 | | | | 129,189 | |
| | |
Marcus Corp. (The) | | | 3,872 | | | | 139,779 | |
| | |
Netflix, Inc.* | | | 15,972 | | | | 4,590,512 | |
| | |
Take-Two Interactive Software, Inc.* | | | 5,082 | | | | 611,619 | |
| | |
Viacom, Inc., Class A(a) | | | 7,986 | | | | 190,786 | |
| | |
Viacom, Inc., Class B | | | 2,420 | | | | 52,175 | |
| | |
Walt Disney Co. (The) | | | 64,372 | | | | 8,363,210 | |
| | |
World Wrestling Entertainment, Inc., Class A(a) | | | 3,146 | | | | 176,302 | |
| | |
Zynga, Inc., Class A* | | | 49,610 | | | | 306,094 | |
| | | | | | | | 18,973,192 | |
|
| Equity Real Estate Investment Trusts (REITs) – 3.9% | |
| | |
Acadia Realty Trust(a) | | | 2,420 | | | | 67,712 | |
| | |
Agree Realty Corp.(a) | | | 1,210 | | | | 95,312 | |
| | |
Alexander & Baldwin, Inc. | | | 10,406 | | | | 244,645 | |
| | |
Alexander’s, Inc. | | | 242 | | | | 83,587 | |
| | |
Alexandria Real Estate Equities, Inc. | | | 4,114 | | | | 653,097 | |
| | |
American Assets Trust, Inc. | | | 3,146 | | | | 154,028 | |
| | |
American Campus Communities, Inc. | | | 6,050 | | | | 302,379 | |
| | |
American Finance Trust, Inc.(a) | | | 8,470 | | | | 125,356 | |
| | |
American Homes 4 Rent, Class A | | | 8,470 | | | | 224,201 | |
| | |
American Tower Corp. | | | 15,488 | | | | 3,377,623 | |
| | |
Americold Realty Trust(a) | | | 2,904 | | | | 116,421 | |
| | |
Apartment Investment & Management Co., Class A | | | 4,598 | | | | 252,338 | |
| | |
Apple Hospitality REIT, Inc.(a) | | | 17,182 | | | | 283,159 | |
| | |
Ashford Hospitality Trust, Inc. | | | 34,122 | | | | 93,153 | |
| | |
AvalonBay Communities, Inc. | | | 5,324 | | | | 1,158,822 | |
| | |
Boston Properties, Inc. | | | 6,292 | | | | 863,262 | |
| | |
Braemar Hotels & Resorts, Inc. | | | 9,438 | | | | 87,113 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 139 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Brandywine Realty Trust | | | 10,406 | | | $ | 159,004 | |
| | |
Brixmor Property Group, Inc. | | | 6,050 | | | | 133,221 | |
| | |
Camden Property Trust | | | 2,178 | | | | 249,098 | |
| | |
CareTrust REIT, Inc. | | | 726 | | | | 17,598 | |
| | |
CatchMark Timber Trust, Inc., Class A | | | 16,456 | | | | 188,750 | |
| | |
Chatham Lodging Trust | | | 1,694 | | | | 30,577 | |
| | |
City Office REIT, Inc. | | | 8,470 | | | | 114,684 | |
| | |
Colony Capital, Inc. | | | 128,260 | | | | 718,256 | |
| | |
Columbia Property Trust, Inc. | | | 13,552 | | | | 278,087 | |
| | |
CoreCivic, Inc. | | | 39,930 | | | | 609,332 | |
| | |
CorEnergy Infrastructure Trust, Inc. | | | 1,210 | | | | 58,286 | |
| | |
CoreSite Realty Corp. | | | 2,420 | | | | 284,350 | |
| | |
Corporate Office Properties Trust | | | 6,534 | | | | 193,668 | |
| | |
Cousins Properties, Inc. | | | 8,470 | | | | 339,901 | |
| | |
Crown Castle International Corp. | | | 15,004 | | | | 2,082,405 | |
| | |
CubeSmart | | | 10,890 | | | | 345,213 | |
| | |
CyrusOne, Inc. | | | 3,872 | | | | 275,996 | |
| | |
DiamondRock Hospitality Co. | | | 6,292 | | | | 62,794 | |
| | |
Digital Realty Trust, Inc.(a) | | | 7,260 | | | | 922,310 | |
| | |
Douglas Emmett, Inc. | | | 7,018 | | | | 304,020 | |
| | |
Duke Realty Corp. | | | 9,922 | | | | 348,659 | |
| | |
EastGroup Properties, Inc. | | | 1,452 | | | | 194,495 | |
| | |
EPR Properties | | | 3,872 | | | | 301,203 | |
| | |
Equinix, Inc. | | | 3,146 | | | | 1,783,090 | |
| | |
Equity Commonwealth | | | 12,100 | | | | 389,378 | |
| | |
Equity LifeStyle Properties, Inc. | | | 4,356 | | | | 304,659 | |
| | |
Equity Residential | | | 11,616 | | | | 1,029,875 | |
| | |
Essex Property Trust, Inc. | | | 2,178 | | | | 712,489 | |
| | |
Extra Space Storage, Inc. | | | 5,566 | | | | 624,895 | |
| | |
Federal Realty Investment Trust | | | 2,662 | | | | 362,059 | |
| | |
First Industrial Realty Trust, Inc. | | | 8,470 | | | | 356,672 | |
| | |
Franklin Street Properties Corp. | | | 24,926 | | | | 214,364 | |
| | |
Front Yard Residential Corp. | | | 15,246 | | | | 188,593 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Gaming and Leisure Properties, Inc. | | | 4,356 | | | $ | 175,808 | |
| | |
GEO Group, Inc. (The) | | | 40,414 | | | | 615,101 | |
| | |
Getty Realty Corp. | | | 968 | | | | 32,467 | |
| | |
Global Net Lease, Inc.(a) | | | 5,082 | | | | 98,997 | |
| | |
Hannon Armstrong Sustainable Infrastructure Capital, Inc. | | | 1,694 | | | | 50,583 | |
| | |
HCP, Inc. | | | 21,538 | | | | 810,260 | |
| | |
Healthcare Realty Trust, Inc.(a) | | | 6,292 | | | | 218,773 | |
| | |
Healthcare Trust of America, Inc., Class A | | | 5,082 | | | | 157,542 | |
| | |
Hersha Hospitality Trust | | | 14,762 | | | | 203,716 | |
| | |
Highwoods Properties, Inc. | | | 9,196 | | | | 430,373 | |
| | |
Host Hotels & Resorts, Inc. | | | 22,022 | | | | 360,941 | |
| | |
Hudson Pacific Properties, Inc. | | | 4,114 | | | | 147,775 | |
| | |
Industrial Logistics Properties Trust | | | 11,132 | | | | 236,444 | |
| | |
Innovative Industrial Properties, Inc.(a) | | | 484 | | | | 36,784 | |
| | |
Investors Real Estate Trust | | | 1,452 | | | | 109,873 | |
| | |
Invitation Homes, Inc. | | | 18,876 | | | | 581,192 | |
| | |
Iron Mountain, Inc. | | | 10,648 | | | | 349,254 | |
| | |
iStar, Inc.(a) | | | 17,182 | | | | 223,538 | |
| | |
JBG SMITH Properties | | | 6,050 | | | | 243,573 | |
| | |
Jernigan Capital, Inc.(a) | | | 4,356 | | | | 82,720 | |
| | |
Kilroy Realty Corp. | | | 4,356 | | | | 365,599 | |
| | |
Kimco Realty Corp.(a) | | | 22,506 | | | | 485,229 | |
| | |
Kite Realty Group Trust | | | 14,278 | | | | 254,434 | |
| | |
Lamar Advertising Co., Class A(a) | | | 4,598 | | | | 367,886 | |
| | |
Lexington Realty Trust(a) | | | 15,004 | | | | 163,243 | |
| | |
Liberty Property Trust | | | 2,904 | | | | 171,539 | |
| | |
Life Storage, Inc. | | | 4,356 | | | | 474,455 | |
| | |
LTC Properties, Inc. | | | 3,146 | | | | 163,120 | |
| | |
Macerich Co. (The)(a) | | | 5,324 | | | | 146,410 | |
| | |
Mack-Cali Realty Corp. | | | 10,406 | | | | 222,896 | |
| | |
Medical Properties Trust, Inc. | | | 25,168 | | | | 521,733 | |
| | |
Mid-America Apartment Communities, Inc. | | | 3,872 | | | | 538,169 | |
| | |
Monmouth Real Estate Investment Corp. | | | 7,744 | | | | 116,780 | |
See Accompanying Notes to the Financial Statements.
| | |
| 140 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
National Health Investors, Inc. | | | 2,904 | | | $ | 249,134 | |
| | |
National Retail Properties, Inc. | | | 3,872 | | | | 228,099 | |
| | |
National Storage Affiliates Trust | | | 968 | | | | 33,077 | |
| | |
New Senior Investment Group, Inc. | | | 4,114 | | | | 28,963 | |
| | |
Office Properties Income Trust(a) | | | 5,324 | | | | 169,729 | |
| | |
Omega Healthcare Investors, Inc.(a) | | | 11,132 | | | | 490,253 | |
| | |
Outfront Media, Inc. | | | 13,310 | | | | 350,186 | |
| | |
Paramount Group, Inc. | | | 17,182 | | | | 231,442 | |
| | |
Park Hotels & Resorts, Inc. | | | 5,082 | | | | 118,156 | |
| | |
Pebblebrook Hotel Trust | | | 10,164 | | | | 261,316 | |
| | |
Pennsylvania REIT(a) | | | 242 | | | | 1,336 | |
| | |
Physicians Realty Trust | | | 10,890 | | | | 203,316 | |
| | |
Piedmont Office Realty Trust, Inc., Class A | | | 4,598 | | | | 103,179 | |
| | |
PotlatchDeltic Corp. | | | 7,260 | | | | 308,332 | |
| | |
Preferred Apartment Communities, Inc., Class A(a) | | | 19,602 | | | | 280,701 | |
| | |
Prologis, Inc. | | | 24,442 | | | | 2,145,030 | |
| | |
PS Business Parks, Inc. | | | 968 | | | | 174,772 | |
| | |
Public Storage | | | 5,082 | | | | 1,132,574 | |
| | |
QTS Realty Trust, Inc., Class A | | | 3,630 | | | | 194,532 | |
| | |
Rayonier, Inc. | | | 3,630 | | | | 97,937 | |
| | |
Realty Income Corp. | | | 12,826 | | | | 1,049,050 | |
| | |
Regency Centers Corp. | | | 7,986 | | | | 536,979 | |
| | |
Retail Opportunity Investments Corp. | | | 4,114 | | | | 76,788 | |
| | |
Retail Properties of America, Inc., Class A | | | 20,328 | | | | 279,713 | |
| | |
Retail Value, Inc. | | | 7,744 | | | | 283,508 | |
| | |
Rexford Industrial Realty, Inc. | | | 4,114 | | | | 197,842 | |
| | |
RLJ Lodging Trust | | | 16,940 | | | | 277,985 | |
| | |
RPT Realty | | | 4,598 | | | | 66,671 | |
| | |
Ryman Hospitality Properties, Inc. | | | 5,082 | | | | 427,752 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Sabra Health Care REIT, Inc. | | | 18,876 | | | $ | 464,350 | |
| | |
Saul Centers, Inc. | | | 1,452 | | | | 77,740 | |
| | |
SBA Communications Corp. | | | 4,598 | | | | 1,106,509 | |
| | |
Senior Housing Properties Trust | | | 22,990 | | | | 228,176 | |
| | |
Seritage Growth Properties,
Class A(a) | | | 2,420 | | | | 105,246 | |
| | |
Service Properties Trust | | | 46,222 | | | | 1,169,417 | |
| | |
Simon Property Group, Inc. | | | 10,164 | | | | 1,531,511 | |
| | |
SITE Centers Corp. | | | 18,876 | | | | 293,144 | |
| | |
SL Green Realty Corp. | | | 3,630 | | | | 303,468 | |
| | |
Spirit Realty Capital, Inc. | | | 8,954 | | | | 446,267 | |
| | |
STAG Industrial, Inc. | | | 4,114 | | | | 127,699 | |
| | |
STORE Capital Corp. | | | 11,132 | | | | 450,846 | |
| | |
Summit Hotel Properties, Inc.(a) | | | 18,634 | | | | 228,453 | |
| | |
Sun Communities, Inc. | | | 4,114 | | | | 669,142 | |
| | |
Sunstone Hotel Investors, Inc. | | | 19,118 | | | | 258,284 | |
| | |
Tanger Factory Outlet Centers,
Inc.(a) | | | 7,744 | | | | 124,833 | |
| | |
Taubman Centers, Inc.(a) | | | 4,840 | | | | 173,175 | |
| | |
Terreno Realty Corp. | | | 1,452 | | | | 81,907 | |
| | |
UDR, Inc. | | | 8,228 | | | | 413,457 | |
| | |
Uniti Group, Inc.(a) | | | 15,004 | | | | 103,828 | |
| | |
Universal Health Realty Income Trust | | | 2,178 | | | | 259,683 | |
| | |
Urban Edge Properties | | | 13,310 | | | | 280,974 | |
| | |
Urstadt Biddle Properties, Inc., Class A | | | 242 | | | | 5,888 | |
| | |
Ventas, Inc. | | | 15,004 | | | | 976,760 | |
| | |
VEREIT, Inc. | | | 35,332 | | | | 347,667 | |
| | |
VICI Properties, Inc.(a) | | | 18,876 | | | | 444,530 | |
| | |
Vornado Realty Trust | | | 6,050 | | | | 397,061 | |
| | |
Washington Prime Group, Inc.(a) | | | 22,264 | | | | 93,954 | |
| | |
Washington REIT | | | 4,840 | | | | 150,137 | |
| | |
Weingarten Realty Investors | | | 12,826 | | | | 406,969 | |
| | |
Welltower, Inc. | | | 16,214 | | | | 1,470,448 | |
| | |
Weyerhaeuser Co. | | | 27,346 | | | | 798,777 | |
| | |
WP Carey, Inc. | | | 4,598 | | | | 423,292 | |
| | |
Xenia Hotels & Resorts, Inc. | | | 14,036 | | | | 295,458 | |
| | | | | | | | 56,224,798 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 141 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Food & Staples Retailing – 1.2% | |
| | |
Andersons, Inc. (The) | | | 10,164 | | | $ | 187,221 | |
| | |
BJ’s Wholesale Club Holdings, Inc.* | | | 37,994 | | | | 1,014,440 | |
| | |
Casey’s General Stores, Inc. | | | 3,388 | | | | 578,704 | |
| | |
Costco Wholesale Corp. | | | 15,488 | | | | 4,601,640 | |
| | |
Ingles Markets, Inc., Class A | | | 3,146 | | | | 124,047 | |
| | |
Kroger Co. (The) | | | 39,930 | | | | 983,875 | |
| | |
Performance Food Group Co.* | | | 10,164 | | | | 433,088 | |
| | |
PriceSmart, Inc. | | | 1,210 | | | | 89,661 | |
| | |
Rite Aid Corp.* (a) | | | 18,876 | | | | 173,659 | |
| | |
SpartanNash Co. | | | 10,406 | | | | 136,266 | |
| | |
Sprouts Farmers Market, Inc.* | | | 7,502 | | | | 145,614 | |
| | |
Sysco Corp. | | | 16,940 | | | | 1,352,998 | |
| | |
United Natural Foods, Inc.* (a) | | | 21,538 | | | | 161,535 | |
| | |
US Foods Holding Corp.* | | | 7,986 | | | | 316,805 | |
| | |
Walgreens Boots Alliance, Inc. | | | 34,364 | | | | 1,882,460 | |
| | |
Walmart, Inc. | | | 51,546 | | | | 6,044,284 | |
| | | | | | | | 18,226,297 | |
|
| Food Products – 1.0% | |
| | |
Archer-Daniels-Midland Co. | | | 24,442 | | | | 1,027,542 | |
| | |
B&G Foods, Inc.(a) | | | 21,296 | | | | 331,153 | |
| | |
Bunge Ltd. | | | 6,050 | | | | 326,700 | |
| | |
Calavo Growers, Inc.(a) | | | 1,210 | | | | 104,943 | |
| | |
Cal-Maine Foods, Inc.(a) | | | 5,324 | | | | 212,374 | |
| | |
Campbell Soup Co. | | | 7,744 | | | | 358,625 | |
| | |
Conagra Brands, Inc. | | | 17,182 | | | | 464,773 | |
| | |
Darling Ingredients, Inc.* | | | 18,150 | | | | 350,295 | |
| | |
Farmer Brothers Co.* (a) | | | 1,694 | | | | 21,734 | |
| | |
Flowers Foods, Inc. | | | 8,954 | | | | 194,481 | |
| | |
Fresh Del Monte Produce, Inc. | | | 6,776 | | | | 216,154 | |
| | |
Freshpet, Inc.* | | | 968 | | | | 50,588 | |
| | |
General Mills, Inc. | | | 25,410 | | | | 1,292,352 | |
| | |
Hain Celestial Group, Inc. (The)* (a) | | | 7,502 | | | | 177,347 | |
| | |
Hershey Co. (The) | | | 4,356 | | | | 639,766 | |
| | |
Hormel Foods Corp. | | | 7,502 | | | | 306,757 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Food Products – (continued) | |
| | |
Hostess Brands, Inc.* | | | 17,424 | | | $ | 222,679 | |
| | |
Ingredion, Inc. | | | 2,420 | | | | 191,180 | |
| | |
J&J Snack Foods Corp. | | | 1,694 | | | | 323,147 | |
| | |
JM Smucker Co. (The) | | | 3,872 | | | | 409,193 | |
| | |
Kellogg Co. | | | 10,890 | | | | 691,842 | |
| | |
Kraft Heinz Co. (The) | | | 22,748 | | | | 735,443 | |
| | |
Lamb Weston Holdings, Inc. | | | 5,082 | | | | 396,599 | |
| | |
Lancaster Colony Corp.(a) | | | 1,210 | | | | 168,408 | |
| | |
Landec Corp.* | | | 968 | | | | 9,535 | |
| | |
McCormick & Co., Inc.(Non-Voting)(a) | | | 3,872 | | | | 622,192 | |
| | |
Mondelez International, Inc., Class A | | | 52,272 | | | | 2,741,666 | |
| | |
Pilgrim’s Pride Corp.* | | | 3,872 | | | | 117,554 | |
| | |
Post Holdings, Inc.* | | | 3,630 | | | | 373,527 | |
| | |
Sanderson Farms, Inc. | | | 2,178 | | | | 337,176 | |
| | |
Seaboard Corp. | | | 24 | | | | 101,258 | |
| | |
Simply Good Foods Co. (The)* | | | 1,694 | | | | 41,571 | |
| | |
Tootsie Roll Industries, Inc.(a) | | | 1,936 | | | | 66,377 | |
| | |
TreeHouse Foods, Inc.* (a) | | | 6,292 | | | | 339,894 | |
| | |
Tyson Foods, Inc., Class A | | | 12,584 | | | | 1,041,829 | |
| | | | | | | | 15,006,654 | |
|
| Gas Utilities – 0.2% | |
| | |
Atmos Energy Corp. | | | 2,904 | | | | 326,642 | |
| | |
Chesapeake Utilities Corp. | | | 2,662 | | | | 252,358 | |
| | |
National Fuel Gas Co. | | | 3,630 | | | | 164,475 | |
| | |
New Jersey Resources Corp.(a) | | | 7,502 | | | | 327,087 | |
| | |
Northwest Natural Holding Co. | | | 726 | | | | 50,356 | |
| | |
ONE Gas, Inc. | | | 4,598 | | | | 426,878 | |
| | |
South Jersey Industries, Inc.(a) | | | 6,776 | | | | 217,916 | |
| | |
Southwest Gas Holdings, Inc. | | | 3,630 | | | | 316,899 | |
| | |
Spire, Inc. | | | 5,082 | | | | 427,193 | |
| | |
UGI Corp. | | | 6,776 | | | | 323,012 | |
| | | | | | | | 2,832,816 | |
|
| Health Care Equipment & Supplies – 2.8% | |
| | |
Abbott Laboratories | | | 64,130 | | | | 5,361,909 | |
| | |
ABIOMED, Inc.* | | | 2,178 | | | | 452,109 | |
| | |
Align Technology, Inc.* | | | 3,146 | | | | 793,704 | |
See Accompanying Notes to the Financial Statements.
| | |
| 142 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Health Care Equipment & Supplies – (continued) | |
| | |
AngioDynamics, Inc.* | | | 2,904 | | | $ | 44,431 | |
| | |
Antares Pharma, Inc.* | | | 1,210 | | | | 4,066 | |
| | |
AtriCure, Inc.* (a) | | | 3,146 | | | | 83,652 | |
| | |
Baxter International, Inc. | | | 18,876 | | | | 1,447,789 | |
| | |
Becton Dickinson and Co. | | | 9,680 | | | | 2,478,080 | |
| | |
BioLife Solutions, Inc.* (a) | | | 242 | | | | 4,116 | |
| | |
Boston Scientific Corp.* | | | 47,432 | | | | 1,977,914 | |
| | |
Cantel Medical Corp.(a) | | | 2,420 | | | | 176,394 | |
| | |
Cardiovascular Systems, Inc.* | | | 1,452 | | | | 64,643 | |
| | |
Cerus Corp.* (a) | | | 9,922 | | | | 43,161 | |
| | |
CONMED Corp. | | | 3,388 | | | | 372,748 | |
| | |
Cooper Cos., Inc. (The) | | | 1,452 | | | | 422,532 | |
| | |
Danaher Corp. | | | 22,022 | | | | 3,035,072 | |
| | |
DENTSPLY SIRONA, Inc. | | | 10,648 | | | | 583,298 | |
| | |
DexCom, Inc.* (a) | | | 4,114 | | | | 634,543 | |
| | |
Edwards Lifesciences Corp.* | | | 7,018 | | | | 1,672,951 | |
| | |
Establishment Labs Holdings, Inc.* (a) | | | 484 | | | | 8,978 | |
| | |
GenMark Diagnostics, Inc.* | | | 1,210 | | | | 6,788 | |
| | |
Glaukos Corp.* (a) | | | 2,178 | | | | 139,022 | |
| | |
Globus Medical, Inc., Class A* | | | 5,082 | | | | 266,144 | |
| | |
Haemonetics Corp.* | | | 2,904 | | | | 350,600 | |
| | |
Heska Corp.* (a) | | | 726 | | | | 58,821 | |
| | |
Hill-Rom Holdings, Inc. | | | 3,630 | | | | 380,025 | |
| | |
Hologic, Inc.* | | | 7,018 | | | | 339,040 | |
| | |
ICU Medical, Inc.* | | | 1,210 | | | | 195,548 | |
| | |
IDEXX Laboratories, Inc.* | | | 2,904 | | | | 827,669 | |
| | |
Insulet Corp.* (a) | | | 2,420 | | | | 351,674 | |
| | |
Integer Holdings Corp.* | | | 3,630 | | | | 281,107 | |
| | |
Integra LifeSciences Holdings Corp.* | | | 5,082 | | | | 295,061 | |
| | |
Intuitive Surgical, Inc.* | | | 3,872 | | | | 2,141,022 | |
| | |
iRhythm Technologies, Inc.* (a) | | | 1,936 | | | | 129,364 | |
| | |
Lantheus Holdings, Inc.* | | | 6,050 | | | | 126,143 | |
| | |
LeMaitre Vascular, Inc.(a) | | | 484 | | | | 16,746 | |
| | |
LivaNova plc* | | | 3,630 | | | | 256,750 | |
| | |
Masimo Corp.* | | | 2,662 | | | | 388,093 | |
| | |
Medtronic plc | | | 47,190 | | | | 5,138,991 | |
| | |
Meridian Bioscience, Inc. | | | 3,146 | | | | 30,799 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Health Care Equipment & Supplies – (continued) | |
| | |
Merit Medical Systems, Inc.* | | | 3,630 | | | $ | 74,978 | |
| | |
Mesa Laboratories, Inc.(a) | | | 242 | | | | 55,116 | |
| | |
Natus Medical, Inc.* | | | 1,694 | | | | 57,054 | |
| | |
Neogen Corp.* (a) | | | 3,630 | | | | 236,168 | |
| | |
Nevro Corp.* (a) | | | 2,420 | | | | 208,604 | |
| | |
Novocure Ltd.* (a) | | | 4,840 | | | | 346,738 | |
| | |
NuVasive, Inc.* | | | 3,146 | | | | 221,919 | |
| | |
OraSure Technologies, Inc.* | | | 726 | | | | 6,200 | |
| | |
Orthofix Medical, Inc.* | | | 3,872 | | | | 162,740 | |
| | |
Penumbra, Inc.* (a) | | | 2,178 | | | | 339,703 | |
| | |
Pulse Biosciences, Inc.* (a) | | | 242 | | | | 3,407 | |
| | |
Quidel Corp.* | | | 2,178 | | | | 123,928 | |
| | |
ResMed, Inc. | | | 4,598 | | | | 680,136 | |
| | |
RTI Surgical Holdings, Inc.* | | | 9,196 | | | | 20,231 | |
| | |
Senseonics Holdings, Inc.* (a) | | | 24,926 | | | | 29,163 | |
| | |
Shockwave Medical, Inc.* | | | 242 | | | | 8,233 | |
| | |
SI-BONE, Inc.* (a) | | | 726 | | | | 12,088 | |
| | |
STAAR Surgical Co.* (a) | | | 2,178 | | | | 71,395 | |
| | |
STERIS plc | | | 2,178 | | | | 308,340 | |
| | |
Stryker Corp. | | | 11,132 | | | | 2,407,518 | |
| | |
Surmodics, Inc.* | | | 968 | | | | 45,990 | |
| | |
Tactile Systems Technology, Inc.* (a) | | | 1,210 | | | | 54,958 | |
| | |
Tandem Diabetes Care, Inc.* | | | 2,420 | | | | 149,024 | |
| | |
Teleflex, Inc. | | | 2,178 | | | | 756,659 | |
| | |
TransEnterix, Inc.* (a) | | | 44,528 | | | | 10,161 | |
| | |
Vapotherm, Inc.* | | | 2,178 | | | | 22,433 | |
| | |
Varex Imaging Corp.* | | | 2,904 | | | | 87,149 | |
| | |
Varian Medical Systems, Inc.* | | | 2,904 | | | | 350,832 | |
| | |
West Pharmaceutical Services, Inc. | | | 3,630 | | | | 522,139 | |
| | |
Wright Medical Group NV* | | | 8,954 | | | | 186,243 | |
| | |
Zimmer Biomet Holdings, Inc. | | | 7,260 | | | | 1,003,550 | |
| | | | | | | | 39,944,294 | |
|
| Health Care Providers & Services – 2.5% | |
| | |
Acadia Healthcare Co., Inc.* (a) | | | 23,474 | | | | 703,985 | |
| | |
Addus HomeCare Corp.* | | | 242 | | | | 20,379 | |
| | |
Amedisys, Inc.* | | | 3,146 | | | | 404,324 | |
| | |
AmerisourceBergen Corp. | | | 6,776 | | | | 578,535 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 143 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Health Care Providers & Services – (continued) | |
| | |
AMN Healthcare Services, Inc.* | | | 5,808 | | | $ | 341,278 | |
| | |
Anthem, Inc. | | | 9,438 | | | | 2,539,577 | |
| | |
BioTelemetry, Inc.* | | | 242 | | | | 9,525 | |
| | |
Brookdale Senior Living, Inc.* (a) | | | 60,016 | | | | 441,118 | |
| | |
Cardinal Health, Inc. | | | 13,068 | | | | 646,213 | |
| | |
Centene Corp.* | | | 16,214 | | | | 860,639 | |
| | |
Chemed Corp. | | | 968 | | | | 381,305 | |
| | |
Cigna Corp. | | | 16,940 | | | | 3,023,112 | |
| | |
Community Health Systems, Inc.* | | | 33,880 | | | | 119,935 | |
| | |
CorVel Corp.* | | | 726 | | | | 57,441 | |
| | |
CVS Health Corp. | | | 55,902 | | | | 3,711,334 | |
| | |
DaVita, Inc.* | | | 4,356 | | | | 255,262 | |
| | |
Diplomat Pharmacy, Inc.* | | | 6,534 | | | | 35,545 | |
| | |
Encompass Health Corp. | | | 5,808 | | | | 371,828 | |
| | |
Ensign Group, Inc. (The) | | | 5,808 | | | | 245,388 | |
| | |
Guardant Health, Inc.* (a) | | | 2,420 | | | | 168,190 | |
| | |
Hanger, Inc.* | | | 1,694 | | | | 38,301 | |
| | |
HCA Healthcare, Inc. | | | 12,342 | | | | 1,648,151 | |
| | |
HealthEquity, Inc.* | | | 4,840 | | | | 274,864 | |
| | |
Henry Schein, Inc.* (a) | | | 3,146 | | | | 196,892 | |
| | |
Humana, Inc. | | | 4,598 | | | | 1,352,732 | |
| | |
Laboratory Corp. of America Holdings* | | | 4,114 | | | | 677,864 | |
| | |
LHC Group, Inc.* | | | 3,146 | | | | 349,112 | |
| | |
Magellan Health, Inc.* | | | 4,598 | | | | 298,410 | |
| | |
McKesson Corp. | | | 9,196 | | | | 1,223,068 | |
| | |
MEDNAX, Inc.* | | | 29,524 | | | | 648,347 | |
| | |
Molina Healthcare, Inc.* | | | 3,630 | | | | 427,033 | |
| | |
National HealthCare Corp. | | | 1,936 | | | | 159,100 | |
| | |
Patterson Cos., Inc. | | | 27,830 | | | | 476,728 | |
| | |
PetIQ, Inc.* (a) | | | 1,694 | | | | 41,876 | |
| | |
Premier, Inc., Class A* (a) | | | 18,634 | | | | 607,096 | |
| | |
Providence Service Corp. (The)* | | | 2,178 | | | | 139,109 | |
| | |
Quest Diagnostics, Inc. | | | 5,082 | | | | 514,552 | |
| | |
R1 RCM, Inc.* | | | 11,616 | | | | 123,478 | |
| | |
RadNet, Inc.* | | | 1,694 | | | | 26,460 | |
| | |
Select Medical Holdings Corp.* | | | 30,250 | | | | 551,155 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Health Care Providers & Services – (continued) | |
| | |
Surgery Partners, Inc.* | | | 7,502 | | | $ | 59,641 | |
| | |
Tenet Healthcare Corp.* (a) | | | 32,428 | | | | 821,725 | |
| | |
Tivity Health, Inc.* | | | 12,826 | | | | 207,909 | |
| | |
Triple-S Management Corp., Class B* | | | 8,712 | | | | 131,813 | |
| | |
UnitedHealth Group, Inc. | | | 34,364 | | | | 8,683,783 | |
| | |
Universal Health Services, Inc., Class B | | | 4,598 | | | | 632,041 | |
| | |
US Physical Therapy, Inc. | | | 1,452 | | | | 205,414 | |
| | |
WellCare Health Plans, Inc.* | | | 2,662 | | | | 789,549 | |
| | | | | | | | 36,221,116 | |
|
| Health Care Technology – 0.2% | |
| | |
Allscripts Healthcare Solutions, Inc.* (a) | | | 12,100 | | | | 132,374 | |
| | |
Castlight Health, Inc., Class B* | | | 5,566 | | | | 8,405 | |
| | |
Cerner Corp. | | | 13,310 | | | | 893,367 | |
| | |
Computer Programs & Systems, Inc. | | | 726 | | | | 16,749 | |
| | |
Evolent Health, Inc., Class A* (a) | | | 6,050 | | | | 46,101 | |
| | |
HealthStream, Inc.* | | | 484 | | | | 13,581 | |
| | |
HMS Holdings Corp.* | | | 5,324 | | | | 174,042 | |
| | |
Inovalon Holdings, Inc., Class A* (a) | | | 3,388 | | | | 52,954 | |
| | |
Inspire Medical Systems, Inc.* (a) | | | 484 | | | | 29,514 | |
| | |
NextGen Healthcare, Inc.* | | | 1,694 | | | | 28,637 | |
| | |
Omnicell, Inc.* | | | 3,872 | | | | 272,550 | |
| | |
Tabula Rasa HealthCare, Inc.* (a) | | | 1,694 | | | | 86,292 | |
| | |
Teladoc Health, Inc.* (a) | | | 4,598 | | | | 352,207 | |
| | |
Veeva Systems, Inc., Class A* | | | 4,356 | | | | 617,812 | |
| | |
Vocera Communications, Inc.* (a) | | | 3,388 | | | | 67,489 | |
| | | | | | | | 2,792,074 | |
|
| Hotels, Restaurants & Leisure – 2.0% | |
| | |
Aramark | | | 12,100 | | | | 529,496 | |
| | |
BBX Capital Corp. | | | 4,598 | | | | 20,553 | |
| | |
Biglari Holdings, Inc., Class B* | | | 242 | | | | 20,202 | |
See Accompanying Notes to the Financial Statements.
| | |
| 144 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Hotels, Restaurants & Leisure – (continued) | |
| | |
BJ’s Restaurants, Inc. | | | 1,694 | | | $ | 67,065 | |
| | |
Bloomin’ Brands, Inc.(a) | | | 31,460 | | | | 623,223 | |
| | |
Boyd Gaming Corp. | | | 10,406 | | | | 283,564 | |
| | |
Brinker International, Inc.(a) | | | 10,890 | | | | 484,061 | |
| | |
Caesars Entertainment Corp.* | | | 32,428 | | | | 398,216 | |
| | |
Carnival Corp. | | | 17,908 | | | | 768,074 | |
| | |
Carrols Restaurant Group, Inc.* | | | 1,936 | | | | 13,804 | |
| | |
Cheesecake Factory, Inc. (The)(a) | | | 2,178 | | | | 91,019 | |
| | |
Chipotle Mexican Grill, Inc.* | | | 726 | | | | 564,944 | |
| | |
Choice Hotels International, Inc.(a) | | | 2,178 | | | | 192,709 | |
| | |
Churchill Downs, Inc. | | | 3,630 | | | | 471,864 | |
| | |
Chuy’s Holdings, Inc.* | | | 242 | | | | 5,898 | |
| | |
Cracker Barrel Old Country Store, Inc.(a) | | | 1,694 | | | | 263,417 | |
| | |
Darden Restaurants, Inc. | | | 4,356 | | | | 489,048 | |
| | |
Dave & Buster’s Entertainment, Inc. | | | 968 | | | | 38,507 | |
| | |
Del Taco Restaurants, Inc.* | | | 5,808 | | | | 44,344 | |
| | |
Denny’s Corp.* | | | 10,164 | | | | 204,500 | |
| | |
Dine Brands Global, Inc. | | | 4,114 | | | | 300,939 | |
| | |
Domino’s Pizza, Inc.(a) | | | 1,936 | | | | 525,856 | |
| | |
Drive Shack, Inc.* (a) | | | 14,278 | | | | 56,969 | |
| | |
Dunkin’ Brands Group, Inc. | | | 2,178 | | | | 171,234 | |
| | |
Eldorado Resorts, Inc.* (a) | | | 4,114 | | | | 184,184 | |
| | |
Everi Holdings, Inc.* | | | 2,662 | | | | 26,780 | |
| | |
Extended Stay America, Inc. | | | 2,904 | | | | 41,266 | |
| | |
Fiesta Restaurant Group, Inc.* | | | 2,178 | | | | 18,720 | |
| | |
Golden Entertainment, Inc.* | | | 2,178 | | | | 31,537 | |
| | |
Hilton Grand Vacations, Inc.* | | | 31,460 | | | | 1,092,606 | |
| | |
Hilton Worldwide Holdings, Inc. | | | 9,922 | | | | 962,037 | |
| | |
Hyatt Hotels Corp., Class A(a) | | | 2,904 | | | | 217,045 | |
| | |
Jack in the Box, Inc. | | | 2,420 | | | | 203,328 | |
| | |
Las Vegas Sands Corp. | | | 14,762 | | | | 912,882 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Hotels, Restaurants & Leisure – (continued) | |
| | |
Marriott International, Inc., Class A | | | 8,712 | | | $ | 1,102,504 | |
| | |
Marriott Vacations Worldwide Corp. | | | 3,146 | | | | 345,840 | |
| | |
McDonald’s Corp. | | | 26,862 | | | | 5,283,755 | |
| | |
MGM Resorts International | | | 20,812 | | | | 593,142 | |
| | |
Norwegian Cruise Line Holdings Ltd.* | | | 9,196 | | | | 466,789 | |
| | |
Papa John’s International, Inc.(a) | | | 2,420 | | | | 141,691 | |
| | |
Penn National Gaming, Inc.* (a) | | | 34,848 | | | | 742,785 | |
| | |
Planet Fitness, Inc., Class A* | | | 3,872 | | | | 246,492 | |
| | |
Red Robin Gourmet Burgers, Inc.* (a) | | | 968 | | | | 29,524 | |
| | |
Red Rock Resorts, Inc., Class A | | | 2,904 | | | | 63,249 | |
| | |
Royal Caribbean Cruises Ltd. | | | 7,502 | | | | 816,443 | |
| | |
Ruth’s Hospitality Group, Inc. | | | 2,662 | | | | 54,784 | |
| | |
Scientific Games Corp.* | | | 9,196 | | | | 220,612 | |
| | |
SeaWorld Entertainment, Inc.* | | | 7,744 | | | | 204,596 | |
| | |
Shake Shack, Inc., Class A* (a) | | | 1,452 | | | | 119,471 | |
| | |
Six Flags Entertainment Corp. | | | 4,840 | | | | 204,200 | |
| | |
Starbucks Corp. | | | 42,108 | | | | 3,560,652 | |
| | |
Texas Roadhouse, Inc. | | | 3,630 | | | | 205,095 | |
| | |
Vail Resorts, Inc. | | | 1,936 | | | | 449,868 | |
| | |
Wendy’s Co. (The) | | | 19,360 | | | | 410,045 | |
| | |
Wingstop, Inc. | | | 1,210 | | | | 100,950 | |
| | |
Wyndham Destinations, Inc. | | | 32,186 | | | | 1,493,752 | |
| | |
Wyndham Hotels & Resorts, Inc. | | | 1,452 | | | | 78,364 | |
| | |
Wynn Resorts Ltd. | | | 4,598 | | | | 557,921 | |
| | |
Yum! Brands, Inc. | | | 10,648 | | | | 1,083,008 | |
| | | | | | | | 28,895,423 | |
|
| Household Durables – 1.0% | |
| | |
Beazer Homes USA, Inc.* | | | 8,470 | | | | 127,135 | |
| | |
Cavco Industries, Inc.* | | | 726 | | | | 139,138 | |
| | |
Century Communities, Inc.* (a) | | | 12,826 | | | | 386,960 | |
| | |
DR Horton, Inc. | | | 17,424 | | | | 912,495 | |
| | |
Ethan Allen Interiors, Inc. | | | 8,228 | | | | 162,174 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 145 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Household Durables – (continued) | |
| | |
Garmin Ltd. | | | 3,630 | | | $ | 340,313 | |
| | |
GoPro, Inc., Class A* (a) | | | 13,552 | | | | 56,376 | |
| | |
Green Brick Partners, Inc.* | | | 10,164 | | | | 102,351 | |
| | |
Helen of Troy Ltd.* | | | 2,662 | | | | 398,661 | |
| | |
Hooker Furniture Corp. | | | 3,630 | | | | 85,922 | |
| | |
Installed Building Products, Inc.* | | | 2,904 | | | | 189,399 | |
| | |
iRobot Corp.* (a) | | | 1,210 | | | | 58,153 | |
| | |
KB Home(a) | | | 31,702 | | | | 1,131,444 | |
| | |
La-Z-Boy, Inc. | | | 3,388 | | | | 120,308 | |
| | |
Leggett & Platt, Inc. | | | 6,776 | | | | 347,609 | |
| | |
Lennar Corp., Class A | | | 10,164 | | | | 605,774 | |
| | |
Lennar Corp., Class B | | | 2,662 | | | | 125,167 | |
| | |
LGI Homes, Inc.* (a) | | | 6,776 | | | | 531,780 | |
| | |
Lovesac Co. (The)* (a) | | | 242 | | | | 3,952 | |
| | |
M/I Homes, Inc.* | | | 12,584 | | | | 555,961 | |
| | |
MDC Holdings, Inc. | | | 12,342 | | | | 477,759 | |
| | |
Meritage Homes Corp.* (a) | | | 13,310 | | | | 959,518 | |
| | |
Mohawk Industries, Inc.* | | | 2,178 | | | | 312,282 | |
| | |
Newell Brands, Inc. | | | 16,456 | | | | 312,170 | |
| | |
NVR, Inc.* | | | 86 | | | | 312,747 | |
| | |
PulteGroup, Inc. | | | 15,488 | | | | 607,749 | |
| | |
Roku, Inc.* (a) | | | 5,566 | | | | 819,315 | |
| | |
Skyline Champion Corp.* | | | 2,420 | | | | 68,317 | |
| | |
Sonos, Inc.* | | | 3,146 | | | | 41,150 | |
| | |
Taylor Morrison Home Corp., Class A* | | | 34,848 | | | | 872,942 | |
| | |
Tempur Sealy International, Inc.* | | | 2,904 | | | | 264,119 | |
| | |
Toll Brothers, Inc. | | | 5,324 | | | | 211,735 | |
| | |
TopBuild Corp.* | | | 12,100 | | | | 1,257,553 | |
| | |
TRI Pointe Group, Inc.* (a) | | | 44,044 | | | | 693,253 | |
| | |
Tupperware Brands Corp. | | | 6,292 | | | | 60,592 | |
| | |
Universal Electronics, Inc.* | | | 5,808 | | | | 302,713 | |
| | |
Whirlpool Corp. | | | 3,630 | | | | 552,196 | |
| | |
William Lyon Homes, Class A* | | | 9,438 | | | | 182,625 | |
| | | | | | | | 14,689,807 | |
|
| Household Products – 1.2% | |
| | |
Central Garden & Pet Co., Class A* | | | 15,972 | | | | 451,688 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Household Products – (continued) | |
| | |
Church & Dwight Co., Inc. | | | 7,260 | | | $ | 507,764 | |
| | |
Clorox Co. (The)(a) | | | 3,630 | | | | 536,115 | |
| | |
Colgate-Palmolive Co. | | | 32,186 | | | | 2,207,960 | |
| | |
Energizer Holdings, Inc.(a) | | | 4,114 | | | | 174,804 | |
| | |
Kimberly-Clark Corp. | | | 12,342 | | | | 1,640,005 | |
| | |
Procter & Gamble Co. (The) | | | 90,024 | | | | 11,208,888 | |
| | |
Spectrum Brands Holdings, Inc. | | | 1,605 | | | | 80,587 | |
| | |
WD-40 Co.(a) | | | 1,452 | | | | 272,105 | |
| | | | | | | | 17,079,916 | |
|
Independent Power and Renewable Electricity
Producers – 0.2% | |
| | |
AES Corp. | | | 26,378 | | | | 449,745 | |
| | |
Clearway Energy, Inc., Class A | | | 5,566 | | | | 95,568 | |
| | |
Clearway Energy, Inc., Class C(a) | | | 24,684 | | | | 447,521 | |
| | |
NRG Energy, Inc. | | | 15,004 | | | | 601,961 | |
| | |
Ormat Technologies, Inc. | | | 2,662 | | | | 203,803 | |
| | |
Pattern Energy Group, Inc., Class A | | | 11,374 | | | | 318,813 | |
| | |
Vistra Energy Corp. | | | 22,748 | | | | 614,878 | |
| | | | | | | | 2,732,289 | |
|
| Industrial Conglomerates – 0.8% | |
| | |
3M Co. | | | 20,812 | | | | 3,433,772 | |
| | |
Carlisle Cos., Inc. | | | 1,694 | | | | 257,945 | |
| | |
General Electric Co. | | | 300,080 | | | | 2,994,798 | |
| | |
Honeywell International, Inc. | | | 25,894 | | | | 4,472,671 | |
| | |
Raven Industries, Inc. | | | 2,178 | | | | 75,969 | |
| | |
Roper Technologies, Inc. | | | 3,388 | | | | 1,141,620 | |
| | | | | | | | 12,376,775 | |
|
| Insurance – 3.0% | |
| | |
Aflac, Inc. | | | 30,734 | | | | 1,633,818 | |
| | |
Alleghany Corp.* | | | 484 | | | | 376,692 | |
| | |
Allstate Corp. (The) | | | 14,520 | | | | 1,545,218 | |
| | |
Ambac Financial Group, Inc.* (a) | | | 15,488 | | | | 317,504 | |
| | |
American Equity Investment Life Holding Co. | | | 31,218 | | | | 770,460 | |
| | |
American Financial Group, Inc. | | | 1,936 | | | | 201,421 | |
See Accompanying Notes to the Financial Statements.
| | |
| 146 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Insurance – (continued) | |
| | |
American International Group, Inc. | | | 37,994 | | | $ | 2,012,162 | |
| | |
American National Insurance Co. | | | 2,420 | | | | 290,352 | |
| | |
AMERISAFE, Inc. | | | 1,452 | | | | 92,246 | |
| | |
Aon plc | | | 7,986 | | | | 1,542,576 | |
| | |
Arch Capital Group Ltd.* | | | 17,908 | | | | 747,838 | |
| | |
Argo Group International Holdings Ltd. | | | 3,872 | | | | 239,561 | |
| | |
Arthur J Gallagher & Co. | | | 8,228 | | | | 750,558 | |
| | |
Assurant, Inc. | | | 2,178 | | | | 274,581 | |
| | |
Assured Guaranty Ltd. | | | 9,680 | | | | 454,186 | |
| | |
Athene Holding Ltd., Class A* | | | 4,114 | | | | 178,342 | |
| | |
Axis Capital Holdings Ltd. | | | 24,200 | | | | 1,438,206 | |
| | |
Brighthouse Financial, Inc.* | | | 36,542 | | | | 1,379,826 | |
| | |
Brown & Brown, Inc. | | | 7,744 | | | | 291,794 | |
| | |
Chubb Ltd. | | | 19,360 | | | | 2,950,851 | |
| | |
Cincinnati Financial Corp. | | | 5,324 | | | | 602,730 | |
| | |
CNO Financial Group, Inc. | | | 40,172 | | | | 628,692 | |
| | |
eHealth, Inc.* (a) | | | 968 | | | | 66,831 | |
| | |
Employers Holdings, Inc. | | | 5,324 | | | | 225,418 | |
| | |
Enstar Group Ltd.* | | | 1,694 | | | | 340,325 | |
| | |
Erie Indemnity Co., Class A(a) | | | 242 | | | | 44,593 | |
| | |
Everest Re Group Ltd. | | | 1,452 | | | | 373,295 | |
| | |
FBL Financial Group, Inc., Class A | | | 2,178 | | | | 124,974 | |
| | |
Fidelity National Financial, Inc. | | | 14,278 | | | | 654,504 | |
| | |
First American Financial Corp. | | | 7,502 | | | | 463,474 | |
| | |
Genworth Financial, Inc., Class A* | | | 160,204 | | | | 685,673 | |
| | |
Globe Life, Inc. | | | 4,114 | | | | 400,416 | |
| | |
Goosehead Insurance, Inc., Class A(a) | | | 484 | | | | 24,771 | |
| | |
Greenlight Capital Re Ltd., Class A* | | | 10,164 | | | | 109,771 | |
| | |
Hanover Insurance Group, Inc. (The) | | | 11,616 | | | | 1,529,943 | |
| | |
Hartford Financial Services Group, Inc. (The) | | | 18,392 | | | | 1,049,815 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Insurance – (continued) | |
| | |
HCI Group, Inc. | | | 968 | | | $ | 40,704 | |
| | |
Health Insurance Innovations, Inc., Class A* (a) | | | 3,630 | | | | 96,122 | |
| | |
Heritage Insurance Holdings, Inc.(a) | | | 6,776 | | | | 90,256 | |
| | |
Horace Mann Educators Corp. | | | 10,648 | | | | 463,827 | |
| | |
James River Group Holdings Ltd.(a) | | | 4,840 | | | | 173,320 | |
| | |
Kemper Corp. | | | 3,872 | | | | 278,319 | |
| | |
Kinsale Capital Group, Inc. | | | 242 | | | | 25,584 | |
| | |
Lincoln National Corp. | | | 11,132 | | | | 628,735 | |
| | |
Loews Corp. | | | 13,794 | | | | 675,906 | |
| | |
Markel Corp.* | | | 484 | | | | 566,764 | |
| | |
Marsh & McLennan Cos., Inc. | | | 17,666 | | | | 1,830,551 | |
| | |
MBIA, Inc.* (a) | | | 24,684 | | | | 229,314 | |
| | |
Mercury General Corp. | | | 7,502 | | | | 360,546 | |
| | |
MetLife, Inc. | | | 32,670 | | | | 1,528,629 | |
| | |
National General Holdings Corp. | | | 17,908 | | | | 381,799 | |
| | |
National Western Life Group, Inc., Class A | | | 484 | | | | 131,938 | |
| | |
Old Republic International Corp. | | | 18,150 | | | | 405,471 | |
| | |
Primerica, Inc. | | | 2,662 | | | | 335,891 | |
| | |
Principal Financial Group, Inc. | | | 14,036 | | | | 749,242 | |
| | |
ProAssurance Corp. | | | 1,936 | | | | 75,930 | |
| | |
Progressive Corp. (The) | | | 20,328 | | | | 1,416,862 | |
| | |
Prudential Financial, Inc. | | | 18,392 | | | | 1,676,247 | |
| | |
Reinsurance Group of America, Inc. | | | 3,630 | | | | 589,766 | |
| | |
RenaissanceRe Holdings Ltd. | | | 2,178 | | | | 407,678 | |
| | |
RLI Corp.(a) | | | 3,146 | | | | 306,169 | |
| | |
Safety Insurance Group, Inc. | | | 2,420 | | | | 235,224 | |
| | |
Selective Insurance Group, Inc. | | | 5,808 | | | | 401,449 | |
| | |
Stewart Information Services Corp. | | | 2,420 | | | | 99,026 | |
| | |
Third Point Reinsurance Ltd.* | | | 26,136 | | | | 248,031 | |
| | |
Travelers Cos., Inc. (The) | | | 11,858 | | | | 1,554,110 | |
| | |
Trupanion, Inc.* (a) | | | 1,936 | | | | 45,883 | |
| | |
United Fire Group, Inc. | | | 4,356 | | | | 198,285 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 147 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Insurance – (continued) | |
| | |
United Insurance Holdings Corp. | | | 6,776 | | | $ | 83,074 | |
| | |
Universal Insurance Holdings, Inc. | | | 6,292 | | | | 170,576 | |
| | |
Unum Group | | | 11,616 | | | | 319,905 | |
| | |
White Mountains Insurance Group Ltd. | | | 242 | | | | 259,182 | |
| | |
Willis Towers Watson plc | | | 4,114 | | | | 768,907 | |
| | |
WR Berkley Corp. | | | 4,356 | | | | 304,484 | |
| | | | | | | | 42,967,123 | |
|
| Interactive Media & Services – 3.3% | |
| | |
Alphabet, Inc., Class A* | | | 10,406 | | | | 13,099,073 | |
| | |
Alphabet, Inc., Class C* | | | 11,374 | | | | 14,332,491 | |
| | |
ANGI Homeservices, Inc., Class A* (a) | | | 9,922 | | | | 67,966 | |
| | |
Care.com, Inc.* | | | 2,904 | | | | 33,919 | |
| | |
Cargurus, Inc.* (a) | | | 4,598 | | | | 154,447 | |
| | |
Cars.com, Inc.* (a) | | | 22,264 | | | | 251,806 | |
| | |
Eventbrite, Inc., Class A* (a) | | | 2,662 | | | | 47,863 | |
| | |
Facebook, Inc., Class A* | | | 86,636 | | | | 16,603,789 | |
| | |
IAC/InterActiveCorp* | | | 2,420 | | | | 549,945 | |
| | |
Liberty TripAdvisor Holdings, Inc., Class A* | | | 242 | | | | 2,335 | |
| | |
Match Group, Inc.(a) | | | 3,388 | | | | 247,290 | |
| | |
QuinStreet, Inc.* | | | 726 | | | | 9,315 | |
| | |
Snap, Inc., Class A* (a) | | | 35,816 | | | | 539,389 | |
| | |
TripAdvisor, Inc.* | | | 6,776 | | | | 273,750 | |
| | |
Twitter, Inc.* | | | 26,620 | | | | 797,801 | |
| | |
Yelp, Inc.* (a) | | | 3,630 | | | | 125,271 | |
| | |
Zillow Group, Inc., Class A* (a) | | | 4,840 | | | | 156,768 | |
| | |
Zillow Group, Inc., Class C* (a) | | | 1,936 | | | | 63,055 | |
| | | | | | | | 47,356,273 | |
|
| Internet & Direct Marketing Retail – 2.3% | |
| | |
1-800-Flowers.com, Inc., Class A* | | | 1,452 | | | | 20,706 | |
| | |
Amazon.com, Inc.* | | | 15,004 | | | | 26,657,007 | |
| | |
Booking Holdings, Inc.* | | | 1,452 | | | | 2,974,814 | |
| | |
Duluth Holdings, Inc., Class B* (a) | | | 968 | | | | 8,944 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Internet & Direct Marketing Retail – (continued) | |
| | |
eBay, Inc. | | | 38,720 | | | $ | 1,364,880 | |
| | |
Etsy, Inc.* (a) | | | 4,356 | | | | 193,798 | |
| | |
Expedia Group, Inc. | | | 4,598 | | | | 628,363 | |
| | |
Groupon, Inc.* | | | 33,154 | | | | 92,168 | |
| | |
GrubHub, Inc.* (a) | | | 3,630 | | | | 123,638 | |
| | |
Lands’ End, Inc.* (a) | | | 2,662 | | | | 32,130 | |
| | |
MercadoLibre, Inc.* | | | 1,694 | | | | 883,455 | |
| | |
Overstock.com, Inc.* (a) | | | 2,420 | | | | 25,483 | |
| | |
PetMed Express, Inc.(a) | | | 2,662 | | | | 62,331 | |
| | |
Quotient Technology, Inc.* | | | 6,534 | | | | 56,258 | |
| | |
Qurate Retail, Inc., Series A* | | | 4,598 | | | | 43,865 | |
| | |
Shutterstock, Inc.* | | | 1,694 | | | | 68,742 | |
| | |
Stamps.com, Inc.* (a) | | | 968 | | | | 81,728 | |
| | |
Stitch Fix, Inc., Class A* (a) | | | 2,178 | | | | 49,789 | |
| | |
Waitr Holdings, Inc.* (a) | | | 5,324 | | | | 2,315 | |
| | |
Wayfair, Inc., Class A* | | | 1,936 | | | | 159,197 | |
| | | | | | | | 33,529,611 | |
|
| IT Services – 4.2% | |
| | |
Accenture plc, Class A | | | 22,506 | | | | 4,173,063 | |
| | |
Akamai Technologies, Inc.* | | | 5,324 | | | | 460,526 | |
| | |
Alliance Data Systems Corp. | | | 726 | | | | 72,600 | |
| | |
Automatic Data Processing, Inc. | | | 15,004 | | | | 2,434,099 | |
| | |
Black Knight, Inc.* | | | 3,146 | | | | 201,973 | |
| | |
Booz Allen Hamilton Holding Corp. | | | 7,018 | | | | 493,857 | |
| | |
Broadridge Financial Solutions, Inc. | | | 3,388 | | | | 424,245 | |
| | |
CACI International, Inc., Class A* | | | 2,178 | | | | 487,328 | |
| | |
Cardtronics plc, Class A* (a) | | | 7,502 | | | | 257,019 | |
| | |
Cass Information Systems, Inc. | | | 242 | | | | 13,869 | |
| | |
Cognizant Technology Solutions Corp., Class A | | | 20,086 | | | | 1,224,041 | |
| | |
Conduent, Inc.* | | | 31,460 | | | | 194,423 | |
| | |
CoreLogic, Inc.* (a) | | | 5,082 | | | | 205,770 | |
| | |
CSG Systems International, Inc. | | | 4,598 | | | | 265,029 | |
| | |
DXC Technology Co. | | | 13,552 | | | | 374,984 | |
| | |
Endurance International Group Holdings, Inc.* | | | 28,314 | | | | 110,991 | |
| | |
EPAM Systems, Inc.* | | | 1,936 | | | | 340,659 | |
See Accompanying Notes to the Financial Statements.
| | |
| 148 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| IT Services – (continued) | |
| | |
Euronet Worldwide, Inc.* | | | 2,662 | | | $ | 372,866 | |
| | |
EVERTEC, Inc. | | | 8,470 | | | | 259,097 | |
| | |
Evo Payments, Inc., Class A* | | | 484 | | | | 13,760 | |
| | |
ExlService Holdings, Inc.* | | | 1,452 | | | | 101,103 | |
| | |
Fidelity National Information Services, Inc. | | | 21,296 | | | | 2,805,961 | |
| | |
Fiserv, Inc.* | | | 21,538 | | | | 2,286,043 | |
| | |
FleetCor Technologies, Inc.* | | | 2,904 | | | | 854,415 | |
| | |
Gartner, Inc.* (a) | | | 2,904 | | | | 447,448 | |
| | |
Genpact Ltd. | | | 6,292 | | | | 246,458 | |
| | |
Global Payments, Inc. | | | 9,662 | | | | 1,634,617 | |
| | |
GoDaddy, Inc., Class A* | | | 4,598 | | | | 299,008 | |
| | |
GTT Communications, Inc.* (a) | | | 3,388 | | | | 25,512 | |
| | |
International Business Machines Corp. | | | 39,688 | | | | 5,307,476 | |
| | |
Jack Henry & Associates, Inc. | | | 1,936 | | | | 274,060 | |
| | |
KBR, Inc. | | | 46,464 | | | | 1,308,426 | |
| | |
Leidos Holdings, Inc. | | | 4,840 | | | | 417,353 | |
| | |
Limelight Networks, Inc.* | | | 18,392 | | | | 77,614 | |
| | |
LiveRamp Holdings, Inc.* | | | 2,662 | | | | 104,058 | |
| | |
ManTech International Corp., Class A | | | 3,872 | | | | 306,585 | |
| | |
Mastercard, Inc., Class A | | | 31,944 | | | | 8,842,419 | |
| | |
MAXIMUS, Inc. | | | 4,356 | | | | 334,279 | |
| | |
MongoDB, Inc.* (a) | | | 968 | | | | 123,681 | |
| | |
NIC, Inc. | | | 2,662 | | | | 62,610 | |
| | |
Okta, Inc.* | | | 3,388 | | | | 369,529 | |
| | |
Paychex, Inc.(a) | | | 9,922 | | | | 829,876 | |
| | |
PayPal Holdings, Inc.* | | | 41,382 | | | | 4,307,866 | |
| | |
Paysign, Inc.* (a) | | | 242 | | | | 2,609 | |
| | |
Perficient, Inc.* | | | 5,808 | | | | 227,674 | |
| | |
Perspecta, Inc. | | | 43,076 | | | | 1,143,237 | |
| | |
Presidio, Inc. | | | 7,744 | | | | 128,550 | |
| | |
Sabre Corp. | | | 8,954 | | | | 210,240 | |
| | |
Science Applications International Corp. | | | 2,904 | | | | 239,928 | |
| | |
Square, Inc., Class A* | | | 13,068 | | | | 802,767 | |
| | |
Switch, Inc., Class A | | | 9,922 | | | | 146,548 | |
| | |
Sykes Enterprises, Inc.* | | | 10,164 | | | | 314,017 | |
| | |
TTEC Holdings, Inc. | | | 3,872 | | | | 183,417 | |
| | |
Twilio, Inc., Class A* (a) | | | 4,356 | | | | 420,615 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| IT Services – (continued) | |
| | |
Unisys Corp.* | | | 17,908 | | | $ | 183,736 | |
| | |
VeriSign, Inc.* | | | 3,388 | | | | 643,788 | |
| | |
Verra Mobility Corp.* (a) | | | 7,502 | | | | 107,654 | |
| | |
Virtusa Corp.* | | | 5,082 | | | | 189,457 | |
| | |
Visa, Inc., Class A(a) | | | 62,436 | | | | 11,167,303 | |
| | |
Western Union Co. (The) | | | 15,246 | | | | 382,065 | |
| | |
WEX, Inc.* | | | 1,936 | | | | 366,252 | |
| | | | | | | | 60,606,453 | |
|
| Leisure Products – 0.3% | |
| | |
Acushnet Holdings Corp. | | | 6,292 | | | | 179,007 | |
| | |
American Outdoor Brands Corp.* | | | 23,232 | | | | 164,483 | |
| | |
Brunswick Corp. | | | 27,104 | | | | 1,578,537 | |
| | |
Callaway Golf Co.(a) | | | 5,566 | | | | 112,545 | |
| | |
Hasbro, Inc.(a) | | | 3,872 | | | | 376,784 | |
| | |
Johnson Outdoors, Inc., Class A | | | 484 | | | | 28,338 | |
| | |
Mattel, Inc.* (a) | | | 107,448 | | | | 1,282,929 | |
| | |
Polaris, Inc. | | | 2,178 | | | | 214,860 | |
| | |
Sturm Ruger & Co., Inc. | | | 2,178 | | | | 99,665 | |
| | |
Vista Outdoor, Inc.* (a) | | | 6,050 | | | | 40,535 | |
| | | | | | | | 4,077,683 | |
|
| Life Sciences Tools & Services – 0.8% | |
| | |
Accelerate Diagnostics, Inc.* (a) | | | 7,260 | | | | 111,804 | |
| | |
Agilent Technologies, Inc. | | | 10,890 | | | | 824,918 | |
| | |
Avantor, Inc.* | | | 7,502 | | | | 106,603 | |
| | |
Bio-Rad Laboratories, Inc., Class A* | | | 726 | | | | 240,756 | |
| | |
Bio-Techne Corp. | | | 1,936 | | | | 403,017 | |
| | |
Bruker Corp. | | | 5,808 | | | | 258,456 | |
| | |
Cambrex Corp.* | | | 3,146 | | | | 187,911 | |
| | |
Charles River Laboratories International, Inc.* | | | 2,904 | | | | 377,462 | |
| | |
Fluidigm Corp.* | | | 5,566 | | | | 27,385 | |
| | |
Illumina, Inc.* | | | 5,324 | | | | 1,573,349 | |
| | |
IQVIA Holdings, Inc.* | | | 5,808 | | | | 838,791 | |
| | |
Luminex Corp. | | | 2,178 | | | | 44,638 | |
| | |
Medpace Holdings, Inc.* | | | 1,452 | | | | 106,911 | |
| | |
Mettler-Toledo International, Inc.* | | | 968 | | | | 682,382 | |
| | |
NeoGenomics, Inc.* | | | 5,082 | | | | 116,530 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 149 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Life Sciences Tools & Services – (continued) | |
| | |
Pacific Biosciences of California, Inc.* | | | 11,374 | | | $ | 55,050 | |
| | |
PerkinElmer, Inc. | | | 4,114 | | | | 353,639 | |
| | |
PRA Health Sciences, Inc.* | | | 2,178 | | | | 212,812 | |
| | |
Quanterix Corp.* | | | 968 | | | | 20,183 | |
| | |
Syneos Health, Inc.* | | | 18,876 | | | | 946,631 | |
| | |
Thermo Fisher Scientific, Inc. | | | 14,278 | | | | 4,311,670 | |
| | |
Waters Corp.* (a) | | | 2,662 | | | | 563,333 | |
| | | | | | | | 12,364,231 | |
|
| Machinery – 2.2% | |
| | |
Actuant Corp., Class A | | | 3,388 | | | | 83,921 | |
| | |
AGCO Corp. | | | 2,904 | | | | 222,708 | |
| | |
Alamo Group, Inc. | | | 968 | | | | 103,634 | |
| | |
Albany International Corp., Class A | | | 3,630 | | | | 304,847 | |
| | |
Allison Transmission Holdings, Inc. | | | 5,566 | | | | 242,733 | |
| | |
Altra Industrial Motion Corp. | | | 20,570 | | | | 633,556 | |
| | |
Astec Industries, Inc. | | | 1,452 | | | | 50,951 | |
| | |
Barnes Group, Inc. | | | 5,808 | | | | 339,478 | |
| | |
Blue Bird Corp.* | | | 3,146 | | | | 61,473 | |
| | |
Briggs & Stratton Corp. | | | 5,808 | | | | 42,805 | |
| | |
Caterpillar, Inc. | | | 23,958 | | | | 3,301,412 | |
| | |
Chart Industries, Inc.* | | | 3,872 | | | | 227,015 | |
| | |
CIRCOR International, Inc.* | | | 4,356 | | | | 166,791 | |
| | |
Colfax Corp.* (a) | | | 31,460 | | | | 1,057,056 | |
| | |
Columbus McKinnon Corp.(a) | | | 968 | | | | 36,319 | |
| | |
Crane Co. | | | 3,630 | | | | 277,768 | |
| | |
Cummins, Inc. | | | 6,776 | | | | 1,168,725 | |
| | |
Deere & Co. | | | 11,132 | | | | 1,938,527 | |
| | |
Donaldson Co., Inc.(a) | | | 3,872 | | | | 204,209 | |
| | |
Douglas Dynamics, Inc. | | | 1,936 | | | | 90,663 | |
| | |
Dover Corp. | | | 5,082 | | | | 527,969 | |
| | |
Energy Recovery, Inc.* (a) | | | 242 | | | | 2,253 | |
| | |
EnPro Industries, Inc. | | | 2,904 | | | | 201,973 | |
| | |
ESCO Technologies, Inc. | | | 726 | | | | 61,340 | |
| | |
Evoqua Water Technologies Corp.* | | | 2,420 | | | | 42,035 | |
| | |
Federal Signal Corp. | | | 5,324 | | | | 172,711 | |
| | |
Flowserve Corp. | | | 1,694 | | | | 82,735 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Machinery – (continued) | |
| | |
Fortive Corp. | | | 11,132 | | | $ | 768,108 | |
| | |
Franklin Electric Co., Inc. | | | 1,452 | | | | 78,190 | |
| | |
Gardner Denver Holdings, Inc.* | | | 8,712 | | | | 277,303 | |
| | |
Gates Industrial Corp. plc* | | | 726 | | | | 7,260 | |
| | |
Gorman-Rupp Co. (The) | | | 968 | | | | 35,758 | |
| | |
Graco, Inc. | | | 3,630 | | | | 164,076 | |
| | |
Greenbrier Cos., Inc. (The) | | | 7,018 | | | | 205,557 | |
| | |
Harsco Corp.* | | | 5,808 | | | | 117,728 | |
| | |
Helios Technologies, Inc. | | | 2,178 | | | | 86,314 | |
| | |
Hillenbrand, Inc. | | | 7,744 | | | | 238,438 | |
| | |
Hyster-Yale Materials Handling, Inc. | | | 484 | | | | 24,548 | |
| | |
IDEX Corp. | | | 1,936 | | | | 301,106 | |
| | |
Illinois Tool Works, Inc. | | | 11,132 | | | | 1,876,633 | |
| | |
Ingersoll-Rand plc | | | 7,502 | | | | 951,929 | |
| | |
ITT, Inc. | | | 5,566 | | | | 330,899 | |
| | |
John Bean Technologies Corp. | | | 2,904 | | | | 298,444 | |
| | |
Kadant, Inc.(a) | | | 2,178 | | | | 197,762 | |
| | |
Kennametal, Inc. | | | 27,104 | | | | 838,869 | |
| | |
Lincoln Electric Holdings, Inc. | | | 1,210 | | | | 108,380 | |
| | |
Lindsay Corp. | | | 484 | | | | 45,694 | |
| | |
Lydall, Inc.* | | | 6,050 | | | | 118,399 | |
| | |
Manitowoc Co., Inc. (The)* | | | 726 | | | | 9,264 | |
| | |
Meritor, Inc.* | | | 25,410 | | | | 559,782 | |
| | |
Middleby Corp. (The)* (a) | | | 2,420 | | | | 292,699 | |
| | |
Milacron Holdings Corp.* | | | 22,022 | | | | 368,208 | |
| | |
Miller Industries, Inc. | | | 1,936 | | | | 69,599 | |
| | |
Mueller Industries, Inc. | | | 2,662 | | | | 81,910 | |
| | |
Mueller Water Products, Inc., Class A | | | 9,680 | | | | 113,256 | |
| | |
Navistar International Corp.* | | | 20,570 | | | | 643,430 | |
| | |
NN, Inc. | | | 16,214 | | | | 117,065 | |
| | |
Nordson Corp. | | | 1,210 | | | | 189,740 | |
| | |
Oshkosh Corp. | | | 4,840 | | | | 413,239 | |
| | |
PACCAR, Inc. | | | 13,552 | | | | 1,030,765 | |
| | |
Parker-Hannifin Corp. | | | 4,598 | | | | 843,687 | |
| | |
Park-Ohio Holdings Corp. | | | 3,146 | | | | 96,771 | |
| | |
Pentair plc | | | 5,324 | | | | 220,786 | |
| | |
Proto Labs, Inc.* | | | 484 | | | | 46,934 | |
| | |
RBC Bearings, Inc.* (a) | | | 1,936 | | | | 310,612 | |
| | |
REV Group, Inc. | | | 14,762 | | | | 183,639 | |
See Accompanying Notes to the Financial Statements.
| | |
| 150 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Machinery – (continued) | |
| | |
Rexnord Corp.* | | | 32,670 | | | $ | 924,234 | |
| | |
Snap-on, Inc. | | | 1,452 | | | | 236,197 | |
| | |
SPX Corp.* | | | 17,182 | | | | 782,468 | |
| | |
SPX FLOW, Inc.* | | | 13,552 | | | | 613,635 | |
| | |
Standex International Corp. | | | 1,452 | | | | 110,033 | |
| | |
Stanley Black & Decker, Inc. | | | 6,534 | | | | 988,790 | |
| | |
Tennant Co. | | | 968 | | | | 74,952 | |
| | |
Terex Corp. | | | 21,780 | | | | 600,039 | |
| | |
Timken Co. (The) | | | 21,538 | | | | 1,055,362 | |
| | |
Toro Co. (The) | | | 5,808 | | | | 447,971 | |
| | |
TriMas Corp.* | | | 7,744 | | | | 250,286 | |
| | |
Trinity Industries, Inc.(a) | | | 12,826 | | | | 253,698 | |
| | |
Wabash National Corp. | | | 12,100 | | | | 172,546 | |
| | |
WABCO Holdings, Inc.* | | | 1,694 | | | | 228,046 | |
| | |
Wabtec Corp. | | | 6,776 | | | | 470,051 | |
| | |
Watts Water Technologies, Inc., Class A | | | 2,420 | | | | 225,665 | |
| | |
Welbilt, Inc.* (a) | | | 9,680 | | | | 183,533 | |
| | |
Woodward, Inc. | | | 3,146 | | | | 335,552 | |
| | |
Xylem, Inc. | | | 4,598 | | | | 352,621 | |
| | | | | | | | 32,614,067 | |
|
| Marine – 0.1% | |
| | |
Eagle Bulk Shipping, Inc.* | | | 22,264 | | | | 96,626 | |
| | |
Genco Shipping & Trading Ltd.* (a) | | | 7,986 | | | | 78,901 | |
| | |
Kirby Corp.* (a) | | | 3,630 | | | | 287,351 | |
| | |
Matson, Inc. | | | 13,068 | | | | 498,936 | |
| | | | | | | | 961,814 | |
|
| Media – 1.6% | |
| | |
Altice USA, Inc., Class A* | | | 9,922 | | | | 307,086 | |
| | |
AMC Networks, Inc., Class A* (a) | | | 11,132 | | | | 484,799 | |
| | |
Cardlytics, Inc.* (a) | | | 484 | | | | 20,284 | |
| | |
CBS Corp.(Non-Voting), Class B | | | 15,246 | | | | 549,466 | |
| | |
Central European Media Enterprises Ltd., Class A* | | | 15,972 | | | | 71,634 | |
| | |
Charter Communications, Inc., Class A* | | | 6,050 | | | | 2,830,553 | |
| | |
Comcast Corp., Class A | | | 199,650 | | | | 8,948,313 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Media – (continued) | |
| | |
comScore, Inc.* (a) | | | 10,164 | | | $ | 23,479 | |
| | |
Discovery, Inc., Class A* (a) | | | 2,420 | | | | 65,231 | |
| | |
Discovery, Inc., Class C* | | | 20,326 | | | | 513,028 | |
| | |
DISH Network Corp., Class A* (a) | | | 14,762 | | | | 507,518 | |
| | |
Emerald Expositions Events, Inc. | | | 1,210 | | | | 11,761 | |
| | |
Entercom Communications Corp., Class A | | | 48,642 | | | | 169,274 | |
| | |
EW Scripps Co. (The), Class A(a) | | | 3,630 | | | | 48,769 | |
| | |
Fox Corp., Class A | | | 10,164 | | | | 325,654 | |
| | |
Fox Corp., Class B | | | 8,228 | | | | 257,043 | |
| | |
Gannett Co., Inc. | | | 34,606 | | | | 375,475 | |
| | |
Gray Television, Inc.* | | | 13,310 | | | | 218,417 | |
| | |
Interpublic Group of Cos., Inc. (The) | | | 12,584 | | | | 273,702 | |
| | |
John Wiley & Sons, Inc., Class A | | | 3,630 | | | | 167,234 | |
| | |
Liberty Broadband Corp., Class A* | | | 5,324 | | | | 628,179 | |
| | |
Liberty Broadband Corp., Class C* (a) | | | 2,420 | | | | 285,729 | |
| | |
Liberty Latin America Ltd., Class A* | | | 18,392 | | | | 343,746 | |
| | |
Liberty Media Corp-Liberty SiriusXM, Class A* | | | 5,082 | | | | 228,233 | |
| | |
Liberty Media Corp-Liberty SiriusXM, Class C* | | | 4,356 | | | | 196,848 | |
| | |
Meredith Corp.(a) | | | 12,826 | | | | 483,540 | |
| | |
MSG Networks, Inc., Class A* | | | 20,086 | | | | 325,594 | |
| | |
National CineMedia, Inc. | | | 14,278 | | | | 119,864 | |
| | |
New Media Investment Group, Inc.(a) | | | 20,086 | | | | 176,958 | |
| | |
New York Times Co. (The), Class A(a) | | | 13,552 | | | | 418,757 | |
| | |
News Corp., Class A | | | 26,862 | | | | 368,278 | |
| | |
News Corp., Class B | | | 968 | | | | 13,668 | |
| | |
Nexstar Media Group, Inc., Class A(a) | | | 4,356 | | | | 423,795 | |
| | |
Omnicom Group, Inc.(a) | | | 8,954 | | | | 691,159 | |
| | |
Scholastic Corp. | | | 2,904 | | | | 111,804 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 151 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Media – (continued) | |
| | |
Sinclair Broadcast Group, Inc., Class A | | | 4,840 | | | $ | 192,826 | |
| | |
Sirius XM Holdings, Inc.(a) | | | 69,454 | | | | 466,731 | |
| | |
TechTarget, Inc.* | | | 242 | | | | 5,905 | |
| | |
TEGNA, Inc. | | | 76,230 | | | | 1,145,737 | |
| | |
Tribune Publishing Co. | | | 3,388 | | | | 30,356 | |
| | |
WideOpenWest, Inc.* | | | 5,082 | | | | 32,271 | |
| | | | | | | | 22,858,698 | |
|
| Metals & Mining – 0.6% | |
| | |
AK Steel Holding Corp.* (a) | | | 110,110 | | | | 259,860 | |
| | |
Allegheny Technologies, Inc.* (a) | | | 32,912 | | | | 691,481 | |
| | |
Carpenter Technology Corp. | | | 14,762 | | | | 723,633 | |
| | |
Century Aluminum Co.* (a) | | | 18,634 | | | | 108,636 | |
| | |
Cleveland-Cliffs, Inc.(a) | | | 87,604 | | | | 633,377 | |
| | |
Coeur Mining, Inc.* | | | 71,390 | | | | 394,073 | |
| | |
Commercial Metals Co. | | | 37,510 | | | | 725,068 | |
| | |
Compass Minerals International, Inc. | | | 2,420 | | | | 136,682 | |
| | |
Freeport-McMoRan, Inc. | | | 58,564 | | | | 575,098 | |
| | |
Haynes International, Inc. | | | 1,210 | | | | 41,697 | |
| | |
Hecla Mining Co. | | | 39,204 | | | | 90,169 | |
| | |
Kaiser Aluminum Corp. | | | 2,420 | | | | 259,134 | |
| | |
Materion Corp. | | | 1,452 | | | | 82,532 | |
| | |
McEwen Mining, Inc.* (a) | | | 23,474 | | | | 39,202 | |
| | |
Newmont Goldcorp Corp. | | | 28,314 | | | | 1,124,915 | |
| | |
Nucor Corp. | | | 10,890 | | | | 586,426 | |
| | |
Reliance Steel & Aluminum Co. | | | 2,662 | | | | 308,898 | |
| | |
Royal Gold, Inc.(a) | | | 2,178 | | | | 251,428 | |
| | |
Ryerson Holding Corp.* | | | 8,470 | | | | 73,604 | |
| | |
Schnitzer Steel Industries, Inc., Class A | | | 8,228 | | | | 175,586 | |
| | |
Southern Copper Corp. | | | 5,324 | | | | 189,428 | |
| | |
Steel Dynamics, Inc. | | | 11,616 | | | | 352,662 | |
| | |
SunCoke Energy, Inc.* | | | 26,862 | | | | 142,100 | |
| | |
TimkenSteel Corp.* | | | 6,776 | | | | 38,081 | |
| | |
United States Steel Corp.(a) | | | 42,350 | | | | 487,449 | |
| | |
Warrior Met Coal, Inc.(a) | | | 18,150 | | | | 353,562 | |
| | |
Worthington Industries, Inc. | | | 11,374 | | | | 418,677 | |
| | | | | | | | 9,263,458 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Mortgage Real Estate Investment Trusts (REITs) – 0.8% | |
| | |
AG Mortgage Investment Trust, Inc. | | | 10,890 | | | $ | 170,320 | |
| | |
AGNC Investment Corp. | | | 26,862 | | | | 457,997 | |
| | |
Annaly Capital Management, Inc. | | | 70,422 | | | | 632,390 | |
| | |
Anworth Mortgage Asset Corp. | | | 242 | | | | 828 | |
| | |
Apollo Commercial Real Estate Finance, Inc.(a) | | | 37,752 | | | | 690,862 | |
| | |
Arbor Realty Trust, Inc.(a) | | | 22,748 | | | | 310,738 | |
| | |
Ares Commercial Real Estate Corp. | | | 1,936 | | | | 30,008 | |
| | |
Arlington Asset Investment Corp., Class A | | | 23,716 | | | | 137,078 | |
| | |
ARMOUR Residential REIT, Inc. | | | 24,926 | | | | 417,012 | |
| | |
Blackstone Mortgage Trust, Inc., Class A | | | 38,478 | | | | 1,396,751 | |
| | |
Capstead Mortgage Corp. | | | 9,680 | | | | 74,826 | |
| | |
Chimera Investment Corp.(a) | | | 66,066 | | | | 1,338,497 | |
| | |
Colony Credit Real Estate, Inc. | | | 16,456 | | | | 235,814 | |
| | |
Dynex Capital, Inc. | | | 8,954 | | | | 144,697 | |
| | |
Exantas Capital Corp. | | | 6,776 | | | | 79,686 | |
| | |
Granite Point Mortgage Trust, Inc. | | | 10,890 | | | | 202,554 | |
| | |
Invesco Mortgage Capital, Inc. | | | 44,044 | | | | 693,253 | |
| | |
KKR Real Estate Finance Trust,
Inc.(a) | | | 3,146 | | | | 63,077 | |
| | |
Ladder Capital Corp. | | | 27,588 | | | | 476,445 | |
| | |
MFA Financial, Inc. | | | 137,214 | | | | 1,041,454 | |
| | |
New Residential Investment Corp. | | | 27,346 | | | | 433,161 | |
| | |
New York Mortgage Trust, Inc.(a) | | | 64,856 | | | | 405,999 | |
| | |
Orchid Island Capital, Inc.(a) | | | 26,378 | | | | 146,925 | |
| | |
PennyMac Mortgage Investment Trust | | | 23,474 | | | | 537,320 | |
| | |
Ready Capital Corp.(a) | | | 6,534 | | | | 103,433 | |
| | |
Redwood Trust, Inc.(a) | | | 31,460 | | | | 514,056 | |
| | |
Starwood Property Trust, Inc. | | | 6,534 | | | | 160,736 | |
| | |
TPG RE Finance Trust, Inc. | | | 10,406 | | | | 210,513 | |
See Accompanying Notes to the Financial Statements.
| | |
| 152 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Mortgage Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Two Harbors Investment Corp.(a) | | | 75,262 | | | $ | 1,043,884 | |
| | |
Western Asset Mortgage Capital Corp. | | | 13,794 | | | | 138,492 | |
| | | | | | | | 12,288,806 | |
|
| Multiline Retail – 0.4% | |
| | |
Big Lots, Inc. | | | 13,310 | | | | 288,428 | |
| | |
Dillard’s, Inc., Class A(a) | | | 4,114 | | | | 283,784 | |
| | |
Dollar General Corp. | | | 10,164 | | | | 1,629,696 | |
| | |
Dollar Tree, Inc.* | | | 9,922 | | | | 1,095,389 | |
| | |
JC Penney Co., Inc.* (a) | | | 1,210 | | | | 1,210 | |
| | |
Kohl’s Corp. | | | 7,502 | | | | 384,552 | |
| | |
Macy’s, Inc. | | | 5,082 | | | | 77,043 | |
| | |
Nordstrom, Inc.(a) | | | 5,324 | | | | 191,131 | |
| | |
Ollie’s Bargain Outlet Holdings, Inc.* (a) | | | 1,936 | | | | 123,672 | |
| | |
Target Corp. | | | 24,200 | | | | 2,587,222 | |
| | | | | | | | 6,662,127 | |
|
| Multi-Utilities – 0.9% | |
| | |
Ameren Corp. | | | 9,438 | | | | 733,333 | |
| | |
Avista Corp. | | | 5,324 | | | | 255,712 | |
| | |
Black Hills Corp. | | | 5,324 | | | | 419,691 | |
| | |
CenterPoint Energy, Inc. | | | 18,634 | | | | 541,690 | |
| | |
CMS Energy Corp. | | | 7,986 | | | | 510,465 | |
| | |
Consolidated Edison, Inc. | | | 13,310 | | | | 1,227,448 | |
| | |
Dominion Energy, Inc. | | | 36,300 | | | | 2,996,565 | |
| | |
DTE Energy Co. | | | 7,744 | | | | 985,966 | |
| | |
MDU Resources Group, Inc. | | | 3,872 | | | | 111,862 | |
| | |
NiSource, Inc. | | | 8,712 | | | | 244,284 | |
| | |
NorthWestern Corp. | | | 5,324 | | | | 386,097 | |
| | |
Public Service Enterprise Group, Inc. | | | 21,538 | | | | 1,363,571 | |
| | |
Sempra Energy | | | 8,954 | | | | 1,293,943 | |
| | |
Unitil Corp. | | | 2,904 | | | | 180,832 | |
| | |
WEC Energy Group, Inc.(a) | | | 12,826 | | | | 1,210,774 | |
| | | | | | | | 12,462,233 | |
|
| Oil, Gas & Consumable Fuels – 3.8% | |
| | |
Antero Midstream Corp.(a) | | | 21,054 | | | | 135,588 | |
| | |
Antero Resources Corp.* | | | 31,944 | | | | 79,860 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Apache Corp. | | | 15,004 | | | $ | 324,987 | |
| | |
Arch Coal, Inc., Class A(a) | | | 6,776 | | | | 534,559 | |
| | |
Berry Petroleum Corp. | | | 16,456 | | | | 154,522 | |
| | |
Bonanza Creek Energy, Inc.* | | | 9,438 | | | | 168,185 | |
| | |
Cabot Oil & Gas Corp. | | | 7,260 | | | | 135,326 | |
| | |
California Resources Corp.* (a) | | | 5,324 | | | | 29,761 | |
| | |
Callon Petroleum Co.* (a) | | | 41,382 | | | | 157,252 | |
| | |
Carrizo Oil & Gas, Inc.* (a) | | | 33,154 | | | | 244,013 | |
| | |
Cheniere Energy, Inc.* | | | 6,776 | | | | 417,063 | |
| | |
Chesapeake Energy Corp.* (a) | | | 377,036 | | | | 505,228 | |
| | |
Chevron Corp. | | | 83,732 | | | | 9,724,634 | |
| | |
Cimarex Energy Co. | | | 5,324 | | | | 224,779 | |
| | |
Clean Energy Fuels Corp.* | | | 62,436 | | | | 140,481 | |
| | |
CNX Resources Corp.* (a) | | | 63,888 | | | | 538,576 | |
| | |
Comstock Resources, Inc.* (a) | | | 9,196 | | | | 62,901 | |
| | |
Concho Resources, Inc. | | | 7,986 | | | | 539,215 | |
| | |
ConocoPhillips | | | 50,820 | | | | 2,805,264 | |
| | |
CONSOL Energy, Inc.* | | | 242 | | | | 3,202 | |
| | |
Continental Resources, Inc.* | | | 4,356 | | | | 128,371 | |
| | |
CVR Energy, Inc. | | | 8,954 | | | | 424,599 | |
| | |
Delek US Holdings, Inc.(a) | | | 23,958 | | | | 957,122 | |
| | |
Denbury Resources, Inc.* (a) | | | 173,756 | | | | 173,426 | |
| | |
Devon Energy Corp. | | | 16,456 | | | | 333,728 | |
| | |
Diamond S Shipping, Inc.* | | | 726 | | | | 10,600 | |
| | |
Diamondback Energy, Inc. | | | 7,744 | | | | 664,125 | |
| | |
Dorian LPG Ltd.* | | | 13,552 | | | | 168,722 | |
| | |
EOG Resources, Inc. | | | 19,118 | | | | 1,325,068 | |
| | |
EQT Corp.(a) | | | 16,940 | | | | 181,936 | |
| | |
Extraction Oil & Gas, Inc.* (a) | | | 15,004 | | | | 25,507 | |
| | |
Exxon Mobil Corp. | | | 187,066 | | | | 12,640,050 | |
| | |
Gran Tierra Energy, Inc.* | | | 26,378 | | | | 28,488 | |
| | |
Green Plains, Inc.(a) | | | 13,068 | | | | 161,128 | |
| | |
Gulfport Energy Corp.* | | | 1,936 | | | | 5,392 | |
| | |
Hess Corp. | | | 9,680 | | | | 636,460 | |
| | |
HighPoint Resources Corp.* | | | 242 | | | | 256 | |
| | |
HollyFrontier Corp. | | | 9,438 | | | | 518,524 | |
| | |
International Seaways, Inc.* | | | 3,630 | | | | 91,258 | |
| | |
Jagged Peak Energy, Inc.* | | | 7,744 | | | | 54,905 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 153 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Kinder Morgan, Inc. | | | 93,412 | | | $ | 1,866,372 | |
| | |
Kosmos Energy Ltd.(a) | | | 37,752 | | | | 234,062 | |
| | |
Laredo Petroleum, Inc.* (a) | | | 4,114 | | | | 9,709 | |
| | |
Magnolia Oil & Gas Corp., Class A* (a) | | | 34,122 | | | | 335,078 | |
| | |
Marathon Oil Corp. | | | 39,688 | | | | 457,603 | |
| | |
Marathon Petroleum Corp. | | | 31,944 | | | | 2,042,819 | |
| | |
Matador Resources Co.* | | | 37,026 | | | | 515,032 | |
| | |
Montage Resources Corp.* (a) | | | 11,374 | | | | 51,410 | |
| | |
Murphy Oil Corp.(a) | | | 4,114 | | | | 84,872 | |
| | |
Noble Energy, Inc.(a) | | | 19,118 | | | | 368,213 | |
| | |
Northern Oil and Gas, Inc.* (a) | | | 85,426 | | | | 167,435 | |
| | |
Oasis Petroleum, Inc.* | | | 56,386 | | | | 147,167 | |
| | |
Occidental Petroleum Corp. | | | 41,624 | | | | 1,685,772 | |
| | |
ONEOK, Inc. | | | 14,520 | | | | 1,013,932 | |
| | |
Par Pacific Holdings, Inc.* | | | 242 | | | | 5,481 | |
| | |
Parsley Energy, Inc., Class A | | | 14,762 | | | | 233,387 | |
| | |
PBF Energy, Inc., Class A | | | 26,378 | | | | 851,482 | |
| | |
PDC Energy, Inc.* | | | 14,278 | | | | 284,846 | |
| | |
Peabody Energy Corp. | | | 27,588 | | | | 290,502 | |
| | |
Penn Virginia Corp.* | | | 2,178 | | | | 51,836 | |
| | |
Phillips 66 | | | 20,328 | | | | 2,374,717 | |
| | |
Pioneer Natural Resources Co. | | | 5,808 | | | | 714,500 | |
| | |
QEP Resources, Inc. | | | 40,414 | | | | 134,579 | |
| | |
Range Resources Corp.(a) | | | 37,268 | | | | 150,190 | |
| | |
Renewable Energy Group, Inc.* (a) | | | 3,872 | | | | 63,268 | |
| | |
REX American Resources Corp.* | | | 968 | | | | 78,330 | |
| | |
Roan Resources, Inc.* (a) | | | 18,876 | | | | 28,314 | |
| | |
SandRidge Energy, Inc.* | | | 242 | | | | 1,060 | |
| | |
SemGroup Corp., Class A | | | 5,808 | | | | 93,509 | |
| | |
SM Energy Co.(a) | | | 10,890 | | | | 85,377 | |
| | |
Southwestern Energy Co.* (a) | | | 103,576 | | | | 212,331 | |
| | |
SRC Energy, Inc.* | | | 83,732 | | | | 261,244 | |
| | |
Talos Energy, Inc.* (a) | | | 12,826 | | | | 276,144 | |
| | |
Targa Resources Corp.(a) | | | 10,890 | | | | 423,403 | |
| | |
Tellurian, Inc.* (a) | | | 9,196 | | | | 73,292 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Unit Corp.* | | | 24,442 | | | $ | 49,862 | |
| | |
Valero Energy Corp. | | | 19,360 | | | | 1,877,533 | |
| | |
W&T Offshore, Inc.* | | | 28,798 | | | | 116,056 | |
| | |
Whiting Petroleum Corp.* (a) | | | 32,912 | | | | 208,662 | |
| | |
Williams Cos., Inc. (The) | | | 44,044 | | | | 982,622 | |
| | |
World Fuel Services Corp. | | | 19,118 | | | | 798,559 | |
| | |
WPX Energy, Inc.* | | | 27,346 | | | | 272,913 | |
| | | | | | | | 55,428,536 | |
|
| Paper & Forest Products – 0.2% | |
| | |
Boise Cascade Co. | | | 12,342 | | | | 441,473 | |
| | |
Clearwater Paper Corp.* | | | 2,178 | | | | 40,380 | |
| | |
Domtar Corp. | | | 22,506 | | | | 818,993 | |
| | |
Louisiana-Pacific Corp.(a) | | | 37,752 | | | | 1,103,491 | |
| | |
Mercer International, Inc.(a) | | | 15,004 | | | | 183,049 | |
| | |
Neenah, Inc. | | | 2,178 | | | | 140,481 | |
| | |
Resolute Forest Products, Inc. | | | 242 | | | | 876 | |
| | |
Schweitzer-Mauduit International, Inc. | | | 6,292 | | | | 254,763 | |
| | |
Verso Corp., Class A* (a) | | | 17,182 | | | | 251,545 | |
| | | | | | | | 3,235,051 | |
|
| Personal Products – 0.3% | |
| | |
Avon Products, Inc.* | | | 23,232 | | | | 99,665 | |
| | |
Coty, Inc., Class A | | | 23,474 | | | | 274,411 | |
| | |
Edgewell Personal Care Co.* (a) | | | 17,182 | | | | 601,370 | |
| | |
elf Beauty, Inc.* | | | 3,630 | | | | 60,984 | |
| | |
Estee Lauder Cos., Inc. (The), Class A | | | 7,502 | | | | 1,397,398 | |
| | |
Herbalife Nutrition Ltd.* (a) | | | 6,776 | | | | 302,684 | |
| | |
Inter Parfums, Inc. | | | 2,662 | | | | 206,119 | |
| | |
Medifast, Inc.(a) | | | 1,210 | | | | 134,237 | |
| | |
Nu Skin Enterprises, Inc., Class A | | | 17,666 | | | | 787,550 | |
| | |
Revlon, Inc., Class A* (a) | | | 1,210 | | | | 31,811 | |
| | |
USANA Health Sciences, Inc.* | | | 1,210 | | | | 89,673 | |
| | | | | | | | 3,985,902 | |
|
| Pharmaceuticals – 3.2% | |
| | |
AcelRx Pharmaceuticals, Inc.* (a) | | | 6,050 | | | | 12,100 | |
See Accompanying Notes to the Financial Statements.
| | |
| 154 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Pharmaceuticals – (continued) | |
| | |
Aerie Pharmaceuticals, Inc.* (a) | | | 3,872 | | | $ | 85,920 | |
| | |
Akorn, Inc.* | | | 11,132 | | | | 55,549 | |
| | |
Allergan plc | | | 14,762 | | | | 2,599,736 | |
| | |
Amphastar Pharmaceuticals, Inc.* | | | 242 | | | | 4,674 | |
| | |
ANI Pharmaceuticals, Inc.* | | | 968 | | | | 75,610 | |
| | |
Axsome Therapeutics, Inc.* (a) | | | 968 | | | | 23,309 | |
| | |
Bristol-Myers Squibb Co.(a) | | | 73,084 | | | | 4,192,829 | |
| | |
Cara Therapeutics, Inc.* (a) | | | 2,662 | | | | 55,263 | |
| | |
Catalent, Inc.* | | | 6,050 | | | | 294,332 | |
| | |
Collegium Pharmaceutical, Inc.* | | | 5,566 | | | | 66,792 | |
| | |
Corcept Therapeutics, Inc.* | | | 6,050 | | | | 88,270 | |
| | |
Elanco Animal Health, Inc.* | | | 14,036 | | | | 379,253 | |
| | |
Eli Lilly & Co. | | | 30,250 | | | | 3,446,988 | |
| | |
Endo International plc* | | | 66,550 | | | | 305,464 | |
| | |
Evolus, Inc.* (a) | | | 726 | | | | 11,580 | |
| | |
Horizon Therapeutics plc* | | | 18,150 | | | | 524,716 | |
| | |
Innoviva, Inc.* | | | 25,168 | | | | 292,452 | |
| | |
Jazz Pharmaceuticals plc* | | | 2,178 | | | | 273,622 | |
| | |
Johnson & Johnson | | | 94,138 | | | | 12,429,982 | |
| | |
Lannett Co., Inc.* (a) | | | 11,616 | | | | 138,114 | |
| | |
Merck & Co., Inc. | | | 93,170 | | | | 8,074,112 | |
| | |
Mylan NV* | | | 24,200 | | | | 463,430 | |
| | |
MyoKardia, Inc.* (a) | | | 3,146 | | | | 180,360 | |
| | |
Nektar Therapeutics* (a) | | | 8,712 | | | | 149,193 | |
| | |
Odonate Therapeutics, Inc.* (a) | | | 6,292 | | | | 199,834 | |
| | |
Omeros Corp.* (a) | | | 484 | | | | 7,667 | |
| | |
Optinose, Inc.* (a) | | | 6,292 | | | | 49,203 | |
| | |
Pacira BioSciences, Inc.* | | | 3,146 | | | | 127,382 | |
| | |
Perrigo Co. plc | | | 5,808 | | | | 307,940 | |
| | |
Pfizer, Inc. | | | 202,554 | | | | 7,771,997 | |
| | |
Phibro Animal Health Corp., Class A | | | 1,936 | | | | 46,387 | |
| | |
Prestige Consumer Healthcare, Inc.* (a) | | | 15,246 | | | | 540,623 | |
| | |
Reata Pharmaceuticals, Inc., Class A* (a) | | | 1,452 | | | | 299,228 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Pharmaceuticals – (continued) | |
| | |
Revance Therapeutics, Inc.* (a) | | | 2,420 | | | $ | 37,897 | |
| | |
SIGA Technologies, Inc.* (a) | | | 18,392 | | | | 102,076 | |
| | |
Supernus Pharmaceuticals, Inc.* | | | 242 | | | | 6,725 | |
| | |
TherapeuticsMD, Inc.* (a) | | | 13,068 | | | | 34,761 | |
| | |
Theravance Biopharma, Inc.* (a) | | | 3,146 | | | | 50,714 | |
| | |
Tilray, Inc., Class 2* (a) | | | 2,178 | | | | 48,591 | |
| | |
WaVe Life Sciences Ltd.* (a) | | | 1,210 | | | | 30,601 | |
| | |
Zoetis, Inc. | | | 15,972 | | | | 2,043,138 | |
| | |
Zogenix, Inc.* | | | 2,420 | | | | 108,053 | |
| | | | | | | | 46,036,467 | |
|
| Professional Services – 0.6% | |
| | |
ASGN, Inc.* | | | 15,730 | | | | 1,000,271 | |
| | |
CBIZ, Inc.* | | | 9,680 | | | | 264,942 | |
| | |
CoStar Group, Inc.* | | | 1,452 | | | | 797,903 | |
| | |
CRA International, Inc. | | | 242 | | | | 11,918 | |
| | |
Equifax, Inc. | | | 3,630 | | | | 496,257 | |
| | |
Exponent, Inc. | | | 5,566 | | | | 353,608 | |
| | |
Forrester Research, Inc. | | | 484 | | | | 16,688 | |
| | |
FTI Consulting, Inc.* (a) | | | 3,872 | | | | 421,545 | |
| | |
Heidrick & Struggles International, Inc. | | | 1,452 | | | | 41,324 | |
| | |
Huron Consulting Group, Inc.* | | | 3,872 | | | | 256,094 | |
| | |
ICF International, Inc. | | | 2,904 | | | | 248,844 | |
| | |
IHS Markit Ltd.* | | | 12,342 | | | | 864,187 | |
| | |
Insperity, Inc. | | | 3,630 | | | | 383,437 | |
| | |
Kelly Services, Inc., Class A | | | 8,228 | | | | 197,554 | |
| | |
Kforce, Inc. | | | 3,388 | | | | 138,603 | |
| | |
Korn Ferry | | | 17,424 | | | | 639,287 | |
| | |
ManpowerGroup, Inc. | | | 3,630 | | | | 330,040 | |
| | |
Nielsen Holdings plc | | | 9,680 | | | | 195,149 | |
| | |
Resources Connection, Inc. | | | 2,662 | | | | 38,998 | |
| | |
Robert Half International, Inc. | | | 2,178 | | | | 124,734 | |
| | |
TransUnion | | | 5,566 | | | | 459,863 | |
| | |
TriNet Group, Inc.* | | | 2,420 | | | | 128,236 | |
| | |
TrueBlue, Inc.* | | | 11,616 | | | | 266,006 | |
| | |
Verisk Analytics, Inc. | | | 5,082 | | | | 735,365 | |
| | | | | | | | 8,410,853 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 155 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Real Estate Management & Development – 0.3% | |
| | |
Altisource Portfolio Solutions SA* | | | 3,630 | | | $ | 64,614 | |
| | |
CBRE Group, Inc., Class A* | | | 15,730 | | | | 842,342 | |
| | |
Consolidated-Tomoka Land Co. | | | 484 | | | | 30,961 | |
| | |
Cushman & Wakefield plc* | | | 51,546 | | | | 961,333 | |
| | |
eXp World Holdings, Inc.* (a) | | | 5,808 | | | | 52,098 | |
| | |
FRP Holdings, Inc.* | | | 242 | | | | 12,531 | |
| | |
Howard Hughes Corp. (The)* (a) | | | 2,904 | | | | 324,725 | |
| | |
Jones Lang LaSalle, Inc. | | | 1,936 | | | | 283,663 | |
| | |
Kennedy-Wilson Holdings, Inc. | | | 14,762 | | | | 339,674 | |
| | |
Marcus & Millichap, Inc.* | | | 1,210 | | | | 43,221 | |
| | |
Newmark Group, Inc., Class A | | | 48,642 | | | | 516,578 | |
| | |
Realogy Holdings Corp.(a) | | | 11,616 | | | | 91,534 | |
| | |
Redfin Corp.* (a) | | | 7,018 | | | | 122,043 | |
| | |
RMR Group, Inc. (The), Class A | | | 1,452 | | | | 70,277 | |
| | |
St Joe Co. (The)* | | | 968 | | | | 17,956 | |
| | | | | | | | 3,773,550 | |
|
| Road & Rail – 1.0% | |
| | |
AMERCO | | | 484 | | | | 196,039 | |
| | |
ArcBest Corp. | | | 7,502 | | | | 216,733 | |
| | |
Avis Budget Group, Inc.* | | | 17,666 | | | | 524,857 | |
| | |
Covenant Transportation Group, Inc., Class A* | | | 1,936 | | | | 29,756 | |
| | |
CSX Corp. | | | 29,524 | | | | 2,074,652 | |
| | |
Daseke, Inc.* (a) | | | 242 | | | | 651 | |
| | |
Genesee & Wyoming, Inc., Class A* | | | 2,904 | | | | 322,431 | |
| | |
Heartland Express, Inc. | | | 2,178 | | | | 45,520 | |
| | |
JB Hunt Transport Services, Inc. | | | 2,904 | | | | 341,394 | |
| | |
Kansas City Southern | | | 3,146 | | | | 442,894 | |
| | |
Knight-Swift Transportation Holdings, Inc.(a) | | | 9,438 | | | | 344,110 | |
| | |
Landstar System, Inc. | | | 2,662 | | | | 301,205 | |
| | |
Lyft, Inc., Class A* (a) | | | 7,502 | | | | 310,883 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Road & Rail – (continued) | |
| | |
Marten Transport Ltd. | | | 6,534 | | | $ | 141,527 | |
| | |
Norfolk Southern Corp. | | | 10,164 | | | | 1,849,848 | |
| | |
Old Dominion Freight Line, Inc.(a) | | | 3,146 | | | | 572,824 | |
| | |
Ryder System, Inc. | | | 17,424 | | | | 847,329 | |
| | |
Saia, Inc.* | | | 7,986 | | | | 712,351 | |
| | |
Schneider National, Inc., Class B | | | 11,132 | | | | 254,589 | |
| | |
Union Pacific Corp. | | | 25,168 | | | | 4,164,297 | |
| | |
Universal Logistics Holdings, Inc. | | | 1,936 | | | | 36,503 | |
| | |
Werner Enterprises, Inc. | | | 11,132 | | | | 406,318 | |
| | | | | | | | 14,136,711 | |
|
| Semiconductors & Semiconductor Equipment – 3.6% | |
| | |
Advanced Energy Industries, Inc.* | | | 4,356 | | | | 257,440 | |
| | |
Advanced Micro Devices, Inc.* (a) | | | 38,478 | | | | 1,305,558 | |
| | |
Ambarella, Inc.* (a) | | | 968 | | | | 50,946 | |
| | |
Amkor Technology, Inc.* | | | 22,506 | | | | 279,750 | |
| | |
Analog Devices, Inc. | | | 12,100 | | | | 1,290,223 | |
| | |
Applied Materials, Inc. | | | 44,044 | | | | 2,389,827 | |
| | |
Broadcom, Inc. | | | 17,424 | | | | 5,102,618 | |
| | |
Brooks Automation, Inc.(a) | | | 5,082 | | | | 215,833 | |
| | |
Cabot Microelectronics Corp. | | | 2,178 | | | | 329,139 | |
| | |
CEVA, Inc.* | | | 242 | | | | 6,587 | |
| | |
Cirrus Logic, Inc.* | | | 6,534 | | | | 444,051 | |
| | |
Cree, Inc.* (a) | | | 4,598 | | | | 219,463 | |
| | |
Cypress Semiconductor Corp. | | | 19,360 | | | | 450,507 | |
| | |
Diodes, Inc.* | | | 11,132 | | | | 519,308 | |
| | |
Enphase Energy, Inc.* (a) | | | 4,356 | | | | 84,637 | |
| | |
Entegris, Inc. | | | 12,100 | | | | 580,800 | |
| | |
First Solar, Inc.* (a) | | | 3,388 | | | | 175,464 | |
| | |
FormFactor, Inc.* | | | 12,342 | | | | 269,426 | |
| | |
Ichor Holdings Ltd.* | | | 4,598 | | | | 133,848 | |
| | |
Inphi Corp.* | | | 2,420 | | | | 173,950 | |
| | |
Intel Corp. | | | 200,618 | | | | 11,340,935 | |
| | |
KLA Corp. | | | 6,050 | | | | 1,022,692 | |
| | |
Kulicke & Soffa Industries, Inc. | | | 7,986 | | | | 189,628 | |
See Accompanying Notes to the Financial Statements.
| | |
| 156 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Semiconductors & Semiconductor Equipment – (continued) | |
| | |
Lam Research Corp. | | | 6,292 | | | $ | 1,705,384 | |
| | |
Lattice Semiconductor Corp.* | | | 7,744 | | | | 151,705 | |
| | |
MACOM Technology Solutions Holdings, Inc.* | | | 4,598 | | | | 104,558 | |
| | |
MagnaChip Semiconductor Corp.* (a) | | | 12,826 | | | | 163,788 | |
| | |
Marvell Technology Group Ltd.(a) | | | 18,392 | | | | 448,581 | |
| | |
Maxim Integrated Products, Inc. | | | 7,260 | | | | 425,872 | |
| | |
MaxLinear, Inc.* | | | 1,936 | | | | 36,707 | |
| | |
Mellanox Technologies Ltd.* | | | 1,694 | | | | 190,914 | |
| | |
Microchip Technology, Inc.(a) | | | 7,744 | | | | 730,182 | |
| | |
Micron Technology, Inc.* | | | 49,610 | | | | 2,358,955 | |
| | |
MKS Instruments, Inc. | | | 5,082 | | | | 549,974 | |
| | |
Monolithic Power Systems, Inc. | | | 2,420 | | | | 362,806 | |
| | |
NeoPhotonics Corp.* | | | 12,100 | | | | 79,618 | |
| | |
NVIDIA Corp. | | | 21,780 | | | | 4,378,216 | |
| | |
ON Semiconductor Corp.* | | | 19,360 | | | | 394,944 | |
| | |
Onto Innovation, Inc.* (a) | | | 1,411 | | | | 45,419 | |
| | |
PDF Solutions, Inc.* | | | 726 | | | | 11,732 | |
| | |
Photronics, Inc.* | | | 6,050 | | | | 71,390 | |
| | |
Power Integrations, Inc. | | | 1,452 | | | | 132,292 | |
| | |
Qorvo, Inc.* | | | 7,018 | | | | 567,475 | |
| | |
QUALCOMM, Inc. | | | 45,738 | | | | 3,679,165 | |
| | |
Rambus, Inc.* | | | 4,840 | | | | 67,010 | |
| | |
Semtech Corp.* | | | 2,662 | | | | 134,324 | |
| | |
Silicon Laboratories, Inc.* | | | 2,420 | | | | 257,101 | |
| | |
Skyworks Solutions, Inc. | | | 4,598 | | | | 418,694 | |
| | |
SMART Global Holdings, Inc.* | | | 2,662 | | | | 79,061 | |
| | |
SolarEdge Technologies, Inc.* | | | 4,840 | | | | 411,206 | |
| | |
SunPower Corp.* (a) | | | 18,634 | | | | 163,234 | |
| | |
Synaptics, Inc.* (a) | | | 10,164 | | | | 428,006 | |
| | |
Teradyne, Inc. | | | 6,050 | | | | 370,381 | |
| | |
Texas Instruments, Inc. | | | 33,880 | | | | 3,997,501 | |
| | |
Ultra Clean Holdings, Inc.* (a) | | | 8,470 | | | | 181,004 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Semiconductors & Semiconductor Equipment – (continued) | |
| | |
Universal Display Corp. | | | 1,452 | | | $ | 290,661 | |
| | |
Veeco Instruments, Inc.* | | | 23,474 | | | | 320,185 | |
| | |
Xilinx, Inc. | | | 7,744 | | | | 702,691 | |
| | |
Xperi Corp. | | | 14,278 | | | | 289,915 | |
| | | | | | | | 51,533,281 | |
|
| Software – 5.5% | |
| | |
8x8, Inc.* (a) | | | 7,502 | | | | 144,939 | |
| | |
ACI Worldwide, Inc.* | | | 11,374 | | | | 357,030 | |
| | |
Adobe, Inc.* | | | 17,424 | | | | 4,842,652 | |
| | |
Alarm.com Holdings, Inc.* | | | 2,178 | | | | 107,593 | |
| | |
Altair Engineering, Inc., Class A* (a) | | | 2,420 | | | | 89,225 | |
| | |
Alteryx, Inc., Class A* | | | 2,662 | | | | 243,573 | |
| | |
Anaplan, Inc.* | | | 4,840 | | | | 228,448 | |
| | |
ANSYS, Inc.* | | | 2,662 | | | | 586,039 | |
| | |
Appfolio, Inc., Class A* | | | 242 | | | | 23,530 | |
| | |
Appian Corp.* (a) | | | 1,936 | | | | 86,423 | |
| | |
Aspen Technology, Inc.* | | | 3,630 | | | | 417,849 | |
| | |
Autodesk, Inc.* | | | 7,986 | | | | 1,176,817 | |
| | |
Avalara, Inc.* | | | 3,872 | | | | 274,912 | |
| | |
Avaya Holdings Corp.* (a) | | | 38,720 | | | | 468,125 | |
| | |
Blackbaud, Inc. | | | 3,146 | | | | 264,107 | |
| | |
Blackline, Inc.* (a) | | | 3,146 | | | | 147,044 | |
| | |
Bottomline Technologies DE, Inc.* | | | 3,146 | | | | 128,829 | |
| | |
Box, Inc., Class A* (a) | | | 6,776 | | | | 114,650 | |
| | |
Cadence Design Systems, Inc.* | | | 9,680 | | | | 632,588 | |
| | |
CDK Global, Inc. | | | 5,324 | | | | 269,075 | |
| | |
Ceridian HCM Holding, Inc.* | | | 2,662 | | | | 128,441 | |
| | |
ChannelAdvisor Corp.* | | | 1,936 | | | | 18,218 | |
| | |
Cision Ltd.* | | | 8,470 | | | | 85,293 | |
| | |
Citrix Systems, Inc. | | | 4,114 | | | | 447,850 | |
| | |
Cloudera, Inc.* (a) | | | 16,456 | | | | 139,547 | |
| | |
CommVault Systems, Inc.* | | | 2,904 | | | | 144,242 | |
| | |
Cornerstone OnDemand, Inc.* | | | 1,936 | | | | 113,392 | |
| | |
Coupa Software, Inc.* | | | 1,694 | | | | 232,908 | |
| | |
Digimarc Corp.* (a) | | | 726 | | | | 25,846 | |
| | |
DocuSign, Inc.* | | | 4,114 | | | | 272,306 | |
| | |
Dropbox, Inc., Class A* | | | 7,018 | | | | 139,097 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 157 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Software – (continued) | |
| | |
Ebix, Inc.(a) | | | 3,146 | | | $ | 134,114 | |
| | |
eGain Corp.* | | | 1,210 | | | | 9,105 | |
| | |
Envestnet, Inc.* (a) | | | 2,904 | | | | 181,471 | |
| | |
Everbridge, Inc.* (a) | | | 2,178 | | | | 151,393 | |
| | |
Fair Isaac Corp.* | | | 1,452 | | | | 441,466 | |
| | |
FireEye, Inc.* | | | 15,004 | | | | 237,663 | |
| | |
Five9, Inc.* | | | 3,872 | | | | 214,935 | |
| | |
ForeScout Technologies, Inc.* | | | 2,420 | | | | 74,439 | |
| | |
Fortinet, Inc.* | | | 7,018 | | | | 572,388 | |
| | |
Guidewire Software, Inc.* (a) | | | 2,662 | | | | 300,114 | |
| | |
HubSpot, Inc.* | | | 1,452 | | | | 225,205 | |
| | |
Intuit, Inc. | | | 9,196 | | | | 2,367,970 | |
| | |
j2 Global, Inc.(a) | | | 2,904 | | | | 275,764 | |
| | |
LivePerson, Inc.* (a) | | | 3,146 | | | | 129,143 | |
| | |
LogMeIn, Inc.(a) | | | 1,452 | | | | 95,367 | |
| | |
Manhattan Associates, Inc.* | | | 3,872 | | | | 290,206 | |
| | |
Microsoft Corp. | | | 275,880 | | | | 39,552,916 | |
| | |
MicroStrategy, Inc., Class A* | | | 968 | | | | 148,346 | |
| | |
Mimecast Ltd.* | | | 4,840 | | | | 192,196 | |
| | |
Mitek Systems, Inc.* (a) | | | 726 | | | | 6,999 | |
| | |
MobileIron, Inc.* | | | 242 | | | | 1,515 | |
| | |
Nuance Communications, Inc.* | | | 17,424 | | | | 284,360 | |
| | |
Nutanix, Inc., Class A* (a) | | | 5,324 | | | | 155,567 | |
| | |
OneSpan, Inc.* | | | 2,420 | | | | 45,278 | |
| | |
Oracle Corp. | | | 82,280 | | | | 4,483,437 | |
| | |
Palo Alto Networks, Inc.* | | | 3,630 | | | | 825,426 | |
| | |
Paycom Software, Inc.* | | | 1,452 | | | | 307,142 | |
| | |
Paylocity Holding Corp.* | | | 2,178 | | | | 223,463 | |
| | |
Pegasystems, Inc.(a) | | | 3,146 | | | | 236,611 | |
| | |
Pivotal Software, Inc., Class A* | | | 6,050 | | | | 90,569 | |
| | |
Pluralsight, Inc., Class A* (a) | | | 5,566 | | | | 100,633 | |
| | |
Progress Software Corp. | | | 3,388 | | | | 135,113 | |
| | |
Proofpoint, Inc.* | | | 2,420 | | | | 279,195 | |
| | |
PROS Holdings, Inc.* | | | 1,210 | | | | 62,000 | |
| | |
PTC, Inc.* | | | 5,324 | | | | 356,229 | |
| | |
Q2 Holdings, Inc.* (a) | | | 2,420 | | | | 173,006 | |
| | |
QAD, Inc., Class A | | | 968 | | | | 44,993 | |
| | |
Qualys, Inc.* (a) | | | 1,210 | | | | 103,249 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Software – (continued) | |
| | |
Rapid7, Inc.* | | | 1,694 | | | $ | 84,852 | |
| | |
RealPage, Inc.* (a) | | | 2,420 | | | | 146,531 | |
| | |
RingCentral, Inc., Class A* | | | 2,178 | | | | 351,791 | |
| | |
SailPoint Technologies Holding, Inc.* (a) | | | 5,808 | | | | 112,443 | |
| | |
salesforce.com, Inc.* | | | 31,460 | | | | 4,923,175 | |
| | |
ServiceNow, Inc.* | | | 6,292 | | | | 1,555,760 | |
| | |
Smartsheet, Inc., Class A* | | | 5,566 | | | | 219,300 | |
| | |
Splunk, Inc.* (a) | | | 4,840 | | | | 580,606 | |
| | |
SPS Commerce, Inc.* | | | 1,936 | | | | 102,163 | |
| | |
SS&C Technologies Holdings, Inc. | | | 7,744 | | | | 402,765 | |
| | |
SVMK, Inc.* (a) | | | 5,566 | | | | 102,414 | |
| | |
Symantec Corp. | | | 20,328 | | | | 465,105 | |
| | |
Synopsys, Inc.* | | | 4,598 | | | | 624,178 | |
| | |
Tenable Holdings, Inc.* | | | 2,904 | | | | 73,181 | |
| | |
Teradata Corp.* | | | 11,858 | | | | 354,910 | |
| | |
TiVo Corp. | | | 44,528 | | | | 362,458 | |
| | |
Trade Desk, Inc. (The), Class A* (a) | | | 1,936 | | | | 388,749 | |
| | |
Tyler Technologies, Inc.* | | | 1,694 | | | | 454,873 | |
| | |
Varonis Systems, Inc.* (a) | | | 2,178 | | | | 155,836 | |
| | |
Verint Systems, Inc.* | | | 6,776 | | | | 307,563 | |
| | |
VMware, Inc., Class A | | | 1,936 | | | | 306,411 | |
| | |
Workday, Inc., Class A* (a) | | | 5,808 | | | | 941,825 | |
| | |
Workiva, Inc.* | | | 2,178 | | | | 90,757 | |
| | |
Yext, Inc.* | | | 7,018 | | | | 115,516 | |
| | |
Zendesk, Inc.* | | | 3,872 | | | | 273,557 | |
| | |
Zoom Video Communications, Inc., Class A* (a) | | | 1,452 | | | | 101,480 | |
| | |
Zscaler, Inc.* (a) | | | 2,178 | | | | 95,788 | |
| | |
Zuora, Inc., Class A* | | | 4,356 | | | | 62,073 | |
| | | | | | | | 79,615,634 | |
|
| Specialty Retail – 2.6% | |
| | |
Aaron’s, Inc. | | | 6,534 | | | | 489,593 | |
| | |
Abercrombie & Fitch Co., Class A(a) | | | 19,360 | | | | 313,438 | |
| | |
Advance Auto Parts, Inc. | | | 2,420 | | | | 393,202 | |
| | |
American Eagle Outfitters, Inc. | | | 18,634 | | | | 286,591 | |
| | |
America’sCar-Mart, Inc.* | | | 242 | | | | 22,020 | |
See Accompanying Notes to the Financial Statements.
| | |
| 158 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Specialty Retail – (continued) | |
| | |
Asbury Automotive Group, Inc.* | | | 7,502 | | | $ | 773,681 | |
| | |
At Home Group, Inc.* (a) | | | 3,388 | | | | 28,866 | |
| | |
AutoNation, Inc.* | | | 17,908 | | | | 910,622 | |
| | |
AutoZone, Inc.* | | | 968 | | | | 1,107,760 | |
| | |
Bed Bath & Beyond, Inc.(a) | | | 25,652 | | | | 351,432 | |
| | |
Best Buy Co., Inc. | | | 9,922 | | | | 712,697 | |
| | |
Boot Barn Holdings, Inc.* | | | 2,662 | | | | 93,303 | |
| | |
Buckle, Inc. (The)(a) | | | 8,954 | | | | 187,318 | |
| | |
Burlington Stores, Inc.* (a) | | | 3,146 | | | | 604,567 | |
| | |
Caleres, Inc. | | | 6,776 | | | | 145,820 | |
| | |
Camping World Holdings, Inc., Class A(a) | | | 11,616 | | | | 109,771 | |
| | |
CarMax, Inc.* | | | 7,502 | | | | 698,961 | |
| | |
Carvana Co.* | | | 3,388 | | | | 274,699 | |
| | |
Cato Corp. (The), Class A | | | 6,292 | | | | 110,047 | |
| | |
Chico’s FAS, Inc. | | | 11,132 | | | | 38,294 | |
| | |
Children’s Place, Inc. (The)(a) | | | 1,210 | | | | 99,111 | |
| | |
Conn’s, Inc.* | | | 6,534 | | | | 158,057 | |
| | |
Container Store Group, Inc. (The)* (a) | | | 5,082 | | | | 21,446 | |
| | |
Designer Brands, Inc., Class A(a) | | | 9,196 | | | | 151,734 | |
| | |
Dick’s Sporting Goods, Inc.(a) | | | 20,328 | | | | 791,369 | |
| | |
Five Below, Inc.* | | | 1,694 | | | | 211,936 | |
| | |
Floor & Decor Holdings, Inc., Class A* (a) | | | 6,292 | | | | 288,362 | |
| | |
Foot Locker, Inc.(a) | | | 5,082 | | | | 221,118 | |
| | |
GameStop Corp., Class A(a) | | | 484 | | | | 2,633 | |
| | |
Gap, Inc. (The)(a) | | | 12,342 | | | | 200,681 | |
| | |
Genesco, Inc.* | | | 5,566 | | | | 216,239 | |
| | |
Group 1 Automotive, Inc. | | | 4,598 | | | | 457,225 | |
| | |
Guess?, Inc.(a) | | | 1,694 | | | | 28,375 | |
| | |
Haverty Furniture Cos., Inc.(a) | | | 2,904 | | | | 52,679 | |
| | |
Hibbett Sports, Inc.* | | | 6,292 | | | | 150,127 | |
| | |
Home Depot, Inc. (The) | | | 40,172 | | | | 9,423,548 | |
| | |
L Brands, Inc.(a) | | | 11,858 | | | | 202,060 | |
| | |
Lithia Motors, Inc., Class A(a) | | | 6,534 | | | | 1,028,974 | |
| | |
Lowe’s Cos., Inc. | | | 28,072 | | | | 3,133,116 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Specialty Retail – (continued) | |
| | |
MarineMax, Inc.* | | | 1,452 | | | $ | 22,433 | |
| | |
Michaels Cos., Inc. (The)* (a) | | | 9,680 | | | | 84,506 | |
| | |
Monro, Inc.(a) | | | 2,178 | | | | 152,700 | |
| | |
Murphy USA, Inc.* | | | 9,196 | | | | 1,084,484 | |
| | |
National Vision Holdings, Inc.* (a) | | | 6,292 | | | | 149,750 | |
| | |
Office Depot, Inc. | | | 79,134 | | | | 163,016 | |
| | |
O’Reilly Automotive, Inc.* | | | 2,662 | | | | 1,159,328 | |
| | |
Party City Holdco, Inc.* | | | 242 | | | | 1,360 | |
| | |
Penske Automotive Group, Inc. | | | 7,502 | | | | 365,497 | |
| | |
Rent-A-Center, Inc. | | | 968 | | | | 25,042 | |
| | |
RH* (a) | | | 4,840 | | | | 879,428 | |
| | |
Ross Stores, Inc. | | | 11,858 | | | | 1,300,467 | |
| | |
Sally Beauty Holdings, Inc.* (a) | | | 38,478 | | | | 596,409 | |
| | |
Shoe Carnival, Inc.(a) | | | 484 | | | | 16,064 | |
| | |
Signet Jewelers Ltd. | | | 7,744 | | | | 124,214 | |
| | |
Sleep Number Corp.* | | | 8,954 | | | | 430,867 | |
| | |
Sonic Automotive, Inc., Class A | | | 6,776 | | | | 218,390 | |
| | |
Tiffany & Co.(a) | | | 4,114 | | | | 512,234 | |
| | |
TJX Cos., Inc. (The) | | | 42,350 | | | | 2,441,478 | |
| | |
Tractor Supply Co. | | | 5,566 | | | | 528,881 | |
| | |
Ulta Beauty, Inc.* | | | 2,178 | | | | 507,801 | |
| | |
Urban Outfitters, Inc.* (a) | | | 23,474 | | | | 673,704 | |
| | |
Williams-Sonoma, Inc. | | | 24,442 | | | | 1,632,481 | |
| | |
Zumiez, Inc.* | | | 5,566 | | | | 177,611 | |
| | | | | | | | 37,739,617 | |
|
| Technology Hardware, Storage & Peripherals – 3.1% | |
| | |
3D Systems Corp.* (a) | | | 7,018 | | | | 66,601 | |
| | |
Apple, Inc. | | | 154,154 | | | | 38,347,349 | |
| | |
Dell Technologies, Inc., Class C* | | | 5,808 | | | | 307,185 | |
| | |
Diebold Nixdorf, Inc.* (a) | | | 15,246 | | | | 106,722 | |
| | |
Hewlett Packard Enterprise Co. | | | 68,002 | | | | 1,115,913 | |
| | |
HP, Inc. | | | 58,564 | | | | 1,017,257 | |
| | |
Immersion Corp.* | | | 1,936 | | | | 15,914 | |
| | |
NCR Corp.* | | | 36,058 | | | | 1,053,254 | |
| | |
NetApp, Inc. | | | 11,132 | | | | 622,056 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 159 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Technology Hardware, Storage & Peripherals – (continued) | |
| | |
Pure Storage, Inc., Class A* (a) | | | 15,246 | | | $ | 296,687 | |
| | |
Seagate Technology plc | | | 10,890 | | | | 631,947 | |
| | |
Western Digital Corp. | | | 12,826 | | | | 662,463 | |
| | |
Xerox Holdings Corp. | | | 9,680 | | | | 328,442 | |
| | | | | | | | 44,571,790 | |
|
| Textiles, Apparel & Luxury Goods – 0.8% | |
| | |
Capri Holdings Ltd.* | | | 8,470 | | | | 263,163 | |
| | |
Carter’s, Inc.(a) | | | 3,146 | | | | 315,355 | |
| | |
Columbia Sportswear Co. | | | 2,420 | | | | 218,889 | |
| | |
Crocs, Inc.* | | | 7,986 | | | | 279,430 | |
| | |
Deckers Outdoor Corp.* | | | 2,662 | | | | 407,020 | |
| | |
Fossil Group, Inc.* (a) | | | 6,534 | | | | 71,090 | |
| | |
G-III Apparel Group Ltd.* | | | 7,744 | | | | 194,452 | |
| | |
Hanesbrands, Inc. | | | 17,908 | | | | 272,381 | |
| | |
Levi Strauss & Co., Class A(a) | | | 2,662 | | | | 47,437 | |
| | |
Lululemon Athletica, Inc.* | | | 3,872 | | | | 790,933 | |
| | |
Movado Group, Inc.(a) | | | 2,420 | | | | 63,041 | |
| | |
NIKE, Inc., Class B | | | 44,044 | | | | 3,944,140 | |
| | |
Oxford Industries, Inc.(a) | | | 2,904 | | | | 199,969 | |
| | |
PVH Corp. | | | 1,694 | | | | 147,649 | |
| | |
Ralph Lauren Corp. | | | 484 | | | | 46,493 | |
| | |
Skechers U.S.A., Inc., Class A* | | | 40,898 | | | | 1,528,358 | |
| | |
Steven Madden Ltd.(a) | | | 5,566 | | | | 229,208 | |
| | |
Tapestry, Inc. | | | 7,260 | | | | 187,744 | |
| | |
Under Armour, Inc., Class A* (a) | | | 10,890 | | | | 224,879 | |
| | |
Under Armour, Inc., Class C* | | | 1,936 | | | | 35,816 | |
| | |
Vera Bradley, Inc.* | | | 11,374 | | | | 122,384 | |
| | |
VF Corp. | | | 13,310 | | | | 1,095,280 | |
| | |
Wolverine World Wide, Inc. | | | 10,890 | | | | 323,215 | |
| | | | | | | | 11,008,326 | |
|
| Thrifts & Mortgage Finance – 0.8% | |
| | |
Axos Financial, Inc.* (a) | | | 15,972 | | | | 463,987 | |
| | |
Capitol Federal Financial, Inc. | | | 968 | | | | 13,813 | |
| | |
Dime Community Bancshares, Inc. | | | 8,712 | | | | 168,054 | |
| | |
Essent Group Ltd. | | | 33,880 | | | | 1,764,809 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Thrifts & Mortgage Finance – (continued) | |
| | |
Federal Agricultural Mortgage Corp., Class C | | | 3,630 | | | $ | 307,425 | |
| | |
Flagstar Bancorp, Inc. | | | 12,584 | | | | 457,303 | |
| | |
HomeStreet, Inc.* | | | 4,114 | | | | 123,461 | |
| | |
LendingTree, Inc.* (a) | | | 726 | | | | 261,251 | |
| | |
Luther Burbank Corp. | | | 11,858 | | | | 137,197 | |
| | |
Meridian Bancorp, Inc. | | | 4,598 | | | | 89,937 | |
| | |
Meta Financial Group, Inc.(a) | | | 6,776 | | | | 214,528 | |
| | |
MGIC Investment Corp. | | | 106,480 | | | | 1,459,841 | |
| | |
Mr Cooper Group, Inc.* (a) | | | 24,442 | | | | 312,858 | |
| | |
New York Community Bancorp, Inc.(a) | | | 20,328 | | | | 236,821 | |
| | |
NMI Holdings, Inc., Class A* | | | 2,178 | | | | 63,706 | |
| | |
Northfield Bancorp, Inc. | | | 3,630 | | | | 61,746 | |
| | |
Northwest Bancshares, Inc.(a) | | | 13,794 | | | | 232,705 | |
| | |
Oritani Financial Corp. | | | 726 | | | | 13,547 | |
| | |
PennyMac Financial Services, Inc.* | | | 16,698 | | | | 519,809 | |
| | |
Provident Financial Services, Inc. | | | 15,246 | | | | 380,388 | |
| | |
Radian Group, Inc. | | | 64,372 | | | | 1,615,737 | |
| | |
TFS Financial Corp. | | | 2,420 | | | | 46,609 | |
| | |
TrustCo Bank Corp. | | | 22,506 | | | | 194,452 | |
| | |
United Community Financial Corp. | | | 1,936 | | | | 22,051 | |
| | |
United Financial Bancorp, Inc. | | | 11,132 | | | | 157,184 | |
| | |
Walker & Dunlop, Inc. | | | 8,470 | | | | 533,525 | |
| | |
Washington Federal, Inc. | | | 28,798 | | | | 1,049,975 | |
| | |
WSFS Financial Corp. | | | 4,356 | | | | 183,693 | |
| | | | | | | | 11,086,412 | |
|
| Tobacco – 0.6% | |
| | |
Altria Group, Inc. | | | 79,860 | | | | 3,576,929 | |
| | |
Philip Morris International, Inc. | | | 57,354 | | | | 4,670,910 | |
| | |
Turning Point Brands, Inc.(a) | | | 1,694 | | | | 35,354 | |
| | |
Universal Corp. | | | 7,986 | | | | 437,633 | |
| | |
Vector Group Ltd.(a) | | | 36,300 | | | | 442,860 | |
| | | | | | | | 9,163,686 | |
See Accompanying Notes to the Financial Statements.
| | |
| 160 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Trading Companies & Distributors – 0.8% | |
| | |
Air Lease Corp.(a) | | | 32,186 | | | $ | 1,415,540 | |
| | |
Aircastle Ltd. | | | 17,424 | | | | 474,281 | |
| | |
Applied Industrial Technologies, Inc. | | | 3,872 | | | | 231,700 | |
| | |
Beacon Roofing Supply, Inc.* (a) | | | 20,812 | | | | 646,005 | |
| | |
BMC Stock Holdings, Inc.* (a) | | | 17,424 | | | | 470,274 | |
| | |
CAI International, Inc.* (a) | | | 5,808 | | | | 138,056 | |
| | |
DXP Enterprises, Inc.* | | | 3,146 | | | | 108,600 | |
| | |
Fastenal Co. | | | 17,182 | | | | 617,521 | |
| | |
Foundation Building Materials, Inc.* | | | 9,196 | | | | 170,954 | |
| | |
GATX Corp.(a) | | | 13,068 | | | | 1,039,559 | |
| | |
GMS, Inc.* | | | 12,584 | | | | 377,017 | |
| | |
H&E Equipment Services, Inc. | | | 11,616 | | | | 394,247 | |
| | |
HD Supply Holdings, Inc.* | | | 7,260 | | | | 287,060 | |
| | |
Herc Holdings, Inc.* | | | 7,502 | | | | 332,039 | |
| | |
Kaman Corp. | | | 4,114 | | | | 241,368 | |
| | |
MSC Industrial Direct Co., Inc., Class A | | | 2,420 | | | | 177,168 | |
| | |
NOW, Inc.* | | | 17,666 | | | | 186,200 | |
| | |
Rush Enterprises, Inc., Class A | | | 9,196 | | | | 401,773 | |
| | |
SiteOne Landscape Supply, Inc.* (a) | | | 2,662 | | | | 234,416 | |
| | |
Systemax, Inc. | | | 484 | | | | 10,474 | |
| | |
Titan Machinery, Inc.* | | | 1,210 | | | | 20,086 | |
| | |
Triton International Ltd. | | | 15,488 | | | | 568,410 | |
| | |
United Rentals, Inc.* | | | 3,630 | | | | 484,859 | |
| | |
Univar Solutions, Inc.* | | | 37,268 | | | | 799,771 | |
| | |
Watsco, Inc.(a) | | | 1,694 | | | | 298,652 | |
| | |
WESCO International, Inc.* | | | 13,794 | | | | 691,769 | |
| | |
WW Grainger, Inc. | | | 1,452 | | | | 448,436 | |
| | | | | | | | 11,266,235 | |
|
| Transportation Infrastructure – 0.1% | |
| | |
Macquarie Infrastructure Corp. | | | 21,780 | | | | 939,589 | |
|
| Water Utilities – 0.1% | |
| | |
American States Water Co.(a) | | | 4,114 | | | | 391,365 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Water Utilities – (continued) | |
| | |
American Water Works Co., Inc. | | | 5,324 | | | $ | 656,289 | |
| | |
Aqua America, Inc.(a) | | | 5,566 | | | | 252,307 | |
| | |
California Water Service Group(a) | | | 4,598 | | | | 257,350 | |
| | |
SJW Group | | | 726 | | | | 52,526 | |
| | | | | | | | 1,609,837 | |
|
| Wireless Telecommunication Services – 0.1% | |
| | |
Boingo Wireless, Inc.* | | | 3,630 | | | | 34,376 | |
| | |
Gogo, Inc.* (a) | | | 20,570 | | | | 126,505 | |
| | |
Shenandoah Telecommunications Co. | | | 6,292 | | | | 202,351 | |
| | |
Sprint Corp.* | | | 33,880 | | | | 210,395 | |
| | |
Telephone & Data Systems, Inc. | | | 6,776 | | | | 176,786 | |
| | |
T-Mobile US, Inc.* | | | 13,794 | | | | 1,140,212 | |
| | | | | | | | 1,890,625 | |
Total Common Stocks
(Cost $970,415,235) | | | | | | | 1,431,891,758 | |
| | | Number of
Rights | | | | |
|
| RIGHTS – 0.0%(c) | |
|
| Chemicals – 0.0%(c) | |
| | |
A Schulman, Inc., CVR* ‡ (d) | | | 8,214 | | | | 4,296 | |
|
| Media – 0.0%(c) | |
| | |
Media General, Inc., CVR* ‡ (d) | | | 22,261 | | | | 2,226 | |
Total Rights
(Cost $–) | | | | | | | 6,522 | |
| | | Principal
Amount | | | | |
|
| SECURITIES LENDING REINVESTMENTS(e) – 7.4% | |
|
| BANK NOTES – 0.2% | |
| | |
Bank of America NA (US Federal Funds Effective Rate (continuous series) + 0.26%), 2.08%, 2/3/2020(f) (Cost $3,000,000) | | $ | 3,000,000 | | | | 3,000,000 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 161 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SECURITIES LENDING REINVESTMENTS(e) – (continued) | |
|
| CERTIFICATES OF DEPOSIT – 1.4% | |
| | |
Bank of Montreal, Chicago (US Federal Funds Effective Rate (continuous series) + 0.35%), 2.17%, 8/6/2020(f) | | $ | 4,000,000 | | | $ | 3,999,992 | |
| | |
Bank of Nova Scotia, Houston
(ICE LIBOR USD 3 Month + 0.22%), 2.18%, 12/30/2019(f) | | | 1,000,000 | | | | 1,000,240 | |
| | |
Cooperatieve Rabobank UA, London (ICE LIBOR USD 1 Month + 0.19%), 1.99%, 4/24/2020(f) | | | 4,000,000 | | | | 3,999,440 | |
| | |
Credit Agricole CIB, New York (ICE LIBOR USD 1 Month + 0.21%), 2.06%, 12/20/2019(f) | | | 2,000,000 | | | | 2,000,000 | |
| | |
Credit Suisse, New York (SOFR + 0.38%), 2.20%, 3/6/2020(f) | | | 4,000,090 | | | | 4,000,838 | |
| | |
Standard Chartered, New York (US Federal Funds Effective Rate (continuous series) + 0.35%), 2.17%, 2/26/2020(f) | | | 2,000,000 | | | | 1,999,992 | |
| | |
Toronto-Dominion Bank, New York (US Federal Funds Effective Rate (continuous series) + 0.30%), 2.12%, 2/27/2020(f) | | | 1,000,000 | | | | 999,766 | |
| | |
Westpac Banking Corp., New York (US Federal Funds Effective Rate (continuous series) + 0.30%), 2.12%, 2/14/2020(f) | | | 2,000,000 | | | | 1,999,996 | |
Total Certificates of Deposit
(Cost $20,000,245) | | | | 20,000,264 | |
| | |
| | | | | | | | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| COMMERCIAL PAPER – 0.3% | |
| | |
Bank of Nova Scotia, Houston (ICE LIBOR USD 1 Month + 0.17%), 2.09%, 5/15/2020(f) (g) | | $ | 2,500,000 | | | $ | 2,498,887 | |
| | |
UBS AG, London (ICE LIBOR USD 1 Month + 0.34%), 2.14%, 7/28/2020(f) (g) | | | 3,000,000 | | | | 3,000,000 | |
Total Commercial Paper
(Cost $5,500,000) | | | | | | | 5,498,887 | |
| | |
| | | | | | | | |
|
| REPURCHASE AGREEMENTS – 5.5% | |
| | |
BofA Securities, Inc., 2.25%, dated 10/31/2019, due 1/31/2020, repurchase price $6,034,500, collateralized by various Common Stocks; total market value $6,569,140 | | | 6,000,000 | | | | 6,000,000 | |
| | |
Citadel Clearing LLC, 2.41%, dated 10/31/2019, due 1/31/2020, repurchase price $5,030,794, collateralized by various Common Stocks; total market value $5,468,705 | | | 5,000,000 | | | | 5,000,000 | |
| | |
Citigroup Global Markets Ltd., 1.75%, dated 10/31/2019, due 11/1/2019, repurchase price $30,001,458, collateralized by various U.S. Treasury Securities, ranging from 0.63% –3.00%, maturing 11/15/2020 –8/15/2048; total market value $30,858,834 | | | 30,000,000 | | | | 30,000,000 | |
See Accompanying Notes to the Financial Statements.
| | |
| 162 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SECURITIES LENDING REINVESTMENTS(e) – (continued) | |
|
| REPURCHASE AGREEMENTS – (continued) | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $2,965,477, collateralized by various U.S. Treasury Securities, ranging from 0.38% –6.88%, maturing 11/30/2020 –9/30/2025; total market value $3,035,850 | | $ | 2,965,336 | | | $ | 2,965,336 | |
| | |
NatWest Markets Securities, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $10,000,478, collateralized by various U.S. Treasury Securities, ranging from 0.13% –2.88%, maturing 1/15/2022 –11/15/2027; total market value $10,150,002 | | | 10,000,000 | | | | 10,000,000 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| REPURCHASE AGREEMENTS – (continued) | |
| | |
Societe Generale, 1.95%, dated 10/31/2019, due 11/1/2019, repurchase price $25,002,980, collateralized by various U.S. Treasury Securities, ranging from 1.13% –4.25%, maturing 1/31/2021 –11/15/2040; Common Stocks; total market value $27,634,826 | | $ | 25,001,626 | | | $ | 25,001,626 | |
Total Repurchase Agreements
(Cost $78,966,962) | | | | 78,966,962 | |
Total Securities Lending Reinvestments
(Cost $107,467,207) | | | | 107,466,113 | |
Total Investments – 106.4%
(Cost $1,077,882,442) | | | | 1,539,364,393 | |
| |
Liabilities in excess of other assets – (6.4%) | | | | (93,227,814 | ) |
| NET ASSETS – 100.0% | | | $ | 1,446,136,579 | |
| * | Non-income producing security. |
| ‡ | Value determined using significant unobservable inputs. |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $132,627,652, collateralized in the form of cash with a value of $107,470,616 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments; $23,653,958 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.75%, and maturity dates ranging from November 14, 2019 – May 15, 2049 and $6,827,174 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.00% – 4.85%, and maturity dates ranging from January 15, 2020 –October 22, 2071; a total value of $137,951,748. |
| (b) | Investment in affiliated company. Northern Trust Investments, Inc., the Investment Adviser of the Fund, is a subsidiary of Northern Trust Corporation. |
| (c) | Represents less than 0.05% of net assets. |
| (d) | Security fair valued as of October 31, 2019, using other significant observable inputs, in accordance with procedures approved by the Board of Trustees. Total value of all such securities at October 31, 2019 amounted to $6,522, which represents approximately 0.00% of net assets of the Fund. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 163 | |
FlexShares® Morningstar US Market Factor Tilt Index Fund (cont.)
| (e) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $107,466,113. |
| (f) | Variable or floating rate security, linked to the referenced benchmark. The interest rate shown is the rate in effect as of October 31, 2019. |
| (g) | Security exempt from registration under Section 4(2) of the Securities Act of 1933. Such securities may be sold in transactions exempt from registration normally to qualified institutional buyers. |
Percentages shown are based on Net Assets.
Abbreviations
CVR – Contingent Value Rights
ICE – Intercontinental Exchange
LIBOR – London Interbank Offered Rate
SOFR – Secured Overnight Financing Rate
USD – US Dollar
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | |
Aggregate gross unrealized appreciation | | $ | 482,432,904 | |
Aggregate gross unrealized depreciation | | | (21,740,593 | ) |
Net unrealized appreciation | | $ | 460,692,311 | |
Federal income tax cost | | $ | 1,078,884,938 | |
Investment in a company which was affiliated for the period ended October 31, 2019, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Security | | Value
October 31,
2018 | | | Purchases
at Cost | | | Sales
Proceeds | | | Shares
October 31,
2019 | | | Value
October 31,
2019 | | | Change in
Unrealized
Appreciation
(Depreciation) | | | Dividend
Income | | | Realized
Gain | |
Northern Trust Corp. | | $ | 809,190 | | | $ | 202,398 | | | $ | 241,680 | | | | 7,986 | | | $ | 796,044 | | | $ | 25,402 | | | $ | 17,820 | | | $ | 734 | |
Futures Contracts
FlexShares® Morningstar US Market Factor Tilt Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional
Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | | | | | |
Russell 2000E-Mini Index | | | 37 | | | | 12/20/2019 | | | | USD | | | $ | 2,892,290 | | | $ | 33,668 | |
S&P 500E-Mini Index | | | 60 | | | | 12/20/2019 | | | | USD | | | | 9,107,400 | | | | 162,915 | |
S&P Midcap 400E-Mini Index | | | 12 | | | | 12/20/2019 | | | | USD | | | | 2,346,000 | | | | 16,273 | |
| | | | | | | | | | | | | | | | | | | $ | 212,856 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Abbreviations:
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | |
| 164 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 98.3% | |
|
| Aerospace & Defense – 0.7% | |
| | |
Airbus SE | | | 16,863 | | | $ | 2,415,992 | |
| | |
BAE Systems plc | | | 76,846 | | | | 572,966 | |
| | |
Bombardier, Inc., Class B* (a) | | | 48,735 | | | | 61,551 | |
| | |
CAE, Inc. | | | 7,108 | | | | 178,626 | |
| | |
Cobham plc | | | 7,653 | | | | 15,627 | |
| | |
Dassault Aviation SA | | | 55 | | | | 76,394 | |
| | |
Elbit Systems Ltd. | | | 412 | | | | 67,526 | |
| | |
Leonardo SpA | | | 18,403 | | | | 213,731 | |
| | |
LISI | | | 3,196 | | | | 112,317 | |
| | |
Meggitt plc | | | 35,805 | | | | 289,295 | |
| | |
MTU Aero Engines AG | | | 1,386 | | | | 370,182 | |
| | |
QinetiQ Group plc | | | 30,657 | | | | 125,040 | |
| | |
Rolls-Royce Holdings plc* | | | 45,661 | | | | 418,915 | |
| | |
Saab AB, Class B(a) | | | 2,493 | | | | 77,034 | |
| | |
Safran SA | | | 9,856 | | | | 1,559,761 | |
| | |
Senior plc | | | 47,440 | | | | 113,382 | |
| | |
Singapore Technologies Engineering Ltd. | | | 17,900 | | | | 52,479 | |
| | |
Thales SA | | | 3,542 | | | | 346,321 | |
| | |
Ultra Electronics Holdings plc | | | 1,661 | | | | 41,912 | |
| | | | | | | | 7,109,051 | |
|
| Air Freight & Logistics – 0.5% | |
| | |
Bollore SA(a) | | | 12,858 | | | | 55,659 | |
| | |
bpost SA | | | 15,440 | | | | 176,563 | |
| | |
Cia de Distribucion Integral Logista Holdings SA | | | 2,159 | | | | 45,259 | |
| | |
Deutsche Post AG (Registered) | | | 31,108 | | | | 1,101,904 | |
| | |
DSV Panalpina A/S | | | 5,581 | | | | 541,796 | |
| | |
Freightways Ltd. | | | 12,987 | | | | 64,130 | |
| | |
ID Logistics Group* | | | 81 | | | | 15,489 | |
| | |
Kerry Logistics Network Ltd.(a) | | | 40,500 | | | | 64,695 | |
| | |
Kintetsu World Express, Inc. | | | 38,500 | | | | 628,935 | |
| | |
Konoike Transport Co. Ltd. | | | 29,200 | | | | 447,839 | |
| | |
Mainfreight Ltd. | | | 3,192 | | | | 82,291 | |
| | |
Panalpina Welttransport Holding AG (Registered)(a) | | | 680 | | | | 157,122 | |
| | |
PostNL NV(a) | | | 357,599 | | | | 821,050 | |
| | |
Royal Mail plc | | | 20,480 | | | | 56,076 | |
| | |
SG Holdings Co. Ltd. | | | 2,400 | | | | 59,697 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Air Freight & Logistics – (continued) | |
| | |
Yamato Holdings Co. Ltd. | | | 12,500 | | | $ | 210,906 | |
| | | | | | | | 4,529,411 | |
|
| Airlines – 0.8% | |
| | |
Air Canada* | | | 11,242 | | | | 401,149 | |
| | |
AirFrance-KLM* | | | 19,520 | | | | 232,475 | |
| | |
Air New Zealand Ltd. | | | 30,617 | | | | 55,468 | |
| | |
ANA Holdings, Inc. | | | 4,500 | | | | 154,933 | |
| | |
Chorus Aviation, Inc.(a) | | | 111,034 | | | | 659,775 | |
| | |
Dart Group plc | | | 73,920 | | | | 1,210,004 | |
| | |
Deutsche Lufthansa AG (Registered) | | | 15,785 | | | | 273,756 | |
| | |
easyJet plc | | | 6,640 | | | | 106,371 | |
| | |
Exchange Income Corp.(a) | | | 28,182 | | | | 836,444 | |
| | |
Finnair OYJ | | | 57,134 | | | | 372,888 | |
| | |
International Consolidated Airlines Group SA, DI | | | 40,502 | | | | 278,400 | |
| | |
Japan Airlines Co. Ltd. | | | 8,200 | | | | 255,925 | |
| | |
Norwegian Air Shuttle ASA* | | | 21,600 | | | | 105,092 | |
| | |
Qantas Airways Ltd. | | | 41,760 | | | | 184,419 | |
| | |
SAS AB* (a) | | | 165,737 | | | | 259,418 | |
| | |
Singapore Airlines Ltd. | | | 12,000 | | | | 82,971 | |
| | |
WestJet Airlines Ltd.(a) | | | 91,245 | | | | 2,126,400 | |
| | |
Wizz Air Holdings plc* (b) | | | 2,172 | | | | 107,195 | |
| | | | | | | | 7,703,083 | |
|
| Auto Components – 2.3% | |
| | |
Aisan Industry Co. Ltd. | | | 12,808 | | | | 106,748 | |
| | |
Aisin Seiki Co. Ltd. | | | 9,000 | | | | 362,980 | |
| | |
ARB Corp. Ltd.(a) | | | 997 | | | | 12,439 | |
| | |
Bridgestone Corp. | | | 33,300 | | | | 1,393,237 | |
| | |
CIE Automotive SA | | | 3,217 | | | | 80,108 | |
| | |
Cie Generale des Etablissements Michelin SCA | | | 8,008 | | | | 974,713 | |
| | |
Cie Plastic Omnium SA | | | 720 | | | | 19,680 | |
| | |
CIR-Compagnie Industriali Riunite SpA(a) | | | 190,190 | | | | 195,847 | |
| | |
Continental AG | | | 5,929 | | | | 792,969 | |
| | |
Daikyonishikawa Corp.(a) | | | 48,004 | | | | 372,558 | |
| | |
Denso Corp. | | | 25,900 | | | | 1,212,764 | |
| | |
Dometic Group AB(c) | | | 16,230 | | | | 150,705 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 165 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Auto Components – (continued) | |
| | |
Eagle Industry Co. Ltd. | | | 12,600 | | | $ | 127,859 | |
| | |
Exedy Corp. | | | 23,100 | | | | 548,947 | |
| | |
Faurecia SE | | | 6,160 | | | | 287,129 | |
| | |
FCC Co. Ltd. | | | 30,800 | | | | 641,328 | |
| | |
Freni Brembo SpA(a) | | | 3,647 | | | | 38,796 | |
| | |
Futaba Industrial Co. Ltd. | | | 35,200 | | | | 251,370 | |
| | |
Gestamp Automocion SA(b) | | | 24,236 | | | | 103,938 | |
| | |
G-Tekt Corp. | | | 25,000 | | | | 435,225 | |
| | |
GUD Holdings Ltd.(a) | | | 4,852 | | | | 36,169 | |
| | |
Hella GmbH & Co. KGaA | | | 4,435 | | | | 215,828 | |
| | |
Ichikoh Industries Ltd. | | | 17,400 | | | | 139,548 | |
| | |
Keihin Corp. | | | 12,300 | | | | 295,710 | |
| | |
Koito Manufacturing Co. Ltd. | | | 3,200 | | | | 169,317 | |
| | |
KYB Corp.* | | | 18,700 | | | | 601,105 | |
| | |
Leoni AG* | | | 23,010 | | | | 273,269 | |
| | |
Linamar Corp. | | | 880 | | | | 28,756 | |
| | |
Magna International, Inc. | | | 13,244 | | | | 713,615 | |
| | |
Martinrea International, Inc. | | | 66,528 | | | | 543,623 | |
| | |
Musashi Seimitsu Industry Co. Ltd. | | | 35,800 | | | | 503,694 | |
| | |
NGK Spark Plug Co. Ltd. | | | 7,400 | | | | 151,758 | |
| | |
NHK Spring Co. Ltd. | | | 17,000 | | | | 140,428 | |
| | |
Nifco, Inc. | | | 2,400 | | | | 63,938 | |
| | |
Nippon Seiki Co. Ltd. | | | 46,300 | | | | 719,094 | |
| | |
Nissin Kogyo Co. Ltd. | | | 21,000 | | | | 433,967 | |
| | |
NOK Corp. | | | 15,600 | | | | 247,049 | |
| | |
Nokian Renkaat OYJ | | | 6,413 | | | | 183,159 | |
| | |
Pacific Industrial Co. Ltd. | | | 48,500 | | | | 668,470 | |
| | |
Piolax, Inc.(a) | | | 23,100 | | | | 456,637 | |
| | |
Press Kogyo Co. Ltd. | | | 92,400 | | | | 395,738 | |
| | |
Riken Corp. | | | 7,800 | | | | 291,855 | |
| | |
Schaeffler AG (Preference) | | | 146,685 | | | | 1,237,187 | |
| | |
Showa Corp. | | | 47,200 | | | | 995,040 | |
| | |
Stanley Electric Co. Ltd. | | | 3,800 | | | | 106,508 | |
| | |
Sumitomo Electric Industries Ltd. | | | 30,800 | | | | 426,365 | |
| | |
Sumitomo Riko Co. Ltd.(a) | | | 8,000 | | | | 70,154 | |
| | |
Sumitomo Rubber Industries Ltd. | | | 9,300 | | | | 124,138 | |
| | |
Tachi-S Co. Ltd. | | | 19,100 | | | | 256,540 | |
| | |
TI Fluid Systems plc(b) | | | 124,278 | | | | 295,901 | |
| | |
Tokai Rika Co. Ltd. | | | 10,700 | | | | 208,843 | |
| | |
Topre Corp. | | | 46,200 | | | | 809,424 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Auto Components – (continued) | |
| | |
Toyo Tire Corp.(a) | | | 4,600 | | | $ | 64,720 | |
| | |
Toyoda Gosei Co. Ltd. | | | 7,800 | | | | 184,421 | |
| | |
Toyota Boshoku Corp. | | | 2,700 | | | | 40,086 | |
| | |
Toyota Industries Corp. | | | 9,100 | | | | 552,204 | |
| | |
TPR Co. Ltd. | | | 31,900 | | | | 577,773 | |
| | |
TS Tech Co. Ltd. | | | 8,800 | | | | 285,722 | |
| | |
Unipres Corp. | | | 24,500 | | | | 404,537 | |
| | |
Valeo SA | | | 9,123 | | | | 339,337 | |
| | |
Yokohama Rubber Co. Ltd. (The) | | | 8,000 | | | | 180,343 | |
| | | | | | | | 22,541,310 | |
|
| Automobiles – 2.6% | |
| | |
Aston Martin Lagonda Global Holdings plc* (a) (b) | | | 8,000 | | | | 41,335 | |
| | |
Bayerische Motoren Werke AG | | | 14,424 | | | | 1,105,691 | |
| | |
Bayerische Motoren Werke AG (Preference) | | | 4,940 | | | | 304,500 | |
| | |
Daimler AG (Registered) | | | 44,141 | | | | 2,580,978 | |
| | |
Ferrari NV | | | 3,234 | | | | 517,569 | |
| | |
Fiat Chrysler Automobiles NV | | | 49,280 | | | | 765,751 | |
| | |
Honda Motor Co. Ltd. | | | 94,800 | | | | 2,579,914 | |
| | |
Isuzu Motors Ltd. | | | 34,200 | | | | 400,985 | |
| | |
Mazda Motor Corp. | | | 19,700 | | | | 183,141 | |
| | |
Mitsubishi Motors Corp.(a) | | | 17,300 | | | | 79,695 | |
| | |
Nissan Motor Co. Ltd. | | | 131,300 | | | | 837,318 | |
| | |
Peugeot SA | | | 22,819 | | | | 577,897 | |
| | |
Porsche Automobil Holding SE (Preference) | | | 9,009 | | | | 663,359 | |
| | |
Renault SA | | | 8,855 | | | | 452,067 | |
| | |
Subaru Corp. | | | 29,200 | | | | 843,546 | |
| | |
Suzuki Motor Corp. | | | 23,100 | | | | 1,097,680 | |
| | |
Toyota Motor Corp. | | | 132,200 | | | | 9,222,999 | |
| | |
Trigano SA | | | 7,007 | | | | 631,252 | |
| | |
Volkswagen AG | | | 2,704 | | | | 512,540 | |
| | |
Volkswagen AG (Preference) | | | 9,086 | | | | 1,730,351 | |
| | |
Yamaha Motor Co. Ltd. | | | 17,700 | | | | 350,382 | |
| | | | | | | | 25,478,950 | |
|
| Banks – 10.9% | |
| | |
77 Bank Ltd. (The) | | | 61,600 | | | | 982,363 | |
| | |
ABN AMRO Bank NV, CVA(b) | | | 24,255 | | | | 451,633 | |
| | |
AIB Group plc | | | 45,969 | | | | 147,291 | |
| | |
Aktia Bank OYJ | | | 34,881 | | | | 339,728 | |
See Accompanying Notes to the Financial Statements.
| | |
| 166 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Banks – (continued) | |
| | |
Aozora Bank Ltd. | | | 12,400 | | | $ | 320,137 | |
| | |
Australia & New Zealand Banking Group Ltd. | | | 138,879 | | | | 2,558,501 | |
| | |
Awa Bank Ltd. (The) | | | 38,500 | | | | 925,952 | |
| | |
Banca Monte dei Paschi di Siena SpA* (a) | | | 247,410 | | | | 398,301 | |
| | |
Banca Popolare di Sondrio SCPA | | | 372,399 | | | | 744,101 | |
| | |
Banco Bilbao Vizcaya Argentaria SA | | | 353,738 | | | | 1,863,922 | |
| | |
Banco BPM SpA* | | | 136,156 | | | | 309,425 | |
| | |
Banco Comercial Portugues SA, Class R | | | 781,781 | | | | 177,055 | |
| | |
Banco de Sabadell SA | | | 352,660 | | | | 387,071 | |
| | |
Banco Espirito Santo SA (Registered)*‡ (d) | | | 48,647 | | | | — | |
| | |
Banco Santander SA | | | 831,908 | | | | 3,335,657 | |
| | |
Bank Hapoalim BM | | | 71,918 | | | | 575,377 | |
| | |
Bank LeumiLe-Israel BM | | | 53,977 | | | | 393,084 | |
| | |
Bank of Cyprus Holdings plc* | | | 148,635 | | | | 212,256 | |
| | |
Bank of East Asia Ltd. (The) | | | 21,267 | | | | 51,284 | |
| | |
Bank of Georgia Group plc | | | 2,000 | | | | 33,618 | |
| | |
Bank of Ireland Group plc | | | 32,080 | | | | 154,327 | |
| | |
Bank of Kyoto Ltd. (The) | | | 2,600 | | | | 104,380 | |
| | |
Bank of Montreal(a) | | | 19,558 | | | | 1,450,835 | |
| | |
Bank of Nova Scotia (The) | | | 59,444 | | | | 3,416,441 | |
| | |
Bank of Okinawa Ltd. (The) | | | 4,240 | | | | 146,099 | |
| | |
Bank of Queensland Ltd.(a) | | | 38,886 | | | | 242,454 | |
| | |
Bank of the Ryukyus Ltd. | | | 23,861 | | | | 261,995 | |
| | |
Bankia SA | | | 33,120 | | | | 63,111 | |
| | |
Bankinter SA | | | 21,280 | | | | 147,194 | |
| | |
Banque Cantonale de Geneve | | | 480 | | | | 96,073 | |
| | |
Banque Cantonale Vaudoise (Registered) | | | 186 | | | | 145,709 | |
| | |
Barclays plc | | | 749,181 | | | | 1,626,721 | |
| | |
BAWAG Group AG(a) (b) | | | 4,620 | | | | 190,709 | |
| | |
Bendigo & Adelaide Bank Ltd. | | | 3,078 | | | | 22,584 | |
| | |
Berner Kantonalbank AG (Registered)(a) | | | 640 | | | | 141,069 | |
| | |
BNP Paribas SA | | | 59,059 | | | | 3,084,272 | |
| | |
BPER Banca(a) | | | 337,337 | | | | 1,508,035 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – (continued) | |
| | |
Caisse Regionale de Credit Agricole Mutuel de Paris etd’Ile-de-France | | | 7,315 | | | $ | 802,388 | |
| | |
CaixaBank SA | | | 203,588 | | | | 582,596 | |
| | |
Canadian Imperial Bank of Commerce | | | 21,483 | | | | 1,835,703 | |
| | |
Canadian Western Bank | | | 67,144 | | | | 1,703,696 | |
| | |
Chiba Bank Ltd. (The)(a) | | | 17,400 | | | | 95,768 | |
| | |
comdirect bank AG | | | 7,483 | | | | 112,870 | |
| | |
Commerzbank AG | | | 19,040 | | | | 113,921 | |
| | |
Commonwealth Bank of Australia | | | 48,486 | | | | 2,627,592 | |
| | |
Concordia Financial Group Ltd.(a) | | | 43,121 | | | | 177,901 | |
| | |
Credit Agricole SA | | | 68,838 | | | | 897,398 | |
| | |
Credito Emiliano SpA(a) | | | 95,923 | | | | 554,345 | |
| | |
Dah Sing Banking Group Ltd. | | | 24,640 | | | | 31,878 | |
| | |
Dah Sing Financial Holdings Ltd. | | | 92,400 | | | | 344,244 | |
| | |
Danske Bank A/S | | | 30,569 | | | | 436,374 | |
| | |
DBS Group Holdings Ltd. | | | 59,429 | | | | 1,135,350 | |
| | |
DNB ASA | | | 41,349 | | | | 752,562 | |
| | |
Erste Group Bank AG | | | 10,934 | | | | 386,327 | |
| | |
FIBI Holdings Ltd. | | | 8,675 | | | | 285,346 | |
| | |
FinecoBank Banca Fineco SpA | | | 6,110 | | | | 68,848 | |
| | |
Fukuoka Financial Group, Inc. | | | 8,000 | | | | 156,144 | |
| | |
Graubuendner Kantonalbank | | | 81 | | | | 119,027 | |
| | |
Gunma Bank Ltd. (The) | | | 38,900 | | | | 132,419 | |
| | |
Hachijuni Bank Ltd. (The)(a) | | | 53,900 | | | | 234,337 | |
| | |
Hang Seng Bank Ltd. | | | 23,100 | | | | 482,767 | |
| | |
Heartland Group Holdings Ltd. | | | 399,024 | | | | 419,666 | |
| | |
Hiroshima Bank Ltd. (The)(a) | | | 32,000 | | | | 165,173 | |
| | |
Hokkoku Bank Ltd. (The) | | | 18,900 | | | | 536,728 | |
| | |
Hokuhoku Financial Group, Inc.(a) | | | 16,000 | | | | 158,217 | |
| | |
HSBC Holdings plc | | | 1,021,885 | | | | 7,709,121 | |
| | |
Hyakugo Bank Ltd. (The) | | | 215,600 | | | | 700,019 | |
| | |
Hyakujushi Bank Ltd. (The) | | | 23,100 | | | | 483,774 | |
| | |
ING Groep NV | | | 201,817 | | | | 2,280,391 | |
| | |
Intesa Sanpaolo SpA | | | 745,514 | | | | 1,868,072 | |
| | |
Israel Discount Bank Ltd., Class A | | | 69,395 | | | | 317,083 | |
| | |
Juroku Bank Ltd. (The) | | | 24,900 | | | | 573,986 | |
| | |
Jyske Bank A/S (Registered)* | | | 800 | | | | 26,608 | |
| | |
KBC Group NV | | | 11,165 | | | | 783,248 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 167 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Banks – (continued) | |
| | |
Keiyo Bank Ltd. (The) | | | 110,100 | | | $ | 697,641 | |
| | |
Kiyo Bank Ltd. (The)(a) | | | 48,400 | | | | 754,396 | |
| | |
Laurentian Bank of Canada(a) | | | 37,576 | | | | 1,295,083 | |
| | |
Liberbank SA | | | 1,380,071 | | | | 441,271 | |
| | |
Liechtensteinische Landesbank AG | | | 1,920 | | | | 126,670 | |
| | |
Lloyds Banking Group plc | | | 3,728,725 | | | | 2,740,583 | |
| | |
Luzerner Kantonalbank AG (Registered)(a) | | | 259 | | | | 108,141 | |
| | |
Mebuki Financial Group, Inc. | | | 85,310 | | | | 218,592 | |
| | |
Mediobanca Banca di Credito Finanziario SpA | | | 25,872 | | | | 307,403 | |
| | |
Mitsubishi UFJ Financial Group, Inc. | | | 634,300 | | | | 3,343,269 | |
| | |
Miyazaki Bank Ltd. (The) | | | 9,600 | | | | 247,404 | |
| | |
Mizrahi Tefahot Bank Ltd. | | | 11,583 | | | | 287,311 | |
| | |
Mizuho Financial Group, Inc. | | | 1,199,300 | | | | 1,872,641 | |
| | |
Musashino Bank Ltd. (The) | | | 26,200 | | | | 462,175 | |
| | |
Nanto Bank Ltd. (The) | | | 20,746 | | | | 530,428 | |
| | |
National Australia Bank Ltd. | | | 71,554 | | | | 1,410,391 | |
| | |
National Bank of Canada | | | 19,866 | | | | 1,028,102 | |
| | |
Nordea Bank Abp | | | 145,221 | | | | 1,064,629 | |
| | |
North Pacific Bank Ltd. | | | 269,500 | | | | 585,842 | |
| | |
Ogaki Kyoritsu Bank Ltd. (The) | | | 41,500 | | | | 1,009,236 | |
| | |
Oita Bank Ltd. (The)(a) | | | 9,300 | | | | 258,943 | |
| | |
Oversea-Chinese Banking Corp. Ltd. | | | 129,472 | | | | 1,042,664 | |
| | |
Raiffeisen Bank International AG | | | 11,153 | | | | 274,365 | |
| | |
Resona Holdings, Inc. | | | 107,800 | | | | 473,760 | |
| | |
Ringkjoebing Landbobank A/S | | | 1,100 | | | | 75,983 | |
| | |
Royal Bank of Canada | | | 40,119 | | | | 3,242,852 | |
| | |
Royal Bank of Scotland Group plc | | | 192,654 | | | | 530,249 | |
| | |
San-In Godo Bank Ltd. (The)(a) | | | 130,900 | | | | 776,161 | |
| | |
Sbanken ASA(b) | | | 12,000 | | | | 85,348 | |
| | |
Senshu Ikeda Holdings, Inc. | | | 238,700 | | | | 430,567 | |
| | |
Seven Bank Ltd. | | | 48,600 | | | | 141,612 | |
| | |
Shiga Bank Ltd. (The) | | | 1,000 | | | | 24,328 | |
| | |
Shinsei Bank Ltd. | | | 23,100 | | | | 363,685 | |
| | |
Shizuoka Bank Ltd. (The) | | | 24,000 | | | | 184,709 | |
| | |
Skandinaviska Enskilda Banken AB, Class A | | | 79,849 | | | | 766,805 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – (continued) | |
| | |
Skandinaviska Enskilda Banken AB, Class C | | | 28,798 | | | $ | 278,884 | |
| | |
Societe Generale SA | | | 33,880 | | | | 961,965 | |
| | |
Spar Nord Bank A/S | | | 60,137 | | | | 587,395 | |
| | |
SpareBank 1 Nord Norge | | | 86,548 | | | | 672,120 | |
| | |
Sparebank 1 Oestlandet | | | 16,416 | | | | 159,132 | |
| | |
SpareBank 1 SMN | | | 240 | | | | 2,588 | |
| | |
SpareBank 1SR-Bank ASA | | | 8,041 | | | | 85,830 | |
| | |
St Galler Kantonalbank AG (Registered) | | | 110 | | | | 48,102 | |
| | |
Standard Chartered plc | | | 140,217 | | | | 1,271,900 | |
| | |
Sumitomo Mitsui Financial Group, Inc. | | | 66,900 | | | | 2,401,110 | |
| | |
Sumitomo Mitsui Trust Holdings, Inc. | | | 21,800 | | | | 801,783 | |
| | |
Suruga Bank Ltd.* (a) | | | 210,500 | | | | 921,017 | |
| | |
Svenska Handelsbanken AB, Class A | | | 31,436 | | | | 315,394 | |
| | |
Svenska Handelsbanken AB, Class B(a) | | | 16,255 | | | | 163,490 | |
| | |
Swedbank AB, Class A | | | 46,123 | | | | 646,535 | |
| | |
Sydbank A/S | | | 51,359 | | | | 1,007,912 | |
| | |
TBC Bank Group plc | | | 29,273 | | | | 484,855 | |
| | |
Toho Bank Ltd. (The) | | | 214,632 | | | | 530,103 | |
| | |
TOMONY Holdings, Inc. | | | 164,600 | | | | 578,586 | |
| | |
Toronto-Dominion Bank (The) | | | 51,436 | | | | 2,943,281 | |
| | |
Unicaja Banco SA(b) | | | 729,267 | | | | 660,242 | |
| | |
UniCredit SpA | | | 115,346 | | | | 1,462,900 | |
| | |
Unione di Banche Italiane SpA(a) | | | 81,155 | | | | 246,904 | |
| | |
United Overseas Bank Ltd. | | | 48,426 | | | | 954,678 | |
| | |
Valiant Holding AG (Registered) | | | 1,680 | | | | 170,256 | |
| | |
Van Lanschot Kempen NV, CVA | | | 34,573 | | | | 796,499 | |
| | |
Virgin Money UK plc | | | 24,880 | | | | 44,252 | |
| | |
Walliser Kantonalbank (Registered) | | | 960 | | | | 109,937 | |
| | |
Westpac Banking Corp. | | | 92,551 | | | | 1,798,754 | |
| | |
Yamagata Bank Ltd. (The) | | | 2,200 | | | | 31,320 | |
| | |
Yamaguchi Financial Group, Inc. | | | 19,000 | | | | 134,804 | |
| | | | | | | | 105,576,418 | |
|
| Beverages – 1.2% | |
| | |
AG Barr plc | | | 4,785 | | | | 34,364 | |
| | |
Anheuser-Busch InBev SA/NV | | | 24,255 | | | | 1,949,409 | |
See Accompanying Notes to the Financial Statements.
| | |
| 168 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Beverages – (continued) | |
| | |
Asahi Group Holdings Ltd. | | | 16,200 | | | $ | 813,709 | |
| | |
Britvic plc | | | 16,720 | | | | 213,544 | |
| | |
C&C Group plc | | | 20,320 | | | | 99,917 | |
| | |
Carlsberg A/S, Class B | | | 3,003 | | | | 422,670 | |
| | |
Coca-Cola Amatil Ltd. | | | 34,804 | | | | 243,379 | |
| | |
Coca-Cola Bottlers Japan Holdings, Inc.(a) | | | 3,354 | | | | 76,540 | |
| | |
Coca-Cola European Partners plc | | | 7,700 | | | | 412,027 | |
| | |
Coca-Cola HBC AG, DI* | | | 4,000 | | | | 121,636 | |
| | |
Cott Corp.(a) | | | 2,631 | | | | 33,870 | |
| | |
Davide Campari-Milano SpA | | | 13,794 | | | | 126,423 | |
| | |
Diageo plc | | | 65,681 | | | | 2,689,547 | |
| | |
Fevertree Drinks plc | | | 3,795 | | | | 91,339 | |
| | |
Goldin Financial Holdings Ltd.* | | | 60,000 | | | | 19,062 | |
| | |
Heineken Holding NV | | | 2,618 | | | | 249,434 | |
| | |
Heineken NV(a) | | | 5,621 | | | | 573,552 | |
| | |
Ito En Ltd.(a) | | | 800 | | | | 39,147 | |
| | |
Kirin Holdings Co. Ltd. | | | 27,838 | | | | 593,558 | |
| | |
Molson Coors Canada, Inc., Class B | | | 8,198 | | | | 442,786 | |
| | |
Pernod Ricard SA | | | 6,391 | | | | 1,180,035 | |
| | |
Remy Cointreau SA | | | 580 | | | | 77,584 | |
| | |
Royal Unibrew A/S | | | 1,210 | | | | 99,249 | |
| | |
Sapporo Holdings Ltd.(a) | | | 1,800 | | | | 45,406 | |
| | |
Suntory Beverage & Food Ltd. | | | 3,000 | | | | 128,209 | |
| | |
Takara Holdings, Inc. | | | 8,600 | | | | 85,837 | |
| | |
Treasury Wine Estates Ltd. | | | 21,252 | | | | 257,252 | |
| | | | | | | | 11,119,485 | |
|
| Biotechnology – 0.5% | |
| | |
Abcam plc | | | 10,049 | | | | 151,360 | |
| | |
Argenx SE* | | | 394 | | | | 47,825 | |
| | |
BioGaia AB, Class B | | | 1,134 | | | | 43,256 | |
| | |
CSL Ltd. | | | 13,244 | | | | 2,336,134 | |
| | |
Galapagos NV* (a) | | | 1,617 | | | | 297,300 | |
| | |
Genmab A/S* | | | 1,310 | | | | 285,650 | |
| | |
Genus plc | | | 5,782 | | | | 216,526 | |
| | |
Grifols SA | | | 9,702 | | | | 312,598 | |
| | |
Grifols SA (Preference), Class B | | | 5,680 | | | | 123,443 | |
| | |
HEALIOS KK* (a) | | | 1,100 | | | | 12,984 | |
| | |
MorphoSys AG* | | | 1,667 | | | | 181,608 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Biotechnology – (continued) | |
| | |
PeptiDream, Inc.* | | | 2,500 | | | $ | 126,266 | |
| | |
SanBio Co. Ltd.* (a) | | | 2,200 | | | | 89,746 | |
| | |
Swedish Orphan Biovitrum AB* | | | 6,345 | | | | 100,698 | |
| | |
Vitrolife AB | | | 4,445 | | | | 69,483 | |
| | | | | | | | 4,394,877 | |
|
| Building Products – 1.0% | |
| | |
AGC, Inc. | | | 7,700 | | | | 272,800 | |
| | |
Aica Kogyo Co. Ltd. | | | 1,500 | | | | 48,078 | |
| | |
Assa Abloy AB, Class B | | | 27,874 | | | | 662,544 | |
| | |
Belimo Holding AG (Registered) | | | 21 | | | | 131,736 | |
| | |
Bunka Shutter Co. Ltd. | | | 47,900 | | | | 417,832 | |
| | |
Central Glass Co. Ltd. | | | 31,000 | | | | 755,608 | |
| | |
Cie de Saint-Gobain | | | 24,486 | | | | 996,280 | |
| | |
Daikin Industries Ltd. | | | 8,300 | | | | 1,169,317 | |
| | |
dormakaba Holding AG* | | | 212 | | | | 135,676 | |
| | |
Geberit AG (Registered) | | | 770 | | | | 390,638 | |
| | |
GWA Group Ltd.(a) | | | 17,760 | | | | 35,484 | |
| | |
James Halstead plc | | | 4,686 | | | | 30,682 | |
| | |
Kingspan Group plc | | | 4,599 | | | | 238,380 | |
| | |
Lindab International AB | | | 3,680 | | | | 41,176 | |
| | |
LIXIL Group Corp. | | | 4,400 | | | | 82,461 | |
| | |
Munters Group AB* (b) | | | 28,640 | | | | 137,934 | |
| | |
Nibe Industrier AB, Class B | | | 9,994 | | | | 136,928 | |
| | |
Nichias Corp. | | | 6,500 | | | | 138,472 | |
| | |
Nichiha Corp. | | | 26,800 | | | | 775,949 | |
| | |
Nippon Sheet Glass Co. Ltd. | | | 79,700 | | | | 503,539 | |
| | |
Okabe Co. Ltd. | | | 35,700 | | | | 304,146 | |
| | |
Reliance Worldwide Corp. Ltd.(a) | | | 52,795 | | | | 153,131 | |
| | |
Rockwool International A/S, Class A | | | 220 | | | | 41,400 | |
| | |
Rockwool International A/S, Class B | | | 402 | | | | 79,012 | |
| | |
Sanwa Holdings Corp. | | | 9,800 | | | | 115,582 | |
| | |
Schweiter Technologies AG | | | 56 | | | | 57,546 | |
| | |
Sekisui Jushi Corp. | | | 11,200 | | | | 231,242 | |
| | |
Takara Standard Co. Ltd. | | | 8,976 | | | | 158,505 | |
| | |
Takasago Thermal Engineering Co. Ltd. | | | 9,100 | | | | 165,661 | |
| | |
Tarkett SA | | | 722 | | | | 11,760 | |
| | |
TOTO Ltd. | | | 3,900 | | | | 160,719 | |
| | |
Uponor OYJ | | | 46,513 | | | | 607,658 | |
| | | | | | | | 9,187,876 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 169 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Capital Markets – 2.8% | |
| | |
3i Group plc | | | 57,365 | | | $ | 837,318 | |
| | |
Amundi SA(b) | | | 1,440 | | | | 102,818 | |
| | |
Anima Holding SpA(b) | | | 278,078 | | | | 1,206,204 | |
| | |
Ashmore Group plc | | | 23,895 | | | | 143,964 | |
| | |
ASX Ltd. | | | 2,924 | | | | 165,833 | |
| | |
AURELIUS Equity Opportunities SE & Co. KGaA | | | 25,256 | | | | 1,039,726 | |
| | |
Avanza Bank Holding AB | | | 6,589 | | | | 56,286 | |
| | |
Azimut Holding SpA(a) | | | 5,680 | | | | 116,726 | |
| | |
Banca Generali SpA | | | 1,397 | | | | 45,572 | |
| | |
Bolsas y Mercados Espanoles SHMSF SA | | | 965 | | | | 26,764 | |
| | |
Brederode SA | | | 80 | | | | 6,283 | |
| | |
Brewin Dolphin Holdings plc | | | 40,522 | | | | 174,296 | |
| | |
Brookfield Asset Management, Inc., Class A | | | 27,258 | | | | 1,510,405 | |
| | |
Bure Equity AB | | | 10,080 | | | | 155,893 | |
| | |
Burford Capital Ltd. | | | 9,311 | | | | 105,966 | |
| | |
CI Financial Corp. | | | 19,597 | | | | 285,825 | |
| | |
Close Brothers Group plc | | | 15,400 | | | | 275,599 | |
| | |
Credit Suisse Group AG (Registered)* | | | 124,098 | | | | 1,538,098 | |
| | |
Daiwa Securities Group, Inc. | | | 89,100 | | | | 403,610 | |
| | |
Deutsche Bank AG (Registered) | | | 79,156 | | | | 573,488 | |
| | |
Deutsche Boerse AG | | | 5,777 | | | | 895,548 | |
| | |
EFG International AG* | | | 6,000 | | | | 37,821 | |
| | |
Euronext NV(b) | | | 1,650 | | | | 132,999 | |
| | |
Fairfax India Holdings Corp.* (b) | | | 4,683 | | | | 52,918 | |
| | |
Fiera Capital Corp. | | | 32,802 | | | | 262,047 | |
| | |
Flow Traders(b) | | | 3,572 | | | | 84,165 | |
| | |
Gimv NV | | | 13,552 | | | | 813,418 | |
| | |
Haitong International Securities Group Ltd.(a) | | | 1,925,000 | | | | 559,986 | |
| | |
Hargreaves Lansdown plc | | | 5,061 | | | | 116,047 | |
| | |
Hong Kong Exchanges & Clearing Ltd. | | | 35,458 | | | | 1,108,388 | |
| | |
IG Group Holdings plc | | | 673 | | | | 5,533 | |
| | |
IGM Financial, Inc. | | | 8,240 | | | | 233,028 | |
| | |
Intermediate Capital Group plc | | | 17,402 | | | | 334,620 | |
| | |
Investec plc | | | 18,480 | | | | 104,644 | |
| | |
IOOF Holdings Ltd.(a) | | | 243,936 | | | | 1,240,281 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Capital Markets – (continued) | |
| | |
Jafco Co. Ltd. | | | 300 | | | $ | 11,364 | |
| | |
Japan Exchange Group, Inc. | | | 18,400 | | | | 306,199 | |
| | |
Julius Baer Group Ltd.* | | | 4,160 | | | | 183,474 | |
| | |
Jupiter Fund Management plc | | | 4,560 | | | | 20,216 | |
| | |
London Stock Exchange Group plc | | | 8,855 | | | | 796,815 | |
| | |
Macquarie Group Ltd. | | | 10,087 | | | | 930,669 | |
| | |
Magellan Financial Group Ltd.(a) | | | 2,640 | | | | 87,613 | |
| | |
Man Group plc | | | 79,920 | | | | 148,403 | |
| | |
Mason Group Holdings Ltd. | | | 2,078,905 | | | | 20,954 | |
| | |
Monex Group, Inc.(a) | | | 161,700 | | | | 397,874 | |
| | |
Natixis SA | | | 19,440 | | | | 89,160 | |
| | |
Nomura Holdings, Inc. | | | 134,700 | | | | 617,149 | |
| | |
Okasan Securities Group, Inc. | | | 29,600 | | | | 105,416 | |
| | |
Partners Group Holding AG | | | 539 | | | | 420,166 | |
| | |
Pendal Group Ltd. | | | 6,964 | | | | 34,305 | |
| | |
Perpetual Ltd. | | | 6,622 | | | | 163,921 | |
| | |
Platinum Asset Management Ltd.(a) | | | 31,440 | | | | 89,675 | |
| | |
Quilter plc(b) | | | 156,387 | | | | 277,037 | |
| | |
Rathbone Brothers plc | | | 1,140 | | | | 30,610 | |
| | |
Ratos AB, Class B(a) | | | 192,423 | | | | 496,921 | |
| | |
Rothschild & Co. | | | 6,468 | | | | 181,844 | |
| | |
Sanne Group plc | | | 13,604 | | | | 92,947 | |
| | |
SBI Holdings, Inc. | | | 10,900 | | | | 238,962 | |
| | |
Schroders plc | | | 960 | | | | 38,447 | |
| | |
Schroders plc(Non-Voting) | | | 4,377 | | | | 131,401 | |
| | |
Sparx Group Co. Ltd.(a) | | | 56,700 | | | | 140,563 | |
| | |
St James’s Place plc | | | 12,720 | | | | 171,345 | |
| | |
Standard Life Aberdeen plc | | | 89,571 | | | | 351,771 | |
| | |
TMX Group Ltd. | | | 1,545 | | | | 135,275 | |
| | |
Tokai Tokyo Financial Holdings, Inc.(a) | | | 231,000 | | | | 606,854 | |
| | |
TP ICAP plc | | | 469,680 | | | | 2,084,029 | |
| | |
UBS Group AG (Registered)* | | | 199,892 | | | | 2,357,986 | |
| | |
Value Partners Group Ltd.(a) | | | 8,000 | | | | 4,226 | |
| | |
Vontobel Holding AG (Registered) | | | 339 | | | | 19,720 | |
| | |
Vostok New Ventures Ltd., SDR* (a) | | | 6,421 | | | | 40,322 | |
| | |
VZ Holding AG | | | 57 | | | | 15,886 | |
| | | | | | | | 26,591,636 | |
See Accompanying Notes to the Financial Statements.
| | |
| 170 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Chemicals – 3.1% | |
| | |
ADEKA Corp. | | | 4,200 | | | $ | 60,763 | |
| | |
Air Liquide SA | | | 12,762 | | | | 1,695,737 | |
| | |
Air Water, Inc. | | | 6,000 | | | | 113,334 | |
| | |
Akzo Nobel NV | | | 5,820 | | | | 536,004 | |
| | |
Arkema SA | | | 4,620 | | | | 472,340 | |
| | |
Asahi Kasei Corp. | | | 61,600 | | | | 690,333 | |
| | |
BASF SE | | | 47,278 | | | | 3,598,839 | |
| | |
Borregaard ASA | | | 6,375 | | | | 61,416 | |
| | |
Chemtrade Logistics Income Fund(a) | | | 14,560 | | | | 115,762 | |
| | |
Chr Hansen Holding A/S | | | 2,772 | | | | 212,880 | |
| | |
Chugoku Marine Paints Ltd. | | | 24,900 | | | | 243,230 | |
| | |
CI Takiron Corp. | | | 61,000 | | | | 370,723 | |
| | |
Clariant AG (Registered)* | | | 11,963 | | | | 245,019 | |
| | |
Corbion NV | | | 3,198 | | | | 92,407 | |
| | |
Covestro AG(b) | | | 6,776 | | | | 325,443 | |
| | |
Croda International plc | | | 4,438 | | | | 276,572 | |
| | |
Daicel Corp. | | | 15,700 | | | | 141,744 | |
| | |
Dainichiseika Color & Chemicals Manufacturing Co. Ltd. | | | 15,400 | | | | 468,674 | |
| | |
DIC Corp. | | | 2,899 | | | | 83,936 | |
| | |
Elementis plc | | | 9,933 | | | | 19,113 | |
| | |
Elkem ASA(b) | | | 28,160 | | | | 66,864 | |
| | |
EMS-Chemie Holding AG (Registered) | | | 419 | | | | 261,994 | |
| | |
Evonik Industries AG | | | 4,000 | | | | 105,541 | |
| | |
FUCHS PETROLUB SE | | | 3,256 | | | | 131,317 | |
| | |
FUCHS PETROLUB SE (Preference) | | | 2,151 | | | | 91,863 | |
| | |
Fujimori Kogyo Co. Ltd. | | | 11,400 | | | | 407,049 | |
| | |
Fuso Chemical Co. Ltd. | | | 1,100 | | | | 28,633 | |
| | |
Givaudan SA (Registered) | | | 231 | | | | 678,193 | |
| | |
Hexpol AB | | | 5,784 | | | | 51,631 | |
| | |
Incitec Pivot Ltd. | | | 54,091 | | | | 128,568 | |
| | |
Ishihara Sangyo Kaisha Ltd. | | | 37,700 | | | | 393,722 | |
| | |
Israel Chemicals Ltd. | | | 29,862 | | | | 132,633 | |
| | |
Israel Corp. Ltd. (The)* | | | 243 | | | | 46,344 | |
| | |
JCU Corp. | | | 8,100 | | | | 200,505 | |
| | |
Johnson Matthey plc | | | 3,360 | | | | 133,479 | |
| | |
JSP Corp. | | | 17,700 | | | | 329,752 | |
| | |
JSR Corp. | | | 8,300 | | | | 157,317 | |
| | |
K+S AG (Registered) | | | 714 | | | | 10,164 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Chemicals – (continued) | |
| | |
Kaneka Corp. | | | 4,400 | | | $ | 147,949 | |
| | |
Kansai Paint Co. Ltd.(a) | | | 6,100 | | | | 148,120 | |
| | |
Kanto Denka Kogyo Co. Ltd. | | | 33,200 | | | | 296,667 | |
| | |
Koninklijke DSM NV | | | 4,965 | | | | 588,540 | |
| | |
Konishi Co. Ltd. | | | 19,100 | | | | 272,264 | |
| | |
Kumiai Chemical Industry Co. Ltd.(a) | | | 8,000 | | | | 74,594 | |
| | |
Kuraray Co. Ltd. | | | 24,600 | | | | 295,368 | |
| | |
LANXESS AG | | | 4,509 | | | | 293,276 | |
| | |
Lenzing AG | | | 485 | | | | 51,052 | |
| | |
Lintec Corp. | | | 1,800 | | | | 38,146 | |
| | |
Methanex Corp. | | | 4,543 | | | | 172,512 | |
| | |
Mitsubishi Chemical Holdings Corp. | | | 85,400 | | | | 656,151 | |
| | |
Mitsubishi Gas Chemical Co., Inc. | | | 16,400 | | | | 234,080 | |
| | |
Mitsui Chemicals, Inc. | | | 15,800 | | | | 380,439 | |
| | |
Nihon Parkerizing Co. Ltd. | | | 7,600 | | | | 90,198 | |
| | |
Nippon Kayaku Co. Ltd. | | | 15,100 | | | | 184,795 | |
| | |
Nippon Paint Holdings Co. Ltd. | | | 5,200 | | | | 286,203 | |
| | |
Nippon Shokubai Co. Ltd. | | | 400 | | | | 24,865 | |
| | |
Nippon Soda Co. Ltd. | | | 26,339 | | | | 707,539 | |
| | |
Nissan Chemical Corp.(a) | | | 3,800 | | | | 157,477 | |
| | |
Nitto Denko Corp. | | | 3,300 | | | | 184,376 | |
| | |
NOF Corp. | | | 2,000 | | | | 68,267 | |
| | |
Novozymes A/S, Class B | | | 6,699 | | | | 315,560 | |
| | |
Nufarm Ltd.* (a) | | | 246,631 | | | | 1,005,905 | |
| | |
Nutrien Ltd. | | | 17,941 | | | | 860,092 | |
| | |
OCI NV* | | | 1,318 | | | | 29,570 | |
| | |
Okamoto Industries, Inc. | | | 600 | | | | 23,311 | |
| | |
Orica Ltd. | | | 4,722 | | | | 74,499 | |
| | |
Osaka Soda Co. Ltd. | | | 16,200 | | | | 461,551 | |
| | |
Sakata INX Corp. | | | 31,200 | | | | 356,143 | |
| | |
Sanyo Chemical Industries Ltd. | | | 11,100 | | | | 533,925 | |
| | |
Scapa Group plc | | | 24,480 | | | | 70,640 | |
| | |
Shikoku Chemicals Corp. | | | 40,500 | | | | 479,908 | |
| | |
Shin-Etsu Chemical Co. Ltd. | | | 12,500 | | | | 1,406,040 | |
| | |
Shin-Etsu Polymer Co. Ltd. | | | 23,200 | | | | 200,657 | |
| | |
Showa Denko KK | | | 9,400 | | | | 267,379 | |
| | |
Sika AG (Registered)(a) | | | 2,541 | | | | 436,483 | |
| | |
Sirius Minerals plc* (a) | | | 245,130 | | | | 9,116 | |
| | |
SOL SpA | | | 3,009 | | | | 35,248 | |
| | |
Solvay SA | | | 2,618 | | | | 284,775 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 171 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Chemicals – (continued) | |
| | |
Sumitomo Bakelite Co. Ltd. | | | 3,000 | | | $ | 126,127 | |
| | |
Sumitomo Chemical Co. Ltd. | | | 64,600 | | | | 298,186 | |
| | |
Sumitomo Seika Chemicals Co. Ltd. | | | 7,700 | | | | 246,802 | |
| | |
Symrise AG | | | 3,465 | | | | 333,535 | |
| | |
Synthomer plc(a) | | | 37,452 | | | | 135,211 | |
| | |
T Hasegawa Co. Ltd. | | | 900 | | | | 16,892 | |
| | |
Taiyo Holdings Co. Ltd. | | | 900 | | | | 32,885 | |
| | |
Taiyo Nippon Sanso Corp. | | | 7,200 | | | | 169,968 | |
| | |
Tayca Corp.(a) | | | 8,100 | | | | 161,093 | |
| | |
Teijin Ltd. | | | 8,200 | | | | 165,509 | |
| | |
Tenma Corp. | | | 8,100 | | | | 148,506 | |
| | |
Tessenderlo Group SA* | | | 779 | | | | 25,769 | |
| | |
Toagosei Co. Ltd. | | | 6,900 | | | | 77,422 | |
| | |
Tokai Carbon Co. Ltd.(a) | | | 11,000 | | | | 112,335 | |
| | |
Tokuyama Corp. | | | 10,300 | | | | 277,925 | |
| | |
Tokyo Ohka Kogyo Co. Ltd.(a) | | | 700 | | | | 27,973 | |
| | |
Toray Industries, Inc. | | | 57,200 | | | | 407,789 | |
| | |
Tosoh Corp. | | | 13,800 | | | | 191,225 | |
| | |
Toyo Ink SC Holdings Co. Ltd. | | | 1,600 | | | | 39,384 | |
| | |
Toyobo Co. Ltd.(a) | | | 69,300 | | | | 942,975 | |
| | |
Ube Industries Ltd. | | | 9,400 | | | | 203,643 | |
| | |
Umicore SA(a) | | | 5,600 | | | | 230,975 | |
| | |
Victrex plc | | | 3,740 | | | | 106,277 | |
| | |
Wacker Chemie AG | | | 1,924 | | | | 151,114 | |
| | |
Yara International ASA | | | 6,006 | | | | 234,125 | |
| | |
Zeon Corp. | | | 8,000 | | | | 91,985 | |
| | | | | | | | 30,339,148 | |
|
| Commercial Services & Supplies – 0.8% | |
| | |
Babcock International Group plc | | | 12,240 | | | | 87,746 | |
| | |
Bell System24 Holdings, Inc. | | | 5,600 | | | | 92,155 | |
| | |
Biffa plc(b) | | | 52,800 | | | | 174,224 | |
| | |
Bilfinger SE | | | 4,914 | | | | 164,031 | |
| | |
Boyd Group Income Fund | | | 300 | | | | 41,923 | |
| | |
Brambles Ltd. | | | 61,812 | | | | 509,747 | |
| | |
Bravida Holding AB(b) | | | 12,702 | | | | 117,141 | |
| | |
CITIC Envirotech Ltd. | | | 406,500 | | | | 103,048 | |
| | |
Cleanaway Waste Management Ltd. | | | 115,675 | | | | 147,036 | |
| | |
Coor Service Management Holding AB(b) | | | 16,960 | | | | 145,231 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Commercial Services & Supplies – (continued) | |
| | |
Dai Nippon Printing Co. Ltd. | | | 3,900 | | | $ | 104,909 | |
| | |
Daiseki Co. Ltd. | | | 2,500 | | | | 73,424 | |
| | |
Downer EDI Ltd. | | | 43,582 | | | | 241,708 | |
| | |
Duskin Co. Ltd. | | | 5,700 | | | | 152,327 | |
| | |
Edenred | | | 5,468 | | | | 287,938 | |
| | |
Elis SA | | | 7,107 | | | | 135,822 | |
| | |
Elis SA – XLON | | | 4,520 | | | | 86,609 | |
| | |
G4S plc | | | 121,198 | | | | 324,325 | |
| | |
HomeServe plc | | | 11,489 | | | | 172,306 | |
| | |
Intrum AB(a) | | | 7,700 | | | | 207,799 | |
| | |
ISS A/S | | | 1,600 | | | | 41,890 | |
| | |
IWG plc | | | 39,525 | | | | 196,091 | |
| | |
Kokuyo Co. Ltd. | | | 5,600 | | | | 82,779 | |
| | |
Lassila & Tikanoja OYJ | | | 960 | | | | 15,487 | |
| | |
Loomis AB, Class B | | | 2,271 | | | | 87,924 | |
| | |
Mitsubishi Pencil Co. Ltd. | | | 1,800 | | | | 28,622 | |
| | |
Nippon Kanzai Co. Ltd. | | | 1,300 | | | | 22,932 | |
| | |
Okamura Corp. | | | 17,000 | | | | 171,722 | |
| | |
Park24 Co. Ltd.(a) | | | 2,200 | | | | 52,077 | |
| | |
PayPoint plc | | | 3,648 | | | | 43,146 | |
| | |
Pilot Corp. | | | 500 | | | | 20,489 | |
| | |
Prestige International, Inc. | | | 4,000 | | | | 33,375 | |
| | |
Relia, Inc. | | | 2,100 | | | | 27,487 | |
| | |
Rentokil Initial plc | | | 56,364 | | | | 331,490 | |
| | |
Ritchie Bros Auctioneers, Inc. | | | 4,230 | | | | 174,401 | |
| | |
Sato Holdings Corp. | | | 1,100 | | | | 32,612 | |
| | |
Secom Co. Ltd. | | | 5,400 | | | | 502,761 | |
| | |
Securitas AB, Class B | | | 7,047 | | | | 112,936 | |
| | |
Serco Group plc* | | | 57,046 | | | | 115,155 | |
| | |
SmartGroup Corp. Ltd. | | | 918 | | | | 7,216 | |
| | |
Societe BIC SA(a) | | | 1,944 | | | | 135,009 | |
| | |
Sohgo Security Services Co. Ltd. | | | 2,900 | | | | 158,540 | |
| | |
Tomra Systems ASA | | | 2,590 | | | | 69,848 | |
| | |
Toppan Printing Co. Ltd. | | | 15,000 | | | | 279,034 | |
| | |
Transcontinental, Inc., Class A(a) | | | 53,977 | | | | 617,654 | |
| | |
Waste Connections, Inc. | | | 8,855 | | | | 819,644 | |
| | | | | | | | 7,549,770 | |
|
| Communications Equipment – 0.1% | |
| | |
Nokia OYJ | | | 176,638 | | | | 649,037 | |
| | |
Telefonaktiebolaget LM Ericsson, Class A | | | 14,984 | | | | 130,799 | |
See Accompanying Notes to the Financial Statements.
| | |
| 172 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Communications Equipment – (continued) | |
| | |
Telefonaktiebolaget LM Ericsson, Class B | | | 70,235 | | | $ | 614,993 | |
| | | | | | | | 1,394,829 | |
|
| Construction & Engineering – 2.4% | |
| | |
ACS Actividades de Construccion y Servicios SA | | | 17,370 | | | | 705,196 | |
| | |
Aecon Group, Inc. | | | 294 | | | | 4,071 | |
| | |
AF Gruppen ASA | | | 2,860 | | | | 55,137 | |
| | |
Arcadis NV(a) | | | 57,477 | | | | 1,134,999 | |
| | |
Badger Daylighting Ltd. | | | 2,812 | | | | 83,482 | |
| | |
Balfour Beatty plc | | | 575,883 | | | | 1,679,664 | |
| | |
Boskalis Westminster(a) | | | 218 | | | | 4,786 | |
| | |
Bouygues SA | | | 7,392 | | | | 313,382 | |
| | |
Chiyoda Corp.* | | | 4,000 | | | | 10,397 | |
| | |
Cie d’Entreprises CFE | | | 282 | | | | 27,183 | |
| | |
CIMIC Group Ltd. | | | 5,661 | | | | 128,744 | |
| | |
COMSYS Holdings Corp. | | | 4,300 | | | | 127,681 | |
| | |
Dai-Dan Co. Ltd.(a) | | | 23,200 | | | | 540,378 | |
| | |
Daiho Corp. | | | 15,400 | | | | 438,046 | |
| | |
Eiffage SA | | | 2,541 | | | | 273,054 | |
| | |
Elecnor SA | | | 36,575 | | | | 422,331 | |
| | |
Electra Ltd. | | | 160 | | | | 56,716 | |
| | |
Ferrovial SA | | | 17,977 | | | | 530,683 | |
| | |
Fomento de Construcciones y Contratas SA | | | 3,542 | | | | 42,915 | |
| | |
Galliford Try plc | | | 78,200 | | | | 741,729 | |
| | |
Gold-Finance Holdings Ltd.* (b) (d) | | | 89,827 | | | | 825 | |
| | |
Hazama Ando Corp. | | | 30,800 | | | | 239,893 | |
| | |
HOCHTIEF AG | | | 442 | | | | 55,131 | |
| | |
JGC Holdings Corp. | | | 5,400 | | | | 79,173 | |
| | |
John Laing Group plc(b) | | | 388,465 | | | | 1,834,759 | |
| | |
Kajima Corp. | | | 18,900 | | | | 261,546 | |
| | |
Kandenko Co. Ltd. | | | 3,000 | | | | 28,528 | |
| | |
Kier Group plc(a) | | | 126,623 | | | | 185,970 | |
| | |
Kinden Corp. | | | 7,500 | | | | 113,431 | |
| | |
Koninklijke BAM Groep NV(a) | | | 194,656 | | | | 493,406 | |
| | |
Koninklijke Volkerwessels NV | | | 17,330 | | | | 402,152 | |
| | |
Kumagai Gumi Co. Ltd. | | | 6,500 | | | | 202,026 | |
| | |
Kyowa Exeo Corp. | | | 3,900 | | | | 100,039 | |
| | |
Kyudenko Corp. | | | 2,100 | | | | 69,349 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Construction & Engineering – (continued) | |
| | |
Maeda Corp. | | | 8,100 | | | $ | 75,976 | |
| | |
Maeda Road Construction Co. Ltd. | | | 3,000 | | | | 64,992 | |
| | |
Maire Tecnimont SpA(a) | | | 73,304 | | | | 191,860 | |
| | |
Mirait Holdings Corp.(a) | | | 13,700 | | | | 221,141 | |
| | |
Monadelphous Group Ltd.(a) | | | 9,080 | | | | 95,962 | |
| | |
Morgan Sindall Group plc | | | 34,881 | | | | 577,741 | |
| | |
NCC AB, Class B | | | 246 | | | | 3,960 | |
| | |
Nippo Corp. | | | 2,000 | | | | 41,330 | |
| | |
Nippon Densetsu Kogyo Co. Ltd. | | | 1,700 | | | | 37,144 | |
| | |
Nishimatsu Construction Co. Ltd. | | | 2,600 | | | | 54,571 | |
| | |
Obayashi Corp. | | | 30,900 | | | | 320,133 | |
| | |
Okumura Corp. | | | 3,000 | | | | 85,472 | |
| | |
Peab AB | | | 3,999 | | | | 33,746 | |
| | |
Penta-Ocean Construction Co. Ltd. | | | 17,100 | | | | 105,506 | |
| | |
Porr Ag(a) | | | 6,880 | | | | 162,724 | |
| | |
Raito Kogyo Co. Ltd.(a) | | | 38,600 | | | | 617,357 | |
| | |
Sacyr SA(a) | | | 257,458 | | | | 732,444 | |
| | |
Salini Impregilo SpA* (a) | | | 136,136 | | | | 277,333 | |
| | |
Sanki Engineering Co. Ltd. | | | 32,400 | | | | 397,713 | |
| | |
Shapir Engineering and Industry Ltd. | | | 18,954 | | | | 93,975 | |
| | |
Shikun & Binui Ltd. | | | 18,400 | | | | 73,108 | |
| | |
Shimizu Corp. | | | 29,700 | | | | 278,579 | |
| | |
Shinnihon Corp. | | | 16,200 | | | | 128,125 | |
| | |
SHO-BOND Holdings Co. Ltd.(a) | | | 1,200 | | | | 46,843 | |
| | |
Skanska AB, Class B | | | 18,511 | | | | 394,840 | |
| | |
SNC-Lavalin Group, Inc.(a) | | | 6,480 | | | | 117,388 | |
| | |
Sumitomo Densetsu Co. Ltd. | | | 15,400 | | | | 323,228 | |
| | |
Sumitomo Mitsui Construction Co. Ltd. | | | 132,540 | | | | 757,687 | |
| | |
Sweco AB, Class B | | | 3,381 | | | | 119,177 | |
| | |
Taihei Dengyo Kaisha Ltd.(a) | | | 15,600 | | | | 370,284 | |
| | |
Taikisha Ltd. | | | 4,500 | | | | 146,732 | |
| | |
Taisei Corp. | | | 11,200 | | | | 445,493 | |
| | |
Takamatsu Construction Group Co. Ltd. | | | 13,400 | | | | 323,643 | |
| | |
Toda Corp.(a) | | | 25,000 | | | | 157,717 | |
| | |
Toenec Corp. | | | 7,700 | | | | 251,432 | |
| | |
Tokyu Construction Co. Ltd. | | | 62,400 | | | | 498,715 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 173 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Construction & Engineering – (continued) | |
| | |
Toshiba Plant Systems & Services Corp. | | | 3,800 | | | $ | 74,590 | |
| | |
Totetsu Kogyo Co. Ltd. | | | 1,800 | | | | 56,528 | |
| | |
Veidekke ASA | | | 14,056 | | | | 152,713 | |
| | |
Vinci SA(a) | | | 13,629 | | | | 1,529,643 | |
| | |
WSP Global, Inc.(a) | | | 1,210 | | | | 75,656 | |
| | |
YIT OYJ | | | 143,220 | | | | 859,635 | |
| | |
Yokogawa Bridge Holdings Corp. | | | 31,200 | | | | 576,639 | |
| | |
Yurtec Corp. | | | 31,000 | | | | 192,702 | |
| | | | | | | | 23,528,979 | |
|
| Construction Materials – 0.6% | |
| | |
Adelaide Brighton Ltd. | | | 8,796 | | | | 18,665 | |
| | |
Boral Ltd. | | | 53,515 | | | | 185,452 | |
| | |
Brickworks Ltd. | | | 9,360 | | | | 116,655 | |
| | |
Buzzi Unicem SpA(a) | | | 5,653 | | | | 136,478 | |
| | |
Buzzi Unicem SpA (Retirement Savings Plan)(a) | | | 1,925 | | | | 29,465 | |
| | |
Cementir Holding NV | | | 54,933 | | | | 369,616 | |
| | |
CRH plc | | | 22,407 | | | | 816,490 | |
| | |
CSR Ltd. | | | 419,265 | | | | 1,195,850 | |
| | |
Fletcher Building Ltd.(a) | | | 17,649 | | | | 51,838 | |
| | |
HeidelbergCement AG | | | 8,701 | | | | 646,698 | |
| | |
Ibstock plc(b) | | | 9,600 | | | | 30,037 | |
| | |
Imerys SA | | | 33 | | | | 1,275 | |
| | |
James Hardie Industries plc, CHDI(a) | | | 7,840 | | | | 134,386 | |
| | |
Krosaki Harima Corp. | | | 2,700 | | | | 145,359 | |
| | |
LafargeHolcim Ltd. (Registered)* | | | 16,593 | | | | 855,588 | |
| | |
Mitani Sekisan Co. Ltd. | | | 7,800 | | | | 259,747 | |
| | |
Rhi Magnesita NV | | | 2,800 | | | | 126,015 | |
| | |
Sumitomo Osaka Cement Co. Ltd.(a) | | | 1,700 | | | | 74,853 | |
| | |
Taiheiyo Cement Corp. | | | 7,800 | | | | 222,228 | |
| | |
Wienerberger AG | | | 3,846 | | | | 104,009 | |
| | | | | | | | 5,520,704 | |
|
| Consumer Finance – 0.4% | |
| | |
Acom Co. Ltd.(a) | | | 53,900 | | | | 217,883 | |
| | |
AEON Financial Service Co. Ltd. | | | 4,800 | | | | 73,706 | |
| | |
Aiful Corp.* | | | 254,100 | | | | 594,675 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Consumer Finance – (continued) | |
| | |
Allied Properties HK Ltd. | | | 1,618,000 | | | $ | 317,915 | |
| | |
Amigo Holdings plc(b) | | | 24,080 | | | | 21,780 | |
| | |
B2Holding ASA(a) | | | 315,294 | | | | 279,366 | |
| | |
Cembra Money Bank AG | | | 3,003 | | | | 317,723 | |
| | |
Credit Corp. Group Ltd.(a) | | | 6,029 | | | | 130,342 | |
| | |
Credit Saison Co. Ltd. | | | 16,200 | | | | 236,470 | |
| | |
Funding Circle Holdings plc* (a) (b) | | | 10,653 | | | | 16,184 | |
| | |
Hitachi Capital Corp. | | | 9,700 | | | | 218,846 | |
| | |
Hong Leong Finance Ltd. | | | 192,500 | | | | 372,001 | |
| | |
Jaccs Co. Ltd. | | | 21,800 | | | | 495,670 | |
| | |
Provident Financial plc | | | 19,760 | | | | 112,531 | |
| | |
Resurs Holding AB(b) | | | 1,774 | | | | 10,459 | |
| | |
Sun Hung Kai & Co. Ltd. | | | 105,996 | | | | 45,846 | |
| | | | | | | | 3,461,397 | |
|
| Containers & Packaging – 0.3% | |
| | |
BillerudKorsnas AB | | | 12,245 | | | | 147,307 | |
| | |
CCL Industries, Inc., Class B | | | 2,960 | | | | 122,084 | |
| | |
DS Smith plc | | | 45,815 | | | | 212,002 | |
| | |
FP Corp.(a) | | | 600 | | | | 37,464 | |
| | |
Fuji Seal International, Inc. | | | 2,000 | | | | 49,951 | |
| | |
Huhtamaki OYJ | | | 2,051 | | | | 94,960 | |
| | |
Intertape Polymer Group, Inc. | | | 53,746 | | | | 693,523 | |
| | |
Mayr Melnhof Karton AG | | | 275 | | | | 33,810 | |
| | |
Orora Ltd. | | | 44,370 | | | | 94,457 | |
| | |
Pack Corp. (The) | | | 1,200 | | | | 42,570 | |
| | |
Pact Group Holdings Ltd.* (a) | | | 160,694 | | | | 267,918 | |
| | |
Rengo Co. Ltd. | | | 16,800 | | | | 122,770 | |
| | |
Smurfit Kappa Group plc | | | 8,316 | | | | 277,405 | |
| | |
Toyo Seikan Group Holdings Ltd. | | | 5,600 | | | | 89,461 | |
| | |
Vidrala SA | | | 1,239 | | | | 107,680 | |
| | |
Winpak Ltd. | | | 4,494 | | | | 159,471 | |
| | | | | | | | 2,552,833 | |
|
| Distributors – 0.1% | |
| | |
Arata Corp. | | | 11,200 | | | | 422,700 | |
| | |
Bapcor Ltd. | | | 25,156 | | | | 123,918 | |
| | |
Doshisha Co. Ltd. | | | 1,800 | | | | 28,689 | |
| | |
Inchcape plc | | | 4,530 | | | | 37,809 | |
| | |
Jardine Cycle & Carriage Ltd. | | | 10,022 | | | | 240,949 | |
| | |
PALTAC Corp. | | | 800 | | | | 38,925 | |
| | | | | | | | 892,990 | |
See Accompanying Notes to the Financial Statements.
| | |
| 174 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Diversified Consumer Services – 0.1% | |
| | |
AcadeMedia AB* (b) | | | 47,971 | | | $ | 243,233 | |
| | |
Benesse Holdings, Inc. | | | 2,000 | | | | 53,781 | |
| | |
G8 Education Ltd.(a) | | | 28,720 | | | | 50,852 | |
| | |
IDP Education Ltd. | | | 6,853 | | | | 84,040 | |
| | |
InvoCare Ltd.(a) | | | 4,344 | | | | 39,176 | |
| | | | | | | | 471,082 | |
|
| Diversified Financial Services – 1.1% | |
| | |
Ackermans & van Haaren NV | | | 784 | | | | 120,092 | |
| | |
Aker ASA, Class A | | | 760 | | | | 40,445 | |
| | |
AMP Ltd.(a) | | | 117,623 | | | | 148,702 | |
| | |
Banca Farmafactoring SpA(b) | | | 54,516 | | | | 330,257 | |
| | |
Banca IFIS SpA | | | 14,399 | | | | 244,176 | |
| | |
Banca Mediolanum SpA | | | 27,398 | | | | 234,904 | |
| | |
Banque Nationale de Belgique | | | 117 | | | | 292,389 | |
| | |
Cerved Group SpA | | | 10,505 | | | | 102,198 | |
| | |
Challenger Ltd.(a) | | | 11,680 | | | | 64,054 | |
| | |
doValue SpA(b) | | | 3,680 | | | | 43,519 | |
| | |
ECN Capital Corp. | | | 194,997 | | | | 645,366 | |
| | |
Element Fleet Management Corp.(a) | | | 35,189 | | | | 299,857 | |
| | |
Eurazeo SE | | | 4,126 | | | | 287,698 | |
| | |
EXOR NV | | | 4,928 | | | | 377,817 | |
| | |
FFP | | | 1,130 | | | | 132,876 | |
| | |
Financial Products Group Co. Ltd. | | | 53,900 | | | | 547,950 | |
| | |
First Pacific Co. Ltd. | | | 2,002,000 | | | | 766,296 | |
| | |
Fuyo General Lease Co. Ltd.(a) | | | 700 | | | | 45,974 | |
| | |
GRENKE AG | | | 495 | | | | 46,858 | |
| | |
Groupe Bruxelles Lambert SA | | | 1,760 | | | | 176,680 | |
| | |
HAL Trust(a) | | | 1,710 | | | | 259,456 | |
| | |
Industrivarden AB, Class A | | | 8,378 | | | | 185,573 | |
| | |
Industrivarden AB, Class C | | | 250 | | | | 5,421 | |
| | |
Investor AB, Class A | | | 2,092 | | | | 105,530 | |
| | |
Investor AB, Class B(a) | | | 16,940 | | | | 869,480 | |
| | |
Japan Investment Adviser Co. Ltd.(a) | | | 15,400 | | | | 291,176 | |
| | |
Japan Securities Finance Co. Ltd. | | | 77,000 | | | | 372,517 | |
| | |
KBC Ancora | | | 1,377 | | | | 65,598 | |
| | |
Kinnevik AB, Class A | | | 7,238 | | | | 202,844 | |
| | |
Kinnevik AB, Class B | | | 3,760 | | | | 102,993 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Diversified Financial Services – (continued) | |
| | |
L E Lundbergforetagen AB, Class B | | | 1,348 | | | $ | 50,846 | |
| | |
Mitsubishi UFJ Lease & Finance Co. Ltd. | | | 21,500 | | | | 133,051 | |
| | |
Mizuho Leasing Co. Ltd. | | | 28,738 | | | | 816,111 | |
| | |
Onex Corp.(a) | | | 1,520 | | | | 89,545 | |
| | |
ORIX Corp. | | | 63,100 | | | | 996,070 | |
| | |
Pargesa Holding SA | | | 1,265 | | | | 99,867 | |
| | |
Plus500 Ltd. | | | 77,924 | | | | 806,669 | |
| | |
Ricoh Leasing Co. Ltd. | | | 7,700 | | | | 260,691 | |
| | |
Rolls-Royce International Ltd., Class C* (d) | | | 2,100,406 | | | | 2,718 | |
| | |
Sofina SA | | | 330 | | | | 72,970 | |
| | |
SRH NV*‡ (d) | | | 2,857 | | | | — | |
| | |
Tokyo Century Corp. | | | 600 | | | | 27,973 | |
| | |
Wendel SA | | | 1,377 | | | | 195,104 | |
| | |
Zenkoku Hosho Co. Ltd. | | | 1,600 | | | | 67,268 | |
| | | | | | | | 11,027,579 | |
|
| Diversified Telecommunication Services – 1.5% | |
| | |
ARTERIA Networks Corp.* | | | 23,100 | | | | 322,445 | |
| | |
BCE, Inc. | | | 5,631 | | | | 267,680 | |
| | |
Bezeq The Israeli Telecommunication Corp. Ltd.* | | | 3,283 | | | | 2,167 | |
| | |
BT Group plc | | | 408,716 | | | | 1,082,614 | |
| | |
Cellnex Telecom SA* (a) (b) | | | 7,146 | | | | 308,214 | |
| | |
Chorus Ltd. | | | 38,130 | | | | 129,722 | |
| | |
Deutsche Telekom AG (Registered) | | | 90,860 | | | | 1,598,370 | |
| | |
Elisa OYJ | | | 5,044 | | | | 275,571 | |
| | |
Euskaltel SA(b) | | | 22,767 | | | | 211,836 | |
| | |
Gamma Communications plc | | | 1,701 | | | | 26,193 | |
| | |
HKBN Ltd. | | | 51,500 | | | | 91,991 | |
| | |
HKT Trust & HKT Ltd. | | | 162,400 | | | | 252,788 | |
| | |
Iliad SA | | | 1,200 | | | | 124,239 | |
| | |
Infrastrutture Wireless Italiane SpA(b) | | | 5,179 | | | | 53,157 | |
| | |
Inmarsat plc | | | 3,680 | | | | 26,200 | |
| | |
Internet Initiative Japan, Inc. | | | 2,300 | | | | 54,806 | |
| | |
Koninklijke KPN NV | | | 153,872 | | | | 477,235 | |
| | |
Nippon Telegraph & Telephone Corp. | | | 31,300 | | | | 1,556,531 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 175 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Diversified Telecommunication Services – (continued) | |
| | |
Orange SA | | | 106,183 | | | $ | 1,710,607 | |
| | |
PCCW Ltd. | | | 206,035 | | | | 122,501 | |
| | |
Proximus SADP | | | 10,514 | | | | 322,925 | |
| | |
Singapore Telecommunications Ltd. | | | 184,800 | | | | 448,099 | |
| | |
Spark New Zealand Ltd. | | | 71,389 | | | | 205,102 | |
| | |
SpeedCast International Ltd.(a) | | | 65,120 | | | | 44,640 | |
| | |
Sunrise Communications Group AG* (b) | | | 2,693 | | | | 209,190 | |
| | |
Swisscom AG (Registered) | | | 467 | | | | 238,528 | |
| | |
TalkTalk Telecom Group plc | | | 121,905 | | | | 176,044 | |
| | |
Telecom Italia SpA* | | | 353,643 | | | | 207,016 | |
| | |
Telecom Italia SpA (Retirement Savings Plan) | | | 358,572 | | | | 207,541 | |
| | |
Telefonica Deutschland Holding AG | | | 14,053 | | | | 44,605 | |
| | |
Telefonica SA | | | 214,160 | | | | 1,642,627 | |
| | |
Telekom Austria AG* | | | 1,426 | | | | 11,041 | |
| | |
Telenor ASA | | | 21,945 | | | | 411,475 | |
| | |
Telia Co. AB | | | 87,087 | | | | 383,717 | |
| | |
Telstra Corp. Ltd. | | | 78,463 | | | | 188,659 | |
| | |
TELUS Corp. | | | 8,085 | | | | 288,190 | |
| | |
United Internet AG (Registered) | | | 5,623 | | | | 169,442 | |
| | |
Vocus Group Ltd.* | | | 70,640 | | | | 161,576 | |
| | | | | | | | 14,055,284 | |
|
| Electric Utilities – 1.4% | |
| | |
Acciona SA | | | 1,497 | | | | 156,073 | |
| | |
AusNet Services | | | 142,277 | | | | 181,340 | |
| | |
BKW AG | | | 1,400 | | | | 103,289 | |
| | |
Chubu Electric Power Co., Inc. | | | 30,500 | | | | 458,607 | |
| | |
Chugoku Electric Power Co., Inc. (The)(a) | | | 4,206 | | | | 56,064 | |
| | |
CK Infrastructure Holdings Ltd. | | | 24,000 | | | | 172,857 | |
| | |
CLP Holdings Ltd. | | | 61,000 | | | | 633,139 | |
| | |
Contact Energy Ltd. | | | 20,140 | | | | 95,319 | |
| | |
EDP – Energias de Portugal SA | | | 130,823 | | | | 538,565 | |
| | |
Electricite de France SA(a) | | | 14,001 | | | | 144,518 | |
| | |
Elia System Operator SA/NV | | | 1,224 | | | | 105,557 | |
| | |
Emera, Inc.(a) | | | 5,148 | | | | 213,581 | |
| | |
Endesa SA | | | 2,320 | | | | 63,155 | |
| | |
Enel SpA | | | 366,090 | | | | 2,834,492 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Electric Utilities – (continued) | |
| | |
EVN AG | | | 2,240 | | | $ | 40,935 | |
| | |
Fortis, Inc. | | | 10,051 | | | | 418,451 | |
| | |
Fortum OYJ | | | 10,703 | | | | 261,384 | |
| | |
Genesis Energy Ltd.(a) | | | 13,484 | | | | 28,363 | |
| | |
HK Electric Investments & HK Electric Investments Ltd.(b) | | | 174,000 | | | | 173,607 | |
| | |
Hokkaido Electric Power Co., Inc. | | | 10,100 | | | | 53,067 | |
| | |
Hokuriku Electric Power Co.* | | | 15,000 | | | | 107,257 | |
| | |
Hydro One Ltd.(b) | | | 14,168 | | | | 263,989 | |
| | |
Iberdrola SA | | | 170,341 | | | | 1,749,897 | |
| | |
Infratil Ltd. | | | 42,865 | | | | 135,522 | |
| | |
Kansai Electric Power Co., Inc. (The) | | | 42,600 | | | | 498,291 | |
| | |
Kyushu Electric Power Co., Inc. | | | 30,800 | | | | 308,271 | |
| | |
Mercury NZ Ltd. | | | 17,270 | | | | 54,989 | |
| | |
Okinawa Electric Power Co., Inc. (The) | | | 11,215 | | | | 186,424 | |
| | |
Orsted A/S(b) | | | 5,390 | | | | 473,022 | |
| | |
Power Assets Holdings Ltd. | | | 54,500 | | | | 389,052 | |
| | |
Red Electrica Corp. SA | | | 9,747 | | | | 196,280 | |
| | |
Romande Energie Holding SA (Registered) | | | 76 | | | | 90,884 | |
| | |
Shikoku Electric Power Co., Inc.(a) | | | 8,600 | | | | 85,519 | |
| | |
Spark Infrastructure Group | | | 1,230 | | | | 1,712 | |
| | |
SSE plc | | | 59,684 | | | | 991,261 | |
| | |
Terna Rete Elettrica Nazionale SpA(a) | | | 54,824 | | | | 362,338 | |
| | |
Tohoku Electric Power Co., Inc. | | | 22,500 | | | | 231,858 | |
| | |
Tokyo Electric Power Co. Holdings, Inc.* | | | 56,315 | | | | 261,506 | |
| | |
Trustpower Ltd.(a) | | | 25,928 | | | | 140,337 | |
| | |
Verbund AG | | | 3,625 | | | | 196,145 | |
| | | | | | | | 13,456,917 | |
|
| Electrical Equipment – 1.1% | |
| | |
ABB Ltd. (Registered) | | | 49,475 | | | | 1,037,383 | |
| | |
Fagerhult AB | | | 4,207 | | | | 24,977 | |
| | |
Fuji Electric Co. Ltd. | | | 4,800 | | | | 154,072 | |
| | |
Fujikura Ltd. | | | 4,700 | | | | 22,042 | |
| | |
Futaba Corp. | | | 3,400 | | | | 44,000 | |
| | |
Huber + Suhner AG (Registered) | | | 867 | | | | 57,639 | |
See Accompanying Notes to the Financial Statements.
| | |
| 176 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Electrical Equipment – (continued) | |
| | |
Johnson Electric Holdings Ltd. | | | 269,500 | | | $ | 493,082 | |
| | |
Legrand SA | | | 9,163 | | | | 715,385 | |
| | |
Mabuchi Motor Co. Ltd.(a) | | | 2,000 | | | | 81,865 | |
| | |
Melrose Industries plc | | | 151,074 | | | | 416,589 | |
| | |
Mitsubishi Electric Corp. | | | 71,200 | | | | 1,025,140 | |
| | |
Nexans SA | | | 21,098 | | | | 857,724 | |
| | |
Nidec Corp. | | | 7,755 | | | | 1,153,871 | |
| | |
Nippon Carbon Co. Ltd.(a) | | | 7,800 | | | | 302,678 | |
| | |
Nissin Electric Co. Ltd.(a) | | | 46,200 | | | | 546,169 | |
| | |
Nitto Kogyo Corp. | | | 8,200 | | | | 173,626 | |
| | |
Nordex SE* | | | 3,040 | | | | 39,817 | |
| | |
OSRAM Licht AG | | | 4,182 | | | | 186,626 | |
| | |
Prysmian SpA | | | 9,428 | | | | 217,835 | |
| | |
Sanyo Denki Co. Ltd. | | | 10,900 | | | | 515,231 | |
| | |
Schneider Electric SE | | | 17,094 | | | | 1,587,845 | |
| | |
Siemens Gamesa Renewable Energy SA | | | 8,096 | | | | 111,323 | |
| | |
Signify NV(b) | | | 9,548 | | | | 279,514 | |
| | |
Somfy SA | | | 275 | | | | 25,465 | |
| | |
TKH Group NV, CVA | | | 2,194 | | | | 112,253 | |
| | |
Ushio, Inc. | | | 5,900 | | | | 88,796 | |
| | |
Vestas Wind Systems A/S | | | 7,161 | | | | 584,807 | |
| | | | | | | | 10,855,754 | |
|
| Electronic Equipment, Instruments & Components – 2.0% | |
| | |
Alps Alpine Co. Ltd. | | | 11,748 | | | | 254,727 | |
| | |
ALSO Holding AG (Registered)* | | | 1,120 | | | | 166,624 | |
| | |
Amano Corp. | | | 2,600 | | | | 77,443 | |
| | |
Anritsu Corp.(a) | | | 6,200 | | | | 119,349 | |
| | |
AT&S Austria Technologie & Systemtechnik AG(a) | | | 25,025 | | | | 464,574 | |
| | |
Azbil Corp. | | | 3,000 | | | | 83,946 | |
| | |
Barco NV | | | 440 | | | | 95,723 | |
| | |
Canon Electronics, Inc. | | | 13,200 | | | | 248,481 | |
| | |
Canon Marketing Japan, Inc. | | | 3,700 | | | | 78,925 | |
| | |
Carel Industries SpA(b) | | | 12,720 | | | | 204,351 | |
| | |
Celestica, Inc.* | | | 87,395 | | | | 634,343 | |
| | |
Citizen Watch Co. Ltd.(a) | | | 32,000 | | | | 171,389 | |
| | |
CMK Corp.(a) | | | 53,900 | | | | 330,066 | |
| | |
Comet Holding AG (Registered) | | | 1,120 | | | | 111,915 | |
| | |
CONEXIO Corp. | | | 17,600 | | | | 244,207 | |
| | |
Daiwabo Holdings Co. Ltd. | | | 15,400 | | | | 679,506 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
Electronic Equipment, Instruments & Components –
(continued) | |
| | |
Datalogic SpA | | | 535 | | | $ | 8,279 | |
| | |
Electrocomponents plc | | | 23,255 | | | | 204,686 | |
| | |
Evertz Technologies Ltd. | | | 1,712 | | | | 23,315 | |
| | |
FIH Mobile Ltd.* (a) | | | 2,193,000 | | | | 313,378 | |
| | |
Halma plc | | | 16,401 | | | | 397,611 | |
| | |
Hamamatsu Photonics KK | | | 3,400 | | | | 133,037 | |
| | |
Hexagon AB, Class B | | | 6,699 | | | | 342,727 | |
| | |
Hirose Electric Co. Ltd. | | | 782 | | | | 99,319 | |
| | |
Hitachi High-Technologies Corp. | | | 1,700 | | | | 106,304 | |
| | |
Hitachi Ltd. | | | 45,200 | | | | 1,701,298 | |
| | |
Horiba Ltd. | | | 800 | | | | 54,614 | |
| | |
Hosiden Corp. | | | 46,200 | | | | 489,330 | |
| | |
Inficon Holding AG (Registered) | | | 110 | | | | 78,814 | |
| | |
Ingenico Group SA | | | 447 | | | | 47,745 | |
| | |
Iriso Electronics Co. Ltd. | | | 1,200 | | | | 60,053 | |
| | |
Japan Aviation Electronics Industry Ltd. | | | 2,044 | | | | 38,515 | |
| | |
Japan Display, Inc.* (a) | | | 72,000 | | | | 42,625 | |
| | |
Jenoptik AG | | | 2,585 | | | | 77,002 | |
| | |
Kaga Electronics Co. Ltd. | | | 10,300 | | | | 201,989 | |
| | |
Keyence Corp. | | | 2,700 | | | | 1,718,829 | |
| | |
Koa Corp. | | | 8,100 | | | | 102,875 | |
| | |
Kyocera Corp. | | | 11,300 | | | | 746,539 | |
| | |
Lagercrantz Group AB, Class B | | | 1,944 | | | | 25,021 | |
| | |
Landis+Gyr Group AG* | | | 2,541 | | | | 235,495 | |
| | |
LEM Holding SA (Registered) | | | 27 | | | | 31,905 | |
| | |
Macnica Fuji Electronics Holdings, Inc. | | | 30,900 | | | | 529,649 | |
| | |
Meiko Electronics Co. Ltd. | | | 15,600 | | | | 259,459 | |
| | |
Murata Manufacturing Co. Ltd. | | | 18,600 | | | | 1,008,758 | |
| | |
Mycronic AB | | | 3,001 | | | | 49,994 | |
| | |
Nichicon Corp. | | | 67,500 | | | | 671,847 | |
| | |
Nippon Ceramic Co. Ltd. | | | 900 | | | | 23,594 | |
| | |
Nippon Signal Co. Ltd. | | | 40,000 | | | | 463,993 | |
| | |
Nissha Co. Ltd. | | | 32,500 | | | | 342,121 | |
| | |
Nohmi Bosai Ltd. | | | 10,100 | | | | 211,707 | |
| | |
Oki Electric Industry Co. Ltd. | | | 69,300 | | | | 932,077 | |
| | |
Omron Corp. | | | 8,000 | | | | 473,614 | |
| | |
Optex Group Co. Ltd. | | | 1,000 | | | | 15,466 | |
| | |
Renishaw plc | | | 1,617 | | | | 79,260 | |
| | |
Restar Holdings Corp.(a) | | | 23,100 | | | | 395,310 | |
| | |
Ryosan Co. Ltd. | | | 17,000 | | | | 445,030 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 177 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
Electronic Equipment, Instruments & Components –
(continued) | |
| | |
Shimadzu Corp. | | | 7,000 | | | $ | 188,946 | |
| | |
Siix Corp.(a) | | | 2,028 | | | | 31,122 | |
| | |
Smart Metering Systems plc(a) | | | 19,920 | | | | 122,438 | |
| | |
Spectris plc | | | 3,026 | | | | 93,662 | |
| | |
Taiyo Yuden Co. Ltd.(a) | | | 2,500 | | | | 67,087 | |
| | |
Tamura Corp. | | | 8,000 | | | | 46,399 | |
| | |
TDK Corp. | | | 4,300 | | | | 430,776 | |
| | |
Topcon Corp.(a) | | | 2,200 | | | | 30,648 | |
| | |
V Technology Co. Ltd.(a) | | | 6,400 | | | | 384,811 | |
| | |
Venture Corp. Ltd. | | | 17,500 | | | | 203,553 | |
| | |
VSTECS Holdings Ltd.(a) | | | 620,000 | | | | 316,419 | |
| | |
Yaskawa Electric Corp. | | | 7,700 | | | | 297,729 | |
| | |
Yokogawa Electric Corp. | | | 8,000 | | | | 147,782 | |
| | | | | | | | 19,510,125 | |
|
| Energy Equipment & Services – 0.5% | |
| | |
Aker Solutions ASA* | | | 7,535 | | | | 17,358 | |
| | |
Borr Drilling Ltd.* (a) | | | 8,980 | | | | 60,573 | |
| | |
BW Offshore Ltd.* | | | 78,925 | | | | 601,746 | |
| | |
CGG SA* | | | 52,560 | | | | 122,085 | |
| | |
Enerflex Ltd. | | | 72,599 | | | | 570,032 | |
| | |
Hunting plc | | | 21,556 | | | | 109,621 | |
| | |
John Wood Group plc | | | 6,800 | | | | 29,768 | |
| | |
Northern Drilling Ltd.* | | | 16,960 | | | | 44,334 | |
| | |
Ocean Yield ASA(a) | | | 32,826 | | | | 183,773 | |
| | |
Odfjell Drilling Ltd.* (a) | | | 40,528 | | | | 117,419 | |
| | |
Pason Systems, Inc. | | | 2,356 | | | | 25,346 | |
| | |
Petrofac Ltd. | | | 229,922 | | | | 1,143,366 | |
| | |
PGS ASA* | | | 62,000 | | | | 104,670 | |
| | |
Precision Drilling Corp.* (a) | | | 232,771 | | | | 247,940 | |
| | |
Saipem SpA* | | | 39,840 | | | | 180,457 | |
| | |
SBM Offshore NV | | | 9,020 | | | | 155,124 | |
| | |
Secure Energy Services, Inc. | | | 18,144 | | | | 58,531 | |
| | |
Subsea 7 SA(a) | | | 16,366 | | | | 153,300 | |
| | |
TechnipFMC plc | | | 16,016 | | | | 315,996 | |
| | |
Tecnicas Reunidas SA* | | | 8,316 | | | | 209,120 | |
| | |
Tenaris SA | | | 6,336 | | | | 64,000 | |
| | |
TGS NOPEC Geophysical Co. ASA | | | 1,140 | | | | 29,577 | |
| | |
Worley Ltd. | | | 15,811 | | | | 148,798 | |
| | | | | | | | 4,692,934 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Entertainment – 0.6% | |
| | |
Akatsuki, Inc.(a) | | | 7,700 | | | $ | 430,211 | |
| | |
Avex, Inc. | | | 30,800 | | | | 376,934 | |
| | |
Capcom Co. Ltd. | | | 2,600 | | | | 61,738 | |
| | |
Cineplex, Inc.(a) | | | 6,480 | | | | 110,683 | |
| | |
Cineworld Group plc | | | 72,056 | | | | 207,647 | |
| | |
CTS Eventim AG & Co. KGaA | | | 1,375 | | | | 83,221 | |
| | |
Daiichikosho Co. Ltd. | | | 1,100 | | | | 52,505 | |
| | |
DeNA Co. Ltd. | | | 4,000 | | | | 68,341 | |
| | |
Entertainment One Ltd. | | | 17,120 | | | | 123,283 | |
| | |
EVENT Hospitality and Entertainment Ltd.(a) | | | 2,282 | | | | 20,627 | |
| | |
IGG, Inc.(a) | | | 768,000 | | | | 502,678 | |
| | |
Kinepolis Group NV | | | 1,030 | | | | 68,488 | |
| | |
Koei Tecmo Holdings Co. Ltd. | | | 1,728 | | | | 40,041 | |
| | |
Konami Holdings Corp. | | | 2,200 | | | | 97,072 | |
| | |
Modern Times Group MTG AB, Class B* | | | 57,314 | | | | 532,550 | |
| | |
Nexon Co. Ltd.* | | | 9,800 | | | | 113,769 | |
| | |
Nintendo Co. Ltd. | | | 3,500 | | | | 1,250,358 | |
| | |
Paradox Interactive AB | | | 952 | | | | 12,984 | |
| | |
Shochiku Co. Ltd.(a) | | | 300 | | | | 44,207 | |
| | |
Square Enix Holdings Co. Ltd. | | | 1,800 | | | | 85,583 | |
| | |
Toei Animation Co. Ltd. | | | 900 | | | | 42,042 | |
| | |
Toho Co. Ltd. | | | 4,100 | | | | 165,737 | |
| | |
Ubisoft Entertainment SA* | | | 2,066 | | | | 122,023 | |
| | |
Vivendi SA | | | 27,027 | | | | 752,611 | |
| | | | | | | | 5,365,333 | |
|
| Equity Real Estate Investment Trusts (REITs) – 2.7% | |
| | |
Abacus Property Group | | | 55,680 | | | | 149,607 | |
| | |
Activia Properties, Inc. | | | 15 | | | | 79,090 | |
| | |
Advance Residence Investment Corp. | | | 41 | | | | 136,155 | |
| | |
Aedifica SA | | | 1,526 | | | | 183,528 | |
| | |
AEON REIT Investment Corp. | | | 29 | | | | 41,687 | |
| | |
ALE Property Group | | | 9,405 | | | | 34,536 | |
| | |
Allied Properties REIT | | | 5,980 | | | | 243,777 | |
| | |
alstria officeREIT-AG | | | 6,756 | | | | 126,627 | |
| | |
Altarea SCA | | | 129 | | | | 28,352 | |
| | |
Argosy Property Ltd. | | | 64,665 | | | | 58,472 | |
| | |
Artis REIT(a) | | | 73,689 | | | | 695,206 | |
| | |
Ascendas REIT | | | 115,500 | | | | 269,029 | |
| | |
Ascott Residence Trust | | | 55,364 | | | | 56,139 | |
See Accompanying Notes to the Financial Statements.
| | |
| 178 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Assura plc | | | 23,301 | | | $ | 22,553 | |
| | |
Aventus Group(a) | | | 283,617 | | | | 535,390 | |
| | |
Befimmo SA | | | 657 | | | | 42,440 | |
| | |
Big Yellow Group plc | | | 17,157 | | | | 253,537 | |
| | |
British Land Co. plc (The) | | | 16,528 | | | | 132,729 | |
| | |
BWP Trust | | | 52,734 | | | | 150,774 | |
| | |
Canadian Apartment Properties REIT | | | 5,101 | | | | 212,834 | |
| | |
CapitaLand Mall Trust | | | 10,900 | | | | 20,343 | |
| | |
CapitaLand Retail China Trust | | | 107,933 | | | | 120,547 | |
| | |
CDL Hospitality Trusts | | | 36,800 | | | | 44,345 | |
| | |
Champion REIT | | | 132,000 | | | | 87,577 | |
| | |
Charter Hall Group | | | 16,271 | | | | 126,672 | |
| | |
Charter Hall Long Wale REIT | | | 3,188 | | | | 12,607 | |
| | |
Charter Hall Retail REIT | | | 45,600 | | | | 138,545 | |
| | |
Charter Hall Social Infrastructure REIT(a) | | | 52,383 | | | | 131,004 | |
| | |
Choice Properties REIT | | | 15,440 | | | | 163,287 | |
| | |
Cofinimmo SA | | | 491 | | | | 72,636 | |
| | |
Comforia Residential REIT, Inc. | | | 34 | | | | 110,707 | |
| | |
Cominar REIT(a) | | | 61,677 | | | | 630,214 | |
| | |
Covivio | | | 1,922 | | | | 217,644 | |
| | |
Cromwell Property Group(a) | | | 213,520 | | | | 194,914 | |
| | |
Daiwa House REIT Investment Corp. | | | 42 | | | | 122,187 | |
| | |
Derwent London plc(a) | | | 7,163 | | | | 329,047 | |
| | |
Dexus | | | 39,424 | | | | 325,119 | |
| | |
Dream Global REIT | | | 24,024 | | | | 304,881 | |
| | |
Dream Industrial REIT | | | 33,726 | | | | 344,868 | |
| | |
Dream Office REIT | | | 7,025 | | | | 156,604 | |
| | |
ESR-REIT | | | 72,000 | | | | 28,304 | |
| | |
Eurocommercial Properties NV, CVA | | | 32,494 | | | | 1,036,805 | |
| | |
Far East Hospitality Trust | | | 53,976 | | | | 28,952 | |
| | |
Fortune REIT | | | 48,000 | | | | 56,343 | |
| | |
Frasers Centrepoint Trust | | | 25,775 | | | | 52,082 | |
| | |
Frasers Commercial Trust | | | 24,460 | | | | 29,475 | |
| | |
Frasers Hospitality Trust | | | 39,200 | | | | 21,170 | |
| | |
Frasers Logistics & Industrial Trust(b) | | | 125,180 | | | | 115,895 | |
| | |
Frontier Real Estate Investment Corp. | | | 12 | | | | 53,559 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Fukuoka REIT Corp. | | | 26 | | | $ | 44,566 | |
| | |
GDI Property Group | | | 9,440 | | | | 10,146 | |
| | |
Gecina SA | | | 1,771 | | | | 303,881 | |
| | |
Global One Real Estate Investment Corp. | | | 48 | | | | 65,003 | |
| | |
GLPJ-Reit | | | 74 | | | | 96,380 | |
| | |
Goodman Group | | | 52,591 | | | | 521,387 | |
| | |
Goodman Property Trust | | | 19,085 | | | | 26,070 | |
| | |
GPT Group (The) | | | 72,457 | | | | 297,020 | |
| | |
Granite REIT | | | 2,800 | | | | 138,940 | |
| | |
Growthpoint Properties Australia Ltd. | | | 19,121 | | | | 56,119 | |
| | |
Hamborner REIT AG | | | 6,058 | | | | 65,221 | |
| | |
Hammerson plc | | | 2,839 | | | | 10,654 | |
| | |
Hankyu Hanshin REIT, Inc. | | | 26 | | | | 44,229 | |
| | |
Heiwa Real Estate REIT, Inc. | | | 770 | | | | 1,017,122 | |
| | |
Hibernia REIT plc | | | 132,671 | | | | 206,628 | |
| | |
Hoshino Resorts REIT, Inc. | | | 24 | | | | 130,984 | |
| | |
Hulic Reit, Inc. | | | 23 | | | | 43,870 | |
| | |
ICADE | | | 2,317 | | | | 226,960 | |
| | |
Ichigo Office REIT Investment | | | 184 | | | | 189,098 | |
| | |
Immobiliare Grande Distribuzione SIIQ SpA(a) | | | 23,342 | | | | 149,999 | |
| | |
Industrial & Infrastructure Fund Investment Corp. | | | 94 | | | | 147,211 | |
| | |
Inmobiliaria Colonial Socimi SA | | | 12,081 | | | | 156,077 | |
| | |
InterRent REIT | | | 1,944 | | | | 23,088 | |
| | |
Intu Properties plc* (a) | | | 726,726 | | | | 423,173 | |
| | |
Invincible Investment Corp. | | | 121 | | | | 76,447 | |
| | |
Japan Hotel REIT Investment Corp. | | | 77 | | | | 63,891 | |
| | |
Japan Logistics Fund, Inc. | | | 19 | | | | 48,280 | |
| | |
Japan Prime Realty Investment Corp. | | | 25 | | | | 120,022 | |
| | |
Japan Real Estate Investment Corp. | | | 18 | | | | 122,714 | |
| | |
Japan Rental Housing Investments, Inc. | | | 26 | | | | 24,917 | |
| | |
Japan Retail Fund Investment Corp. | | | 52 | | | | 121,215 | |
| | |
Kenedix Office Investment Corp. | | | 9 | | | | 70,431 | |
| | |
Kenedix Residential Next Investment Corp. | | | 34 | | | | 69,978 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 179 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Kenedix Retail REIT Corp. | | | 31 | | | $ | 85,339 | |
| | |
Keppel DC REIT | | | 154,081 | | | | 226,432 | |
| | |
Keppel REIT | | | 80,733 | | | | 71,778 | |
| | |
Killam Apartment REIT(a) | | | 9,680 | | | | 143,688 | |
| | |
Kiwi Property Group Ltd. | | | 3,973 | | | | 4,051 | |
| | |
Klepierre SA | | | 3,280 | | | | 122,185 | |
| | |
Land Securities Group plc | | | 11,280 | | | | 137,205 | |
| | |
LaSalle Logiport REIT | | | 129 | | | | 191,999 | |
| | |
Link REIT | | | 58,301 | | | | 635,623 | |
| | |
LondonMetric Property plc(a) | | | 93,115 | | | | 279,298 | |
| | |
Mapletree Commercial Trust | | | 32,090 | | | | 54,939 | |
| | |
Mapletree Industrial Trust | | | 33,416 | | | | 62,611 | |
| | |
Mapletree Logistics Trust | | | 73,207 | | | | 90,369 | |
| | |
Mapletree North Asia Commercial Trust(b) | | | 49,500 | | | | 46,556 | |
| | |
MCUBS MidCity Investment Corp. | | | 100 | | | | 115,998 | |
| | |
Mercialys SA | | | 20,174 | | | | 281,339 | |
| | |
Merlin Properties Socimi SA | | | 2,960 | | | | 43,591 | |
| | |
Mirai Corp. | | | 1,248 | | | | 733,065 | |
| | |
Mirvac Group | | | 138,369 | | | | 306,007 | |
| | |
Mori Hills REIT Investment Corp. | | | 58 | | | | 95,822 | |
| | |
National Storage REIT | | | 70,798 | | | | 90,724 | |
| | |
Nippon Accommodations Fund, Inc. | | | 8 | | | | 50,321 | |
| | |
Nippon Building Fund, Inc. | | | 40 | | | | 303,409 | |
| | |
Nippon Prologis REIT, Inc. | | | 41 | | | | 114,537 | |
| | |
NIPPON REIT Investment Corp. | | | 33 | | | | 143,166 | |
| | |
Nomura Real Estate Master Fund, Inc. | | | 159 | | | | 303,719 | |
| | |
Northview Apartment REIT(a) | | | 21,252 | | | | 466,643 | |
| | |
One REIT, Inc. | | | 14 | | | | 43,966 | |
| | |
Orix JREIT, Inc. | | | 134 | | | | 302,942 | |
| | |
OUE Commercial REIT | | | 82,177 | | | | 32,606 | |
| | |
Parkway Life REIT | | | 12,500 | | | | 30,034 | |
| | |
Precinct Properties New Zealand Ltd. | | | 22,735 | | | | 26,536 | |
| | |
Premier Investment Corp. | | | 90 | | | | 134,952 | |
| | |
Primary Health Properties plc | | | 110,859 | | | | 202,840 | |
| | |
Property for Industry Ltd. | | | 51,499 | | | | 78,768 | |
| | |
Regal REIT | | | 657,000 | | | | 155,916 | |
| | |
Reit 1 Ltd. | | | 127,897 | | | | 809,440 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Retail Estates NV | | | 694 | | | $ | 66,277 | |
| | |
Safestore Holdings plc | | | 12,195 | | | | 110,541 | |
| | |
Scentre Group | | | 124,124 | | | | 327,523 | |
| | |
Secure Income REIT plc | | | 14,030 | | | | 78,610 | |
| | |
Segro plc | | | 45,622 | | | | 498,372 | |
| | |
Sekisui House Reit, Inc.(a) | | | 55 | | | | 50,826 | |
| | |
Shaftesbury plc | | | 4,480 | | | | 54,783 | |
| | |
Shopping Centres Australasia Property Group(a) | | | 100,734 | | | | 186,688 | |
| | |
Societe Fonciere Lyonnaise SA | | | 972 | | | | 79,813 | |
| | |
SPH REIT | | | 44,800 | | | | 37,527 | |
| | |
Star Asia Investment Corp.(a) | | | 78 | | | | 84,923 | |
| | |
Starhill Global REIT | | | 72,900 | | | | 39,638 | |
| | |
Stockland | | | 73,560 | | | | 247,821 | |
| | |
Summit Industrial Income REIT(a) | | | 33,726 | | | | 327,933 | |
| | |
Sunlight REIT | | | 55,000 | | | | 37,332 | |
| | |
Suntec REIT | | | 143,400 | | | | 195,984 | |
| | |
Tokyu REIT, Inc. | | | 40 | | | | 76,962 | |
| | |
Tritax Big Box REIT plc(a) | | | 115,560 | | | | 224,751 | |
| | |
Unibail-Rodamco-Westfield(a) | | | 4,466 | | | | 690,823 | |
| | |
Unibail-Rodamco-Westfield, CHDI | | | 5 | | | | 38 | |
| | |
UNITE Group plc (The) | | | 9,133 | | | | 132,954 | |
| | |
United Urban Investment Corp. | | | 84 | | | | 169,391 | |
| | |
Vicinity Centres | | | 23,616 | | | | 43,442 | |
| | |
Vital Healthcare Property Trust(a) | | | 43,976 | | | | 75,017 | |
| | |
Warehouses De Pauw CVA, CVA | | | 851 | | | | 157,793 | |
| | |
Wereldhave NV | | | 35,651 | | | | 843,210 | |
| | |
Workspace Group plc | | | 8,954 | | | | 117,603 | |
| | | | | | | | 25,615,505 | |
|
| Food & Staples Retailing – 1.4% | |
| | |
Aeon Co. Ltd. | | | 32,213 | | | | 651,084 | |
| | |
Ain Holdings, Inc. | | | 800 | | | | 45,881 | |
| | |
Alimentation Couche-Tard, Inc., Class B(a) | | | 21,714 | | | | 652,568 | |
| | |
Arcs Co. Ltd. | | | 41,318 | | | | 837,023 | |
| | |
Axfood AB | | | 3,184 | | | | 68,675 | |
| | |
Axial Retailing, Inc.(a) | | | 15,400 | | | | 598,307 | |
| | |
Belc Co. Ltd. | | | 800 | | | | 38,629 | |
| | |
Carrefour SA | | | 10,046 | | | | 170,975 | |
| | |
Casino Guichard Perrachon SA(a) | | | 3,920 | | | | 211,539 | |
See Accompanying Notes to the Financial Statements.
| | |
| 180 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Food & Staples Retailing – (continued) | |
| | |
Cawachi Ltd. | | | 8,000 | | | $ | 163,767 | |
| | |
cocokara fine, Inc. | | | 15,400 | | | | 853,300 | |
| | |
Coles Group Ltd. | | | 25,333 | | | | 261,623 | |
| | |
Colruyt SA(a) | | | 1,990 | | | | 110,652 | |
| | |
Cosmos Pharmaceutical Corp. | | | 100 | | | | 20,656 | |
| | |
Create SD Holdings Co. Ltd.(a) | | | 2,000 | | | | 49,822 | |
| | |
Daikokutenbussan Co. Ltd. | | | 400 | | | | 12,525 | |
| | |
Dairy Farm International Holdings Ltd. | | | 7,600 | | | | 45,828 | |
| | |
Empire Co. Ltd., Class A | | | 1,666 | | | | 44,326 | |
| | |
FamilyMart Co. Ltd. | | | 10,648 | | | | 265,547 | |
| | |
George Weston Ltd. | | | 1,920 | | | | 154,041 | |
| | |
Heiwado Co. Ltd. | | | 1,200 | | | | 22,356 | |
| | |
ICA Gruppen AB | | | 4,433 | | | | 196,474 | |
| | |
Inageya Co. Ltd. | | | 2,398 | | | | 32,319 | |
| | |
Itochu-Shokuhin Co. Ltd.(a) | | | 400 | | | | 19,352 | |
| | |
J Sainsbury plc | | | 101,871 | | | | 268,256 | |
| | |
Kato Sangyo Co. Ltd. | | | 1,400 | | | | 44,938 | |
| | |
Kesko OYJ, Class A | | | 562 | | | | 34,610 | |
| | |
Kesko OYJ, Class B | | | 2,318 | | | | 154,337 | |
| | |
Kobe Bussan Co. Ltd. | | | 1,600 | | | | 47,435 | |
| | |
Koninklijke Ahold Delhaize NV | | | 62,293 | | | | 1,551,525 | |
| | |
Kusuri no Aoki Holdings Co. Ltd. | | | 600 | | | | 44,901 | |
| | |
Life Corp. | | | 23,100 | | | | 531,852 | |
| | |
Loblaw Cos. Ltd. | | | 4,620 | | | | 246,897 | |
| | |
MARR SpA | | | 1,155 | | | | 24,251 | |
| | |
Matsumotokiyoshi Holdings Co. Ltd. | | | 3,600 | | | | 127,376 | |
| | |
Metcash Ltd.(a) | | | 116,347 | | | | 226,043 | |
| | |
METRO AG | | | 12,628 | | | | 205,691 | |
| | |
Metro, Inc. | | | 10,304 | | | | 436,667 | |
| | |
Ministop Co. Ltd. | | | 1,000 | | | | 13,478 | |
| | |
Nihon Chouzai Co. Ltd. | | | 3,400 | | | | 123,917 | |
| | |
North West Co., Inc. (The) | | | 95 | | | | 2,037 | |
| | |
Olam International Ltd. | | | 35,100 | | | | 47,197 | |
| | |
Qol Holdings Co. Ltd. | | | 1,500 | | | | 21,146 | |
| | |
Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. | | | 243 | | | | 13,586 | |
| | |
Retail Partners Co. Ltd. | | | 23,400 | | | | 193,079 | |
| | |
Seven & i Holdings Co. Ltd. | | | 23,400 | | | | 887,471 | |
| | |
Sheng Siong Group Ltd. | | | 51,500 | | | | 44,274 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Food & Staples Retailing – (continued) | |
| | |
Shufersal Ltd. | | | 3,578 | | | $ | 24,178 | |
| | |
Sligro Food Group NV | | | 1,155 | | | | 29,380 | |
| | |
Sonae SGPS SA | | | 76,391 | | | | 77,001 | |
| | |
Sugi Holdings Co. Ltd. | | | 800 | | | | 44,623 | |
| | |
Sundrug Co. Ltd. | | | 1,600 | | | | 53,208 | |
| | |
Tesco plc | | | 243,859 | | | | 742,182 | |
| | |
Tsuruha Holdings, Inc. | | | 900 | | | | 101,818 | |
| | |
United Super Markets Holdings, Inc.(a) | | | 2,000 | | | | 18,057 | |
| | |
Valor Holdings Co. Ltd. | | | 10,400 | | | | 178,360 | |
| | |
Welcia Holdings Co. Ltd. | | | 1,800 | | | | 104,065 | |
| | |
Wm Morrison Supermarkets plc | | | 97,867 | | | | 251,823 | |
| | |
Woolworths Group Ltd. | | | 33,726 | | | | 867,150 | |
| | |
Yaoko Co. Ltd. | | | 1,800 | | | | 84,251 | |
| | |
Yokohama Reito Co. Ltd. | | | 38,600 | | | | 384,911 | |
| | | | | | | | 13,779,240 | |
|
| Food Products – 2.5% | |
| | |
a2 Milk Co. Ltd.* | | | 17,120 | | | | 142,728 | |
| | |
AAK AB | | | 5,004 | | | | 88,868 | |
| | |
Agrana Beteiligungs AG | | | 3,909 | | | | 75,359 | |
| | |
Ajinomoto Co., Inc. | | | 21,500 | | | | 409,595 | |
| | |
Ariake Japan Co. Ltd. | | | 800 | | | | 62,310 | |
| | |
Aryzta AG* (a) | | | 799,290 | | | | 629,712 | |
| | |
Associated British Foods plc | | | 6,080 | | | | 175,131 | |
| | |
Austevoll Seafood ASA | | | 8,913 | | | | 90,041 | |
| | |
Bakkafrost P/F | | | 2,188 | | | | 137,030 | |
| | |
Bakkavor Group plc(b) | | | 72,800 | | | | 111,537 | |
| | |
Barry Callebaut AG (Registered) | | | 38 | | | | 80,101 | |
| | |
Bega Cheese Ltd.(a) | | | 7,095 | | | | 17,499 | |
| | |
Bell Food Group AG (Registered)* (a) | | | 320 | | | | 87,884 | |
| | |
Bellamy’s Australia Ltd.* | | | 1,296 | | | | 11,456 | |
| | |
Bonduelle SCA(a) | | | 14,136 | | | | 367,460 | |
| | |
Bourbon Corp. | | | 14,500 | | | | 226,141 | |
| | |
Calbee, Inc. | | | 3,200 | | | | 107,155 | |
| | |
Chocoladefabriken Lindt & Spruengli AG | | | 43 | | | | 319,422 | |
| | |
Chocoladefabriken Lindt & Spruengli AG (Registered) | | | 6 | | | | 491,310 | |
| | |
Costa Group Holdings Ltd. | | | 13,860 | | | | 27,214 | |
| | |
Cranswick plc | | | 2,309 | | | | 92,743 | |
| | |
Danone SA | | | 16,954 | | | | 1,406,499 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 181 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Food Products – (continued) | |
| | |
DyDo Group Holdings, Inc. | | | 500 | | | $ | 20,906 | |
| | |
Ebro Foods SA(a) | | | 4,297 | | | | 94,345 | |
| | |
Elders Ltd. | | | 80,264 | | | | 326,810 | |
| | |
Emmi AG (Registered) | | | 41 | | | | 34,695 | |
| | |
First Resources Ltd. | | | 24,300 | | | | 27,318 | |
| | |
ForFarmers NV(a) | | | 16,757 | | | | 101,514 | |
| | |
Freedom Foods Group Ltd.(a) | | | 4,368 | | | | 16,130 | |
| | |
Fuji Oil Holdings, Inc.(a) | | | 3,400 | | | | 102,530 | |
| | |
Fujicco Co. Ltd. | | | 2,000 | | | | 36,520 | |
| | |
Fujiya Co. Ltd. | | | 400 | | | | 7,778 | |
| | |
Glanbia plc | | | 5,838 | | | | 65,066 | |
| | |
GrainCorp Ltd., Class A | | | 10,837 | | | | 53,980 | |
| | |
Greencore Group plc | | | 27,840 | | | | 83,722 | |
| | |
Grieg Seafood ASA | | | 8,400 | | | | 103,019 | |
| | |
House Foods Group, Inc. | | | 2,400 | | | | 91,356 | |
| | |
Inghams Group Ltd.(a) | | | 43,760 | | | | 93,460 | |
| | |
Itoham Yonekyu Holdings, Inc.(a) | | | 6,500 | | | | 42,089 | |
| | |
Japfa Ltd. | | | 182,200 | | | | 65,600 | |
| | |
Kagome Co. Ltd. | | | 900 | | | | 22,761 | |
| | |
Kameda Seika Co. Ltd. | | | 900 | | | | 40,585 | |
| | |
Kerry Group plc, Class A | | | 4,774 | | | | 577,351 | |
| | |
Kikkoman Corp. | | | 4,000 | | | | 193,516 | |
| | |
Kotobuki Spirits Co. Ltd. | | | 1,000 | | | | 69,007 | |
| | |
LDC SA(a) | | | 3,021 | | | | 377,482 | |
| | |
Leroy Seafood Group ASA | | | 18,318 | | | | 122,982 | |
| | |
Lotus Bakeries NV | | | 13 | | | | 36,694 | |
| | |
Maple Leaf Foods, Inc. | | | 1,946 | | | | 34,009 | |
| | |
Maruha Nichiro Corp. | | | 4,400 | | | | 114,492 | |
| | |
MEIJI Holdings Co. Ltd. | | | 3,800 | | | | 274,881 | |
| | |
Mitsui Sugar Co. Ltd. | | | 14,300 | | | | 311,913 | |
| | |
Morinaga & Co. Ltd.(a) | | | 1,100 | | | | 54,438 | |
| | |
Morinaga Milk Industry Co. Ltd. | | | 1,200 | | | | 46,677 | |
| | |
Mowi ASA | | | 18,391 | | | | 449,098 | |
| | |
Nestle SA (Registered) | | | 85,470 | | | | 9,122,574 | |
| | |
Nichirei Corp. | | | 3,500 | | | | 80,454 | |
| | |
Nippon Flour Mills Co. Ltd. | | | 7,000 | | | | 112,992 | |
| | |
Nippon Suisan Kaisha Ltd. | | | 16,000 | | | | 91,911 | |
| | |
Nisshin Oillio Group Ltd. (The) | | | 1,100 | | | | 38,717 | |
| | |
Nisshin Seifun Group, Inc. | | | 7,090 | | | | 141,006 | |
| | |
Nissin Foods Holdings Co. Ltd. | | | 1,500 | | | | 113,778 | |
| | |
Norway Royal Salmon ASA | | | 5,246 | | | | 124,105 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Food Products – (continued) | |
| | |
Origin Enterprises plc | | | 102,564 | | | $ | 537,800 | |
| | |
Orkla ASA | | | 24,127 | | | | 232,146 | |
| | |
Premium Brands Holdings Corp. | | | 1,100 | | | | 72,720 | |
| | |
Prima Meat Packers Ltd. | | | 29,000 | | | | 718,394 | |
| | |
Riken Vitamin Co. Ltd. | | | 16,300 | | | | 583,516 | |
| | |
S Foods, Inc. | | | 4,500 | | | | 121,548 | |
| | |
Sakata Seed Corp. | | | 2,800 | | | | 92,984 | |
| | |
Salmar ASA | | | 3,732 | | | | 174,178 | |
| | |
Saputo, Inc. | | | 4,455 | | | | 129,479 | |
| | |
Savencia SA | | | 3,003 | | | | 199,678 | |
| | |
Scandi Standard AB | | | 40,579 | | | | 299,047 | |
| | |
Schouw & Co. A/S | | | 1,160 | | | | 83,194 | |
| | |
Showa Sangyo Co. Ltd.(a) | | | 6,800 | | | | 198,141 | |
| | |
Strauss Group Ltd. | | | 952 | | | | 28,828 | |
| | |
Suedzucker AG | | | 8,802 | | | | 126,874 | |
| | |
Synlait Milk Ltd.* | | | 1,760 | | | | 10,610 | |
| | |
Tassal Group Ltd. | | | 37,680 | | | | 107,473 | |
| | |
Tate & Lyle plc | | | 1,134 | | | | 9,876 | |
| | |
Toyo Suisan Kaisha Ltd. | | | 2,800 | | | | 118,107 | |
| | |
Vilmorin & Cie SA | | | 6,439 | | | | 352,000 | |
| | |
Viscofan SA | | | 825 | | | | 44,714 | |
| | |
Vitasoy International Holdings Ltd. | | | 16,000 | | | | 65,121 | |
| | |
WH Group Ltd.(b) | | | 269,500 | | | | 286,084 | |
| | |
Wilmar International Ltd. | | | 130,900 | | | | 360,686 | |
| | |
Yakult Honsha Co. Ltd. | | | 4,300 | | | | 247,408 | |
| | |
Yamazaki Baking Co. Ltd. | | | 2,900 | | | | 49,520 | |
| | | | | | | | 24,325,582 | |
|
| Gas Utilities – 0.4% | |
| | |
AltaGas Ltd.(a) | | | 11,723 | | | | 170,893 | |
| | |
APA Group | | | 28,567 | | | | 229,286 | |
| | |
Enagas SA | | | 6,989 | | | | 173,021 | |
| | |
Hong Kong & China Gas Co. Ltd. | | | 298,848 | | | | 580,332 | |
| | |
Italgas SpA | | | 27,538 | | | | 177,209 | |
| | |
Naturgy Energy Group SA | | | 13,552 | | | | 369,062 | |
| | |
Nippon Gas Co. Ltd.(a) | | | 2,000 | | | | 56,889 | |
| | |
Osaka Gas Co. Ltd. | | | 11,700 | | | | 229,768 | |
| | |
Rubis SCA | | | 4,041 | | | | 234,208 | |
| | |
Saibu Gas Co. Ltd. | | | 26,700 | | | | 620,172 | |
| | |
Shizuoka Gas Co. Ltd. | | | 46,200 | | | | 403,003 | |
| | |
Snam SpA | | | 39,110 | | | | 200,712 | |
See Accompanying Notes to the Financial Statements.
| | |
| 182 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Gas Utilities – (continued) | |
| | |
Superior Plus Corp.(a) | | | 18,859 | | | $ | 170,604 | |
| | |
Toho Gas Co. Ltd. | | | 2,000 | | | | 78,165 | |
| | |
Tokyo Gas Co. Ltd. | | | 7,700 | | | | 188,467 | |
| | | | | | | | 3,881,791 | |
|
| Health Care Equipment & Supplies – 0.9% | |
| | |
Alcon, Inc.* | | | 13,706 | | | | 809,234 | |
| | |
Ambu A/S, Class B(a) | | | 8,766 | | | | 137,730 | |
| | |
Ansell Ltd. | | | 6,098 | | | | 115,954 | |
| | |
Arjo AB, Class B | | | 4,131 | | | | 17,048 | |
| | |
Asahi Intecc Co. Ltd. | | | 10,900 | | | | 301,475 | |
| | |
BioMerieux | | | 825 | | | | 67,512 | |
| | |
Carl Zeiss Meditec AG | | | 715 | | | | 77,974 | |
| | |
Cochlear Ltd. | | | 1,232 | | | | 179,552 | |
| | |
Coloplast A/S, Class B | | | 3,773 | | | | 454,861 | |
| | |
CYBERDYNE, Inc.* | | | 24,300 | | | | 156,897 | |
| | |
Demant A/S* | | | 2,796 | | | | 73,830 | |
| | |
DiaSorin SpA | | | 869 | | | | 97,919 | |
| | |
Draegerwerk AG & Co. KGaA (Preference) | | | 1,280 | | | | 75,043 | |
| | |
Eiken Chemical Co. Ltd. | | | 1,600 | | | | 26,004 | |
| | |
Elekta AB, Class B | | | 6,069 | | | | 84,726 | |
| | |
Fisher & Paykel Healthcare Corp. Ltd. | | | 12,815 | | | | 157,380 | |
| | |
GN Store Nord A/S | | | 3,824 | | | | 168,138 | |
| | |
Hogy Medical Co. Ltd. | | | 1,200 | | | | 40,350 | |
| | |
Hoya Corp. | | | 10,500 | | | | 932,718 | |
| | |
Koninklijke Philips NV | | | 28,413 | | | | 1,244,818 | |
| | |
Mani, Inc. | | | 3,900 | | | | 103,646 | |
| | |
Menicon Co. Ltd. | | | 1,600 | | | | 56,908 | |
| | |
Nagaileben Co. Ltd. | | | 1,500 | | | | 36,007 | |
| | |
Nakanishi, Inc. | | | 5,100 | | | | 85,201 | |
| | |
Nanosonics Ltd.* | | | 26,752 | | | | 125,329 | |
| | |
Nihon Kohden Corp.(a) | | | 2,300 | | | | 69,039 | |
| | |
Nikkiso Co. Ltd. | | | 8,000 | | | | 87,323 | |
| | |
Nipro Corp. | | | 5,200 | | | | 61,185 | |
| | |
Olympus Corp. | | | 35,200 | | | | 481,902 | |
| | |
Paramount Bed Holdings Co. Ltd. | | | 800 | | | | 30,896 | |
| | |
Sartorius AG (Preference) | | | 1,349 | | | | 262,173 | |
| | |
Sectra AB, Class B* | | | 1,654 | | | | 55,195 | |
| | |
Siemens Healthineers AG(b) | | | 3,645 | | | | 154,915 | |
| | |
Smith & Nephew plc | | | 27,027 | | | | 577,928 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Health Care Equipment & Supplies – (continued) | |
| | |
Sonova Holding AG (Registered) | | | 1,463 | | | $ | 335,078 | |
| | |
Straumann Holding AG (Registered) | | | 219 | | | | 195,263 | |
| | |
Sysmex Corp. | | | 4,200 | | | | 275,338 | |
| | |
Terumo Corp. | | | 18,400 | | | | 604,227 | |
| | |
Ypsomed Holding AG (Registered)* (a) | | | 81 | | | | 11,985 | |
| | | | | | | | 8,828,701 | |
|
| Health Care Providers & Services – 0.6% | |
| | |
Alfresa Holdings Corp. | | | 12,000 | | | | 269,960 | |
| | |
Ambea AB(b) | | | 42,042 | | | | 306,774 | |
| | |
Amplifon SpA | | | 3,837 | | | | 96,402 | |
| | |
As One Corp. | | | 700 | | | | 58,730 | |
| | |
Australian Pharmaceutical Industries Ltd.(a) | | | 241,934 | | | | 220,852 | |
| | |
BML, Inc. | | | 3,300 | | | | 97,530 | |
| | |
Chartwell Retirement Residences(a) | | | 14,947 | | | | 167,626 | |
| | |
EBOS Group Ltd. | | | 1,980 | | | | 31,300 | |
| | |
Evergrande Health Industry Group Ltd.* (a) | | | 125,000 | | | | 111,959 | |
| | |
Fagron | | | 8,568 | | | | 162,597 | |
| | |
Fresenius Medical Care AG & Co. KGaA | | | 4,774 | | | | 345,558 | |
| | |
Fresenius SE & Co. KGaA | | | 9,933 | | | | 522,227 | |
| | |
Galenica AG(b) | | | 3,128 | | | | 186,872 | |
| | |
Healius Ltd. | | | 52,880 | | | | 112,210 | |
| | |
Japan Lifeline Co. Ltd.(a) | | | 3,000 | | | | 46,649 | |
| | |
Korian SA(a) | | | 4,552 | | | | 192,981 | |
| | |
Mediclinic International plc | | | 34,000 | | | | 161,025 | |
| | |
Medipal Holdings Corp. | | | 7,100 | | | | 163,010 | |
| | |
Metlifecare Ltd.(a) | | | 60,480 | | | | 186,948 | |
| | |
NichiiGakkan Co. Ltd. | | | 9,200 | | | | 156,418 | |
| | |
NMC Health plc | | | 1,466 | | | | 41,412 | |
| | |
Orpea | | | 1,118 | | | | 134,583 | |
| | |
Raffles Medical Group Ltd. | | | 4,124 | | | | 3,061 | |
| | |
Ramsay Health Care Ltd. | | | 2,640 | | | | 124,571 | |
| | |
RHOEN-KLINIKUM AG | | | 579 | | | | 11,937 | |
| | |
Ryman Healthcare Ltd. | | | 13,156 | | | | 108,921 | |
| | |
Ship Healthcare Holdings, Inc. | | | 3,300 | | | | 141,335 | |
| | |
Sienna Senior Living, Inc.(a) | | | 2,835 | | | | 40,961 | |
| | |
Sonic Healthcare Ltd. | | | 16,562 | | | | 325,652 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 183 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Health Care Providers & Services – (continued) | |
| | |
Summerset Group Holdings Ltd. | | | 11,425 | | | $ | 48,211 | |
| | |
Suzuken Co. Ltd. | | | 3,380 | | | | 181,342 | |
| | |
Toho Holdings Co. Ltd. | | | 4,200 | | | | 107,190 | |
| | |
Town Health International Medical Group Ltd.(d) | | | 398,000 | | | | 35,038 | |
| | |
UDG Healthcare plc | | | 11,405 | | | | 114,080 | |
| | |
Vital KSK Holdings, Inc.(a) | | | 31,200 | | | | 319,778 | |
| | | | | | | | 5,335,700 | |
|
| Health Care Technology – 0.0%(e) | |
| | |
CompuGroup Medical SE | | | 624 | | | | 39,960 | |
| | |
M3, Inc. | | | 10,000 | | | | 240,877 | |
| | | | | | | | 280,837 | |
|
| Hotels, Restaurants & Leisure – 1.9% | |
| | |
Accor SA | | | 7,315 | | | | 314,361 | |
| | |
Aeon Fantasy Co. Ltd. | | | 500 | | | | 13,676 | |
| | |
Arcland Service Holdings Co. Ltd. | | | 1,400 | | | | 24,955 | |
| | |
Aristocrat Leisure Ltd. | | | 15,631 | | | | 340,515 | |
| | |
Atom Corp.(a) | | | 5,800 | | | | 53,598 | |
| | |
Autogrill SpA | | | 6,257 | | | | 61,813 | |
| | |
Basic-Fit NV* (b) | | | 3,008 | | | | 91,951 | |
| | |
Betsson AB* | | | 99,946 | | | | 493,283 | |
| | |
Carnival plc | | | 7,469 | | | | 298,838 | |
| | |
Cie des Alpes | | | 6,930 | | | | 207,590 | |
| | |
Colowide Co. Ltd.(a) | | | 3,500 | | | | 68,248 | |
| | |
Compass Group plc | | | 42,735 | | | | 1,136,949 | |
| | |
Corporate Travel Management Ltd.(a) | | | 3,366 | | | | 40,884 | |
| | |
Create Restaurants Holdings, Inc. | | | 2,200 | | | | 37,933 | |
| | |
Crown Resorts Ltd. | | | 11,014 | | | | 94,548 | |
| | |
Dalata Hotel Group plc | | | 16,255 | | | | 96,115 | |
| | |
Domino’s Pizza Enterprises Ltd.(a) | | | 1,460 | | | | 51,309 | |
| | |
Domino’s Pizza Group plc | | | 15,345 | | | | 56,770 | |
| | |
Doutor Nichires Holdings Co. Ltd. | | | 2,700 | | | | 54,247 | |
| | |
EI Group plc* | | | 406,252 | | | | 1,480,343 | |
| | |
Evolution Gaming Group AB(b) | | | 6,325 | | | | 151,325 | |
| | |
Flight Centre Travel Group Ltd.(a) | | | 3,119 | | | | 91,519 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Hotels, Restaurants & Leisure – (continued) | |
| | |
Flutter Entertainment plc – SGMX | | | 2,538 | | | $ | 261,354 | |
| | |
Flutter Entertainment plc – XDUB | | | 405 | | | | 41,849 | |
| | |
Fuji Kyuko Co. Ltd. | | | 1,000 | | | | 40,100 | |
| | |
Galaxy Entertainment Group Ltd. | | | 67,000 | | | | 462,897 | |
| | |
Genting Hong Kong Ltd.* | | | 1,872,000 | | | | 205,407 | |
| | |
Genting Singapore Ltd. | | | 144,000 | | | | 99,460 | |
| | |
GL Ltd. | | | 310,200 | | | | 180,064 | |
| | |
Great Canadian Gaming Corp.* (a) | | | 2,860 | | | | 90,651 | |
| | |
Greggs plc | | | 8,031 | | | | 184,564 | |
| | |
GVC Holdings plc | | | 19,520 | | | | 224,804 | |
| | |
Hiday Hidaka Corp. | | | 2,191 | | | | 43,028 | |
| | |
HIS Co. Ltd.(a) | | | 800 | | | | 20,839 | |
| | |
Hongkong & Shanghai Hotels Ltd. (The) | | | 24,000 | | | | 27,039 | |
| | |
Ichibanya Co. Ltd. | | | 1,000 | | | | 46,899 | |
| | |
InterContinental Hotels Group plc | | | 5,852 | | | | 352,878 | |
| | |
J D Wetherspoon plc | | | 3,795 | | | | 71,844 | |
| | |
Kindred Group plc, SDR | | | 4,675 | | | | 33,948 | |
| | |
Kisoji Co. Ltd. | | | 1,700 | | | | 44,299 | |
| | |
KOMEDA Holdings Co. Ltd. | | | 1,200 | | | | 23,388 | |
| | |
Kyoritsu Maintenance Co. Ltd.(a) | | | 1,600 | | | | 71,190 | |
| | |
Macau Legend Development Ltd.* | | | 456,000 | | | | 50,035 | |
| | |
Mandarin Oriental International Ltd. | | | 8,000 | | | | 13,200 | |
| | |
Marston’s plc(a) | | | 616,077 | | | | 982,952 | |
| | |
McDonald’s Holdings Co. Japan Ltd. | | | 1,100 | | | | 55,252 | |
| | |
Melco International Development Ltd. | | | 21,000 | | | | 55,865 | |
| | |
Merlin Entertainments plc(b) | | | 6,309 | | | | 37,105 | |
| | |
MGM China Holdings Ltd. | | | 32,400 | | | | 51,508 | |
| | |
Miramar Hotel & Investment | | | 231,000 | | | | 452,704 | |
| | |
Mitchells & Butlers plc* | | | 203,357 | | | | 1,120,993 | |
| | |
MOS Food Services, Inc.(a) | | | 2,100 | | | | 53,265 | |
| | |
NagaCorp Ltd.(a) | | | 160,000 | | | | 291,514 | |
| | |
NetEnt AB* | | | 4,549 | | | | 12,890 | |
| | |
Ohsho Food Service Corp. | | | 1,504 | | | | 90,987 | |
| | |
Oriental Land Co. Ltd. | | | 7,700 | | | | 1,131,442 | |
| | |
Pandox AB | | | 5,720 | | | | 114,586 | |
| | |
Playtech plc | | | 244,244 | | | | 1,241,135 | |
See Accompanying Notes to the Financial Statements.
| | |
| 184 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Hotels, Restaurants & Leisure – (continued) | |
| | |
Plenus Co. Ltd. | | | 1,000 | | | $ | 17,437 | |
| | |
Rank Group plc(a) | | | 102,509 | | | | 322,995 | |
| | |
Restaurant Brands International, Inc. | | | 7,084 | | | | 464,434 | |
| | |
Restaurant Brands New Zealand Ltd.* | | | 1,154 | | | | 8,821 | |
| | |
Restaurant Group plc (The) | | | 419,727 | | | | 736,480 | |
| | |
Ringer Hut Co. Ltd.(a) | | | 1,700 | | | | 38,229 | |
| | |
Round One Corp. | | | 10,800 | | | | 139,964 | |
| | |
Royal Holdings Co. Ltd. | | | 1,600 | | | | 40,568 | |
| | |
Saizeriya Co. Ltd. | | | 9,400 | | | | 213,816 | |
| | |
Sands China Ltd. | | | 66,800 | | | | 330,263 | |
| | |
Scandic Hotels Group AB(b) | | | 61,138 | | | | 588,579 | |
| | |
Shangri-La Asia Ltd. | | | 32,000 | | | | 32,867 | |
| | |
SJM Holdings Ltd. | | | 76,000 | | | | 81,452 | |
| | |
SkiStar AB | | | 2,828 | | | | 33,991 | |
| | |
Skylark Holdings Co. Ltd.(a) | | | 3,700 | | | | 67,254 | |
| | |
Sodexo SA | | | 3,164 | | | | 348,050 | |
| | |
SSP Group plc | | | 23,926 | | | | 197,217 | |
| | |
St Marc Holdings Co. Ltd. | | | 1,400 | | | | 31,301 | |
| | |
Star Entertainment Grp Ltd. (The) | | | 38,963 | | | | 126,165 | |
| | |
Stars Group, Inc. (The)* | | | 6,337 | | | | 138,181 | |
| | |
Tabcorp Holdings Ltd. | | | 39,123 | | | | 129,378 | |
| | |
Tokyo Dome Corp. | | | 7,000 | | | | 61,903 | |
| | |
Toridoll Holdings Corp.(a) | | | 1,600 | | | | 36,735 | |
| | |
Tosho Co. Ltd. | | | 800 | | | | 16,406 | |
| | |
TUI AG, DI | | | 28,259 | | | | 369,328 | |
| | |
Whitbread plc | | | 4,774 | | | | 250,871 | |
| | |
William Hill plc | | | 1,450 | | | | 3,708 | |
| | |
Wynn Macau Ltd. | | | 50,400 | | | | 109,832 | |
| | |
Yoshinoya Holdings Co. Ltd. | | | 4,900 | | | | 114,041 | |
| | |
Zensho Holdings Co. Ltd.(a) | | | 3,600 | | | | 76,359 | |
| | | | | | | | 18,669,330 | |
|
| Household Durables – 1.9% | |
| | |
Barratt Developments plc | | | 67,298 | | | | 549,672 | |
| | |
Bellway plc | | | 5,360 | | | | 219,173 | |
| | |
Berkeley Group Holdings plc | | | 4,851 | | | | 276,259 | |
| | |
Bonava AB, Class B | | | 4,720 | | | | 45,562 | |
| | |
Bovis Homes Group plc | | | 101,332 | | | | 1,534,146 | |
| | |
Breville Group Ltd. | | | 4,514 | | | | 47,706 | |
| | |
Cairn Homes plc | | | 123,064 | | | | 159,538 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Household Durables – (continued) | |
| | |
Casio Computer Co. Ltd.(a) | | | 10,000 | | | $ | 163,267 | |
| | |
Countryside Properties plc(b) | | | 394,163 | | | | 1,801,486 | |
| | |
Crest Nicholson Holdings plc(a) | | | 231,000 | | | | 1,160,982 | |
| | |
De’ Longhi SpA | | | 4,522 | | | | 83,242 | |
| | |
Electrolux AB, Series B | | | 7,237 | | | | 190,422 | |
| | |
ES-Con Japan Ltd.(a) | | | 31,200 | | | | 254,841 | |
| | |
Fiskars OYJ Abp | | | 574 | | | | 7,685 | |
| | |
Forbo Holding AG (Registered) | | | 81 | | | | 128,878 | |
| | |
Fujitsu General Ltd. | | | 2,100 | | | | 38,191 | |
| | |
Haseko Corp. | | | 18,700 | | | | 243,037 | |
| | |
Husqvarna AB, Class B | | | 10,433 | | | | 79,983 | |
| | |
Iida Group Holdings Co. Ltd. | | | 15,400 | | | | 258,127 | |
| | |
JM AB | | | 1,842 | | | | 47,224 | |
| | |
Kaufman & Broad SA | | | 12,628 | | | | 481,543 | |
| | |
Man Wah Holdings Ltd. | | | 1,170,400 | | | | 798,913 | |
| | |
McCarthy & Stone plc(b) | | | 492,415 | | | | 933,476 | |
| | |
Nagawa Co. Ltd.(a) | | | 500 | | | | 30,526 | |
| | |
Neinor Homes SA* (a) (b) | | | 48,202 | | | | 634,563 | |
| | |
Nikon Corp. | | | 15,800 | | | | 203,154 | |
| | |
Nobia AB | | | 93,401 | | | | 597,189 | |
| | |
Panasonic Corp. | | | 115,500 | | | | 979,621 | |
| | |
Persimmon plc | | | 11,858 | | | | 349,389 | |
| | |
Pressance Corp. | | | 20,400 | | | | 335,141 | |
| | |
Redrow plc | | | 22,574 | | | | 175,849 | |
| | |
Rinnai Corp. | | | 100 | | | | 7,391 | |
| | |
Sangetsu Corp. | | | 2,256 | | | | 42,948 | |
| | |
SEB SA | | | 560 | | | | 85,030 | |
| | |
Sekisui Chemical Co. Ltd. | | | 19,500 | | | | 342,542 | |
| | |
Sekisui House Ltd. | | | 26,500 | | | | 574,099 | |
| | |
Sharp Corp.(a) | | | 16,200 | | | | 188,667 | |
| | |
Sony Corp. | | | 38,500 | | | | 2,359,396 | |
| | |
Starts Corp., Inc. | | | 30,800 | | | | 797,458 | |
| | |
Sumitomo Forestry Co. Ltd. | | | 7,800 | | | | 114,072 | |
| | |
Tamron Co. Ltd. | | | 6,800 | | | | 149,769 | |
| | |
Taylor Wimpey plc | | | 111,287 | | | | 238,329 | |
| | |
Token Corp.(a) | | | 7,910 | | | | 509,260 | |
| | |
TomTom NV* | | | 10,869 | | | | 122,836 | |
| | |
Zojirushi Corp.(a) | | | 14,600 | | | | 225,810 | |
| | | | | | | | 18,566,392 | |
|
| Household Products – 0.4% | |
| | |
Earth Corp. | | | 600 | | | | 31,803 | |
| | |
Essity AB, Class A | | | 7,251 | | | | 227,292 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 185 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Household Products – (continued) | |
| | |
Essity AB, Class B | | | 12,797 | | | $ | 400,209 | |
| | |
Henkel AG & Co. KGaA | | | 2,948 | | | | 284,000 | |
| | |
Henkel AG & Co. KGaA (Preference) | | | 3,850 | | | | 400,232 | |
| | |
Lion Corp. | | | 7,700 | | | | 161,970 | |
| | |
Pigeon Corp. | | | 2,400 | | | | 118,107 | |
| | |
PZ Cussons plc | | | 54,000 | | | | 140,800 | |
| | |
Reckitt Benckiser Group plc | | | 20,097 | | | | 1,550,969 | |
| | |
Unicharm Corp. | | | 16,200 | | | | 552,813 | |
| | | | | | | | 3,868,195 | |
|
Independent Power and Renewable Electricity
Producers – 0.2% | |
| | |
Boralex, Inc., Class A(a) | | | 2,081 | | | | 34,516 | |
| | |
ContourGlobal plc(b) | | | 21,886 | | | | 59,615 | |
| | |
Drax Group plc | | | 327,635 | | | | 1,258,312 | |
| | |
EDP Renovaveis SA | | | 6,490 | | | | 73,999 | |
| | |
Electric Power Development Co. Ltd. | | | 8,300 | | | | 202,231 | |
| | |
Encavis AG | | | 3,696 | | | | 36,657 | |
| | |
ERG SpA | | | 2,090 | | | | 44,232 | |
| | |
Innergex Renewable Energy, Inc. | | | 559 | | | | 6,992 | |
| | |
Meridian Energy Ltd. | | | 28,875 | | | | 85,181 | |
| | |
Northland Power, Inc.(a) | | | 2,116 | | | | 42,341 | |
| | |
Renewables Infrastructure Group Ltd. (The) | | | 56,403 | | | | 95,465 | |
| | |
Scatec Solar ASA(b) | | | 988 | | | | 10,987 | |
| | |
Uniper SE | | | 10,241 | | | | 319,225 | |
| | | | | | | | 2,269,753 | |
|
| Industrial Conglomerates – 0.8% | |
| | |
CK Hutchison Holdings Ltd. | | | 135,856 | | | | 1,256,690 | |
| | |
DCC plc | | | 2,080 | | | | 194,758 | |
| | |
Guoco Group Ltd. | | | 4,000 | | | | 66,295 | |
| | |
Indus Holding AG | | | 1,013 | | | | 38,651 | |
| | |
Investment AB Latour, Class B | | | 14,750 | | | | 199,794 | |
| | |
Italmobiliare SpA | | | 245 | | | | 6,546 | |
| | |
Jardine Matheson Holdings Ltd. | | | 7,700 | | | | 439,824 | |
| | |
Jardine Strategic Holdings Ltd. | | | 8,600 | | | | 278,038 | |
| | |
Keppel Corp. Ltd. | | | 30,500 | | | | 153,738 | |
| | |
Lifco AB, Class B | | | 2,000 | | | | 99,893 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Industrial Conglomerates – (continued) | |
| | |
Mie Kotsu Group Holdings, Inc.(a) | | | 54,600 | | | $ | 303,544 | |
| | |
Nisshinbo Holdings, Inc. | | | 19,200 | | | | 161,621 | |
| | |
Nolato AB, Class B | | | 710 | | | | 39,795 | |
| | |
NWS Holdings Ltd. | | | 53,401 | | | | 79,580 | |
| | |
Realord Group Holdings Ltd.* | | | 32,000 | | | | 19,924 | |
| | |
Rheinmetall AG | | | 2,261 | | | | 272,050 | |
| | |
Sembcorp Industries Ltd. | | | 17,200 | | | | 28,942 | |
| | |
Shun Tak Holdings Ltd.(a) | | | 1,540,000 | | | | 632,686 | |
| | |
Siemens AG (Registered) | | | 23,485 | | | | 2,708,664 | |
| | |
Smiths Group plc | | | 13,321 | | | | 278,125 | |
| | |
TOKAI Holdings Corp. | | | 21,395 | | | | 211,169 | |
| | |
Toshiba Corp. | | | 15,400 | | | | 527,793 | |
| | | | | | | | 7,998,120 | |
|
| Insurance – 4.8% | |
| | |
Admiral Group plc | | | 13,328 | | | | 348,723 | |
| | |
Aegon NV | | | 55,808 | | | | 241,328 | |
| | |
Ageas | | | 9,702 | | | | 558,953 | |
| | |
AIA Group Ltd. | | | 356,600 | | | | 3,569,321 | |
| | |
Allianz SE (Registered) | | | 20,790 | | | | 5,079,565 | |
| | |
Alm Brand A/S | | | 16,240 | | | | 132,188 | |
| | |
ASR Nederland NV | | | 8,323 | | | | 304,659 | |
| | |
Assicurazioni Generali SpA | | | 55,902 | | | | 1,133,521 | |
| | |
AUB Group Ltd.(a) | | | 2,255 | | | | 19,187 | |
| | |
Aviva plc | | | 216,832 | | | | 1,164,971 | |
| | |
AXA SA | | | 90,013 | | | | 2,378,519 | |
| | |
Baloise Holding AG (Registered) | | | 3,003 | | | | 554,494 | |
| | |
Beazley plc | | | 37,191 | | | | 282,254 | |
| | |
CBL Corp. Ltd.* (d) | | | 102,937 | | | | 209,263 | |
| | |
Clal Insurance Enterprises Holdings Ltd.* | | | 4,320 | | | | 66,696 | |
| | |
CNP Assurances | | | 11,704 | | | | 232,164 | |
| | |
Coface SA | | | 83,391 | | | | 911,745 | |
| | |
Dai-ichi Life Holdings, Inc. | | | 56,300 | | | | 929,870 | |
| | |
Direct Line Insurance Group plc | | | 104,214 | | | | 366,935 | |
| | |
Fairfax Financial Holdings Ltd. | | | 539 | | | | 228,829 | |
| | |
Gjensidige Forsikring ASA | | | 945 | | | | 17,693 | |
| | |
Great Eastern Holdings Ltd. | | | 6,800 | | | | 109,174 | |
| | |
Great-West Lifeco, Inc. | | | 8,470 | | | | 206,409 | |
| | |
Grupo Catalana Occidente SA | | | 2,102 | | | | 73,636 | |
| | |
Hannover Rueck SE | | | 640 | | | | 113,386 | |
See Accompanying Notes to the Financial Statements.
| | |
| 186 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Insurance – (continued) | |
| | |
Harel Insurance Investments & Financial Services Ltd. | | | 19,063 | | | $ | 152,296 | |
| | |
Hastings Group Holdings plc(b) | | | 293,104 | | | | 690,283 | |
| | |
Helvetia Holding AG (Registered) | | | 1,265 | | | | 177,427 | |
| | |
Hiscox Ltd. | | | 14,168 | | | | 272,984 | |
| | |
iA Financial Corp., Inc. | | | 8,654 | | | | 417,639 | |
| | |
IDI Insurance Co. Ltd. | | | 6,545 | | | | 233,859 | |
| | |
Insurance Australia Group Ltd. | | | 55,594 | | | | 304,114 | |
| | |
Intact Financial Corp.(a) | | | 5,082 | | | | 525,464 | |
| | |
Japan Post Holdings Co. Ltd. | | | 64,500 | | | | 594,256 | |
| | |
Japan Post Insurance Co. Ltd. | | | 7,600 | | | | 120,498 | |
| | |
Just Group plc* | | | 729,504 | | | | 573,467 | |
| | |
Lancashire Holdings Ltd. | | | 23,588 | | | | 217,170 | |
| | |
Legal & General Group plc | | | 260,095 | | | | 887,516 | |
| | |
Manulife Financial Corp.(a) | | | 90,167 | | | | 1,682,806 | |
| | |
Mapfre SA | | | 80,157 | | | | 223,568 | |
| | |
Medibank Pvt Ltd. | | | 62,011 | | | | 144,402 | |
| | |
Menora Mivtachim Holdings Ltd. | | | 23,017 | | | | 369,142 | |
| | |
Migdal Insurance & Financial Holding Ltd. | | | 90,400 | | | | 93,824 | |
| | |
MS&AD Insurance Group Holdings, Inc. | | | 21,800 | | | | 707,610 | |
| | |
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Registered) | | | 7,623 | | | | 2,117,645 | |
| | |
nib holdings Ltd. | | | 19,924 | | | | 96,224 | |
| | |
NN Group NV | | | 18,410 | | | | 701,822 | |
| | |
Phoenix Group Holdings plc | | | 16,000 | | | | 145,798 | |
| | |
Phoenix Holdings Ltd. (The) | | | 21,712 | | | | 132,297 | |
| | |
Poste Italiane SpA(b) | | | 18,134 | | | | 220,115 | |
| | |
Power Corp. of Canada | | | 12,270 | | | | 284,543 | |
| | |
Power Financial Corp. | | | 6,237 | | | | 146,156 | |
| | |
Prudential plc | | | 74,536 | | | | 1,300,623 | |
| | |
QBE Insurance Group Ltd. | | | 23,254 | | | | 201,863 | |
| | |
RSA Insurance Group plc | | | 35,728 | | | | 241,424 | |
| | |
Sabre Insurance Group plc(b) | | | 21,200 | | | | 80,927 | |
| | |
Saga plc | | | 833,602 | | | | 506,117 | |
| | |
Sampo OYJ, Class A | | | 11,014 | | | | 451,453 | |
| | |
SCOR SE | | | 9,933 | | | | 418,669 | |
| | |
Societa Cattolica di Assicurazioni SC | | | 123,277 | | | | 1,074,828 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Insurance – (continued) | |
| | |
Sompo Holdings, Inc. | | | 19,200 | | | $ | 759,084 | |
| | |
Sony Financial Holdings, Inc. | | | 8,200 | | | | 177,418 | |
| | |
Steadfast Group Ltd. | | | 52,828 | | | | 130,661 | |
| | |
Storebrand ASA | | | 17,930 | | | | 126,939 | |
| | |
Sun Life Financial, Inc. | | | 27,335 | | | | 1,228,916 | |
| | |
Suncorp Group Ltd. | | | 22,592 | | | | 209,346 | |
| | |
Swiss Life Holding AG (Registered) | | | 1,848 | | | | 923,672 | |
| | |
Swiss Re AG | | | 14,091 | | | | 1,475,146 | |
| | |
T&D Holdings, Inc. | | | 23,100 | | | | 260,691 | |
| | |
Talanx AG | | | 3,690 | | | | 170,022 | |
| | |
Tokio Marine Holdings, Inc. | | | 30,800 | | | | 1,671,841 | |
| | |
Topdanmark A/S | | | 1,650 | | | | 73,929 | |
| | |
Tryg A/S | | | 2,365 | | | | 66,087 | |
| | |
Unipol Gruppo SpA(a) | | | 6,080 | | | | 33,909 | |
| | |
UnipolSai Assicurazioni SpA | | | 27,841 | | | | 77,683 | |
| | |
UNIQA Insurance Group AG | | | 4,884 | | | | 46,942 | |
| | |
Wuestenrot & Wuerttembergische AG | | | 13,552 | | | | 277,590 | |
| | |
Yunfeng Financial Group Ltd.* | | | 136,000 | | | | 60,385 | |
| | |
Zurich Insurance Group AG | | | 7,162 | | | | 2,798,025 | |
| | | | | | | | 46,310,598 | |
|
| Interactive Media & Services – 0.1% | |
| | |
Auto Trader Group plc(b) | | | 27,864 | | | | 202,707 | |
| | |
carsales.com Ltd. | | | 634 | | | | 6,788 | |
| | |
Dip Corp.(a) | | | 1,400 | | | | 38,242 | |
| | |
Kakaku.com, Inc. | | | 1,600 | | | | 37,342 | |
| | |
LINE Corp.* | | | 900 | | | | 33,218 | |
| | |
New Work SE | | | 159 | | | | 50,112 | |
| | |
REA Group Ltd. | | | 2,748 | | | | 205,586 | |
| | |
Rightmove plc | | | 30,927 | | | | 239,557 | |
| | |
Scout24 AG(b) | | | 2,584 | | | | 159,853 | |
| | |
Z Holdings Corp. | | | 40,000 | | | | 123,584 | |
| | | | | | | | 1,096,989 | |
|
| Internet & Direct Marketing Retail – 0.2% | |
| | |
ASKUL Corp.(a) | | | 500 | | | | 13,811 | |
| | |
ASOS plc* (a) | | | 3,749 | | | | 171,248 | |
| | |
Belluna Co. Ltd. | | | 53,900 | | | | 353,998 | |
| | |
boohoo Group plc* | | | 21,836 | | | | 74,595 | |
| | |
Delivery Hero SE* (b) | | | 4,128 | | | | 193,565 | |
| | |
Dustin Group AB(a) (b) | | | 3,680 | | | | 29,373 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 187 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Internet & Direct Marketing Retail – (continued) | |
| | |
Just Eat plc* | | | 13,319 | | | $ | 126,676 | |
| | |
Moneysupermarket.com Group plc | | | 22,168 | | | | 98,420 | |
| | |
Ocado Group plc* | | | 20,020 | | | | 344,289 | |
| | |
Rakuten, Inc. | | | 23,400 | | | | 224,681 | |
| | |
Rocket Internet SE* (b) | | | 1,646 | | | | 43,742 | |
| | |
Takeaway.com NV* (a) (b) | | | 1,022 | | | | 83,234 | |
| | |
Takkt AG | | | 29,645 | | | | 352,563 | |
| | |
Webjet Ltd.(a) | | | 2,707 | | | | 21,093 | |
| | |
Zalando SE* (b) | | | 1,921 | | | | 83,262 | |
| | |
zooplus AG* | | | 207 | | | | 22,632 | |
| | |
ZOZO, Inc.(a) | | | 4,000 | | | | 93,650 | |
| | | | | | | | 2,330,832 | |
|
| IT Services – 1.0% | |
| | |
Adyen NV* (b) | | | 539 | | | | 378,480 | |
| | |
Afterpay Touch Group Ltd.* | | | 2,660 | | | | 52,889 | |
| | |
Alten SA | | | 1,130 | | | | 124,114 | |
| | |
Altran Technologies SA | | | 15,575 | | | | 247,264 | |
| | |
Amadeus IT Group SA | | | 13,013 | | | | 963,121 | |
| | |
Atea ASA* | | | 10,346 | | | | 130,942 | |
| | |
Atos SE | | | 5,462 | | | | 423,023 | |
| | |
Bechtle AG | | | 1,192 | | | | 129,195 | |
| | |
Cancom SE | | | 2,336 | | | | 124,679 | |
| | |
Capgemini SE | | | 4,466 | | | | 502,983 | |
| | |
CGI, Inc.* | | | 8,316 | | | | 647,767 | |
| | |
Computacenter plc | | | 9,339 | | | | 165,439 | |
| | |
Computershare Ltd. | | | 16,984 | | | | 185,346 | |
| | |
Digital Garage, Inc. | | | 1,300 | | | | 43,051 | |
| | |
DTS Corp. | | | 4,000 | | | | 85,287 | |
| | |
Econocom Group SA/NV | | | 125,202 | | | | 326,576 | |
| | |
Evry A/S(b) | | | 4,800 | | | | 18,769 | |
| | |
FDM Group Holdings plc | | | 3,850 | | | | 36,019 | |
| | |
Formula Systems 1985 Ltd. | | | 829 | | | | 55,289 | |
| | |
Fujitsu Ltd. | | | 7,700 | | | | 685,275 | |
| | |
Global Dominion Access SA* (b) | | | 2,113 | | | | 8,864 | |
| | |
GMO internet, Inc.(a) | | | 1,200 | | | | 20,402 | |
| | |
Indra Sistemas SA* | | | 5,627 | | | | 54,365 | |
| | |
Infocom Corp. | | | 1,600 | | | | 33,641 | |
| | |
Itochu Techno-Solutions Corp. | | | 2,400 | | | | 64,893 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| IT Services – (continued) | |
| | |
Link Administration Holdings Ltd.(a) | | | 6,763 | | | $ | 26,092 | |
| | |
Matrix IT Ltd. | | | 2,464 | | | | 45,279 | |
| | |
Mitsubishi Research Institute, Inc. | | | 15,400 | | | | 548,448 | |
| | |
NEC Networks & System Integration Corp. | | | 4,300 | | | | 136,432 | |
| | |
NET One Systems Co. Ltd. | | | 7,800 | | | | 212,271 | |
| | |
NEXTDC Ltd.* (a) | | | 16,647 | | | | 73,516 | |
| | |
Nihon Unisys Ltd. | | | 2,600 | | | | 86,222 | |
| | |
Nomura Research Institute Ltd. | | | 12,345 | | | | 263,904 | |
| | |
NS Solutions Corp. | | | 800 | | | | 27,418 | |
| | |
NSD Co. Ltd. | | | 2,580 | | | | 79,831 | |
| | |
NTT Data Corp. | | | 15,400 | | | | 203,994 | |
| | |
Obic Co. Ltd. | | | 1,500 | | | | 189,399 | |
| | |
Otsuka Corp. | | | 3,400 | | | | 138,070 | |
| | |
Reply SpA | | | 880 | | | | 57,336 | |
| | |
SCSK Corp. | | | 900 | | | | 46,122 | |
| | |
Shopify, Inc., Class A* | | | 2,849 | | | | 895,224 | |
| | |
Softcat plc | | | 12,119 | | | | 147,489 | |
| | |
Sopra Steria Group | | | 1,463 | | | | 200,597 | |
| | |
SUNeVision Holdings Ltd.* | | | 134,000 | | | | 99,333 | |
| | |
Tieto OYJ | | | 1,598 | | | | 45,462 | |
| | |
TIS, Inc. | | | 2,300 | | | | 139,781 | |
| | |
Transcosmos, Inc. | | | 2,100 | | | | 52,993 | |
| | |
Wirecard AG | | | 3,311 | | | | 419,444 | |
| | |
Worldline SA* (b) | | | 3,211 | | | | 195,059 | |
| | | | | | | | 9,837,389 | |
|
| Leisure Products – 0.3% | |
| | |
Bandai Namco Holdings, Inc. | | | 8,900 | | | | 548,959 | |
| | |
Beneteau SA | | | 8,838 | | | | 82,431 | |
| | |
BRP, Inc. | | | 3,584 | | | | 161,128 | |
| | |
Heiwa Corp. | | | 8,850 | | | | 182,722 | |
| | |
Mizuno Corp. | | | 15,400 | | | | 405,282 | |
| | |
Sega Sammy Holdings, Inc. | | | 5,300 | | | | 74,912 | |
| | |
Shimano, Inc. | | | 2,800 | | | | 468,803 | |
| | |
Spin Master Corp.* (b) | | | 2,048 | | | | 58,058 | |
| | |
Technogym SpA(b) | | | 4,905 | | | | 54,066 | |
| | |
Thule Group AB(b) | | | 2,805 | | | | 57,152 | |
| | |
Tomy Co. Ltd. | | | 10,900 | | | | 118,977 | |
| | |
Universal Entertainment Corp. | | | 300 | | | | 10,073 | |
| | |
Yamaha Corp. | | | 4,600 | | | | 215,735 | |
See Accompanying Notes to the Financial Statements.
| | |
| 188 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Leisure Products – (continued) | |
| | |
Yonex Co. Ltd.(a) | | | 10,000 | | | $ | 53,837 | |
| | | | | | | | 2,492,135 | |
|
| Life Sciences Tools & Services – 0.2% | |
| | |
Clinigen Group plc | | | 5,270 | | | | 56,669 | |
| | |
EPS Holdings, Inc. | | | 1,900 | | | | 23,340 | |
| | |
Eurofins Scientific SE(a) | | | 580 | | | | 293,902 | |
| | |
Evotec SE* | | | 8,413 | | | | 192,319 | |
| | |
Gerresheimer AG | | | 755 | | | | 60,857 | |
| | |
Lonza Group AG (Registered)* | | | 2,079 | | | | 747,956 | |
| | |
QIAGEN NV* | | | 6,631 | | | | 197,670 | |
| | |
Sartorius Stedim Biotech | | | 770 | | | | 115,285 | |
| | |
Siegfried Holding AG (Registered)* | | | 165 | | | | 67,137 | |
| | |
Tecan Group AG (Registered) | | | 779 | | | | 184,102 | |
| | | | | | | | 1,939,237 | |
|
| Machinery – 3.4% | |
| | |
Aalberts NV | | | 5,373 | | | | 216,158 | |
| | |
Ag Growth International, Inc. | | | 912 | | | | 29,712 | |
| | |
Aida Engineering Ltd. | | | 31,200 | | | | 268,406 | |
| | |
Alfa Laval AB | | | 6,238 | | | | 144,452 | |
| | |
Alstom SA | | | 3,962 | | | | 171,283 | |
| | |
Amada Holdings Co. Ltd. | | | 18,600 | | | | 213,864 | |
| | |
ANDRITZ AG | | | 3,620 | | | | 162,677 | |
| | |
Atlas Copco AB, Class A(a) | | | 14,476 | | | | 512,519 | |
| | |
Atlas Copco AB, Class B | | | 12,166 | | | | 377,697 | |
| | |
ATS Automation Tooling Systems, Inc.* | | | 1,400 | | | | 19,045 | |
| | |
Bando Chemical Industries Ltd. | | | 39,000 | | | | 334,425 | |
| | |
Beijer Alma AB | | | 2,304 | | | | 29,702 | |
| | |
Bodycote plc | | | 16,467 | | | | 152,567 | |
| | |
Bucher Industries AG (Registered) | | | 275 | | | | 84,890 | |
| | |
Cargotec OYJ, Class B | | | 684 | | | | 23,961 | |
| | |
CKD Corp.(a) | | | 8,000 | | | | 114,333 | |
| | |
CNH Industrial NV | | | 18,865 | | | | 205,164 | |
| | |
Concentric AB | | | 914 | | | | 12,238 | |
| | |
Construcciones y Auxiliar de Ferrocarriles SA | | | 720 | | | | 32,332 | |
| | |
Conzzeta AG (Registered) | | | 55 | | | | 47,879 | |
| | |
Daetwyler Holding AG | | | 1,134 | | | | 195,139 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Machinery – (continued) | |
| | |
Daifuku Co. Ltd.(a) | | | 4,800 | | | $ | 257,971 | |
| | |
Daiwa Industries Ltd. | | | 1,600 | | | | 18,101 | |
| | |
Danieli & C Officine Meccaniche SpA(a) | | | 3,209 | | | | 55,420 | |
| | |
Danieli & C Officine Meccaniche SpA (Retirement Savings Plan) | | | 3,477 | | | | 38,209 | |
| | |
Deutz AG | | | 6,640 | | | | 37,040 | |
| | |
DMG Mori AG | | | 1,007 | | | | 47,747 | |
| | |
DMG Mori Co. Ltd. | | | 2,100 | | | | 34,480 | |
| | |
Duerr AG | | | 1,232 | | | | 36,341 | |
| | |
Epiroc AB, Class A | | | 37,807 | | | | 426,169 | |
| | |
FANUC Corp. | | | 5,300 | | | | 1,058,970 | |
| | |
Fincantieri SpA(a) | | | 79,280 | | | | 83,584 | |
| | |
FLSmidth & Co. A/S | | | 2,798 | | | | 100,167 | |
| | |
Fluidra SA* | | | 912 | | | | 11,396 | |
| | |
Fuji Corp.(a) | | | 13,000 | | | | 218,501 | |
| | |
Fujitec Co. Ltd. | | | 56,900 | | | | 836,354 | |
| | |
Furukawa Co. Ltd. | | | 30,800 | | | | 445,027 | |
| | |
GEA Group AG | | | 4,960 | | | | 151,677 | |
| | |
Georg Fischer AG (Registered)(a) | | | 272 | | | | 259,113 | |
| | |
Gima TT SpA(b) | | | 12,720 | | | | 98,486 | |
| | |
Glory Ltd. | | | 7,800 | | | | 230,887 | |
| | |
Harmonic Drive Systems, Inc.(a) | | | 1,500 | | | | 70,210 | |
| | |
Hino Motors Ltd. | | | 16,000 | | | | 152,740 | |
| | |
Hitachi Construction Machinery Co. Ltd.(a) | | | 7,700 | | | | 201,145 | |
| | |
Hitachi Zosen Corp. | | | 97,400 | | | | 331,559 | |
| | |
Hoshizaki Corp. | | | 1,200 | | | | 102,567 | |
| | |
IHI Corp. | | | 2,500 | | | | 62,462 | |
| | |
IMA Industria Macchine Automatiche SpA(a) | | | 495 | | | | 33,687 | |
| | |
Interpump Group SpA(a) | | | 3,884 | | | | 106,423 | |
| | |
Interroll Holding AG (Registered) | | | 34 | | | | 70,291 | |
| | |
Japan Steel Works Ltd. (The) | | | 8,600 | | | | 184,164 | |
| | |
JTEKT Corp. | | | 2,300 | | | | 29,658 | |
| | |
Jungheinrich AG (Preference) | | | 2,364 | | | | 59,974 | |
| | |
Kawasaki Heavy Industries Ltd. | | | 2,800 | | | | 67,938 | |
| | |
KION Group AG | | | 3,696 | | | | 245,675 | |
| | |
Kitz Corp. | | | 81,300 | | | | 559,523 | |
| | |
Koenig & Bauer AG | | | 11,542 | | | | 381,412 | |
| | |
Komatsu Ltd. | | | 26,800 | | | | 634,394 | |
| | |
Komax Holding AG (Registered)(a) | | | 645 | | | | 137,007 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 189 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Machinery – (continued) | |
| | |
Komori Corp. | | | 4,400 | | | $ | 47,213 | |
| | |
Kone OYJ, Class B | | | 11,088 | | | | 705,603 | |
| | |
Konecranes OYJ | | | 2,273 | | | | 70,117 | |
| | |
Krones AG | | | 1,610 | | | | 105,347 | |
| | |
Kubota Corp. | | | 30,800 | | | | 493,461 | |
| | |
Kurita Water Industries Ltd. | | | 3,400 | | | | 98,756 | |
| | |
Kyokuto Kaihatsu Kogyo Co. Ltd. | | | 30,900 | | | | 418,460 | |
| | |
Makino Milling Machine Co. Ltd. | | | 23,200 | | | | 1,167,458 | |
| | |
Makita Corp. | | | 6,600 | | | | 224,976 | |
| | |
Manitou BF SA | | | 4,640 | | | | 94,732 | |
| | |
Max Co. Ltd. | | | 9,800 | | | | 181,033 | |
| | |
Meidensha Corp. | | | 26,600 | | | | 514,997 | |
| | |
Metso OYJ | | | 507 | | | | 19,164 | |
| | |
MINEBEA MITSUMI, Inc. | | | 15,411 | | | | 296,516 | |
| | |
MISUMI Group, Inc. | | | 8,200 | | | | 208,138 | |
| | |
Mitsubishi Heavy Industries Ltd. | | | 15,400 | | | | 627,083 | |
| | |
Mitsuboshi Belting Ltd. | | | 23,100 | | | | 438,474 | |
| | |
Mitsui E&S Holdings Co. Ltd.* (a) | | | 69,300 | | | | 708,994 | |
| | |
Miura Co. Ltd. | | | 3,300 | | | | 100,430 | |
| | |
Morgan Advanced Materials plc | | | 239,850 | | | | 731,222 | |
| | |
Morita Holdings Corp. | | | 9,000 | | | | 152,269 | |
| | |
Nachi-Fujikoshi Corp.(a) | | | 19,700 | | | | 956,709 | |
| | |
NFI Group, Inc.(a) | | | 42,812 | | | | 943,633 | |
| | |
NGK Insulators Ltd. | | | 8,700 | | | | 134,719 | |
| | |
Nitta Corp. | | | 3,400 | | | | 100,171 | |
| | |
Noritake Co. Ltd. | | | 7,700 | | | | 356,848 | |
| | |
Norma Group SE | | | 234 | | | | 8,605 | |
| | |
NSK Ltd. | | | 39,600 | | | | 372,171 | |
| | |
OC Oerlikon Corp. AG (Registered) | | | 13,878 | | | | 142,050 | |
| | |
Oiles Corp. | | | 8,620 | | | | 131,965 | |
| | |
OKUMA Corp. | | | 1,000 | | | | 60,497 | |
| | |
OSG Corp.(a) | | | 1,500 | | | | 32,427 | |
| | |
Outotec OYJ* | | | 35,725 | | | | 229,893 | |
| | |
Palfinger AG | | | 2,657 | | | | 75,886 | |
| | |
Pfeiffer Vacuum Technology AG | | | 1,102 | | | | 172,491 | |
| | |
Rational AG | | | 55 | | | | 41,879 | |
| | |
Rotork plc | | | 23,256 | | | | 90,701 | |
| | |
Ryobi Ltd. | | | 24,800 | | | | 466,842 | |
| | |
Sandvik AB | | | 28,490 | | | | 503,749 | |
| | |
Schindler Holding AG | | | 1,465 | | | | 358,103 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Machinery – (continued) | |
| | |
Schindler Holding AG (Registered) | | | 602 | | | $ | 142,272 | |
| | |
SFS Group AG | | | 1,600 | | | | 141,475 | |
| | |
Shima Seiki Manufacturing Ltd.(a) | | | 1,300 | | | | 31,446 | |
| | |
Shinmaywa Industries Ltd. | | | 11,400 | | | | 140,991 | |
| | |
Sintokogio Ltd. | | | 38,500 | | | | 375,010 | |
| | |
SKF AB, Class A | | | 2,427 | | | | 44,034 | |
| | |
SKF AB, Class B | | | 3,120 | | | | 56,527 | |
| | |
SMC Corp. | | | 1,800 | | | | 785,736 | |
| | |
Sodick Co. Ltd. | | | 22,800 | | | | 199,939 | |
| | |
Spirax-Sarco Engineering plc | | | 2,647 | | | | 271,449 | |
| | |
Stabilus SA | | | 3,069 | | | | 172,737 | |
| | |
Star Micronics Co. Ltd.(a) | | | 29,300 | | | | 452,625 | |
| | |
Sumitomo Heavy Industries Ltd. | | | 5,200 | | | | 163,304 | |
| | |
Tadano Ltd.(a) | | | 14,600 | | | | 133,703 | |
| | |
Takeuchi Manufacturing Co. Ltd. | | | 30,800 | | | | 487,478 | |
| | |
Takuma Co. Ltd. | | | 15,600 | | | | 186,730 | |
| | |
Techtronic Industries Co. Ltd. | | | 88,000 | | | | 690,509 | |
| | |
THK Co. Ltd. | | | 10,600 | | | | 309,357 | |
| | |
Tocalo Co. Ltd. | | | 54,600 | | | | 544,460 | |
| | |
Toshiba Machine Co. Ltd. | | | 14,049 | | | | 317,225 | |
| | |
Trelleborg AB, Class B | | | 2,480 | | | | 40,144 | |
| | |
Tsubaki Nakashima Co. Ltd.(a) | | | 5,600 | | | | 96,195 | |
| | |
Tsubakimoto Chain Co. | | | 2,200 | | | | 75,908 | |
| | |
Tsugami Corp.(a) | | | 16,200 | | | | 151,952 | |
| | |
Union Tool Co. | | | 500 | | | | 16,049 | |
| | |
Valmet OYJ | | | 5,005 | | | | 111,900 | |
| | |
Vesuvius plc | | | 166,243 | | | | 859,183 | |
| | |
Volvo AB, Class A | | | 21,791 | | | | 326,606 | |
| | |
Volvo AB, Class B | | | 64,142 | | | | 961,368 | |
| | |
Wacker Neuson SE | | | 5,236 | | | | 89,492 | |
| | |
Wartsila OYJ Abp | | | 11,105 | | | | 117,227 | |
| | |
Washtec AG | | | 2,080 | | �� | | 104,657 | |
| | |
Weir Group plc (The) | | | 2,400 | | | | 41,817 | |
| | |
YAMABIKO Corp. | | | 46,400 | | | | 530,506 | |
| | |
Yangzijiang Shipbuilding Holdings Ltd. | | | 174,600 | | | | 122,520 | |
| | | | | | | | 33,101,225 | |
|
| Marine – 0.3% | |
| | |
AP Moller – Maersk A/S, Class A | | | 231 | | | | 277,382 | |
See Accompanying Notes to the Financial Statements.
| | |
| 190 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Marine – (continued) | |
| | |
AP Moller – Maersk A/S, Class B | | | 154 | | | $ | 196,376 | |
| | |
Dfds A/S | | | 1,509 | | | | 59,408 | |
| | |
Golden Ocean Group Ltd. | | | 64,372 | | | | 371,598 | |
| | |
Irish Continental Group plc | | | 11,810 | | | | 56,393 | |
| | |
Kawasaki Kisen Kaisha Ltd.* (a) | | | 8,100 | | | | 122,356 | |
| | |
Kuehne + Nagel International AG (Registered) | | | 1,309 | | | | 211,390 | |
| | |
NS United Kaiun Kaisha Ltd.(a) | | | 8,100 | | | | 184,695 | |
| | |
Orient Overseas International Ltd. | | | 7,000 | | | | 32,152 | |
| | |
Pacific Basin Shipping Ltd. | | | 3,437,000 | | | | 798,109 | |
| | |
SITC International Holdings Co. Ltd. | | | 182,000 | | | | 200,862 | |
| | |
Stolt-Nielsen Ltd. | | | 9,680 | | | | 119,561 | |
| | |
Wallenius Wilhelmsen ASA | | | 19,252 | | | | 41,938 | |
| | |
Wilh Wilhelmsen Holding ASA, Class A | | | 4,368 | | | | 68,033 | |
| | |
Wilh Wilhelmsen Holding ASA, Class B | | | 14,686 | | | | 232,738 | |
| | | | | | | | 2,972,991 | |
|
| Media – 0.9% | |
| | |
Altice Europe NV* | | | 11,083 | | | | 63,307 | |
| | |
Ascential plc(b) | | | 19,337 | | | | 87,377 | |
| | |
Atresmedia Corp. de Medios de Comunicacion SA | | | 49,665 | | | | 207,672 | |
| | |
Axel Springer SE* | | | 2,916 | | | | 203,327 | |
| | |
Cogeco, Inc. | | | 4,849 | | | | 376,048 | |
| | |
Corus Entertainment, Inc., Class B | | | 169,400 | | | | 652,158 | |
| | |
CyberAgent, Inc. | | | 2,200 | | | | 71,838 | |
| | |
Daily Mail & General Trust plc, Class A | | | 6,037 | | | | 68,510 | |
| | |
Dentsu, Inc. | | | 9,800 | | | | 352,639 | |
| | |
Euromoney Institutional Investor plc | | | 4,083 | | | | 74,602 | |
| | |
Eutelsat Communications SA | | | 9,280 | | | | 176,005 | |
| | |
Hakuhodo DY Holdings, Inc. | | | 7,400 | | | | 111,440 | |
| | |
Informa plc | | | 48,972 | | | | 491,116 | |
| | |
IPSOS | | | 28,721 | | | | 865,150 | |
| | |
ITV plc | | | 133,200 | | | | 230,533 | |
| | |
JCDecaux SA(a) | | | 6,314 | | | | 172,583 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Media – (continued) | |
| | |
Lagardere SCA | | | 9,311 | | | $ | 207,964 | |
| | |
Mediaset SpA* | | | 7,888 | | | | 23,593 | |
| | |
Metropole Television SA | | | 1,295 | | | | 22,784 | |
| | |
Nine Entertainment Co. Holdings Ltd.(a) | | | 90,800 | | | | 115,104 | |
| | |
Nippon Television Holdings, Inc. | | | 8,100 | | | | 106,621 | |
| | |
NOS SGPS SA | | | 1,360 | | | | 8,079 | |
| | |
oOh!media Ltd.(a) | | | 6,533 | | | | 12,422 | |
| | |
Pearson plc | | | 29,568 | | | | 261,016 | |
| | |
Promotora de Informaciones SA, Class A* | | | 32,897 | | | | 48,960 | |
| | |
ProSiebenSat.1 Media SE | | | 14,630 | | | | 216,103 | |
| | |
Publicis Groupe SA | | | 4,241 | | | | 182,398 | |
| | |
Quebecor, Inc., Class B | | | 7,789 | | | | 181,458 | |
| | |
RAI Way SpA(b) | | | 8,120 | | | | 50,097 | |
| | |
Sanoma OYJ | | | 10,880 | | �� | | 113,736 | |
| | |
Schibsted ASA, Class A | | | 2,349 | | | | 69,079 | |
| | |
Schibsted ASA, Class B | | | 3,483 | | | | 97,420 | |
| | |
SES SA, FDR | | | 14,707 | | | | 285,005 | |
| | |
Seven West Media Ltd.* (a) | | | 549,120 | | | | 151,326 | |
| | |
Shaw Communications, Inc., Class B | | | 6,116 | | | | 125,079 | |
| | |
Singapore Press Holdings Ltd. | | | 111,100 | | | | 181,228 | |
| | |
SKY Perfect JSAT Holdings, Inc. | | | 15,200 | | | | 63,131 | |
| | |
Southern Cross Media Group Ltd. | | | 45,760 | | | | 25,852 | |
| | |
Stroeer SE & Co. KGaA | | | 620 | | | | 49,941 | |
| | |
Tamedia AG (Registered) | | | 1,760 | | | | 165,164 | |
| | |
Telenet Group Holding NV* | | | 4,543 | | | | 223,111 | |
| | |
Television Francaise 1 | | | 85,855 | | | | 720,297 | |
| | |
Vector, Inc. | | | 1,500 | | | | 14,181 | |
| | |
Wowow, Inc. | | | 3,630 | | | | 87,573 | |
| | |
WPP plc | | | 55,132 | | | | 687,155 | |
| | |
Zenrin Co. Ltd. | | | 2,400 | | | | 43,713 | |
| | | | | | | | 8,743,895 | |
|
| Metals & Mining – 4.2% | |
| | |
Acerinox SA | | | 231 | | | | 2,159 | |
| | |
Agnico Eagle Mines Ltd. | | | 4,158 | | | | 256,089 | |
| | |
Aichi Steel Corp. | | | 9,400 | | | | 307,812 | |
| | |
Alacer Gold Corp.* (a) | | | 233,156 | | | | 1,156,600 | |
| | |
Alamos Gold, Inc., Class A | | | 24,480 | | | | 133,542 | |
| | |
Alumina Ltd. | | | 94,737 | | | | 148,161 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 191 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Metals & Mining – (continued) | |
| | |
AMG Advanced Metallurgical Group NV(a) | | | 26,103 | | | $ | 640,971 | |
| | |
Anglo American plc | | | 71,533 | | | | 1,834,242 | |
| | |
Antofagasta plc | | | 18,600 | | | | 208,721 | |
| | |
APERAM SA(a) | | | 1,904 | | | | 48,559 | |
| | |
ArcelorMittal | | | 25,949 | | | | 383,008 | |
| | |
Asahi Holdings, Inc.(a) | | | 31,600 | | | | 737,494 | |
| | |
Aurubis AG | | | 29,183 | | | | 1,432,227 | |
| | |
B2Gold Corp.* | | | 52,817 | | | | 186,056 | |
| | |
Barrick Gold Corp. | | | 28,111 | | | | 489,352 | |
| | |
Barrick Gold Corp. – XLON | | | 22,293 | | | | 371,811 | |
| | |
Bekaert SA | | | 36,406 | | | | 1,014,596 | |
| | |
BHP Group Ltd. | | | 86,856 | | | | 2,151,228 | |
| | |
BHP Group plc | | | 55,055 | | | | 1,164,651 | |
| | |
BlueScope Steel Ltd. | | | 25,795 | | | | 236,894 | |
| | |
Boliden AB | | | 9,702 | | | | 261,475 | |
| | |
Centamin plc | | | 48,989 | | | | 73,566 | |
| | |
Centerra Gold, Inc.* | | | 180,180 | | | | 1,539,484 | |
| | |
Daido Steel Co. Ltd.(a) | | | 2,000 | | | | 88,248 | |
| | |
Detour Gold Corp.* | | | 20,559 | | | | 342,089 | |
| | |
Dowa Holdings Co. Ltd. | | | 2,200 | | | | 76,518 | |
| | |
Endeavour Mining Corp.* | | | 2,501 | | | | 45,383 | |
| | |
Eramet(a) | | | 8,162 | | | | 407,400 | |
| | |
Evolution Mining Ltd. | | | 42,290 | | | | 120,330 | |
| | |
Evraz plc | | | 12,821 | | | | 60,920 | |
| | |
Ferrexpo plc | | | 238,315 | | | | 388,404 | |
| | |
First Quantum Minerals Ltd.(a) | | | 32,956 | | | | 279,074 | |
| | |
Fortescue Metals Group Ltd. | | | 43,120 | | | | 264,694 | |
| | |
Franco-Nevada Corp. | | | 4,443 | | | | 432,012 | |
| | |
Fresnillo plc(a) | | | 13,040 | | | | 119,804 | |
| | |
Glencore plc* | | | 543,774 | | | | 1,637,027 | |
| | |
Granges AB | | | 61,292 | | | | 596,742 | |
| | |
Highland Gold Mining Ltd. | | | 183,876 | | | | 483,485 | |
| | |
Hill & Smith Holdings plc | | | 4,063 | | | | 68,874 | |
| | |
Hitachi Metals Ltd.(a) | | | 4,740 | | | | 59,982 | |
| | |
Hochschild Mining plc | | | 14,099 | | | | 36,525 | |
| | |
Hudbay Minerals, Inc. | | | 14,880 | | | | 54,115 | |
| | |
IAMGOLD Corp.* (a) | | | 47,672 | | | | 179,538 | |
| | |
Independence Group NL | | | 36,717 | | | | 161,137 | |
| | |
Ivanhoe Mines Ltd., Class A* | | | 21,170 | | | | 52,669 | |
| | |
JFE Holdings, Inc. | | | 36,300 | | | | 459,018 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Metals & Mining – (continued) | |
| | |
KAZ Minerals plc | | | 17,892 | | | $ | 108,677 | |
| | |
Kinross Gold Corp.* | | | 27,217 | | | | 132,528 | |
| | |
Kirkland Lake Gold Ltd. | | | 4,640 | | | | 218,347 | |
| | |
Kobe Steel Ltd. | | | 8,200 | | | | 44,601 | |
| | |
Kyoei Steel Ltd. | | | 14,300 | | | | 263,103 | |
| | |
Labrador Iron Ore Royalty Corp. | | | 2,640 | | | | 44,812 | |
| | |
Largo Resources Ltd.* (a) | | | 198,814 | | | | 199,669 | |
| | |
Lundin Gold, Inc.* (a) | | | 17,172 | | | | 103,214 | |
| | |
Lundin Mining Corp. | | | 45,422 | | | | 229,814 | |
| | |
Lynas Corp. Ltd.* (a) | | | 50,800 | | | | 86,797 | |
| | |
MAG Silver Corp.* | | | 11,120 | | | | 109,986 | |
| | |
Mineral Resources Ltd.(a) | | | 21,483 | | | | 211,650 | |
| | |
Mitsubishi Materials Corp. | | | 7,800 | | | | 225,836 | |
| | |
Newcrest Mining Ltd. | | | 26,334 | | | | 567,870 | |
| | |
Nippon Light Metal Holdings Co. Ltd. | | | 66,500 | | | | 130,410 | |
| | |
Nippon Steel Corp. | | | 40,615 | | | | 597,926 | |
| | |
Norsk Hydro ASA | | | 51,200 | | | | 180,961 | |
| | |
Northern Star Resources Ltd.(a) | | | 32,156 | | | | 216,886 | |
| | |
Novagold Resources, Inc.* (a) | | | 5,530 | | | | 40,307 | |
| | |
OceanaGold Corp. | | | 62,061 | | | | 149,209 | |
| | |
OM Holdings Ltd. | | | 245,835 | | | | 82,990 | |
| | |
Osaka Steel Co. Ltd. | | | 1,000 | | | | 13,746 | |
| | |
Outokumpu OYJ | | | 261,857 | | | | 741,745 | |
| | |
OZ Minerals Ltd. | | | 13,621 | | | | 95,249 | |
| | |
Pan American Silver Corp.(a) | | | 11,396 | | | | 193,958 | |
| | |
Perenti Global Ltd. | | | 508,297 | | | | 801,938 | |
| | |
Pilbara Minerals Ltd.* (a) | | | 182,560 | | | | 40,877 | |
| | |
Polymetal International plc | | | 19,368 | | | | 317,037 | |
| | |
Pretium Resources, Inc.* (a) | | | 151,690 | | | | 1,531,499 | |
| | |
Regis Resources Ltd. | | | 70,455 | | | | 237,846 | |
| | |
Resolute Mining Ltd.* (a) | | | 34,640 | | | | 28,877 | |
| | |
Rio Tinto Ltd.(a) | | | 12,166 | | | | 761,735 | |
| | |
Rio Tinto plc | | | 49,434 | | | | 2,567,659 | |
| | |
Salzgitter AG | | | 30,723 | | | | 556,301 | |
| | |
Sandfire Resources NL(a) | | | 134,904 | | | | 539,994 | |
| | |
Sandstorm Gold Ltd.* | | | 16,268 | | | | 116,346 | |
| | |
Sanyo Special Steel Co. Ltd.(a) | | | 21,700 | | | | 277,209 | |
| | |
Saracen Mineral Holdings Ltd.* (a) | | | 86,702 | | | | 224,000 | |
| | |
SEMAFO, Inc.* | | | 267,960 | | | | 866,459 | |
| | |
Sims Metal Management Ltd.(a) | | | 126,203 | | | | 812,960 | |
| | |
South32 Ltd. | | | 264,572 | | | | 464,806 | |
See Accompanying Notes to the Financial Statements.
| | |
| 192 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Metals & Mining – (continued) | |
| | |
SSAB AB, Class A | | | 13,394 | | | $ | 37,467 | |
| | |
SSR Mining, Inc.* | | | 9,309 | | | | 137,969 | |
| | |
St Barbara Ltd.(a) | | | 43,360 | | | | 83,345 | |
| | |
Stelco Holdings, Inc. | | | 18,018 | | | | 140,514 | |
| | |
Sumitomo Metal Mining Co. Ltd. | | | 8,400 | | | | 284,079 | |
| | |
Teck Resources Ltd., Class B | | | 24,101 | | | | 381,773 | |
| | |
thyssenkrupp AG | | | 20,867 | | | | 297,871 | |
| | |
Toho Titanium Co. Ltd. | | | 200 | | | | 1,665 | |
| | |
Topy Industries Ltd.(a) | | | 9,700 | | | | 199,554 | |
| | |
Torex Gold Resources, Inc.* | | | 67,683 | | | | 992,317 | |
| | |
Turquoise Hill Resources Ltd.* (a) | | | 84,560 | | | | 34,741 | |
| | |
UACJ Corp.(a) | | | 24,300 | | | | 450,237 | |
| | |
voestalpine AG(a) | | | 2,640 | | | | 66,122 | |
| | |
Wheaton Precious Metals Corp. | | | 10,976 | | | | 308,315 | |
| | |
Yamana Gold, Inc. | | | 43,348 | | | | 158,636 | |
| | |
Yodogawa Steel Works Ltd. | | | 26,000 | | | | 495,444 | |
| | | | | | | | 40,398,569 | |
|
| Multiline Retail – 0.4% | |
| | |
B&M European Value Retail SA | | | 48,569 | | | | 232,727 | |
| | |
Canadian Tire Corp. Ltd., Class A | | | 1,848 | | | | 199,641 | |
| | |
Dollarama, Inc. | | | 7,777 | | | | 262,182 | |
| | |
Fuji Co. Ltd. | | | 30,900 | | | | 559,376 | |
| | |
H2O Retailing Corp.(a) | | | 11,315 | | | | 129,263 | |
| | |
Harvey Norman Holdings Ltd. | | | 5,610 | | | | 15,808 | |
| | |
Hudson’s Bay Co. | | | 9,920 | | | | 75,324 | |
| | |
Isetan Mitsukoshi Holdings Ltd. | | | 14,400 | | | | 115,621 | |
| | |
Izumi Co. Ltd.(a) | | | 1,300 | | | | 49,124 | |
| | |
J Front Retailing Co. Ltd. | | | 10,700 | | | | 137,084 | |
| | |
Marks & Spencer Group plc(a) | | | 56,221 | | | | 132,041 | |
| | |
Marui Group Co. Ltd. | | | 5,500 | | | | 122,968 | |
| | |
Next plc | | | 4,235 | | | | 360,699 | |
| | |
Pan Pacific International Holdings Corp. | | | 13,600 | | | | 214,747 | |
| | |
Parco Co. Ltd.(a) | | | 17,600 | | | | 212,949 | |
| | |
Ryohin Keikaku Co. Ltd. | | | 6,000 | | | | 134,591 | |
| | |
Seria Co. Ltd. | | | 1,000 | | | | 25,216 | |
| | |
Takashimaya Co. Ltd. | | | 9,100 | | | | 106,232 | |
| | |
Wesfarmers Ltd. | | | 27,489 | | | | 752,997 | |
| | | | | | | | 3,838,590 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Multi-Utilities – 0.8% | |
| | |
A2A SpA | | | 167,118 | | | $ | 335,415 | |
| | |
ACEA SpA | | | 1,552 | | | | 30,890 | |
| | |
AGL Energy Ltd. | | | 26,719 | | | | 364,111 | |
| | |
Algonquin Power & Utilities Corp.(a) | | | 25,249 | | | | 347,513 | |
| | |
Centrica plc | | | 290,598 | | | | 272,850 | |
| | |
E.ON SE | | | 50,917 | | | | 513,352 | |
| | |
Engie SA | | | 85,162 | | | | 1,424,690 | |
| | |
Hera SpA | | | 66,176 | | | | 283,357 | |
| | |
Iren SpA | | | 50,950 | | | | 158,135 | |
| | |
Keppel Infrastructure Trust | | | 170,047 | | | | 66,847 | |
| | |
National Grid plc | | | 113,617 | | | | 1,325,095 | |
| | |
REN – Redes Energeticas Nacionais SGPS SA | | | 314,006 | | | | 931,853 | |
| | |
RWE AG | | | 30,514 | | | | 930,394 | |
| | |
Suez | | | 11,724 | | | | 182,791 | |
| | |
Telecom Plus plc | | | 7,522 | | | | 116,996 | |
| | |
Veolia Environnement SA | | | 26,180 | | | | 688,426 | |
| | | | | | | | 7,972,715 | |
|
| Oil, Gas & Consumable Fuels – 5.4% | |
| | |
Aker BP ASA(a) | | | 4,404 | | | | 121,790 | |
| | |
ARC Resources Ltd.(a) | | | 24,960 | | | | 105,966 | |
| | |
Baytex Energy Corp.* | | | 38,400 | | | | 42,947 | |
| | |
Beach Energy Ltd. | | | 193,501 | | | | 305,286 | |
| | |
Birchcliff Energy Ltd.(a) | | | 176,785 | | | | 270,352 | |
| | |
BP plc | | | 1,013,431 | | | | 6,416,581 | |
| | |
Brightoil Petroleum Holdings Ltd.* (d) | | | 50,147 | | | | 9,597 | |
| | |
BW LPG Ltd.(b) | | | 66,451 | | | | 465,748 | |
| | |
Cairn Energy plc* | | | 50,800 | | | | 116,877 | |
| | |
Caltex Australia Ltd. | | | 8,880 | | | | 166,834 | |
| | |
Cameco Corp. | | | 13,932 | | | | 124,655 | |
| | |
Canadian Natural Resources Ltd. | | | 63,756 | | | | 1,610,938 | |
| | |
Cenovus Energy, Inc.(a) | | | 38,962 | | | | 332,601 | |
| | |
China Aviation Oil Singapore Corp. Ltd. | | | 96,000 | | | | 86,058 | |
| | |
Cosmo Energy Holdings Co. Ltd.(a) | | | 7,000 | | | | 151,390 | |
| | |
Delek Group Ltd. | | | 543 | | | | 67,807 | |
| | |
Diversified Gas & Oil plc(a) (b) | | | 562,023 | | | | 778,166 | |
| | |
DNO ASA(a) | | | 22,960 | | | | 27,771 | |
| | |
Enbridge, Inc. | | | 60,214 | | | | 2,197,638 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 193 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Encana Corp. | | | 72,226 | | | $ | 283,552 | |
| | |
Enerplus Corp. | | | 16,456 | | | | 99,536 | |
| | |
Eni SpA | | | 129,283 | | | | 1,957,263 | |
| | |
Equinor ASA | | | 55,055 | | | | 1,020,003 | |
| | |
Equital Ltd.* | | | 14,504 | | | | 420,686 | |
| | |
Etablissements Maurel et Prom SA(a) | | | 66,297 | | | | 194,526 | |
| | |
Euronav NV | | | 19,296 | | | | 217,644 | |
| | |
FLEX LNG Ltd.* | | | 20,713 | | | | 191,762 | |
| | |
Frontera Energy Corp. | | | 52,129 | | | | 418,825 | |
| | |
Galp Energia SGPS SA | | | 7,324 | | | | 116,682 | |
| | |
Gaztransport Et Technigaz SA | | | 1,680 | | | | 153,036 | |
| | |
Genel Energy plc | | | 177,485 | | | | 438,202 | |
| | |
Gibson Energy, Inc. | | | 7,625 | | | | 133,199 | |
| | |
Husky Energy, Inc.(a) | | | 11,656 | | | | 81,588 | |
| | |
Idemitsu Kosan Co. Ltd. | | | 17,182 | | | | 509,396 | |
| | |
Imperial Oil Ltd. | | | 5,120 | | | | 127,771 | |
| | |
Inpex Corp. | | | 40,500 | | | | 377,820 | |
| | |
Inter Pipeline Ltd. | | | 21,584 | | | | 363,086 | |
| | |
Itochu Enex Co. Ltd. | | | 46,300 | | | | 388,885 | |
| | |
Iwatani Corp.(a) | | | 2,197 | | | | 76,515 | |
| | |
Japan Petroleum Exploration Co. Ltd. | | | 8,000 | | | | 206,244 | |
| | |
JXTG Holdings, Inc. | | | 190,050 | | | | 895,532 | |
| | |
Keyera Corp. | | | 1,840 | | | | 42,740 | |
| | |
Koninklijke Vopak NV | | | 2,356 | | | | 129,294 | |
| | |
Lundin Petroleum AB | | | 4,170 | | | | 137,986 | |
| | |
MEG Energy Corp.* | | | 20,320 | | | | 78,228 | |
| | |
Mitsuuroko Group Holdings Co. Ltd. | | | 38,500 | | | | 416,678 | |
| | |
Naphtha Israel Petroleum Corp. Ltd. | | | 27,742 | | | | 155,498 | |
| | |
Neste OYJ | | | 15,246 | | | | 550,418 | |
| | |
New Hope Corp. Ltd.(a) | | | 254,947 | | | | 374,125 | |
| | |
New Zealand Refining Co. Ltd. (The) | | | 67,959 | | | | 89,343 | |
| | |
NuVista Energy Ltd.* (a) | | | 182,490 | | | | 262,416 | |
| | |
Oil Refineries Ltd. | | | 182,503 | | | | 93,646 | |
| | |
OMV AG | | | 9,009 | | | | 525,863 | |
| | |
Origin Energy Ltd. | | | 65,681 | | | | 355,672 | |
| | |
Paramount Resources Ltd., Class A* | | | 55,748 | | | | 218,012 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Parex Resources, Inc.* | | | 6,710 | | | $ | 91,128 | |
| | |
Parkland Fuel Corp. | | | 2,333 | | | | 77,657 | |
| | |
Pembina Pipeline Corp. | | | 12,859 | | | | 453,663 | |
| | |
Peyto Exploration & Development Corp.(a) | | | 131,670 | | | | 263,470 | |
| | |
PrairieSky Royalty Ltd. | | | 486 | | | | 4,755 | |
| | |
Premier Oil plc* (a) | | | 563,563 | | | | 603,090 | |
| | |
Repsol SA | | | 66,234 | | | | 1,086,241 | |
| | |
Royal Dutch Shell plc, Class A | | | 209,594 | | | | 6,056,223 | |
| | |
Royal Dutch Shell plc, Class B | | | 184,193 | | | | 5,286,508 | |
| | |
San-Ai Oil Co. Ltd. | | | 58,000 | | | | 615,383 | |
| | |
Santos Ltd. | | | 79,926 | | | | 447,128 | |
| | |
Saras SpA | | | 397,397 | | | | 762,572 | |
| | |
Seven Generations Energy Ltd., Class A* (a) | | | 28,480 | | | | 159,914 | |
| | |
Suncor Energy, Inc. | | | 43,659 | | | | 1,300,785 | |
| | |
TC Energy Corp. | | | 28,799 | | | | 1,454,685 | |
| | |
TORC Oil & Gas Ltd.(a) | | | 28,276 | | | | 72,285 | |
| | |
TOTAL SA | | | 121,198 | | | | 6,373,338 | |
| | |
Tourmaline Oil Corp.(a) | | | 80 | | | | 688 | |
| | |
Tullow Oil plc | | | 31,712 | | | | 84,492 | |
| | |
United Energy Group Ltd.* (a) | | | 560,000 | | | | 113,605 | |
| | |
Vermilion Energy, Inc.(a) | | | 347 | | | | 4,594 | |
| | |
Washington H Soul Pattinson & Co. Ltd.(a) | | | 8,285 | | | | 123,977 | |
| | |
Whitecap Resources, Inc.(a) | | | 333,333 | | | | 930,751 | |
| | |
Whitehaven Coal Ltd.(a) | | | 24,365 | | | | 55,563 | |
| | |
Woodside Petroleum Ltd. | | | 24,694 | | | | 547,816 | |
| | | | | | | | 52,470,985 | |
|
| Paper & Forest Products – 0.6% | |
| | |
Ahlstrom-Munksjo OYJ | | | 4,545 | | | | 68,149 | |
| | |
Altri SGPS SA | | | 83,468 | | | | 508,907 | |
| | |
Canfor Corp.* | | | 52,514 | | | | 636,073 | |
| | |
Canfor Pulp Products, Inc.(a) | | | 26,642 | | | | 175,539 | |
| | |
Daiken Corp. | | | 12,500 | | | | 226,631 | |
| | |
Daio Paper Corp. | | | 3,745 | | | | 50,335 | |
| | |
Ence Energia y Celulosa SA(a) | | | 124,278 | | | | 489,437 | |
| | |
Hadera Paper Ltd. | | | 2,400 | | | | 115,247 | |
| | |
Hokuetsu Corp. | | | 112,900 | | | | 579,617 | |
| | |
Holmen AB, Class B | | | 4,070 | | | | 120,229 | |
| | |
Interfor Corp.* | | | 5,920 | | | | 70,715 | |
| | |
Metsa Board OYJ | | | 6,595 | | | | 43,668 | |
See Accompanying Notes to the Financial Statements.
| | |
| 194 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Paper & Forest Products – (continued) | |
| | |
Mondi plc | | | 13,937 | | | $ | 288,101 | |
| | |
Navigator Co. SA (The) | | | 6,520 | | | | 23,510 | |
| | |
Nippon Paper Industries Co. Ltd.(a) | | | 8,100 | | | | 140,339 | |
| | |
Norbord, Inc.(a) | | | 3,136 | | | | 90,715 | |
| | |
Oji Holdings Corp. | | | 42,500 | | | | 222,122 | |
| | |
Semapa-Sociedade de Investimento e Gestao | | | 19,096 | | | | 262,471 | |
| | |
Stella-Jones, Inc. | | | 1,045 | | | | 29,036 | |
| | |
Stora Enso OYJ, Class R | | | 23,947 | | | | 310,579 | |
| | |
Svenska Cellulosa AB SCA, Class A | | | 3,160 | | | | 33,455 | |
| | |
Svenska Cellulosa AB SCA, Class B | | | 14,939 | | | | 152,518 | |
| | |
UPM-Kymmene OYJ | | | 26,257 | | | | 853,616 | |
| | |
West Fraser Timber Co. Ltd.(a) | | | 2,213 | | | | 102,539 | |
| | | | | | | | 5,593,548 | |
|
| Personal Products – 1.1% | |
| | |
Beiersdorf AG | | | 2,618 | | | | 310,040 | |
| | |
Blackmores Ltd.(a) | | | 798 | | | | 47,589 | |
| | |
Fancl Corp.(a) | | | 5,000 | | | | 142,223 | |
| | |
Interparfums SA | | | 595 | | | | 27,847 | |
| | |
Kao Corp. | | | 14,200 | | | | 1,148,557 | |
| | |
Kobayashi Pharmaceutical Co. Ltd. | | | 1,400 | | | | 112,539 | |
| | |
Kose Corp. | | | 700 | | | | 124,971 | |
| | |
L’Occitane International SA | | | 81,000 | | | | 182,510 | |
| | |
L’Oreal SA | | | 7,401 | | | | 2,161,663 | |
| | |
Mandom Corp. | | | 2,600 | | | | 72,633 | |
| | |
Milbon Co. Ltd. | | | 1,000 | | | | 55,132 | |
| | |
Noevir Holdings Co. Ltd. | | | 1,900 | | | | 103,168 | |
| | |
Ontex Group NV | | | 5,840 | | | | 105,940 | |
| | |
Pola Orbis Holdings, Inc. | | | 2,000 | | | | 45,548 | |
| | |
Rohto Pharmaceutical Co. Ltd. | | | 2,000 | | | | 60,589 | |
| | |
Shiseido Co. Ltd. | | | 13,200 | | | | 1,095,024 | |
| | |
Unilever NV | | | 47,492 | | | | 2,805,527 | |
| | |
Unilever plc | | | 34,804 | | | | 2,081,807 | |
| | |
YA-MAN Ltd. | | | 800 | | | | 5,225 | |
| | | | | | | | 10,688,532 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Pharmaceuticals – 4.3% | |
| | |
ALK-Abello A/S* | | | 532 | | | $ | 114,336 | |
| | |
Almirall SA | | | 4,710 | | | | 88,384 | |
| | |
Aphria, Inc.* (a) | | | 4,500 | | | | 22,597 | |
| | |
Astellas Pharma, Inc. | | | 59,900 | | | | 1,029,778 | |
| | |
AstraZeneca plc | | | 37,499 | | | | 3,639,763 | |
| | |
Aurora Cannabis, Inc.* (a) | | | 33,649 | | | | 120,838 | |
| | |
Bausch Health Cos., Inc.* (a) | | | 10,780 | | | | 268,526 | |
| | |
Bayer AG (Registered) | | | 46,970 | | | | 3,646,137 | |
| | |
CannTrust Holdings, Inc.* (a) | | | 10,800 | | | | 12,161 | |
| | |
Canopy Growth Corp.* (a) | | | 6,237 | | | | 124,944 | |
| | |
Chugai Pharmaceutical Co. Ltd. | | | 8,200 | | | | 694,047 | |
| | |
COSMO Pharmaceuticals NV* | | | 1,040 | | | | 77,045 | |
| | |
Cronos Group, Inc.* (a) | | | 10,880 | | | | 89,235 | |
| | |
Daiichi Sankyo Co. Ltd. | | | 18,100 | | | | 1,195,449 | |
| | |
Dechra Pharmaceuticals plc | | | 5,318 | | | | 180,983 | |
| | |
Eisai Co. Ltd. | | | 8,800 | | | | 642,020 | |
| | |
Faes Farma SA | | | 27,831 | | | | 159,906 | |
| | |
Financiere de Tubize SA(a) | | | 1,549 | | | | 107,490 | |
| | |
GlaxoSmithKline plc | | | 136,784 | | | | 3,130,395 | |
| | |
GW Pharmaceuticals plc* (d) | | | 1 | | | | 10 | |
| | |
H Lundbeck A/S | | | 1,852 | | | | 63,203 | |
| | |
Haw Par Corp. Ltd. | | | 3,200 | | | | 31,507 | |
| | |
HEXO Corp.* (a) | | | 15,680 | | | | 33,761 | |
| | |
Hikma Pharmaceuticals plc | | | 7,104 | | | | 184,771 | |
| | |
Hisamitsu Pharmaceutical Co., Inc. | | | 1,900 | | | | 89,108 | |
| | |
Hutchison China MediTech Ltd.* | | | 7,150 | | | | 28,682 | |
| | |
Ipsen SA | | | 770 | | | | 82,039 | |
| | |
JCR Pharmaceuticals Co. Ltd. | | | 600 | | | | 46,510 | |
| | |
Kaken Pharmaceutical Co. Ltd. | | | 1,500 | | | | 73,817 | |
| | |
Kissei Pharmaceutical Co. Ltd. | | | 1,400 | | | | 36,352 | |
| | |
Knight Therapeutics, Inc.* | | | 11,684 | | | | 74,495 | |
| | |
Kyowa Kirin Co. Ltd. | | | 5,000 | | | | 92,318 | |
| | |
Mayne Pharma Group Ltd.* (a) | | | 148,797 | | | | 52,795 | |
| | |
Merck KGaA | | | 2,695 | | | | 321,414 | |
| | |
Mitsubishi Tanabe Pharma Corp. | | | 4,700 | | | | 56,606 | |
| | |
Mochida Pharmaceutical Co. Ltd. | | | 3,200 | | | | 128,468 | |
| | |
Nichi-iko Pharmaceutical Co. Ltd.(a) | | | 46,200 | | | | 544,032 | |
| | |
Nippon Shinyaku Co. Ltd. | | | 2,000 | | | | 181,305 | |
| | |
Novartis AG (Registered) | | | 72,786 | | | | 6,350,288 | |
| | |
Novo Nordisk A/S, Class B | | | 48,570 | | | | 2,653,882 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 195 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Pharmaceuticals – (continued) | |
| | |
Ono Pharmaceutical Co. Ltd. | | | 16,000 | | | $ | 302,965 | |
| | |
Orion OYJ, Class A | | | 1,474 | | | | 64,792 | |
| | |
Orion OYJ, Class B | | | 6,398 | | | | 283,661 | |
| | |
Otsuka Holdings Co. Ltd. | | | 16,700 | | | | 701,028 | |
| | |
Recipharm AB, Class B | | | 3,741 | | | | 53,314 | |
| | |
Recordati SpA | | | 2,359 | | | | 99,141 | |
| | |
Roche Holding AG | | | 19,250 | | | | 5,790,119 | |
| | |
Roche Holding AG – BR | | | 859 | | | | 255,763 | |
| | |
Sanofi | | | 31,837 | | | | 2,934,576 | |
| | |
Santen Pharmaceutical Co. Ltd. | | | 15,500 | | | | 276,005 | |
| | |
Seikagaku Corp. | | | 1,800 | | | | 20,697 | |
| | |
Shionogi & Co. Ltd. | | | 9,000 | | | | 542,639 | |
| | |
Sosei Group Corp.* (a) | | | 8,000 | | | | 188,335 | |
| | |
Sumitomo Dainippon Pharma Co. Ltd. | | | 10,400 | | | | 182,978 | |
| | |
Taisho Pharmaceutical Holdings Co. Ltd. | | | 2,500 | | | | 179,686 | |
| | |
Takeda Pharmaceutical Co. Ltd. | | | 44,217 | | | | 1,606,627 | |
| | |
Teva Pharmaceutical Industries Ltd.* | | | 29,797 | | | | 243,463 | |
| | |
Torii Pharmaceutical Co. Ltd. | | | 7,700 | | | | 205,846 | |
| | |
Towa Pharmaceutical Co. Ltd. | | | 1,200 | | | | 30,948 | |
| | |
Tsumura & Co. | | | 900 | | | | 24,959 | |
| | |
UCB SA | | | 3,850 | | | | 310,375 | |
| | |
Vifor Pharma AG | | | 1,457 | | | | 228,941 | |
| | |
Virbac SA* | | | 532 | | | | 129,685 | |
| | |
ZERIA Pharmaceutical Co. Ltd.(a) | | | 1,800 | | | | 34,133 | |
| | | | | | | | 41,160,073 | |
|
| Professional Services – 1.0% | |
| | |
Adecco Group AG (Registered) | | | 10,164 | | | | 602,372 | |
| | |
AF POYRY AB, Class B | | | 4,429 | | | | 94,333 | |
| | |
ALS Ltd. | | | 13,503 | | | | 75,074 | |
| | |
Applus Services SA | | | 16,282 | | | | 196,364 | |
| | |
Benefit One, Inc. | | | 2,000 | | | | 40,775 | |
| | |
Bureau Veritas SA | | | 3,536 | | | | 90,300 | |
| | |
Capita plc* | | | 4,240 | | | | 8,565 | |
| | |
DKSH Holding AG | | | 660 | | | | 31,316 | |
| | |
en-japan, Inc. | | | 1,700 | | | | 72,809 | |
| | |
Experian plc | | | 28,336 | | | | 890,270 | |
| | |
Funai Soken Holdings, Inc. | | | 2,700 | | | | 65,511 | |
| | |
Groupe Crit | | | 720 | | | | 53,578 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Professional Services – (continued) | |
| | |
Hays plc | | | 34,264 | | | $ | 69,654 | |
| | |
Intertek Group plc | | | 4,158 | | | | 287,962 | |
| | |
Intertrust NV(a) (b) | | | 8,932 | | | | 169,803 | |
| | |
IPH Ltd. | | | 31,760 | | | | 176,580 | |
| | |
JAC Recruitment Co. Ltd. | | | 1,300 | | | | 24,712 | |
| | |
McMillan Shakespeare Ltd. | | | 17,577 | | | | 194,118 | |
| | |
Meitec Corp. | | | 2,400 | | | | 125,878 | |
| | |
Morneau Shepell, Inc. | | | 2,428 | | | | 58,578 | |
| | |
Nihon M&A Center, Inc. | | | 2,400 | | | | 73,484 | |
| | |
Nomura Co. Ltd. | | | 6,000 | | | | 74,705 | |
| | |
Outsourcing, Inc. | | | 11,100 | | | | 120,749 | |
| | |
Pagegroup plc | | | 20,728 | | | | 119,412 | |
| | |
Persol Holdings Co. Ltd. | | | 5,700 | | | | 110,198 | |
| | |
Randstad NV | | | 4,158 | | | | 230,274 | |
| | |
Recruit Holdings Co. Ltd. | | | 46,200 | | | | 1,543,205 | |
| | |
RELX plc | | | 58,520 | | | | 1,406,968 | |
| | |
RWS Holdings plc | | | 3,113 | | | | 24,169 | |
| | |
SEEK Ltd. | | | 5,653 | | | | 88,330 | |
| | |
SGS SA (Registered) | | | 198 | | | | 515,292 | |
| | |
SMS Co. Ltd. | | | 3,200 | | | | 79,271 | |
| | |
Stantec, Inc. | | | 1,027 | | | | 21,957 | |
| | |
Synergie SA | | | 2,720 | | | | 77,230 | |
| | |
TechnoPro Holdings, Inc. | | | 1,900 | | | | 118,107 | |
| | |
Teleperformance | | | 1,617 | | | | 366,574 | |
| | |
Thomson Reuters Corp.(a) | | | 6,853 | | | | 461,490 | |
| | |
Wolters Kluwer NV | | | 9,086 | | | | 669,231 | |
| | | | | | | | 9,429,198 | |
|
| Real Estate Management & Development – 3.1% | |
| | |
ADLER Real Estate AG* | | | 35,574 | | | | 410,375 | |
| | |
ADO Group Ltd.* | | | 8,847 | | | | 249,852 | |
| | |
ADO Properties SA(b) | | | 2,400 | | | | 97,731 | |
| | |
Aedas Homes SAU* (b) | | | 486 | | | | 11,224 | |
| | |
Aeon Mall Co. Ltd. | | | 7,690 | | | | 123,490 | |
| | |
AFI Properties Ltd.* | | | 17,171 | | | | 613,050 | |
| | |
Airport City Ltd.* | | | 1,928 | | | | 36,387 | |
| | |
Allreal Holding AG (Registered)* | | | 1,402 | | | | 273,083 | |
| | |
Alrov Properties and Lodgings Ltd. | | | 3,440 | | | | 149,470 | |
| | |
Altus Group Ltd. | | | 1,792 | | | | 49,765 | |
| | |
Amot Investments Ltd. | | | 14,530 | | | | 102,267 | |
| | |
Aroundtown SA | | | 13,148 | | | | 110,982 | |
See Accompanying Notes to the Financial Statements.
| | |
| 196 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Real Estate Management & Development – (continued) | |
| | |
Ashtrom Properties Ltd. | | | 7,227 | | | $ | 48,036 | |
| | |
Atrium Ljungberg AB, Class B | | | 7,605 | | | | 151,716 | |
| | |
Aveo Group(a) | | | 19,840 | | | | 29,251 | |
| | |
Azrieli Group Ltd. | | | 2,518 | | | | 194,019 | |
| | |
Bayside Land Corp. | | | 144 | | | | 96,653 | |
| | |
Big Shopping Centers Ltd. | | | 3,120 | | | | 282,377 | |
| | |
Blue Square Real Estate Ltd. | | | 1,280 | | | | 65,280 | |
| | |
Bukit Sembawang Estates Ltd. | | | 123,200 | | | | 439,951 | |
| | |
CA Immobilien Anlagen AG | | | 1,760 | | | | 67,939 | |
| | |
CapitaLand Ltd. | | | 126,800 | | | | 335,413 | |
| | |
Castellum AB | | | 16,863 | | | | 345,248 | |
| | |
Catena AB | | | 4,800 | | | | 175,872 | |
| | |
City Developments Ltd. | | | 21,400 | | | | 169,665 | |
| | |
CK Asset Holdings Ltd. | | | 154,000 | | | | 1,074,780 | |
| | |
CLS Holdings plc | | | 14,403 | | | | 47,246 | |
| | |
Colliers International Group, Inc. | | | 1,940 | | | | 130,258 | |
| | |
Corem Property Group AB, Class B | | | 89,200 | | | | 199,060 | |
| | |
Corestate Capital Holding SA(a) | | | 8,547 | | | | 318,484 | |
| | |
Daejan Holdings plc | | | 8,239 | | | | 518,138 | |
| | |
Daibiru Corp. | | | 3,300 | | | | 36,845 | |
| | |
Daito Trust Construction Co. Ltd. | | | 1,900 | | | | 252,560 | |
| | |
Daiwa House Industry Co. Ltd. | | | 33,800 | | | | 1,167,781 | |
| | |
Deutsche Wohnen SE | | | 10,010 | | | | 376,573 | |
| | |
Dios Fastigheter AB | | | 71,302 | | | | 595,028 | |
| | |
Emperor International Holdings Ltd. | | | 574,000 | | | | 128,163 | |
| | |
Fabege AB | | | 11,849 | | | | 177,102 | |
| | |
Far East Consortium International Ltd. | | | 859,969 | | | | 364,277 | |
| | |
Fastighets AB Balder, Class B* | | | 8,222 | | | | 319,175 | |
| | |
FastPartner AB | | | 6,642 | | | | 56,394 | |
| | |
First Capital Realty, Inc., REIT | | | 15,864 | | | | 263,123 | |
| | |
FirstService Corp. | | | 1,780 | | | | 155,688 | |
| | |
Gazit-Globe Ltd. | | | 3,498 | | | | 35,272 | |
| | |
Goldcrest Co. Ltd.(a) | | | 9,100 | | | | 188,557 | |
| | |
Grainger plc | | | 33,054 | | | | 109,838 | |
| | |
Grand City Properties SA | | | 2,508 | | | | 58,647 | |
| | |
Great Eagle Holdings Ltd. | | | 8,776 | | | | 29,672 | |
| | |
Heba Fastighets AB, Class B | | | 43,725 | | | | 358,539 | |
| | |
Heiwa Real Estate Co. Ltd. | | | 11,700 | | | | 283,233 | |
| | |
Hembla AB* | | | 6,592 | | | | 147,108 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Real Estate Management & Development – (continued) | |
| | |
Hemfosa Fastigheter AB | | | 10,627 | | | $ | 109,697 | |
| | |
Henderson Land Development Co. Ltd. | | | 60,239 | | | | 301,668 | |
| | |
Hiag Immobilien Holding AG | | | 355 | | | | 37,955 | |
| | |
HKR International Ltd.(a) | | | 634,560 | | | | 263,938 | |
| | |
Ho Bee Land Ltd. | | | 56,000 | | | | 96,286 | |
| | |
Hufvudstaden AB, Class A | | | 2,610 | | | | 43,751 | |
| | |
Hulic Co. Ltd. | | | 4,900 | | | | 53,530 | |
| | |
Hysan Development Co. Ltd. | | | 19,000 | | | | 75,028 | |
| | |
Ichigo, Inc. | | | 14,300 | | | | 57,277 | |
| | |
IMMOFINANZ AG* | | | 4,089 | | | | 117,469 | |
| | |
Industrial Buildings Corp. Ltd.* | | | 28,014 | | | | 62,213 | |
| | |
Intershop Holding AG | | | 131 | | | | 71,955 | |
| | |
Isras Investment Co. Ltd. | | | 312 | | | | 68,447 | |
| | |
Jerusalem Economy Ltd.* | | | 160,105 | | | | 683,396 | |
| | |
Jeudan A/S | | | 112 | | | | 18,735 | |
| | |
K Wah International Holdings Ltd. | | | 1,042,089 | | | | 570,392 | |
| | |
Kenedix, Inc. | | | 13,500 | | | | 73,803 | |
| | |
Kerry Properties Ltd. | | | 39,000 | | | | 126,389 | |
| | |
Klovern AB, Class B | | | 356,048 | | | | 623,083 | |
| | |
Kowloon Development Co. Ltd. | | | 312,000 | | | | 393,299 | |
| | |
Kungsleden AB | | | 18,080 | | | | 164,580 | |
| | |
Lai Sun Development Co. Ltd. | | | 148,209 | | | | 177,752 | |
| | |
Langham Hospitality Investments and Langham Hospitality Investments Ltd.(a) | | | 143,500 | | | | 40,646 | |
| | |
LEG Immobilien AG | | | 2,541 | | | | 291,708 | |
| | |
Lendlease Group | | | 26,026 | | | | 335,123 | |
| | |
Melisron Ltd. | | | 3,845 | | | | 232,868 | |
| | |
Mitsubishi Estate Co. Ltd. | | | 33,600 | | | | 655,030 | |
| | |
Mitsui Fudosan Co. Ltd. | | | 27,400 | | | | 704,865 | |
| | |
Mobimo Holding AG (Registered)* | | | 232 | | | | 65,362 | |
| | |
New World Development Co. Ltd. | | | 184,362 | | | | 264,392 | |
| | |
Nexity SA | | | 1,546 | | | | 79,996 | |
| | |
Nomura Real Estate Holdings, Inc. | | | 5,800 | | | | 138,099 | |
| | |
Norstar Holdings, Inc. | | | 13,552 | | | | 248,075 | |
| | |
Norwegian Property ASA | | | 16,948 | | | | 24,366 | |
| | |
Open House Co. Ltd.(a) | | | 4,000 | | | | 102,900 | |
| | |
Oxley Holdings Ltd. | | | 449,988 | | | | 112,418 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 197 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Real Estate Management & Development – (continued) | |
| | |
PATRIZIA AG | | | 3,248 | | | $ | 66,566 | |
| | |
Platzer Fastigheter Holding AB, Class B(a) | | | 32,626 | | | | 327,469 | |
| | |
Property & Building Corp. Ltd. | | | 480 | | | | 53,006 | |
| | |
PSP Swiss Property AG (Registered) | | | 1,501 | | | | 198,511 | |
| | |
Relo Group, Inc. | | | 2,270 | | | | 55,960 | |
| | |
S IMMO AG | | | 8,160 | | | | 206,654 | |
| | |
Sagax AB, Class B | | | 11,486 | | | | 132,334 | |
| | |
SAMTY Co. Ltd. | | | 23,400 | | | | 443,086 | |
| | |
Savills plc | | | 106,183 | | | | 1,260,652 | |
| | |
SEA Holdings Ltd. | | | 33,170 | | | | 33,984 | |
| | |
Sino Land Co. Ltd. | | | 183,823 | | | | 275,346 | |
| | |
Sirius Real Estate Ltd. | | | 92,769 | | | | 88,232 | |
| | |
St Modwen Properties plc | | | 2,689 | | | | 15,693 | |
| | |
Sumitomo Realty & Development Co. Ltd. | | | 10,700 | | | | 390,270 | |
| | |
Summit Real Estate Holdings Ltd. | | | 39,886 | | | | 509,959 | |
| | |
Sun Frontier Fudousan Co. Ltd. | | | 16,200 | | | | 198,257 | |
| | |
Sun Hung Kai Properties Ltd. | | | 38,500 | | | | 584,055 | |
| | |
Swire Pacific Ltd., Class A | | | 3,500 | | | | 33,358 | |
| | |
Swire Properties Ltd. | | | 47,600 | | | | 150,008 | |
| | |
Swiss Prime Site AG (Registered)* | | | 2,464 | | | | 253,704 | |
| | |
TAG Immobilien AG | | | 7,460 | | | | 181,269 | |
| | |
TLG Immobilien AG | | | 2,046 | | | | 59,919 | |
| | |
Tokyo Tatemono Co. Ltd. | | | 16,000 | | | | 229,259 | |
| | |
Tokyu Fudosan Holdings Corp. | | | 20,000 | | | | 133,389 | |
| | |
Tricon Capital Group, Inc.(a) | | | 115,192 | | | | 934,262 | |
| | |
United Engineers Ltd. | | | 77,800 | | | | 151,490 | |
| | |
United Industrial Corp. Ltd. | | | 5,656 | | | | 12,052 | |
| | |
Unizo Holdings Co. Ltd.(a) | | | 21,600 | | | | 998,030 | |
| | |
UOL Group Ltd. | | | 26,999 | | | | 154,739 | |
| | |
Vonovia SE | | | 15,445 | | | | 822,101 | |
| | |
Wallenstam AB, Class B | | | 19,977 | | | | 219,172 | |
| | |
Wang On Properties Ltd. | | | 3,080,000 | | | | 361,535 | |
| | |
Wharf Holdings Ltd. (The) | | | 57,000 | | | | 129,597 | |
| | |
Wharf Real Estate Investment Co. Ltd. | | | 21,000 | | | | 123,786 | |
| | |
Wheelock & Co. Ltd. | | | 24,000 | | | | 148,666 | |
| | |
Wihlborgs Fastigheter AB | | | 8,338 | | | | 126,269 | |
| | |
Wing Tai Holdings Ltd. | | | 59,200 | | | | 88,303 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Real Estate Management & Development – (continued) | |
| | |
Wing Tai Properties Ltd. | | | 308,000 | | | $ | 192,556 | |
| | | | | | | | 29,850,626 | |
|
| Road & Rail – 1.7% | |
| | |
Aurizon Holdings Ltd. | | | 31,840 | | | | 129,423 | |
| | |
Canadian National Railway Co. | | | 22,022 | | | | 1,973,745 | |
| | |
Canadian Pacific Railway Ltd. | | | 4,466 | | | | 1,017,698 | |
| | |
Central Japan Railway Co. | | | 6,600 | | | | 1,361,149 | |
| | |
ComfortDelGro Corp. Ltd. | | | 129,900 | | | | 219,530 | |
| | |
East Japan Railway Co. | | | 10,300 | | | | 938,390 | |
| | |
Europcar Mobility Group(a) (b) | | | 75,948 | | | | 278,766 | |
| | |
Firstgroup plc* | | | 1,074,997 | | | | 1,795,841 | |
| | |
Fukuyama Transporting Co. Ltd. | | | 1,000 | | | | 36,215 | |
| | |
Go-Ahead Group plc (The) | | | 35,420 | | | | 936,836 | |
| | |
Hamakyorex Co. Ltd. | | | 10,100 | | | | 347,084 | |
| | |
Hankyu Hanshin Holdings, Inc. | | | 5,400 | | | | 217,289 | |
| | |
Hitachi Transport System Ltd. | | | 2,700 | | | | 77,050 | |
| | |
Keikyu Corp.(a) | | | 6,000 | | | | 120,216 | |
| | |
Keio Corp. | | | 2,800 | | | | 173,794 | |
| | |
Keisei Electric Railway Co. Ltd. | | | 5,100 | | | | 209,699 | |
| | |
Kintetsu Group Holdings Co. Ltd. | | | 8,300 | | | | 453,753 | |
| | |
Kyushu Railway Co. | | | 2,100 | | | | 69,544 | |
| | |
Maruzen Showa Unyu Co. Ltd. | | | 11,200 | | | | 316,507 | |
| | |
MTR Corp. Ltd.(a) | | | 42,264 | | | | 242,658 | |
| | |
Nankai Electric Railway Co. Ltd. | | | 3,000 | | | | 78,368 | |
| | |
National Express Group plc | | | 37,840 | | | | 218,580 | |
| | |
Nikkon Holdings Co. Ltd. | | | 2,600 | | | | 63,782 | |
| | |
Nippon Express Co. Ltd. | | | 3,700 | | | | 212,543 | |
| | |
Nishi-Nippon Railroad Co. Ltd.(a) | | | 1,000 | | | | 23,301 | |
| | |
Odakyu Electric Railway Co. Ltd. | | | 15,600 | | | | 381,396 | |
| | |
Sankyu, Inc. | | | 2,333 | | | | 119,558 | |
| | |
Seibu Holdings, Inc. | | | 8,100 | | | | 143,336 | |
| | |
Seino Holdings Co. Ltd. | | | 7,500 | | | | 96,920 | |
| | |
Senko Group Holdings Co. Ltd. | | | 126,800 | | | | 1,027,490 | |
| | |
Sixt SE | | | 550 | | | | 53,752 | |
| | |
Sixt SE (Preference) | | | 1,518 | | | | 102,968 | |
| | |
Stagecoach Group plc | | | 381,227 | | | | 677,312 | |
| | |
Stef SA | | | 2,310 | | | | 224,470 | |
| | |
TFI International, Inc. | | | 6,459 | | | | 206,250 | |
| | |
Tobu Railway Co. Ltd. | | | 4,000 | | | | 134,129 | |
| | |
Tokyu Corp. | | | 21,200 | | | | 402,213 | |
| | |
Tonami Holdings Co. Ltd. | | | 5,000 | | | | 231,257 | |
See Accompanying Notes to the Financial Statements.
| | |
| 198 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Road & Rail – (continued) | |
| | |
Trancom Co. Ltd. | | | 600 | | | $ | 39,739 | |
| | |
West Japan Railway Co. | | | 7,000 | | | | 609,768 | |
| | | | | | | | 15,962,319 | |
|
| Semiconductors & Semiconductor Equipment – 1.0% | |
| | |
Advantest Corp. | | | 3,100 | | | | 141,802 | |
| | |
ams AG* | | | 5,280 | | | | 235,975 | |
| | |
ASM International NV | | | 3,348 | | | | 336,392 | |
| | |
ASM Pacific Technology Ltd. | | | 5,000 | | | | 69,982 | |
| | |
ASML Holding NV | | | 12,243 | | | | 3,209,842 | |
| | |
BE Semiconductor Industries NV(a) | | | 4,080 | | | | 150,803 | |
| | |
Dialog Semiconductor plc* | | | 720 | | | | 32,299 | |
| | |
Disco Corp. | | | 1,700 | | | | 375,524 | |
| | |
Infineon Technologies AG | | | 28,952 | | | | 561,315 | |
| | |
IQE plc* (a) | | | 80,000 | | | | 77,640 | |
| | |
Japan Material Co. Ltd. | | | 3,900 | | | | 55,377 | |
| | |
Lasertec Corp. | | | 500 | | | | 36,261 | |
| | |
Melexis NV(a) | | | 495 | | | | 34,681 | |
| | |
Mimasu Semiconductor Industry Co. Ltd.(a) | | | 15,600 | | | | 307,223 | |
| | |
Nordic Semiconductor ASA* | | | 142,527 | | | | 812,670 | |
| | |
Renesas Electronics Corp.* | | | 38,500 | | | | 263,540 | |
| | |
Rohm Co. Ltd. | | | 3,800 | | | | 304,408 | |
| | |
Sanken Electric Co. Ltd.(a) | | | 17,200 | | | | 408,421 | |
| | |
SCREEN Holdings Co. Ltd.(a) | | | 1,800 | | | | 126,377 | |
| | |
Shindengen Electric Manufacturing Co. Ltd. | | | 7,700 | | | | 263,540 | |
| | |
Shinko Electric Industries Co. Ltd.(a) | | | 5,800 | | | | 57,032 | |
| | |
Siltronic AG | | | 2,114 | | | | 200,990 | |
| | |
SOITEC* | | | 816 | | | | 89,808 | |
| | |
STMicroelectronics NV | | | 20,713 | | | | 470,026 | |
| | |
SUMCO Corp. | | | 20,300 | | | | 341,948 | |
| | |
Tokyo Electron Ltd. | | | 4,300 | | | | 878,058 | |
| | |
Tower Semiconductor Ltd.* | | | 3,423 | | | | 75,483 | |
| | |
Ulvac, Inc. | | | 1,700 | | | | 75,168 | |
| | |
X-Fab Silicon Foundries SE* (b) | | | 11,600 | | | | 52,284 | |
| | | | | | | | 10,044,869 | |
|
| Software – 0.9% | |
| | |
Altium Ltd. | | | 5,461 | | | | 121,072 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Software – (continued) | |
| | |
AVEVA Group plc | | | 2,580 | | | $ | 139,617 | |
| | |
BlackBerry Ltd.* (a) | | | 5,490 | | | | 28,905 | |
| | |
Blue Prism Group plc* | | | 4,832 | | | | 51,428 | |
| | |
Constellation Software, Inc. | | | 620 | | | | 613,622 | |
| | |
Dassault Systemes SE | | | 3,947 | | | | 599,092 | |
| | |
Descartes Systems Group, Inc. (The)* | | | 4,000 | | | | 155,971 | |
| | |
Enghouse Systems Ltd. | | | 3,344 | | | | 97,622 | |
| | |
Fuji Soft, Inc. | | | 1,600 | | | | 70,228 | |
| | |
Hilan Ltd. | | | 1,569 | | | | 69,421 | |
| | |
Infomart Corp. | | | 5,500 | | | | 83,437 | |
| | |
IRESS Ltd. | | | 8,665 | | | | 76,055 | |
| | |
Justsystems Corp. | | | 5,600 | | | | 231,553 | |
| | |
Kinaxis, Inc.* | | | 1,436 | | | | 91,895 | |
| | |
Micro Focus International plc | | | 14,418 | | | | 197,763 | |
| | |
Miroku Jyoho Service Co. Ltd. | | | 1,000 | | | | 26,539 | |
| | |
Nemetschek SE | | | 2,310 | | | | 117,518 | |
| | |
Nice Ltd.* | | | 2,058 | | | | 325,444 | |
| | |
Open Text Corp. | | | 10,857 | | | | 439,616 | |
| | |
Oracle Corp. Japan | | | 800 | | | | 70,894 | |
| | |
RIB Software SE | | | 8,720 | | | | 225,895 | |
| | |
Sage Group plc (The) | | | 28,875 | | | | 268,948 | |
| | |
SAP SE | | | 30,184 | | | | 4,000,564 | |
| | |
SimCorp A/S | | | 2,459 | | | | 219,803 | |
| | |
Software AG | | | 1,320 | | | | 41,971 | |
| | |
Sophos Group plc(b) | | | 11,880 | | | | 87,286 | |
| | |
Systena Corp. | | | 5,200 | | | | 75,134 | |
| | |
Technology One Ltd. | | | 33,615 | | | | 170,682 | |
| | |
Temenos AG (Registered)* | | | 1,326 | | | | 189,140 | |
| | |
Trend Micro, Inc. | | | 2,500 | | | | 127,191 | |
| | |
WiseTech Global Ltd. | | | 4,953 | | | | 89,302 | |
| | | | | | | | 9,103,608 | |
|
| Specialty Retail – 2.3% | |
| | |
ABC-Mart, Inc. | | | 700 | | | | 48,046 | |
| | |
Accent Group Ltd. | | | 18,000 | | | | 18,726 | |
| | |
Alpen Co. Ltd. | | | 10,600 | | | | 169,141 | |
| | |
AOKI Holdings, Inc. | | | 38,500 | | | | 393,530 | |
| | |
Aoyama Trading Co. Ltd. | | | 30,800 | | | | 544,175 | |
| | |
AP Eagers Ltd. | | | 130,823 | | | | 1,103,197 | |
| | |
Arcland Sakamoto Co. Ltd. | | | 26,600 | | | | 316,429 | |
| | |
Autobacs Seven Co. Ltd.(a) | | | 2,100 | | | | 34,811 | |
| | |
BCA Marketplace plc | | | 67,200 | | | | 205,218 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 199 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Specialty Retail – (continued) | |
| | |
Bic Camera, Inc.(a) | | | 4,100 | | | $ | 44,980 | |
| | |
Bilia AB, Class A | | | 63,987 | | | | 642,905 | |
| | |
Carasso Motors Ltd. | | | 31,120 | | | | 144,315 | |
| | |
Card Factory plc | | | 306,845 | | | | 672,615 | |
| | |
CECONOMY AG* | | | 137,214 | | | | 692,700 | |
| | |
Chiyoda Co. Ltd. | | | 2,800 | | | | 41,726 | |
| | |
Clas Ohlson AB, Class B | | | 11,920 | | | | 114,878 | |
| | |
DCM Holdings Co. Ltd.(a) | | | 25,100 | | | | 249,131 | |
| | |
Delek Automotive Systems Ltd. | | | 38,245 | | | | 148,701 | |
| | |
Dixons Carphone plc | | | 835,450 | | | | 1,418,907 | |
| | |
Dunelm Group plc | | | 324 | | | | 3,310 | |
| | |
EDION Corp.(a) | | | 77,000 | | | | 767,828 | |
| | |
Fast Retailing Co. Ltd.(a) | | | 1,900 | | | | 1,178,438 | |
| | |
Fenix Outdoor International AG | | | 369 | | | | 34,509 | |
| | |
Fielmann AG | | | 607 | | | | 46,862 | |
| | |
Fnac Darty SA* (a) | | | 13,395 | | | | 774,853 | |
| | |
Geo Holdings Corp. | | | 27,500 | | | | 343,671 | |
| | |
Giordano International Ltd. | | | 1,034,000 | | | | 328,497 | |
| | |
GrandVision NV(b) | | | 10,395 | | | | 317,763 | |
| | |
Hennes & Mauritz AB, Class B(a) | | | 27,566 | | | | 577,254 | |
| | |
Hikari Tsushin, Inc. | | | 600 | | | | 132,205 | |
| | |
Hornbach Holding AG & Co. KGaA | | | 6,237 | | | | 377,140 | |
| | |
Industria de Diseno Textil SA | | | 34,034 | | | | 1,061,262 | |
| | |
JBHi-Fi Ltd.(a) | | | 9,194 | | | | 234,619 | |
| | |
JD Sports Fashion plc | | | 8,827 | | | | 87,768 | |
| | |
JINS Holdings, Inc. | | | 900 | | | | 56,445 | |
| | |
Joshin Denki Co. Ltd. | | | 29,200 | | | | 589,915 | |
| | |
Joyful Honda Co. Ltd. | | | 8,400 | | | | 107,540 | |
| | |
Kingfisher plc | | | 68,983 | | | | 184,955 | |
| | |
Kohnan Shoji Co. Ltd. | | | 23,100 | | | | 538,477 | |
| | |
Komeri Co. Ltd. | | | 23,100 | | | | 497,450 | |
| | |
K’s Holdings Corp. | | | 6,100 | | | | 69,913 | |
| | |
Leon’s Furniture Ltd. | | | 16,160 | | | | 193,647 | |
| | |
LIXIL VIVA Corp. | | | 16,000 | | | | 278,100 | |
| | |
Luk Fook Holdings International Ltd.(a) | | | 247,672 | | | | 658,862 | |
| | |
Maisons du Monde SA(a) (b) | | | 37,343 | | | | 516,189 | |
| | |
Nishimatsuya Chain Co. Ltd.(a) | | | 1,300 | | | | 11,617 | |
| | |
Nitori Holdings Co. Ltd. | | | 2,300 | | | | 351,260 | |
| | |
Nojima Corp. | | | 30,800 | | | | 551,582 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Specialty Retail – (continued) | |
| | |
PAL GROUP Holdings Co. Ltd. | | | 1,800 | | | $ | 57,111 | |
| | |
Pets at Home Group plc | | | 378,224 | | | | 1,009,188 | |
| | |
Premier Investments Ltd. | | | 6,508 | | | | 85,997 | |
| | |
Sa Sa International Holdings Ltd.(a) | | | 215,601 | | | | 51,715 | |
| | |
Shimachu Co. Ltd.(a) | | | 1,300 | | | | 35,403 | |
| | |
Shimamura Co. Ltd. | | | 1,700 | | | | 144,831 | |
| | |
Super Retail Group Ltd.(a) | | | 96,327 | | | | 631,126 | |
| | |
T-Gaia Corp. | | | 7,600 | | | | 184,191 | |
| | |
United Arrows Ltd. | | | 4,400 | | | | 134,924 | |
| | |
USS Co. Ltd. | | | 6,200 | | | | 120,783 | |
| | |
Vivo Energy plc(b) | | | 40,320 | | | | 63,652 | |
| | |
VT Holdings Co. Ltd. | | | 59,700 | | | | 268,389 | |
| | |
WH Smith plc | | | 3,339 | | | | 94,536 | |
| | |
World Co. Ltd. | | | 15,600 | | | | 362,059 | |
| | |
Xebio Holdings Co. Ltd. | | | 23,100 | | | | 260,050 | |
| | |
Yamada Denki Co. Ltd. | | | 27,000 | | | | 130,623 | |
| | |
Yellow Hat Ltd. | | | 31,000 | | | | 508,709 | |
| | | | | | | | 22,019,349 | |
|
| Technology Hardware, Storage & Peripherals – 0.5% | |
| | |
Brother Industries Ltd. | | | 8,200 | | | | 155,876 | |
| | |
Canon, Inc. | | | 49,800 | | | | 1,364,485 | |
| | |
Eizo Corp. | | | 1,400 | | | | 52,384 | |
| | |
Elecom Co. Ltd. | | | 5,700 | | | | 222,506 | |
| | |
FUJIFILM Holdings Corp. | | | 15,400 | | | | 680,931 | |
| | |
Konica Minolta, Inc. | | | 18,900 | | | | 139,689 | |
| | |
Logitech International SA (Registered) | | | 3,669 | | | | 150,069 | |
| | |
MCJ Co. Ltd. | | | 53,900 | | | | 357,489 | |
| | |
NEC Corp. | | | 11,400 | | | | 453,448 | |
| | |
Quadient | | | 27,412 | | | | 586,567 | |
| | |
Ricoh Co. Ltd. | | | 26,500 | | | | 237,778 | |
| | |
Riso Kagaku Corp. | | | 1,700 | | | | 28,180 | |
| | |
S&T AG | | | 228 | | | | 4,869 | |
| | |
Seiko Epson Corp. | | | 8,300 | | | | 118,083 | |
| | |
Toshiba TEC Corp. | | | 3,800 | | | | 138,143 | |
| | | | | | | | 4,690,497 | |
|
| Textiles, Apparel & Luxury Goods – 1.6% | |
| | |
adidas AG | | | 5,313 | | | | 1,641,014 | |
| | |
Asics Corp. | | | 12,200 | | | | 210,810 | |
| | |
Brunello Cucinelli SpA | | | 1,556 | | | | 48,745 | |
See Accompanying Notes to the Financial Statements.
| | |
| 200 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Textiles, Apparel & Luxury Goods – (continued) | |
| | |
Burberry Group plc | | | 13,475 | | | $ | 356,405 | |
| | |
Chow Sang Sang Holdings International Ltd. | | | 301,000 | | | | 351,782 | |
| | |
Cie Financiere Richemont SA (Registered) | | | 13,167 | | | | 1,035,479 | |
| | |
Coats Group plc | | | 98,856 | | | | 91,207 | |
| | |
Crystal International Group Ltd.(b) | | | 585,000 | | | | 226,157 | |
| | |
Delta-Galil Industries Ltd. | | | 960 | | | | 24,330 | |
| | |
Descente Ltd. | | | 2,400 | | | | 31,036 | |
| | |
EssilorLuxottica SA – IM | | | 2,578 | | | | 394,320 | |
| | |
EssilorLuxottica SA – MO | | | 5,276 | | | | 805,228 | |
| | |
Gildan Activewear, Inc. | | | 8,624 | | | | 220,792 | |
| | |
Goldwin, Inc.(a) | | | 2,400 | | | | 184,487 | |
| | |
Gunze Ltd. | | | 700 | | | | 30,660 | |
| | |
Hermes International | | | 912 | | | | 656,270 | |
| | |
HUGO BOSS AG | | | 511 | | | | 21,504 | |
| | |
Japan Wool Textile Co. Ltd. (The) | | | 49,900 | | | | 492,515 | |
| | |
Kering SA | | | 2,233 | | | | 1,271,034 | |
| | |
Kurabo Industries Ltd. | | | 17,800 | | | | 410,649 | |
| | |
Li & Fung Ltd.(a) | | | 4,928,000 | | | | 540,730 | |
| | |
LVMH Moet Hennessy Louis Vuitton SE | | | 7,777 | | | | 3,318,727 | |
| | |
Moncler SpA | | | 3,061 | | | | 117,954 | |
| | |
Onward Holdings Co. Ltd. | | | 107,800 | | | | 625,231 | |
| | |
Pandora A/S | | | 7,654 | | | | 376,550 | |
| | |
Puma SE | | | 2,080 | | | | 156,521 | |
| | |
Regina Miracle International Holdings Ltd.(b) | | | 20,000 | | | | 13,091 | |
| | |
Samsonite International SA(b) | | | 36,600 | | | | 75,370 | |
| | |
Seiko Holdings Corp.(a) | | | 23,400 | | | | 579,020 | |
| | |
Seiren Co. Ltd. | | | 11,200 | | | | 139,242 | |
| | |
Stella International Holdings Ltd. | | | 455,000 | | | | 762,813 | |
| | |
Swatch Group AG (The) | | | 1,309 | | | | 362,155 | |
| | |
Swatch Group AG (The) (Registered) | | | 1,997 | | | | 106,959 | |
| | |
Tod’s SpA | | | 245 | | | | 11,617 | |
| | |
TSI Holdings Co. Ltd. | | | 4,800 | | | | 25,220 | |
| | |
Wacoal Holdings Corp. | | | 1,500 | | | | 39,739 | |
| | |
Yondoshi Holdings, Inc.(a) | | | 1,400 | | | | 34,293 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Textiles, Apparel & Luxury Goods – (continued) | |
| | |
Yue Yuen Industrial Holdings Ltd. | | | 22,000 | | | $ | 62,033 | |
| | | | | | | | 15,851,689 | |
|
| Thrifts & Mortgage Finance – 0.8% | |
| | |
Aareal Bank AG | | | 44,968 | | | | 1,511,077 | |
| | |
Deutsche Pfandbriefbank AG(b) | | | 100,023 | | | | 1,366,986 | |
| | |
Equitable Group, Inc. | | | 7,315 | | | | 630,681 | |
| | |
Genworth Mortgage Insurance Australia Ltd.(a) | | | 47,182 | | | | 126,773 | |
| | |
Home Capital Group, Inc.* (a) | | | 53,438 | | | | 1,102,221 | |
| | |
OneSavings Bank plc | | | 278,704 | | | | 1,298,315 | |
| | |
Paragon Banking Group plc | | | 232,694 | | | | 1,516,069 | |
| | | | | | | | 7,552,122 | |
|
| Tobacco – 0.7% | |
| | |
British American Tobacco plc | | | 114,730 | | | | 4,011,406 | |
| | |
Imperial Brands plc | | | 44,497 | | | | 974,469 | |
| | |
Japan Tobacco, Inc. | | | 53,900 | | | | 1,224,535 | |
| | |
Scandinavian Tobacco Group A/S(b) | | | 45,662 | | | | 539,780 | |
| | |
Swedish Match AB | | | 6,006 | | | | 282,524 | |
| | | | | | | | 7,032,714 | |
|
| Trading Companies & Distributors – 1.9% | |
| | |
AddTech AB, Class B | | | 4,329 | | | | 120,646 | |
| | |
Advan Co. Ltd. | | | 6,400 | | | | 72,641 | |
| | |
Ashtead Group plc | | | 18,634 | | | | 566,159 | |
| | |
BayWa AG | | | 6,575 | | | | 192,554 | |
| | |
Beijer Ref AB | | | 3,795 | | | | 102,573 | |
| | |
Brenntag AG | | | 2,605 | | | | 130,782 | |
| | |
Bunzl plc | | | 12,474 | | | | 324,118 | |
| | |
Cramo OYJ | | | 39,039 | | | | 413,762 | |
| | |
Diploma plc | | | 6,602 | | | | 136,602 | |
| | |
Ferguson plc | | | 6,237 | | | | 531,535 | |
| | |
Finning International, Inc.(a) | | | 387 | | | | 6,604 | |
| | |
Grafton Group plc | | | 11,760 | | | | 118,848 | |
| | |
Hanwa Co. Ltd. | | | 4,200 | | | | 123,352 | |
| | |
Howden Joinery Group plc | | | 32,516 | | | | 242,945 | |
| | |
IMCD NV | | | 2,350 | | | | 183,262 | |
| | |
Inaba Denki Sangyo Co. Ltd. | | | 800 | | | | 37,075 | |
| | |
Inabata & Co. Ltd. | | | 35,000 | | | | 462,005 | |
| | |
Indutrade AB | | | 2,198 | | | | 67,804 | |
| | |
ITOCHU Corp. | | | 78,100 | | | | 1,640,674 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 201 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Trading Companies & Distributors – (continued) | |
| | |
Japan Pulp & Paper Co. Ltd. | | | 9,200 | | | $ | 356,154 | |
| | |
Kanamoto Co. Ltd.(a) | | | 31,923 | | | | 861,084 | |
| | |
Kanematsu Corp. | | | 76,100 | | | | 933,431 | |
| | |
Kloeckner & Co. SE | | | 48,895 | | | | 282,567 | |
| | |
Marubeni Corp. | | | 95,400 | | | | 675,800 | |
| | |
Mitsubishi Corp. | | | 69,300 | | | | 1,771,844 | |
| | |
Mitsui & Co. Ltd. | | | 93,200 | | | | 1,610,018 | |
| | |
MonotaRO Co. Ltd. | | | 2,800 | | | | 85,602 | |
| | |
Nagase & Co. Ltd. | | | 4,900 | | | | 74,924 | |
| | |
Nichiden Corp. | | | 23,100 | | | | 439,115 | |
| | |
Nippon Steel Trading Corp. | | | 600 | | | | 25,226 | |
| | |
Nishio Rent All Co. Ltd. | | | 16,500 | | | | 445,525 | |
| | |
Reece Ltd.(a) | | | 5,999 | | | | 42,859 | |
| | |
Rexel SA | | | 4,641 | | | | 57,473 | |
| | |
Richelieu Hardware Ltd. | | | 1,340 | | | | 27,568 | |
| | |
Russel Metals, Inc.(a) | | | 56,672 | | | | 932,209 | |
| | |
Seven Group Holdings Ltd.(a) | | | 10,640 | | | | 137,519 | |
| | |
SIG plc(a) | | | 547,393 | | | | 797,576 | |
| | |
Sojitz Corp. | | | 63,300 | | | | 200,255 | |
| | |
Sumitomo Corp. | | | 56,100 | | | | 914,891 | |
| | |
Toromont Industries Ltd.(a) | | | 3,554 | | | | 183,899 | |
| | |
Toyota Tsusho Corp. | | | 16,300 | | | | 568,438 | |
| | |
Travis Perkins plc | | | 12,782 | | | | 237,017 | |
| | |
Yamazen Corp. | | | 71,500 | | | | 666,685 | |
| | |
Yuasa Trading Co. Ltd. | | | 15,400 | | | | 480,783 | |
| | | | | | | | 18,282,403 | |
|
| Transportation Infrastructure – 0.5% | |
| | |
Aena SME SA(b) | | | 1,925 | | | | 353,284 | |
| | |
Aeroports de Paris | | | 1,421 | | | | 270,142 | |
| | |
ASTM SpA | | | 1,680 | | | | 52,967 | |
| | |
Atlantia SpA | | | 17,710 | | | | 437,446 | |
| | |
Atlas Arteria Ltd.(a) | | | 37,577 | | | | 207,886 | |
| | |
Auckland International Airport Ltd. | | | 22,876 | | | | 136,435 | |
| | |
BBA Aviation plc | | | 31,120 | | | | 122,258 | |
| | |
Enav SpA(b) | | | 12,657 | | | | 73,710 | |
| | |
Flughafen Zurich AG (Registered) | | | 320 | | | | 57,628 | |
| | |
Fraport AG Frankfurt Airport Services Worldwide | | | 890 | | | | 74,410 | |
| | |
Getlink SE | | | 15,509 | | | | 259,712 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Transportation Infrastructure – (continued) | |
| | |
Hamburger Hafen und Logistik AG | | | 1,220 | | | $ | 31,605 | |
| | |
Hutchison Port Holdings Trust | | | 461,700 | | | | 71,563 | |
| | |
James Fisher & Sons plc | | | 1,322 | | | | 33,255 | |
| | |
Kamigumi Co. Ltd. | | | 6,500 | | | | 147,551 | |
| | |
Port of Tauranga Ltd. | | | 5,225 | | | | 22,417 | |
| | |
Qube Holdings Ltd.(a) | | | 105,591 | | | | 236,427 | |
| | |
SATS Ltd. | | | 19,000 | | | | 70,502 | |
| | |
Societa Iniziative Autostradali e Servizi SpA | | | 4,167 | | | | 72,012 | |
| | |
Sumitomo Warehouse Co. Ltd. (The) | | | 58,900 | | | | 804,185 | |
| | |
Sydney Airport | | | 48,510 | | | | 293,436 | |
| | |
Transurban Group | | | 64,407 | | | | 658,498 | |
| | |
Westshore Terminals Investment Corp.(a) | | | 5,020 | | | | 87,235 | |
| | | | | | | | 4,574,564 | |
|
| Water Utilities – 0.1% | |
| | |
Pennon Group plc | | | 2,760 | | | | 32,079 | |
| | |
Severn Trent plc | | | 10,549 | | | | 307,816 | |
| | |
United Utilities Group plc | | | 19,635 | | | | 221,098 | |
| | | | | | | | 560,993 | |
|
| Wireless Telecommunication Services – 1.1% | |
| | |
1&1 Drillisch AG | | | 2,659 | | | | 71,137 | |
| | |
Cellcom Israel Ltd.* | | | 21,851 | | | | 55,813 | |
| | |
Freenet AG | | | 2,198 | | | | 48,787 | |
| | |
Hutchison Telecommunications Hong Kong Holdings Ltd.(a) | | | 548,000 | | | | 99,284 | |
| | |
KDDI Corp. | | | 86,500 | | | | 2,399,644 | |
| | |
Millicom International Cellular SA, SDR | | | 415 | | | | 18,953 | |
| | |
NTT DOCOMO, Inc. | | | 34,400 | | | | 946,672 | |
| | |
Okinawa Cellular Telephone Co. | | | 10,500 | | | | 358,887 | |
| | |
Rogers Communications, Inc., Class B | | | 11,935 | | | | 563,084 | |
| | |
SmarTone Telecommunications Holdings Ltd. | | | 4,740 | | | | 4,118 | |
| | |
Softbank Corp.(a) | | | 46,200 | | | | 634,633 | |
| | |
SoftBank Group Corp. | | | 49,482 | | | | 1,917,854 | |
| | |
StarHub Ltd. | | | 137,700 | | | | 131,533 | |
| | |
Tele2 AB, Class B | | | 13,458 | | | | 192,840 | |
| | |
VEON Ltd. | | | 48,560 | | | | 114,311 | |
See Accompanying Notes to the Financial Statements.
| | |
| 202 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Wireless Telecommunication Services – (continued) | |
| | |
Vodafone Group plc | | | 1,337,336 | | | $ | 2,723,827 | |
| | | | | | | | 10,281,377 | |
Total Common Stocks
(Cost $855,570,153) | | | | 948,511,532 | |
| | |
| | | | | | | | |
|
| CLOSED END FUNDS – 0.0%(e) | |
|
| Capital Markets – 0.0%(e) | |
| | |
HBM Healthcare Investments AG Class A* | | | 240 | | | | 48,450 | |
|
| Equity Real Estate Investment Trusts (REITs) – 0.0%(e) | |
| | |
UK Commercial Property REIT Ltd. | | | 18,880 | | | | 21,426 | |
Total Closed End Funds
(Cost $44,670) | | | | 69,876 | |
| | | Number of
Rights | | | | |
|
| RIGHTS – 0.0%(e) | |
|
| Containers & Packaging – 0.0%(e) | |
| | |
Vidrala SA, expiring 11/11/2019* | | | 1,239 | | | | 5,301 | |
|
| Equity Real Estate Investment Trusts (REITs) – 0.0%(e) | |
| | |
Mapletree Commercial Trust, expiring 11/7/2019, price 2.24 SGD* (d) | | | 2,278 | | | | 151 | |
|
| Food Products – 0.0%(e) | |
| | |
Costa Group Holdings Ltd., expiring 11/18/2019, price 2.20 AUD* | | | 3,465 | | | | 1,599 | |
|
| Media – 0.0%(e) | |
| | |
Mediaset SpA, expiring 11/6/2019, price 2.77 EUR* (d) | | | 7,888 | | | | 24,377 | |
|
| Metals & Mining – 0.0%(e) | |
| | |
Pan American Silver Corp., CVR* ‡ (a) (d) | | | 41,840 | | | | 21,757 | |
Total Rights
(Cost $—) | | | | 53,185 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SECURITIES LENDING REINVESTMENTS(f) – 1.3% | |
|
| REPURCHASE AGREEMENTS – 1.3% | |
| | |
Citigroup Global Markets Ltd., 1.75%, dated 10/31/2019, due 11/1/2019, repurchase price $5,000,243, collateralized by various U.S. Treasury Securities, ranging from 0.63% – 3.00%, maturing 11/15/2020 – 8/15/2048; total market value $5,143,139 | | $ | 5,000,000 | | | $ | 5,000,000 | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $2,660,631, collateralized by various U.S. Treasury Securities, ranging from 0.38% – 6.88%, maturing 11/30/2020 – 9/30/2025; total market value $2,723,769 | | | 2,660,503 | | | | 2,660,503 | |
| | |
NatWest Markets Securities, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $2,000,096, collateralized by various U.S. Treasury Securities, ranging from 0.13% – 2.88%, maturing 1/15/2022 – 11/15/2027; total market value $2,030,000 | | | 2,000,000 | | | | 2,000,000 | |
| | |
Societe Generale, 1.95%, dated 10/31/2019, due 11/1/2019, repurchase price $2,800,152, collateralized by various U.S. Treasury Securities, ranging from 1.13% – 4.25%, maturing 1/31/2021 –11/15/2040; Common Stocks; total market value $3,094,899 | | | 2,800,000 | | | | 2,800,000 | |
| | | | | 12,460,503 | |
Total Securities Lending Reinvestments
(Cost $12,460,503) | | | | 12,460,503 | |
Total Investments – 99.6%
(Cost $868,075,326) | | | | 961,095,096 | |
| |
Other Assets Less Liabilities – 0.4% | | | | 4,047,385 | |
| NET ASSETS – 100.0% | | | $ | 965,142,481 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 203 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
| * | Non-income producing security. |
| ‡ | Value determined using significant unobservable inputs. |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $68,189,593, collateralized in the form of cash with a value of $12,460,503 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments; $16,432,266 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.13%, and maturity dates ranging from November 14, 2019 – May 15, 2049 and $44,649,095 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.00% – 6.25%, and maturity dates ranging from November 25, 2019 – October 22, 2071; a total value of $73,541,864. |
| (b) | Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States and as such may have restrictions on resale. |
| (c) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The value of these securities is determined by valuations supplied by a pricing service or brokers, or, if not available, in accordance with procedures established by the Board of Trustees. |
| (d) | Security fair valued as of October 31, 2019, using other significant observable inputs, in accordance with procedures approved by the Board of Trustees. Total value of all such securities at October 31, 2019 amounted to $303,736, which represents approximately 0.03% of net assets of the Fund. |
| (e) | Represents less than 0.05% of net assets. |
| (f) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $12,460,503. |
Percentages shown are based on Net Assets.
Abbreviations
AUD – Australian Dollar
CHDI – Clearing House Electronic Subregister System (CHESS) Depository Interest
CVA – Dutch Certification
CVR – Contingent Value Rights
DI – Depositary Interest
EUR – Euro
FDR – Fiduciary Depositary Receipt
OYJ – Public Limited Company
Preference – A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.
SCA – Limited partnership with share capital
SDR – Swedish Depositary Receipt
SGD – Singapore Dollar
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 157,953,939 | |
Aggregate gross unrealized depreciation | | | (74,149,251 | ) |
Net unrealized appreciation | | $ | 83,804,688 | |
Federal income tax cost | | $ | 877,687,109 | |
Futures Contracts
FlexShares® Morningstar Developed Marketsex-US Factor Tilt Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional
Amount | | | Value and
Unrealized
Appreciation/ (Depreciation)* | |
Long Contracts | | | | | |
EURO STOXX 50 Index | | | 139 | | | | 12/20/2019 | | | | EUR | | | $ | 5,596,669 | | | $ | 114,534 | |
FTSE 100 Index | | | 34 | | | | 12/20/2019 | | | | GBP | | | | 3,187,950 | | | | (28,216 | ) |
Hang Seng Index | | | 2 | | | | 11/28/2019 | | | | HKD | | | | 344,285 | | | | 2,481 | |
S&P/TSX 60 Index | | | 13 | | | | 12/19/2019 | | | | CAD | | | | 1,948,294 | | | | (5,416 | ) |
SGX Nikkei 225 Index | | | 38 | | | | 12/12/2019 | | | | JPY | | | | 4,035,336 | | | | 249,851 | |
SPI 200 Index | | | 10 | | | | 12/19/2019 | | | | AUD | | | | 1,143,485 | | | | (4,847 | ) |
| | | | | | | | | | | | | | | | | | | $ | 328,387 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
See Accompanying Notes to the Financial Statements.
| | |
| 204 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
Forward Foreign Currency Contracts
FlexShares® Morningstar Developed Marketsex-US Factor Tilt Index Fund had the following outstanding contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity Date | | | Unrealized
Appreciation/
(Depreciation) | |
AUD | | | 340,064 | | | | | Morgan Stanley | | USD | | | 234,000 | | | | 12/18/2019 | | | $ | 572 | |
CAD | | | 231,918 | | | | | Morgan Stanley | | USD | | | 176,000 | | | | 12/18/2019 | | | | 489 | |
CAD | | | 379,174 | | | | | Toronto-Dominion Bank (The) | | USD | | | 287,070 | | | | 12/18/2019 | | | | 1,480 | |
CHF | | | 326,894 | | | | | Morgan Stanley | | USD | | | 331,000 | | | | 12/18/2019 | | | | 1,483 | |
EUR | | | 900,292 | | | | | Goldman Sachs & Co. | | USD | | | 991,781 | | | | 12/18/2019 | | | | 15,807 | |
EUR | | | 703,613 | | | | | Morgan Stanley | | USD | | | 785,000 | | | | 12/18/2019 | | | | 2,469 | |
EUR | | | 374,235 | | | | | Toronto-Dominion Bank (The) | | USD | | | 412,000 | | | | 12/18/2019 | | | | 6,836 | |
GBP | | | 554,852 | | | | | Citibank NA | | USD | | | 684,419 | | | | 12/18/2019 | | | | 34,663 | |
GBP | | | 319,049 | | | | | Toronto-Dominion Bank (The) | | USD | | | 394,000 | | | | 12/18/2019 | | | | 19,484 | |
JPY | | | 91,644,971 | | | | | Morgan Stanley | | USD | | | 844,000 | | | | 12/18/2019 | | | | 6,269 | |
SEK | | | 1,961,931 | | | | | Morgan Stanley | | USD | | | 203,000 | | | | 12/18/2019 | | | | 1,187 | |
USD | | | 270,000 | | | | | JPMorgan Chase Bank | | CHF | | | 264,145 | | | | 12/18/2019 | | | | 1,338 | |
USD | | | 264,278 | | | | | Bank of New York | | HKD | | | 2,071,174 | | | | 12/18/2019 | | | | 74 | |
USD | | | 1,412,000 | | | | | Toronto-Dominion Bank (The) | | JPY | | | 151,958,601 | | | | 12/18/2019 | | | | 2,149 | |
Total unrealized appreciation | | | | | | | | | | | | $ | 94,300 | |
HKD | | | 1,301,274 | | | | | Morgan Stanley | | USD | | | 166,000 | | | | 12/18/2019 | | | $ | (6 | ) |
JPY | | | 115,705,700 | | | | | Goldman Sachs & Co. | | USD | | | 1,080,706 | | | | 12/18/2019 | | | | (7,205 | ) |
USD | | | 128,988 | | | | | Morgan Stanley | | AUD | | | 187,387 | | | | 12/18/2019 | | | | (269 | ) |
USD | | | 113,764 | | | | | Morgan Stanley | | CHF | | | 112,030 | | | | 12/18/2019 | | | | (182 | ) |
USD | | | 113,437 | | | | | Bank of New York | | DKK | | | 763,595 | | | | 12/18/2019 | | | | (1,012 | ) |
USD | | | 280,000 | | | | | Morgan Stanley | | EUR | | | 252,633 | | | | 12/18/2019 | | | | (2,741 | ) |
USD | | | 2,500,000 | | | | | Morgan Stanley | | GBP | | | 1,939,640 | | | | 12/18/2019 | | | | (13,751 | ) |
USD | | | 291,573 | | | | | Toronto-Dominion Bank (The) | | SEK | | | 2,809,101 | | | | 12/18/2019 | | | | (783 | ) |
USD | | | 2,777 | | | | | JPMorgan Chase Bank | | SGD | | | 3,828 | | | | 12/18/2019 | | | | (37 | ) |
Total unrealized depreciation | | | | | | | | | | | | $ | (25,986 | ) |
Net unrealized appreciation | | | | | | | | | | | | $ | 68,314 | |
Abbreviations:
AUD – Australian Dollar
CAD – Canadian Dollar
CHF – Swiss Franc
DKK – Danish Krone
EUR – Euro
GBP – British Pound
HKD – Hong Kong Dollar
JPY – Japanese Yen
SEK – Swedish Krona
SGD – Singapore Dollar
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 205 | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)
FlexShares® Morningstar Developed Marketsex-US Factor Tilt Index Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Australia | | | 5.0 | % |
Austria | | | 0.3 | |
Belgium | | | 1.0 | |
Canada | | | 8.9 | |
Denmark | | | 1.1 | |
Finland | | | 0.9 | |
France | | | 7.3 | |
Germany | | | 6.5 | |
Hong Kong | | | 3.0 | |
Ireland | | | 0.4 | |
Israel | | | 1.0 | |
Italy | | | 2.7 | |
Japan | | | 28.8 | |
Netherlands | | | 2.8 | |
New Zealand | | | 0.3 | |
Norway | | | 1.1 | |
Portugal | | | 0.3 | |
Singapore | | | 1.1 | |
Spain | | | 2.3 | |
Sweden | | | 2.8 | |
Switzerland | | | 5.2 | |
United Kingdom | | | 15.5 | |
Other1 | | | 1.7 | |
| | | | 100.0 | % |
| 1 | Includes anynon-equity securities, securities lending reinvestments and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | |
| 206 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 99.4% | |
|
| Aerospace & Defense – 0.1% | |
| | |
Aselsan Elektronik Sanayi ve Ticaret A/S | | | 17,019 | | | $ | 54,669 | |
| | |
AviChina Industry & Technology Co. Ltd., Class H | | | 114,000 | | | | 53,962 | |
| | |
Bharat Electronics Ltd. | | | 17,280 | | | | 28,784 | |
| | |
Embraer SA | | | 24,600 | | | | 107,423 | |
| | |
Hanwha Aerospace Co. Ltd.* | | | 899 | | | | 29,208 | |
| | |
Korea Aerospace Industries Ltd. | | | 2,508 | | | | 81,915 | |
| | |
LIG Nex1 Co. Ltd. | | | 430 | | | | 12,437 | |
| | |
United Aircraft Corp. PJSC* ^ | | | 25,155,036 | | | | 233,603 | |
| | | | | | | | 602,001 | |
|
| Air Freight & Logistics – 0.5% | |
| | |
BEST, Inc., ADR* | | | 4,700 | | | | 26,790 | |
| | |
GD Express Carrier Bhd. | | | 51,838 | | | | 3,535 | |
| | |
Gulf Warehousing Co. | | | 165,148 | | | | 231,325 | |
| | |
Hyundai Glovis Co. Ltd. | | | 1,640 | | | | 212,850 | |
| | |
Imperial Logistics Ltd. | | | 186,304 | | | | 701,260 | |
| | |
Kerry TJ Logistics Co. Ltd. | | | 14,000 | | | | 17,523 | |
| | |
Sinotrans Ltd., Class H | | | 2,214,000 | | | | 652,531 | |
| | |
ZTO Express Cayman, Inc., ADR | | | 14,842 | | | | 326,524 | |
| | | | | | | | 2,172,338 | |
|
| Airlines – 0.7% | |
| | |
Aegean Airlines SA | | | 27,962 | | | | 255,806 | |
| | |
Aeroflot PJSC | | | 19,139 | | | | 31,933 | |
| | |
Air Arabia PJSC* | | | 2,303,954 | | | | 853,130 | |
| | |
Air China Ltd., Class H | | | 164,000 | | | | 145,216 | |
| | |
AirAsia Group Bhd. | | | 139,400 | | | | 63,720 | |
| | |
Asiana Airlines, Inc.* | | | 2,987 | | | | 13,684 | |
| | |
Azul SA (Preference)* | | | 8,200 | | | | 107,280 | |
| | |
Bangkok Airways PCL, NVDR | | | 52,000 | | | | 13,174 | |
| | |
Cebu Air, Inc. | | | 201,720 | | | | 367,107 | |
| | |
China Airlines Ltd. | | | 87,000 | | | | 25,894 | |
| | |
China Eastern Airlines Corp. Ltd., Class H* | | | 132,000 | | | | 66,019 | |
| | |
China Southern Airlines Co. Ltd., Class H | | | 86,000 | | | | 53,107 | |
| | |
Eva Airways Corp. | | | 142,798 | | | | 66,848 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Airlines – (continued) | |
| | |
Gol Linhas Aereas Inteligentes SA (Preference)* | | | 3,500 | | | $ | 31,910 | |
| | |
Grupo Aeromexico SAB de CV* (a) | | | 237,900 | | | | 184,890 | |
| | |
Hanjin Kal Corp. | | | 1,957 | | | | 50,967 | |
| | |
InterGlobe Aviation Ltd.(b) | | | 3,231 | | | | 66,364 | |
| | |
Jejuair Co. Ltd. | | | 755 | | | | 15,574 | |
| | |
Korean Air Lines Co. Ltd. | | | 3,444 | | | | 73,708 | |
| | |
Latam Airlines Group SA | | | 9,676 | | | | 107,073 | |
| | |
SpiceJet Ltd.* | | | 7,072 | | | | 11,486 | |
| | |
Thai Airways International PCL, NVDR* | | | 688,800 | | | | 168,807 | |
| | |
Turk Hava Yollari AO* | | | 52,316 | | | | 106,600 | |
| | |
Tway Air Co. Ltd.* | | | 20,500 | | | | 88,100 | |
| | | | | | | | 2,968,397 | |
|
| Auto Components – 1.0% | |
| | |
Apollo Tyres Ltd. | | | 14,352 | | | | 38,506 | |
| | |
Balkrishna Industries Ltd. | | | 4,462 | | | | 55,655 | |
| | |
Bharat Forge Ltd. | | | 6,966 | | | | 44,573 | |
| | |
Bosch Ltd. | | | 246 | | | | 53,083 | |
| | |
Cayman Engley Industrial Co. Ltd. | | | 43,796 | | | | 138,839 | |
| | |
Ceat Ltd. | | | 936 | | | | 13,312 | |
| | |
Cheng Shin Rubber Industry Co. Ltd. | | | 82,000 | | | | 128,897 | |
| | |
China First Capital Group Ltd.* | | | 66,000 | | | | 18,778 | |
| | |
Cub Elecparts, Inc. | | | 2,949 | | | | 24,704 | |
| | |
Endurance Technologies Ltd.(b) | | | 1,456 | | | | 22,384 | |
| | |
Exide Industries Ltd. | | | 5,676 | | | | 15,453 | |
| | |
Fuyao Glass Industry Group Co. Ltd., Class H(b) | | | 14,400 | | | | 40,788 | |
| | |
Halla Holdings Corp. | | | 7,790 | | | | 279,541 | |
| | |
Hankook Tire & Technology Co. Ltd. | | | 5,412 | | | | 144,435 | |
| | |
Hanon Systems | | | 6,560 | | | | 65,406 | |
| | |
Hota Industrial Manufacturing Co. Ltd. | | | 9,826 | | | | 36,476 | |
| | |
Hyundai Mobis Co. Ltd. | | | 4,920 | | | | 1,006,455 | |
| | |
Hyundai Wia Corp. | | | 618 | | | | 27,196 | |
| | |
Kenda Rubber Industrial Co. Ltd. | | | 29,307 | | | | 31,242 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 207 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Auto Components – (continued) | |
| | |
Korea Autoglass Corp. | | | 9,102 | | | $ | 131,822 | |
| | |
Kumho Tire Co., Inc.* | | | 3,552 | | | | 12,914 | |
| | |
Mahindra CIE Automotive Ltd.* | | | 6,379 | | | | 13,553 | |
| | |
Mando Corp. | | | 2,378 | | | | 73,172 | |
| | |
Minth Group Ltd.(a) | | | 28,000 | | | | 99,315 | |
| | |
Motherson Sumi Systems Ltd. | | | 39,552 | �� | | | 68,561 | |
| | |
MRF Ltd. | | | 36 | | | | 33,333 | |
| | |
Nan Kang Rubber Tire Co. Ltd. | | | 20,000 | | | | 36,530 | |
| | |
Nemak SAB de CV(b) | | | 62,400 | | | | 27,828 | |
| | |
Nexen Tire Corp. | | | 1,545 | | | | 12,430 | |
| | |
S&T Motiv Co. Ltd. | | | 8,036 | | | | 314,961 | |
| | |
Sebang Global Battery Co. Ltd. | | | 6,724 | | | | 220,194 | |
| | |
SL Corp. | | | 1,545 | | | | 27,821 | |
| | |
Sri Trang Agro-Industry PCL, NVDR | | | 20,800 | | | | 7,164 | |
| | |
Sundram Fasteners Ltd. | | | 3,224 | | | | 22,238 | |
| | |
Tianneng Power International Ltd.(a) | | | 748,000 | | | | 489,588 | |
| | |
WABCO India Ltd. | | | 172 | | | | 15,048 | |
| | |
Xinyi Glass Holdings Ltd. | | | 190,000 | | | | 214,055 | |
| | | | | | | | 4,006,250 | |
|
| Automobiles – 1.7% | |
| | |
Astra International Tbk. PT | | | 713,400 | | | | 353,219 | |
| | |
BAIC Motor Corp. Ltd., Class H(b) | | | 1,599,000 | | | | 995,588 | |
| | |
Bajaj Auto Ltd. | | | 2,542 | | | | 116,381 | |
| | |
Brilliance China Automotive Holdings Ltd. | | | 226,000 | | | | 250,288 | |
| | |
BYD Co. Ltd., Class H(a) | | | 17,500 | | | | 82,390 | |
| | |
China Motor Corp. | | | 24,400 | | | | 33,185 | |
| | |
Dongfeng Motor Group Co. Ltd., Class H | | | 202,000 | | | | 203,090 | |
| | |
DRB-Hicom Bhd. | | | 7,300 | | | | 4,420 | |
| | |
Eicher Motors Ltd. | | | 492 | | | | 156,336 | |
| | |
Ford Otomotiv Sanayi A/S | | | 6,154 | | | | 69,484 | |
| | |
Geely Automobile Holdings Ltd. | | | 328,000 | | | | 623,550 | |
| | |
Great Wall Motor Co. Ltd., Class H(a) | | | 246,000 | | | | 200,247 | |
| | |
Guangzhou Automobile Group Co. Ltd., Class H | | | 214,400 | | | | 214,736 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Automobiles – (continued) | |
| | |
Hero MotoCorp Ltd. | | | 3,362 | | | $ | 128,178 | |
| | |
Hyundai Motor Co. | | | 10,496 | | | | 1,100,616 | |
| | |
Hyundai Motor Co. (2nd Preference) | | | 2,706 | | | | 184,439 | |
| | |
Hyundai Motor Co. (3rd Preference) | | | 54 | | | | 3,328 | |
| | |
Hyundai Motor Co. (Preference) | | | 1,312 | | | | 82,321 | |
| | |
Indus Motor Co. Ltd. | | | 11,480 | | | | 68,786 | |
| | |
Kia Motors Corp. | | | 19,246 | | | | 703,870 | |
| | |
Mahindra & Mahindra Ltd. | | | 20,910 | | | | 178,783 | |
| | |
Maruti Suzuki India Ltd. | | | 4,182 | | | | 445,707 | |
| | |
Oriental Holdings Bhd. | | | 319,800 | | | | 497,475 | |
| | |
Ssangyong Motor Co.* | | | 771 | | | | 1,518 | |
| | |
Tata Motors Ltd.* | | | 19,006 | | | | 47,616 | |
| | |
Tata Motors Ltd., Class A* | | | 25,527 | | | | 29,422 | |
| | |
Tofas Turk Otomobil Fabrikasi A/S | | | 6,639 | | | | 26,010 | |
| | |
TVS Motor Co. Ltd. | | | 3,564 | | | | 24,453 | |
| | |
UMW Holdings Bhd. | | | 20,800 | | | | 22,052 | |
| | |
Yadea Group Holdings Ltd.(b) | | | 40,000 | | | | 8,676 | |
| | |
Yulon Motor Co. Ltd. | | | 82,000 | | | | 52,798 | |
| | | | | | | | 6,908,962 | |
|
| Banks – 14.8% | |
| | |
Absa Group Ltd. | | | 53,300 | | | | 548,020 | |
| | |
Abu Dhabi Commercial Bank PJSC | | | 203,482 | | | | 432,139 | |
| | |
AFFIN Bank Bhd. | | | 38,816 | | | | 18,022 | |
| | |
Agricultural Bank of China Ltd., Class H | | | 2,050,000 | | | | 844,827 | |
| | |
Akbank T.A.S.* | | | 193,149 | | | | 233,636 | |
| | |
Akbank T.A.S., ADR* | | | 20,016 | | | | 46,637 | |
| | |
Al Khalij Commercial Bank PQSC | | | 1,788,256 | | | | 589,373 | |
| | |
Al Rajhi Bank | | | 42,804 | | | | 689,375 | |
| | |
Alinma Bank | | | 27,306 | | | | 152,610 | |
| | |
Alior Bank SA* | | | 2,987 | | | | 21,109 | |
| | |
Alliance Bank Malaysia Bhd. | | | 28,200 | | | | 19,437 | |
| | |
Alpha Bank AE* | | | 43,460 | | | | 92,657 | |
| | |
AMMB Holdings Bhd. | | | 123,000 | | | | 117,451 | |
| | |
AU Small Finance Bank Ltd.(b) | | | 2,288 | | | | 22,118 | |
| | |
Axis Bank Ltd. | | | 67,568 | | | | 701,460 | |
See Accompanying Notes to the Financial Statements.
| | |
| 208 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Banks – (continued) | |
| | |
Banco Bradesco SA | | | 36,192 | | | $ | 296,161 | |
| | |
Banco Bradesco SA (Preference) | | | 139,400 | | | | 1,221,278 | |
| | |
Banco Davivienda SA (Preference) | | | 3,395 | | | | 43,412 | |
| | |
Banco de Bogota SA | | | 7,052 | | | | 181,643 | |
| | |
Banco de Chile | | | 1,575,095 | | | | 202,993 | |
| | |
Banco de Credito e Inversiones SA | | | 1,722 | | | | 95,951 | |
| | |
Banco del Bajio SA(b) | | | 25,800 | | | | 41,704 | |
| | |
Banco do Brasil SA* | | | 84,800 | | | | 1,017,118 | |
| | |
Banco do Estado do Rio Grande do Sul SA (Preference), Class B | | | 16,400 | | | | 91,347 | |
| | |
Banco Inter SA (Preference)* (b) | | | 8,600 | | | | 36,719 | |
| | |
Banco Santander Chile | | | 2,077,716 | | | | 129,006 | |
| | |
Banco Santander Mexico SA Institucion de Banca Multiple Grupo Financiero Santand | | | 17,200 | | | | 23,173 | |
| | |
Bancolombia SA | | | 9,348 | | | | 113,723 | |
| | |
Bancolombia SA (Preference) | | | 15,416 | | | | 201,323 | |
| | |
Bank Al Habib Ltd. | | | 943,000 | | | | 418,242 | |
| | |
Bank AlBilad | | | 13,038 | | | | 86,218 | |
| | |
Bank Alfalah Ltd. | | | 1,148,000 | | | | 306,281 | |
| | |
BankAl-Jazira | | | 15,006 | | | | 52,177 | |
| | |
Bank Central Asia Tbk. PT | | | 385,400 | | | | 863,491 | |
| | |
Bank Danamon Indonesia Tbk. PT | | | 31,900 | | | | 9,545 | |
| | |
Bank Handlowy w Warszawie SA | | | 2,012 | | | | 26,897 | |
| | |
Bank Mandiri Persero Tbk. PT | | | 647,800 | | | | 324,200 | |
| | |
Bank Millennium SA* | | | 25,240 | | | | 40,655 | |
| | |
Bank Negara Indonesia Persero Tbk. PT | | | 549,400 | | | | 300,395 | |
| | |
Bank of Baroda* | | | 44,362 | | | | 60,793 | |
| | |
Bank of China Ltd., Class H | | | 5,576,000 | | | | 2,283,701 | |
| | |
Bank of Chongqing Co. Ltd., Class H | | | 492,000 | | | | 289,386 | |
| | |
Bank of Communications Co. Ltd., Class H | | | 1,558,000 | | | | 1,065,476 | |
| | |
Bank of Gansu Co. Ltd., Class H(b) | | | 1,394,000 | | | | 313,031 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – (continued) | |
| | |
Bank of Jinzhou Co. Ltd., Class H* (b) | | | 47,000 | | | $ | 16,101 | |
| | |
Bank of the Philippine Islands | | | 59,860 | | | | 114,423 | |
| | |
Bank of Tianjin Co. Ltd., Class H(b) | | | 656,000 | | | | 300,476 | |
| | |
Bank Pembangunan Daerah Jawa Barat Dan Banten Tbk. PT | | | 249,600 | | | | 32,185 | |
| | |
Bank Pembangunan Daerah Jawa Timur Tbk. PT | | | 2,935,600 | | | | 144,302 | |
| | |
Bank Polska Kasa Opieki SA | | | 5,494 | | | | 155,243 | |
| | |
Bank Rakyat Indonesia Persero Tbk. PT | | | 1,853,200 | | | | 555,815 | |
| | |
Bank Tabungan Negara Persero Tbk. PT | | | 377,200 | | | | 49,982 | |
| | |
Banque Saudi Fransi | | | 14,514 | | | | 130,422 | |
| | |
BDO Unibank, Inc. | | | 59,040 | | | | 180,221 | |
| | |
BIMB Holdings Bhd. | | | 14,780 | | | | 15,033 | |
| | |
BNK Financial Group, Inc. | | | 20,172 | | | | 120,500 | |
| | |
BOC Hong Kong Holdings Ltd. | | | 260,000 | | | | 895,671 | |
| | |
Canara Bank* | | | 11,983 | | | | 34,389 | |
| | |
Capitec Bank Holdings Ltd.(a) | | | 2,132 | | | | 194,324 | |
| | |
Chang Hwa Commercial Bank Ltd. | | | 174,344 | | | | 136,025 | |
| | |
China Banking Corp. | | | 1,069,074 | | | | 530,903 | |
| | |
China CITIC Bank Corp. Ltd., Class H | | | 871,000 | | | | 505,639 | |
| | |
China Construction Bank Corp., Class H | | | 7,134,000 | | | | 5,743,463 | |
| | |
China Everbright Bank Co. Ltd., Class H | | | 246,000 | | | | 113,306 | |
| | |
China Merchants Bank Co. Ltd., Class H | | | 270,500 | | | | 1,294,225 | |
| | |
China Minsheng Banking Corp. Ltd., Class H | | | 410,000 | | | | 287,189 | |
| | |
China Zheshang Bank Co. Ltd., Class H* | | | 74,000 | | | | 39,088 | |
| | |
Chongqing Rural Commercial Bank Co. Ltd., Class H | | | 2,378,000 | | | | 1,271,268 | |
| | |
CIMB Group Holdings Bhd. | | | 235,149 | | | | 295,449 | |
| | |
City Union Bank Ltd. | | | 9,675 | | | | 28,904 | |
| | |
Commercial Bank PSQC (The) | | | 143,828 | | | | 169,860 | |
| | |
Commercial International Bank Egypt SAE | | | 46,166 | | | | 231,688 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 209 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Banks – (continued) | |
| | |
Credicorp Ltd. | | | 2,296 | | | $ | 491,436 | |
| | |
Credit Agricole Egypt SAE | | | 6,777 | | | | 18,433 | |
| | |
Credit Bank of Moscow PJSC | | | 435,690 | | | | 39,250 | |
| | |
CTBC Financial Holding Co. Ltd. | | | 1,394,000 | | | | 970,838 | |
| | |
DCB Bank Ltd. | | | 1,720 | | | | 4,369 | |
| | |
DGB Financial Group, Inc. | | | 13,612 | | | | 82,249 | |
| | |
Doha Bank QPSC | | | 132,210 | | | | 92,231 | |
| | |
Dubai Islamic Bank PJSC | | | 123,000 | | | | 177,159 | |
| | |
E.Sun Financial Holding Co. Ltd. | | | 411,721 | | | | 372,626 | |
| | |
Eurobank Ergasias SA* | | | 164,984 | | | | 167,130 | |
| | |
Far Eastern International Bank | | | 123,013 | | | | 48,291 | |
| | |
Federal Bank Ltd. | | | 49,410 | | | | 58,376 | |
| | |
First Abu Dhabi Bank PJSC | | | 148,420 | | | | 615,049 | |
| | |
First Financial Holding Co. Ltd. | | | 332,120 | | | | 243,849 | |
| | |
Grupo Aval Acciones y Valores SA (Preference) | | | 338,414 | | | | 138,734 | |
| | |
Grupo Elektra SAB de CV(a) | | | 2,050 | | | | 149,490 | |
| | |
Grupo Financiero Banorte SAB de CV, Class O | | | 82,000 | | | | 449,092 | |
| | |
Grupo Financiero Inbursa SAB de CV, Class O | | | 73,800 | | | | 92,000 | |
| | |
Grupo Security SA | | | 33,325 | | | | 9,673 | |
| | |
Habib Bank Ltd. | | | 32,200 | | | | 26,487 | |
| | |
Habib Metropolitan Bank Ltd. | | | 533,000 | | | | 106,600 | |
| | |
Hana Financial Group, Inc. | | | 22,304 | | | | 646,048 | |
| | |
Harbin Bank Co. Ltd., Class H* (b) | | | 1,804,000 | | | | 342,953 | |
| | |
Hong Leong Bank Bhd. | | | 32,800 | | | | 135,172 | |
| | |
Hong Leong Financial Group Bhd. | | | 12,600 | | | | 52,529 | |
| | |
Housing & Development Bank | | | 54,366 | | | | 144,841 | |
| | |
Hua Nan Financial Holdings Co. Ltd. | | | 262,350 | | | | 188,744 | |
| | |
Huishang Bank Corp. Ltd., Class H | | | 1,886,000 | | | | 732,724 | |
| | |
ICICI Bank Ltd. | | | 109,880 | | | | 717,339 | |
| | |
IDFC First Bank Ltd.* | | | 76,061 | | | | 47,881 | |
| | |
Indian Bank* | | | 9,984 | | | | 18,721 | |
| | |
Industrial & Commercial Bank of China Ltd., Class H | | | 5,658,000 | | | | 4,071,490 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – (continued) | |
| | |
Industrial Bank of Korea | | | 19,926 | | | $ | 202,094 | |
| | |
ING Bank Slaski SA | | | 1,394 | | | | 70,888 | |
| | |
Intercorp Financial Services, Inc.* (b) | | | 1,040 | | | | 43,368 | |
| | |
Itau CorpBanca | | | 7,069,861 | | | | 42,933 | |
| | |
Itau Unibanco Holding SA (Preference) | | | 164,000 | | | | 1,480,102 | |
| | |
Itausa – Investimentos Itau SA | | | 33,909 | | | | 116,566 | |
| | |
Itausa – Investimentos Itau SA (Preference) | | | 155,800 | | | | 532,089 | |
| | |
JB Financial Group Co. Ltd. | | | 13,424 | | | | 61,613 | |
| | |
Jiangxi Bank Co. Ltd., Class H(b) | | | 410,000 | | | | 240,109 | |
| | |
Karur Vysya Bank Ltd. (The) | | | 13,613 | | | | 10,527 | |
| | |
KB Financial Group, Inc. | | | 28,371 | | | | 1,022,965 | |
| | |
Kiatnakin Bank PCL, NVDR | | | 32,800 | | | | 71,151 | |
| | |
King’s Town Bank Co. Ltd. | | | 52,000 | | | | 54,066 | |
| | |
Komercni banka A/S | | | 1,804 | | | | 61,032 | |
| | |
Kotak Mahindra Bank Ltd. | | | 28,618 | | | | 635,272 | |
| | |
Krung Thai Bank PCL, NVDR | | | 237,800 | | | | 130,733 | |
| | |
LH Financial Group PCL, NVDR | | | 3,862,200 | | | | 161,165 | |
| | |
Malayan Banking Bhd. | | | 221,400 | | | | 455,675 | |
| | |
Masraf Al Rayan QSC | | | 124,968 | | | | 128,709 | |
| | |
mBank SA* | | | 574 | | | | 57,445 | |
| | |
MCB Bank Ltd. | | | 51,500 | | | | 57,214 | |
| | |
Mega Financial Holding Co. Ltd. | | | 385,000 | | | | 378,164 | |
| | |
Metropolitan Bank & Trust Co. | | | 73,205 | | | | 97,520 | |
| | |
Moneta Money Bank A/S(b) | | | 3,626 | | | | 12,061 | |
| | |
National Bank of Greece SA* | | | 21,509 | | | | 72,949 | |
| | |
National Bank of Pakistan* | | | 492,500 | | | | 112,938 | |
| | |
National Commercial Bank | | | 46,412 | | | | 538,336 | |
| | |
Nedbank Group Ltd. | | | 28,536 | | | | 434,154 | |
| | |
OTP Bank Nyrt | | | 7,626 | | | | 351,787 | |
| | |
Philippine National Bank* | | | 624,435 | | | | 552,510 | |
| | |
Piraeus Bank SA* | | | 25,087 | | | | 87,603 | |
| | |
Postal Savings Bank of China Co. Ltd., Class H(a) (b) | | | 656,000 | | | | 421,001 | |
| | |
Powszechna Kasa Oszczednosci Bank Polski SA | | | 29,930 | | | | 299,065 | |
| | |
Public Bank Bhd. | | | 106,600 | | | | 517,884 | |
| | |
Punjab National Bank* | | | 25,105 | | | | 23,130 | |
See Accompanying Notes to the Financial Statements.
| | |
| 210 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Banks – (continued) | |
| | |
Qatar International Islamic Bank QSC | | | 20,420 | | | $ | 53,335 | |
| | |
Qatar Islamic Bank SAQ | | | 41,000 | | | | 171,387 | |
| | |
Qatar National Bank QPSC | | | 151,126 | | | | 796,929 | |
| | |
RBL Bank Ltd.(b) | | | 3,686 | | | | 16,115 | |
| | |
RHB Bank Bhd. | | | 221,400 | | | | 304,667 | |
| | |
Riyad Bank | | | 46,740 | | | | 276,679 | |
| | |
Rizal Commercial Banking Corp. | | | 43,139 | | | | 21,848 | |
| | |
Samba Financial Group | | | 34,358 | | | | 253,771 | |
| | |
Santander Bank Polska SA | | | 1,066 | | | | 87,515 | |
| | |
Sberbank of Russia PJSC | | | 783,756 | | | | 2,873,308 | |
| | |
Sberbank of Russia PJSC (Preference) | | | 72,898 | | | | 241,832 | |
| | |
Security Bank Corp. | | | 13,750 | | | | 53,976 | |
| | |
Shanghai Commercial & Savings Bank Ltd. (The) | | | 170,568 | | | | 294,175 | |
| | |
Shengjing Bank Co. Ltd., Class H(b) | | | 492,000 | | | | 331,444 | |
| | |
Shinhan Financial Group Co. Ltd. | | | 32,226 | | | | 1,177,193 | |
| | |
Siam Commercial Bank PCL (The), NVDR | | | 114,800 | | | | 425,819 | |
| | |
SinoPac Financial Holdings Co. Ltd. | | | 328,000 | | | | 134,689 | |
| | |
Standard Bank Group Ltd. | | | 92,250 | | | | 1,062,343 | |
| | |
State Bank of India* | | | 61,418 | | | | 270,511 | |
| | |
Syndicate Bank* | | | 379,250 | | | | 162,012 | |
| | |
Taichung Commercial Bank Co. Ltd. | | | 186,167 | | | | 71,860 | |
| | |
Taishin Financial Holding Co. Ltd. | | | 757,278 | | | | 352,014 | |
| | |
Taiwan Business Bank | | | 181,462 | | | | 76,601 | |
| | |
Taiwan Cooperative Financial Holding Co. Ltd. | | | 340,000 | | | | 233,997 | |
| | |
Thanachart Capital PCL, NVDR | | | 49,200 | | | | 86,359 | |
| | |
Tisco Financial Group PCL, NVDR | | | 20,000 | | | | 64,580 | |
| | |
TMB Bank PCL, NVDR | | | 902,000 | | | | 43,016 | |
| | |
Turkiye Garanti Bankasi A/S* | | | 155,800 | | | | 250,914 | |
| | |
Turkiye Halk Bankasi A/S* | | | 56,130 | | | | 51,487 | |
| | |
Turkiye Is Bankasi A/S, Class C* | | | 105,206 | | | | 106,817 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – (continued) | |
| | |
Turkiye Vakiflar Bankasi TAO, Class D* | | | 95,932 | | | $ | 72,882 | |
| | |
Union Bank of India* | | | 373,920 | | | | 302,336 | |
| | |
Union Bank of Taiwan* | | | 187,296 | | | | 65,528 | |
| | |
Union Bank of the Philippines | | | 389,500 | | | | 461,689 | |
| | |
United Bank Ltd. | | | 21,500 | | | | 19,013 | |
| | |
VTB Bank PJSC | | | 360,091,531 | | | | 242,173 | |
| | |
Woori Financial Group, Inc. | | | 32,226 | | | | 325,459 | |
| | |
Yapi ve Kredi Bankasi A/S* | | | 80,342 | | | | 32,066 | |
| | |
Yes Bank Ltd. | | | 55,186 | | | | 54,775 | |
| | | | | | | | 61,160,740 | |
|
| Beverages – 0.5% | |
| | |
Ambev SA* | | | 147,600 | | | | 639,022 | |
| | |
Anadolu Efes Biracilik ve Malt Sanayii A/S | | | 10,922 | | | | 36,766 | |
| | |
Arca Continental SAB de CV | | | 13,700 | | | | 76,796 | |
| | |
Becle SAB de CV | | | 10,700 | | | | 18,551 | |
| | |
Carabao Group PCL, NVDR | | | 13,100 | | | | 36,552 | |
| | |
Carlsberg Brewery Malaysia Bhd. | | | 5,100 | | | | 33,858 | |
| | |
China Resources Beer Holdings Co. Ltd. | | | 49,107 | | | | 252,812 | |
| | |
Cia Cervecerias Unidas SA | | | 6,150 | | | | 61,414 | |
| | |
Coca-Cola Embonor SA (Preference), Class B | | | 4,368 | | | | 8,135 | |
| | |
Coca-Cola Femsa SAB de CV | | | 16,400 | | | | 90,426 | |
| | |
Coca-Cola Icecek A/S | | | 360 | | | | 1,969 | |
| | |
Embotelladora Andina SA (Preference), Class B | | | 9,513 | | | | 27,473 | |
| | |
Emperador, Inc.* | | | 145,600 | | | | 20,085 | |
| | |
Fomento Economico Mexicano SAB de CV(a) | | | 57,400 | | | | 511,067 | |
| | |
Fraser & Neave Holdings Bhd. | | | 3,700 | | | | 30,620 | |
| | |
Heineken Malaysia Bhd. | | | 1,900 | | | | 11,622 | |
| | |
Hey Song Corp. | | | 2,000 | | | | 2,086 | |
| | |
Hite Jinro Co. Ltd. | | | 1,790 | | | | 43,771 | |
| | |
Lotte Chilsung Beverage Co. Ltd. | | | 150 | | | | 17,663 | |
| | |
Muhak Co. Ltd. | | | 761 | | | | 5,906 | |
| | |
Osotspa PCL, NVDR | | | 22,400 | | | | 31,528 | |
| | |
Tibet Water Resources Ltd.* | | | 52,000 | | | | 8,559 | |
| | |
Tsingtao Brewery Co. Ltd., Class H | | | 14,000 | | | | 81,363 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 211 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Beverages – (continued) | |
| | |
United Breweries Ltd. | | | 1,379 | | | $ | 24,811 | |
| | |
United Spirits Ltd.* | | | 11,480 | | | | 101,150 | |
| | |
Varun Beverages Ltd. | | | 1,161 | | | | 10,151 | |
| | |
Vina Concha y Toro SA | | | 1,616 | | | | 2,977 | |
| | | | | | | | 2,187,133 | |
|
| Biotechnology – 0.4% | |
| | |
3SBio, Inc.* (b) | | | 33,480 | | | | 62,623 | |
| | |
ABLBio, Inc.* | | | 1,133 | | | | 18,698 | |
| | |
Alteogen, Inc.* | | | 574 | | | | 21,264 | |
| | |
Amicogen, Inc.* | | | 514 | | | | 9,896 | |
| | |
Anterogen Co. Ltd.* | | | 328 | | | | 13,631 | |
| | |
BeiGene Ltd.* | | | 15,300 | | | | 162,805 | |
| | |
Biocon Ltd. | | | 9,530 | | | | 33,066 | |
| | |
Celltrion, Inc.* | | | 3,609 | | | | 620,396 | |
| | |
China Biologic Products Holdings, Inc.* (a) | | | 492 | | | | 56,108 | |
| | |
Genexine Co. Ltd.* | | | 650 | | | | 31,398 | |
| | |
Green Cross Cell Corp. | | | 258 | | | | 9,591 | |
| | |
Green Cross Corp. | | | 300 | | | | 33,134 | |
| | |
Green Cross Holdings Corp. | | | 1,787 | | | | 31,948 | |
| | |
Helixmith Co. Ltd.* | | | 729 | | | | 60,653 | |
| | |
Hugel, Inc.* | | | 104 | | | | 32,627 | |
| | |
Innovent Biologics, Inc.* (b) | | | 23,000 | | | | 70,135 | |
| | |
iNtRON Biotechnology, Inc.* | | | 920 | | | | 10,240 | |
| | |
Medy-Tox, Inc. | | | 169 | | | | 47,935 | |
| | |
OBI Pharma, Inc.* | | | 2,584 | | | | 11,332 | |
| | |
PharmaEngine, Inc. | | | 4,172 | | | | 9,991 | |
| | |
PharmaEssentia Corp.* | | | 9,000 | | | | 33,853 | |
| | |
Seegene, Inc.* | | | 999 | | | | 18,246 | |
| | |
SillaJen, Inc.* | | | 2,522 | | | | 41,728 | |
| | |
STCUBE* | | | 750 | | | | 7,091 | |
| | |
TaiMed Biologics, Inc.* | | | 8,000 | | | | 35,085 | |
| | |
Tanvex BioPharma, Inc.* | | | 9,000 | | | | 15,227 | |
| | |
Zai Lab Ltd., ADR* | | | 700 | | | | 23,653 | |
| | | | | | | | 1,522,354 | |
|
| Building Products – 0.2% | |
| | |
Astral Poly Technik Ltd. | | | 2,278 | | | | 35,873 | |
| | |
China Lesso Group Holdings Ltd. | | | 82,000 | | | | 84,849 | |
| | |
Elementia SAB de CV* (a) (b) | | | 10,400 | | | | 4,774 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Building Products – (continued) | |
| | |
IS Dongseo Co. Ltd. | | | 1,106 | | | $ | 30,372 | |
| | |
Kajaria Ceramics Ltd. | | | 2,608 | | | | 20,528 | |
| | |
KCC Corp. | | | 203 | | | | 39,433 | |
| | |
Kyung Dong Navien Co. Ltd. | | | 208 | | | | 7,848 | |
| | |
LG Hausys Ltd. | | | 6,150 | | | | 314,517 | |
| | |
Taiwan Glass Industry Corp. | | | 56,000 | | | | 21,340 | |
| | |
Trakya Cam Sanayii A/S | | | 407,950 | | | | 209,954 | |
| | | | | | | | 769,488 | |
|
| Capital Markets – 2.1% | |
| | |
B3 SA – Brasil Bolsa Balcao | | | 68,300 | | | | 823,125 | |
| | |
Banco BTG Pactual SA* | | | 5,200 | | | | 84,145 | |
| | |
Bolsa Mexicana de Valores SAB de CV | | | 6,900 | | | | 15,181 | |
| | |
Brait SE* (a) | | | 300,612 | | | | 341,652 | |
| | |
Bursa Malaysia Bhd. | | | 17,700 | | | | 25,628 | |
| | |
Capital Securities Corp. | | | 103,000 | | | | 31,130 | |
| | |
China Cinda Asset Management Co. Ltd., Class H | | | 656,000 | | | | 136,428 | |
| | |
China Ding Yi Feng Holdings Ltd.(c) | | | 40,000 | | | | 117,892 | |
| | |
China Everbright Ltd. | | | 72,000 | | | | 106,929 | |
| | |
China Galaxy Securities Co. Ltd., Class H | | | 246,000 | | | | 125,861 | |
| | |
China Huarong Asset Management Co. Ltd., Class H(b) | | | 656,000 | | | | 97,090 | |
| | |
China International Capital Corp. Ltd., Class H(a) (b) | | | 32,800 | | | | 60,011 | |
| | |
China Merchants Securities Co. Ltd., Class H(a) (b) | | | 754,400 | | | | 856,649 | |
| | |
CITIC Securities Co. Ltd., Class H(a) | | | 164,000 | | | | 302,150 | |
| | |
Coronation Fund Managers Ltd. | | | 7,009 | | | | 19,808 | |
| | |
CSC Financial Co. Ltd., Class H(b) | | | 820,000 | | | | 570,193 | |
| | |
Daishin Securities Co. Ltd. | | | 4,440 | | | | 47,512 | |
| | |
Daishin Securities Co. Ltd. (Preference) | | | 1,603 | | | | 12,882 | |
| | |
Daou Technology, Inc. | | | 2,355 | | | | 36,637 | |
| | |
Dubai Financial Market PJSC* | | | 67,052 | | | | 16,193 | |
See Accompanying Notes to the Financial Statements.
| | |
| 212 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Capital Markets – (continued) | |
| | |
Edelweiss Financial Services Ltd. | | | 11,236 | | | $ | 14,637 | |
| | |
Egyptian Financial Group-Hermes Holding Co. | | | 588,924 | | | | 688,538 | |
| | |
Everbright Securities Co. Ltd., Class H(b) | | | 295,200 | | | | 209,789 | |
| | |
GF Securities Co. Ltd., Class H | | | 98,400 | | | | 102,823 | |
| | |
Guotai Junan International Holdings Ltd.(a) | | | 2,706,000 | | | | 455,736 | |
| | |
Guotai Junan Securities Co. Ltd., Class H(b) | | | 19,600 | | | | 30,009 | |
| | |
Haitong Securities Co. Ltd., Class H | | | 229,600 | | | | 235,233 | |
| | |
Hanwha Investment & Securities Co. Ltd.* | | | 168,838 | | | | 290,962 | |
| | |
HDFC Asset Management Co. Ltd.(b) | | | 862 | | | | 36,390 | |
| | |
Huatai Securities Co. Ltd., Class H(b) | | | 49,200 | | | | 73,319 | |
| | |
IBF Financial Holdings Co. Ltd. | | | 47,398 | | | | 16,972 | |
| | |
Indiabulls Ventures Ltd. | | | 9,273 | | | | 13,185 | |
| | |
Investec Ltd. | | | 10,414 | | | | 59,400 | |
| | |
Jih Sun Financial Holdings Co. Ltd. | | | 99,410 | | | | 31,253 | |
| | |
JM Financial Ltd. | | | 11,544 | | | | 12,695 | |
| | |
JSE Ltd. | | | 4,205 | | | | 36,290 | |
| | |
KIWOOM Securities Co. Ltd. | | | 927 | | | | 55,136 | |
| | |
Korea Investment Holdings Co. Ltd. | | | 3,034 | | | | 176,806 | |
| | |
Kresna Graha Investama Tbk. PT* | | | 187,300 | | | | 6,672 | |
| | |
Macquarie Korea Infrastructure Fund | | | 12,300 | | | | 125,278 | |
| | |
Meritz Securities Co. Ltd. | | | 24,108 | | | | 93,452 | |
| | |
Mirae Asset Daewoo Co. Ltd. | | | 27,716 | | | | 170,329 | |
| | |
Moscow ExchangeMICEX-RTS PJSC | | | 44,491 | | | | 65,989 | |
| | |
NH Investment & Securities Co. Ltd. | | | 5,986 | | | | 62,255 | |
| | |
NH Investment & Securities Co. Ltd. (Preference) | | | 5,853 | | | | 45,025 | |
| | |
Noah Holdings Ltd., ADR* (a) | | | 800 | | | | 24,232 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Capital Markets – (continued) | |
| | |
Orient Securities Co. Ltd., Class H(a) (b) | | | 721,600 | | | $ | 404,178 | |
| | |
Pioneers Holding for Financial Investments SAE* | | | 410,738 | | | | 143,784 | |
| | |
PSG Konsult Ltd. | | | 3,256 | | | | 1,924 | |
| | |
Reinet Investments SCA | | | 8,692 | | | | 163,627 | |
| | |
Samsung Securities Co. Ltd. | | | 4,592 | | | | 132,615 | |
| | |
Shinyoung Securities Co. Ltd. | | | 3,034 | | | | 143,948 | |
| | |
Sociedad de Inversiones Oro Blanco SA | | | 33,725,935 | | | | 104,224 | |
| | |
Warsaw Stock Exchange | | | 1,040 | | | | 10,523 | |
| | |
Yuanta Financial Holding Co. Ltd. | | | 820,000 | | | | 513,165 | |
| | |
Yuanta Securities Korea Co. Ltd.* | | | 87,740 | | | | 193,813 | |
| | | | | | | | 8,771,302 | |
|
| Chemicals – 3.3% | |
| | |
Advanced Petrochemical Co. | | | 4,151 | | | | 51,468 | |
| | |
AECI Ltd. | | | 114,472 | | | | 742,071 | |
| | |
AK Holdings, Inc. | | | 5,576 | | | | 150,010 | |
| | |
Akzo Nobel India Ltd. | | | 832 | | | | 24,845 | |
| | |
Alpek SAB de CV(a) | | | 14,100 | | | | 15,238 | |
| | |
Asian Paints Ltd. | | | 9,840 | | | | 251,047 | |
| | |
Barito Pacific Tbk. PT | | | 2,017,200 | | | | 136,521 | |
| | |
BASF India Ltd. | | | 836 | | | | 11,834 | |
| | |
Batu Kawan Bhd. | | | 18,800 | | | | 70,188 | |
| | |
Berger Paints India Ltd. | | | 10,816 | | | | 80,355 | |
| | |
Braskem SA (Preference), Class A | | | 7,700 | | | | 53,131 | |
| | |
Castrol India Ltd. | | | 9,090 | | | | 19,499 | |
| | |
Chambal Fertilizers and Chemicals Ltd. | | | 5,408 | | | | 12,988 | |
| | |
Chandra Asri Petrochemical Tbk. PT | | | 51,500 | | | | 34,854 | |
| | |
China General Plastics Corp. | | | 380,412 | | | | 281,180 | |
| | |
China Lumena New Materials Corp.*‡ (c) | | | 888,000 | | | | — | |
| | |
ChinaMan-Made Fiber Corp. | | | 1,312,425 | | | | 350,952 | |
| | |
China Petrochemical Development Corp. | | | 179,235 | | | | 59,764 | |
| | |
China Risun Group Ltd., Class H(a) (b) | | | 984,000 | | | | 364,086 | |
| | |
China Steel Chemical Corp. | | | 8,000 | | | | 33,245 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 213 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Chemicals – (continued) | |
| | |
Ciech SA* | | | 27,224 | | | $ | 231,208 | |
| | |
Coromandel International Ltd. | | | 1,898 | | | | 12,721 | |
| | |
D&L Industries, Inc. | | | 110,800 | | | | 18,625 | |
| | |
DCM Shriram Ltd. | | | 38,294 | | | | 198,573 | |
| | |
Dongjin Semichem Co. Ltd. | | | 206 | | | | 2,957 | |
| | |
Dongyue Group Ltd. | | | 1,148,000 | | | | 539,015 | |
| | |
Eastern Polymer Group PCL, NVDR | | | 52,200 | | | | 12,879 | |
| | |
Ecopro Co. Ltd.* | | | 624 | | | | 11,156 | |
| | |
Egypt Kuwait Holding Co. SAE | | | 36,677 | | | | 50,944 | |
| | |
Engro Corp. Ltd. | | | 34,170 | | | | 65,043 | |
| | |
Engro Fertilizers Ltd. | | | 592,000 | | | | 271,357 | |
| | |
Eternal Materials Co. Ltd. | | | 46,010 | | | | 39,147 | |
| | |
Fauji Fertilizer Co. Ltd. | | | 61,000 | | | | 36,925 | |
| | |
Finolex Industries Ltd. | | | 145 | | | | 1,237 | |
| | |
Foosung Co. Ltd.* | | | 1,768 | | | | 12,826 | |
| | |
Formosa Chemicals & Fibre Corp. | | | 138,000 | | | | 401,662 | |
| | |
Formosa Plastics Corp. | | | 143,000 | | | | 459,434 | |
| | |
Fufeng Group Ltd.* (a) | | | 1,066,000 | | | | 492,354 | |
| | |
GFL Ltd. | | | 1,704 | | | | 2,022 | |
| | |
Grand Pacific Petrochemical* | | | 738,000 | | | | 446,090 | |
| | |
Grupa Azoty SA* | | | 3,090 | | | | 28,397 | |
| | |
Gujarat Narmada Valley Fertilizers & Chemicals Ltd. | | | 38,950 | | | | 118,917 | |
| | |
Hansol Chemical Co. Ltd. | | | 528 | | | | 42,569 | |
| | |
Hanwha Chemical Corp. | | | 7,954 | | | | 111,778 | |
| | |
Himadri Speciality Chemical Ltd. | | | 7,638 | | | | 8,120 | |
| | |
Huabao International Holdings Ltd. | | | 820,000 | | | | 300,267 | |
| | |
Huchems Fine Chemical Corp. | | | 398 | | | | 7,560 | |
| | |
Indorama Ventures PCL, NVDR | | | 147,600 | | | | 136,870 | |
| | |
International CSRC Investment Holdings Co. | | | 70,095 | | | | 75,413 | |
| | |
Kansai Nerolac Paints Ltd. | | | 2,196 | | | | 17,196 | |
| | |
Kolon Industries, Inc. | | | 822 | | | | 33,383 | |
| | |
Korea Petrochemical Ind Co. Ltd. | | | 420 | | | | 42,958 | |
| | |
Kumho Petrochemical Co. Ltd. | | | 1,312 | | | | 78,938 | |
| | |
LG Chem Ltd. | | | 1,558 | | | | 411,780 | |
| | |
LG Chem Ltd. (Preference) | | | 396 | | | | 58,543 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Chemicals – (continued) | |
| | |
Lotte Chemical Corp. | | | 1,230 | | | $ | 239,985 | |
| | |
Lotte Chemical Titan Holding Bhd.(b) | | | 41,200 | | | | 24,453 | |
| | |
LOTTE Fine Chemical Co. Ltd. | | | 1,313 | | | | 49,881 | |
| | |
Misr Fertilizers Production Co. SAE | | | 1,204 | | | | 5,265 | |
| | |
Miwon Specialty Chemical Co. Ltd. | | | 2,870 | | | | 176,130 | |
| | |
Namhae Chemical Corp. | | | 1,040 | | | | 7,419 | |
| | |
Nan Ya Plastics Corp. | | | 183,000 | | | | 432,844 | |
| | |
National Industrialization Co.* | | | 14,935 | | | | 48,664 | |
| | |
OCI Co. Ltd. | | | 721 | | | | 38,980 | |
| | |
Orbia Advance Corp. SAB de CV(a) | | | 41,000 | | | | 88,771 | |
| | |
Oriental Union Chemical Corp. | | | 34,000 | | | | 24,573 | |
| | |
Petkim Petrokimya Holding A/S* | | | 90,370 | | | | 54,419 | |
| | |
Petronas Chemicals Group Bhd. | | | 106,600 | | | | 190,571 | |
| | |
PhosAgro PJSC | | | 1,080 | | | | 40,910 | |
| | |
PI Industries Ltd. | | | 1,268 | | | | 25,537 | |
| | |
Pidilite Industries Ltd. | | | 4,100 | | | | 81,019 | |
| | |
PTT Global Chemical PCL, NVDR | | | 106,600 | | | | 180,050 | |
| | |
Sahara International Petrochemical Co. | | | 12,874 | | | | 56,435 | |
| | |
Sasa Polyester Sanayi A/S | | | 125,952 | | | | 153,456 | |
| | |
Sasol Ltd. | | | 19,926 | | | | 362,804 | |
| | |
Saudi Arabian Fertilizer Co. | | | 6,150 | | | | 128,074 | |
| | |
Saudi Basic Industries Corp. | | | 30,794 | | | | 720,111 | |
| | |
Saudi Industrial Investment Group | | | 16,646 | | | | 93,565 | |
| | |
Saudi Kayan Petrochemical Co.* | | | 26,732 | | | | 72,848 | |
| | |
Scientex Bhd. | | | 8,700 | | | | 19,155 | |
| | |
Shinkong Synthetic Fibers Corp. | | | 1,476,000 | | | | 540,642 | |
| | |
Sidi Kerir Petrochemicals Co. | | | 120,376 | | | | 86,217 | |
| | |
Sinofert Holdings Ltd.* | | | 172,000 | | | | 17,556 | |
| | |
Sinopec Shanghai Petrochemical Co. Ltd., Class H | | | 232,000 | | | | 64,529 | |
| | |
SK Chemicals Co. Ltd. | | | 213 | | | | 8,641 | |
| | |
SK Discovery Co. Ltd. | | | 11,972 | | | | 231,012 | |
| | |
SK Materials Co. Ltd. | | | 65 | | | | 10,235 | |
See Accompanying Notes to the Financial Statements.
| | |
| 214 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Chemicals – (continued) | |
| | |
SKC Co. Ltd. | | | 956 | | | $ | 36,442 | |
| | |
SKCKOLONPI, Inc. | | | 520 | | | | 15,375 | |
| | |
Sociedad Quimica y Minera de Chile SA (Preference), Class B | | | 3,526 | | | | 93,739 | |
| | |
Soda Sanayii A/S | | | 30,857 | | | | 29,601 | |
| | |
Solar Industries India Ltd. | | | 1,040 | | | | 15,605 | |
| | |
Songwon Industrial Co. Ltd. | | | 16,974 | | | | 225,406 | |
| | |
Soulbrain Co. Ltd. | | | 846 | | | | 54,827 | |
| | |
SRF Ltd. | | | 774 | | | | 31,605 | |
| | |
Supreme Industries Ltd. | | | 1,204 | | | | 19,761 | |
| | |
Taekwang Industrial Co. Ltd. | | | 30 | | | | 28,287 | |
| | |
Taiwan Fertilizer Co. Ltd. | | | 37,000 | | | | 58,951 | |
| | |
Taiwan Styrene Monomer | | | 410,000 | | | | 290,928 | |
| | |
Tata Chemicals Ltd. | | | 1,541 | | | | 13,618 | |
| | |
TOA Paint Thailand PCL, NVDR | | | 12,000 | | | | 17,884 | |
| | |
TSRC Corp. | | | 34,000 | | | | 27,086 | |
| | |
Unid Co. Ltd. | | | 6,232 | | | | 250,148 | |
| | |
Unipar Carbocloro SA (Preference) | | | 41,000 | | | | 296,286 | |
| | |
UPL Ltd. | | | 18,829 | | | | 158,336 | |
| | |
Yanbu National Petrochemical Co. | | | 9,102 | | | | 120,865 | |
| | | | | | | | 13,581,641 | |
|
| Commercial Services & Supplies – 0.1% | |
| | |
China Everbright International Ltd. | | | 270,444 | | | | 204,618 | |
| | |
Cleanaway Co. Ltd. | | | 3,000 | | | | 15,571 | |
| | |
Country Garden Services Holdings Co. Ltd. | | | 45,887 | | | | 156,026 | |
| | |
ECOVE Environment Corp. | | | 1,000 | | | | 6,981 | |
| | |
Greentown Service Group Co. Ltd.(b) | | | 30,000 | | | | 34,104 | |
| | |
KEPCO Plant Service & Engineering Co. Ltd. | | | 1,144 | | | | 32,055 | |
| | |
S-1 Corp. | | | 738 | | | | 59,436 | |
| | |
Sunny Friend Environmental Technology Co. Ltd. | | | 3,000 | | | | 25,919 | |
| | |
Taiwan Secom Co. Ltd. | | | 11,165 | | | | 31,947 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Commercial Services & Supplies – (continued) | |
| | |
Taiwan Shin Kong Security Co. Ltd. | | | 8,240 | | | $ | 10,165 | |
| | | | | | | | 576,822 | |
|
| Communications Equipment – 0.1% | |
| | |
Accton Technology Corp. | | | 17,000 | | | | 101,362 | |
| | |
Advanced Ceramic X Corp. | | | 1,000 | | | | 8,278 | |
| | |
BYD Electronic International Co. Ltd.(a) | | | 40,000 | | | | 69,000 | |
| | |
KMW Co. Ltd.* | | | 618 | | | | 28,471 | |
| | |
Sterlite Technologies Ltd. | | | 5,616 | | | | 10,360 | |
| | |
Wistron NeWeb Corp. | | | 10,093 | | | | 25,199 | |
| | |
Yangtze Optical Fibre and Cable Joint Stock Ltd. Co., Class H(b) | | | 6,000 | | | | 9,462 | |
| | |
ZTE Corp., Class H* (a) | | | 23,400 | | | | 65,683 | |
| | | | | | | | 317,815 | |
|
| Construction & Engineering – 1.5% | |
| | |
Acter Group Corp. Ltd. | | | 52,000 | | | | 286,986 | |
| | |
BES Engineering Corp. | | | 55,000 | | | | 14,671 | |
| | |
Budimex SA | | | 460 | | | | 15,916 | |
| | |
CH Karnchang PCL, NVDR | | | 737 | | | | 498 | |
| | |
China Communications Construction Co. Ltd., Class H | | | 328,000 | | | | 249,839 | |
| | |
China Communications Services Corp. Ltd., Class H | | | 94,000 | | | | 58,168 | |
| | |
China Energy Engineering Corp. Ltd., Class H | | | 6,232,000 | | | | 628,154 | |
| | |
China Railway Construction Corp. Ltd., Class H | | | 144,000 | | | | 157,638 | |
| | |
China Railway Group Ltd., Class H | | | 295,000 | | | | 178,031 | |
| | |
China State Construction International Holdings Ltd. | | | 108,000 | | | | 99,488 | |
| | |
Continental Holdings Corp. | | | 397,000 | | | | 195,628 | |
| | |
CTCI Corp. | | | 23,000 | | | | 30,903 | |
| | |
Daelim Industrial Co. Ltd. | | | 2,050 | | | | 160,342 | |
| | |
Daewoo Engineering & Construction Co. Ltd.* | | | 17,548 | | | | 65,685 | |
| | |
Dilip Buildcon Ltd.(b) | | | 1,768 | | | | 10,774 | |
| | |
Ellaktor SA* | | | 120,294 | | | | 246,671 | |
| | |
Engineers India Ltd. | | | 7,880 | | | | 13,287 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 215 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Construction & Engineering – (continued) | |
| | |
Gamuda Bhd. | | | 79,600 | | | $ | 71,247 | |
| | |
GEK Terna Holding Real Estate Construction SA* | | | 56,744 | | | | 431,750 | |
| | |
GS Engineering & Construction Corp. | | | 5,166 | | | | 137,204 | |
| | |
HDC Holdings Co. Ltd. | | | 2,399 | | | | 24,434 | |
| | |
HDC Hyundai DevelopmentCo-Engineering & Construction, Class E | | | 1,236 | | | | 32,880 | |
| | |
Hyundai Engineering & Construction Co. Ltd. | | | 5,412 | | | | 199,790 | |
| | |
IJM Corp. Bhd. | | | 86,400 | | | | 44,456 | |
| | |
IRB Infrastructure Developers Ltd.* | | | 136,120 | | | | 151,897 | |
| | |
Kalpataru Power Transmission Ltd. | | | 542 | | | | 3,297 | |
| | |
KEC International Ltd. | | | 516 | | | | 1,972 | |
| | |
KEPCO Engineering & Construction Co., Inc. | | | 602 | | | | 10,633 | |
| | |
Kumho Industrial Co. Ltd. | | | 20,664 | | | | 214,908 | |
| | |
Larsen & Toubro Ltd. | | | 11,266 | | | | 233,962 | |
| | |
Larsen & Toubro Ltd., GDR(b) | | | 296 | | | | 6,246 | |
| | |
Malaysian Resources Corp. Bhd. | | | 83,200 | | | | 14,734 | |
| | |
Metallurgical Corp. of China Ltd., Class H | | | 2,870,000 | | | | 607,857 | |
| | |
NCC Ltd. | | | 15,600 | | | | 12,712 | |
| | |
PP Persero Tbk. PT | | | 3,107,800 | | | | 392,986 | |
| | |
Samsung Engineering Co. Ltd.* | | | 5,949 | | | | 91,016 | |
| | |
Sinopec Engineering Group Co. Ltd., Class H | | | 1,394,000 | | | | 798,584 | |
| | |
Sino-Thai Engineering & Construction PCL, NVDR | | | 41,571 | | | | 23,129 | |
| | |
Taeyoung Engineering & Construction Co. Ltd. | | | 2,884 | | | | 32,225 | |
| | |
Tekfen Holding A/S | | | 15,056 | | | | 44,673 | |
| | |
Totalindo Eka Persada Tbk. PT* | | | 262,900 | | | | 10,957 | |
| | |
United Integrated Services Co. Ltd. | | | 5,000 | | | | 26,034 | |
| | |
Voltas Ltd. | | | 1,251 | | | | 12,496 | |
| | |
Waskita Karya Persero Tbk. PT | | | 385,600 | | | | 42,716 | |
| | |
Wijaya Karya Persero Tbk. PT | | | 164,800 | | | | 23,246 | |
| | | | | | | | 6,110,720 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Construction Materials – 1.8% | |
| | |
ACC Ltd. | | | 1,926 | | | $ | 42,579 | |
| | |
Ambuja Cements Ltd. | | | 21,648 | | | | 61,743 | |
| | |
Anhui Conch Cement Co. Ltd., Class H | | | 84,000 | | | | 503,183 | |
| | |
Asia Cement China Holdings Corp. | | | 444,500 | | | | 541,043 | |
| | |
Asia Cement Co. Ltd. | | | 1,312 | | | | 94,500 | |
| | |
Asia Cement Corp. | | | 164,000 | | | | 231,934 | |
| | |
BBMG Corp., Class H | | | 2,132,000 | | | | 612,042 | |
| | |
Cahya Mata Sarawak Bhd. | | | 32,900 | | | | 19,054 | |
| | |
Cementos Argos SA | | | 5,520 | | | | 12,467 | |
| | |
Cementos Argos SA (Preference) | | | 10,296 | | | | 17,676 | |
| | |
Cementos Pacasmayo SAA | | | 4,992 | | | | 10,088 | |
| | |
CEMEX Latam Holdings SA* | | | 7,998 | | | | 10,772 | |
| | |
Cemex SAB de CV | | | 549,400 | | | | 207,186 | |
| | |
Chia Hsin Cement Corp. | | | 492,000 | | | | 307,091 | |
| | |
China National Building Material Co. Ltd., Class H | | | 266,050 | | | | 224,715 | |
| | |
China Resources Cement Holdings Ltd. | | | 164,000 | | | | 179,951 | |
| | |
China Shanshui Cement Group Ltd.* | | | 1,230,000 | | | | 406,458 | |
| | |
Dalmia Bharat Ltd. | | | 1,648 | | | | 18,815 | |
| | |
Eagle Cement Corp. | | | 62,400 | | | | 19,060 | |
| | |
Grasim Industries Ltd. | | | 12,458 | | | | 135,024 | |
| | |
Grupo Argos SA | | | 23,780 | | | | 128,810 | |
| | |
Grupo Argos SA (Preference) | | | 13,791 | | | | 56,986 | |
| | |
Grupo Cementos de Chihuahua SAB de CV(a) | | | 10,300 | | | | 57,770 | |
| | |
Huaxin Cement Co. Ltd., Class B | | | 317,820 | | | | 577,797 | |
| | |
Indocement Tunggal Prakarsa Tbk. PT | | | 57,400 | | | | 81,784 | |
| | |
Lucky Cement Ltd. | | | 10,400 | | | | 23,509 | |
| | |
POSCO Chemical Co. Ltd. | | | 1,144 | | | | 47,247 | |
| | |
PPC Ltd.* | | | 1,620,593 | | | | 414,199 | |
| | |
Prism Johnson Ltd. | | | 10,157 | | | | 11,313 | |
| | |
Qatar National Cement Co. QSC | | | 167,691 | | | | 267,127 | |
| | |
Qatari Investors Group QSC | | | 495,036 | | | | 225,696 | |
| | |
Ramco Cements Ltd. (The) | | | 3,536 | | | | 39,124 | |
| | |
Saudi Cement Co. | | | 3,605 | | | | 65,942 | |
See Accompanying Notes to the Financial Statements.
| | |
| 216 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Construction Materials – (continued) | |
| | |
Semen Indonesia Persero Tbk. PT | | | 98,400 | | | $ | 88,677 | |
| | |
Shree Cement Ltd. | | | 328 | | | | 92,039 | |
| | |
Siam Cement PCL (The), NVDR | | | 8,200 | | | | 99,665 | |
| | |
Siam City Cement PCL, NVDR | | | 4,700 | | | | 33,621 | |
| | |
Southern Province Cement Co. | | | 1,634 | | | | 23,571 | |
| | |
Ssangyong Cement Industrial Co. Ltd. | | | 6,660 | | | | 33,545 | |
| | |
Taiwan Cement Corp. | | | 356,884 | | | | 474,235 | |
| | |
Titan Cement International SA* | | | 1,371 | | | | 29,062 | |
| | |
TPI Polene PCL, NVDR | | | 377,200 | | | | 16,615 | |
| | |
UltraTech Cement Ltd. | | | 3,514 | | | | 205,265 | |
| | |
Waskita Beton Precast Tbk. PT | | | 10,619,000 | | | | 251,158 | |
| | |
West China Cement Ltd. | | | 2,624,000 | | | | 421,838 | |
| | | | | | | | 7,421,976 | |
|
| Consumer Finance – 0.9% | |
| | |
51 Credit Card, Inc.* | | | 697,000 | | | | 147,622 | |
| | |
AEON Credit Service M Bhd. | | | 4,400 | | | | 16,111 | |
| | |
Aju Capital Co. Ltd. | | | 14,760 | | | | 133,207 | |
| | |
Bajaj Finance Ltd. | | | 5,986 | | | | 339,903 | |
| | |
Cholamandalam Investment and Finance Co. Ltd. | | | 9,985 | | | | 42,937 | |
| | |
Gentera SAB de CV(a) | | | 1,049,600 | | | | 1,043,468 | |
| | |
KRUK SA | | | 1 | | | | 38 | |
| | |
Krungthai Card PCL, NVDR | | | 36,800 | | | | 50,578 | |
| | |
LexinFintech Holdings Ltd., ADR* | | | 59,695 | | | | 676,941 | |
| | |
Mahindra & Mahindra Financial Services Ltd. | | | 10,621 | | | | 52,859 | |
| | |
Manappuram Finance Ltd. | | | 18,492 | | | | 44,152 | |
| | |
Muangthai Capital PCL, NVDR | | | 20,600 | | | | 42,299 | |
| | |
Muthoot Finance Ltd. | | | 3,784 | | | | 37,753 | |
| | |
PPDAI Group, Inc., ADR | | | 114,800 | | | | 321,440 | |
| | |
Qudian, Inc., ADR* | | | 3,300 | | | | 22,869 | |
| | |
Safmar Financial Investment | | | 56,908 | | | | 417,453 | |
| | |
Samsung Card Co. Ltd. | | | 2,296 | | | | 66,209 | |
| | |
Shriram Transport Finance Co. Ltd. | | | 4,920 | | | | 78,983 | |
| | |
Srisawad Corp. PCL, NVDR | | | 27,303 | | | | 58,322 | |
| | |
Sundaram Finance Ltd. | | | 1,310 | | | | 29,759 | |
| | |
Transaction Capital Ltd. | | | 17,028 | | | | 24,926 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Consumer Finance – (continued) | |
| | |
Unifin Financiera SAB de CV(a) | | | 139,400 | | | $ | 235,290 | |
| | |
Yixin Group Ltd.* (b) | | | 122,000 | | | | 29,108 | |
| | |
Yulon Finance Corp. | | | 1,100 | | | | 4,083 | |
| | | | | | | | 3,916,310 | |
|
| Containers & Packaging – 0.4% | |
| | |
Cheng Loong Corp. | | | 984,000 | | | | 586,705 | |
| | |
Greatview Aseptic Packaging Co. Ltd. | | | 12,000 | | | | 6,048 | |
| | |
Klabin SA | | | 24,600 | | | | 96,944 | |
| | |
Lock&Lock Co. Ltd. | | | 728 | | | | 7,383 | |
| | |
Taiwan Hon Chuan Enterprise Co. Ltd. | | | 246,000 | | | | 444,474 | |
| | |
Ton Yi Industrial Corp. | | | 738,000 | | | | 294,565 | |
| | |
Vitro SAB de CV, Series A | | | 123,000 | | | | 272,342 | |
| | | | | | | | 1,708,461 | |
|
| Distributors – 0.1% | |
| | |
Dah Chong Hong Holdings Ltd. | | | 820,000 | | | | 374,549 | |
| | |
Inter Cars SA | | | 402 | | | | 20,495 | |
| | | | | | | | 395,044 | |
|
| Diversified Consumer Services – 0.4% | |
| | |
China Education Group Holdings Ltd.(a) (b) | | | 31,000 | | | | 46,435 | |
| | |
China Maple Leaf Educational Systems Ltd.(a) | | | 56,000 | | | | 17,648 | |
| | |
China Yuhua Education Corp. Ltd.(b) | | | 66,000 | | | | 37,978 | |
| | |
Cogna Educacao | | | 57,400 | | | | 138,267 | |
| | |
Curro Holdings Ltd.(a) | | | 7,904 | | | | 9,565 | |
| | |
Daekyo Co. Ltd. | | | 1,248 | | | | 6,586 | |
| | |
Fu Shou Yuan International Group Ltd. | | | 42,000 | | | | 37,136 | |
| | |
Lung Yen Life Service Corp. | | | 14,000 | | | | 27,917 | |
| | |
MegaStudyEdu Co. Ltd. | | | 8,036 | | | | 253,143 | |
| | |
New Oriental Education & Technology Group, Inc., ADR* | | | 4,018 | | | | 490,437 | |
| | |
TAL Education Group, ADR* | | | 12,546 | | | | 537,094 | |
| | |
Virscend Education Co. Ltd.(b) | | | 67,000 | | | | 19,148 | |
| | |
Wisdom Education International Holdings Co. Ltd.(b) | | | 40,000 | | | | 17,199 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 217 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Diversified Consumer Services – (continued) | |
| | |
YDUQS Part | | | 10,800 | | | $ | 105,595 | |
| | | | | | | | 1,744,148 | |
|
| Diversified Financial Services – 0.7% | |
| | |
Aditya Birla Capital Ltd.* | | | 14,160 | | | | 16,340 | |
| | |
Amanat Holdings PJSC | | | 49,192 | | | | 11,853 | |
| | |
Bajaj Holdings & Investment Ltd. | | | 1,005 | | | | 51,996 | |
| | |
Chailease Holding Co. Ltd. | | | 44,827 | | | | 202,484 | |
| | |
China ShandongHi-Speed Financial Group Ltd.* (a) | | | 8,364,000 | | | | 248,646 | |
| | |
Corp. Financiera Colombiana SA* | | | 8,743 | | | | 75,308 | |
| | |
Far East Horizon Ltd. | | | 82,000 | | | | 77,735 | |
| | |
FirstRand Ltd. | | | 120,540 | | | | 522,539 | |
| | |
Grupo de Inversiones Suramericana SA | | | 17,056 | | | | 172,659 | |
| | |
Grupo de Inversiones Suramericana SA (Preference) | | | 7,872 | | | | 72,186 | |
| | |
Haci Omer Sabanci Holding A/S | | | 84,296 | | | | 122,034 | |
| | |
Hankook Technology Group Co. Ltd. | | | 2,460 | | | | 28,122 | |
| | |
IDFC Ltd. | | | 800,484 | | | | 395,565 | |
| | |
Inversiones La Construccion SA | | | 3,744 | | | | 45,346 | |
| | |
L&T Finance Holdings Ltd. | | | 25,376 | | | | 34,203 | |
| | |
Meritz Financial Group, Inc. | | | 4,139 | | | | 44,291 | |
| | |
Metro Pacific Investments Corp. | | | 902,000 | | | | 85,321 | |
| | |
NICE Holdings Co. Ltd. | | | 728 | | | | 12,139 | |
| | |
Power Finance Corp. Ltd.* | | | 43,830 | | | | 67,449 | |
| | |
PSG Group Ltd. | | | 5,740 | | | | 89,986 | |
| | |
REC Ltd. | | | 45,592 | | | | 89,861 | |
| | |
Remgro Ltd. | | | 18,122 | | | | 208,451 | |
| | |
RMB Holdings Ltd. | | | 25,830 | | | | 136,270 | |
| | | | | | | | 2,810,784 | |
|
| Diversified Telecommunication Services – 1.2% | |
| | |
Asia Pacific Telecom Co. Ltd.* | | | 104,000 | | | | 20,499 | |
| | |
Bharti Infratel Ltd. | | | 28,208 | | | | 75,443 | |
| | |
China Telecom Corp. Ltd., Class H | | | 1,044,000 | | | | 444,896 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Diversified Telecommunication Services – (continued) | |
| | |
China Tower Corp. Ltd., Class H(b) | | | 1,570,000 | | | $ | 346,543 | |
| | |
China Unicom Hong Kong Ltd. | | | 208,000 | | | | 206,203 | |
| | |
Chunghwa Telecom Co. Ltd. | | | 126,000 | | | | 463,593 | |
| | |
CITIC Telecom International Holdings Ltd. | | | 1,558,000 | | | | 592,373 | |
| | |
Emirates Telecommunications Group Co. PJSC | | | 60,434 | | | | 272,486 | |
| | |
Hellenic Telecommunications Organization SA | | | 8,446 | | | | 128,150 | |
| | |
Inscobee, Inc.* | | | 5,160 | | | | 11,997 | |
| | |
Jasmine International PCL, NVDR | | | 76,400 | | | | 15,814 | |
| | |
LG Uplus Corp. | | | 15,908 | | | | 183,904 | |
| | |
Link Net Tbk. PT | | | 31,200 | | | | 9,780 | |
| | |
Magyar Telekom Telecommunications plc | | | 416,970 | | | | 622,260 | |
| | |
O2 Czech Republic A/S | | | 3,092 | | | | 29,211 | |
| | |
Oi SA* | | | 409,400 | | | | 96,884 | |
| | |
Ooredoo QPSC | | | 56,744 | | | | 113,769 | |
| | |
Orange Polska SA* | | | 14,014 | | | | 22,959 | |
| | |
Rostelecom PJSC | | | 79,622 | | | | 97,553 | |
| | |
Rostelecom PJSC (Preference) | | | 15,392 | | | | 15,639 | |
| | |
Sarana Menara Nusantara Tbk. PT | | | 963,500 | | | | 45,302 | |
| | |
Telecom Egypt Co. | | | 37,657 | | | | 26,901 | |
| | |
Telefonica Brasil SA (Preference) | | | 15,300 | | | | 202,303 | |
| | |
Telekom Malaysia Bhd. | | | 60,000 | | | | 53,991 | |
| | |
Telekomunikasi Indonesia Persero Tbk. PT | | | 1,590,800 | | | | 465,782 | |
| | |
Telesites SAB de CV* (a) | | | 60,200 | | | | 39,501 | |
| | |
Telkom SA SOC Ltd. | | | 9,348 | | | | 42,906 | |
| | |
TIME dotCom Bhd. | | | 18,200 | | | | 39,767 | |
| | |
Tower Bersama Infrastructure Tbk. PT | | | 81,300 | | | | 36,633 | |
| | |
True Corp. PCL, NVDR | | | 364,800 | | | | 60,407 | |
| | |
Turk Telekomunikasyon A/S* | | | 19,746 | | | | 20,083 | |
| | | | | | | | 4,803,532 | |
|
| Electric Utilities – 1.8% | |
| | |
Adani Transmission Ltd.* | | | 6,748 | | | | 26,077 | |
| | |
Alupar Investimento SA | | | 3,500 | | | | 21,160 | |
| | |
Celsia SA ESP | | | 11,648 | | | | 14,998 | |
See Accompanying Notes to the Financial Statements.
| | |
| 218 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Electric Utilities – (continued) | |
| | |
Centrais Eletricas Brasileiras SA | | | 19,700 | | | $ | 194,134 | |
| | |
Centrais Eletricas Brasileiras SA (Preference), Class B | | | 16,400 | | | | 167,456 | |
| | |
CESC Ltd. | | | 65,272 | | | | 734,634 | |
| | |
CEZ A/S | | | 5,576 | | | | 127,307 | |
| | |
Cia de Transmissao de Energia Eletrica Paulista (Preference) | | | 7,600 | | | | 44,622 | |
| | |
Cia Energetica de Minas Gerais | | | 6,200 | | | | 23,089 | |
| | |
Cia Energetica de Minas Gerais (Preference) | | | 32,800 | | | | 111,528 | |
| | |
Cia Paranaense de Energia | | | 2,600 | | | | 35,576 | |
| | |
Cia Paranaense de Energia (Preference) | | | 8,200 | | | | 113,714 | |
| | |
EDP – Energias do Brasil SA | | | 24,600 | | | | 116,247 | |
| | |
Enea SA* | | | 17,968 | | | | 39,775 | |
| | |
Enel Americas SA | | | 2,686,334 | | | | 502,088 | |
| | |
Enel Chile SA | | | 696,921 | | | | 57,360 | |
| | |
Energa SA* | | | 198,399 | | | | 319,831 | |
| | |
Energisa SA | | | 10,300 | | | | 122,951 | |
| | |
Enerjisa Enerji A/S(b) | | | 247,148 | | | | 267,804 | |
| | |
Engie Energia Chile SA | | | 15,830 | | | | 23,499 | |
| | |
Equatorial Energia SA | | | 6,800 | | | | 172,575 | |
| | |
Federal Grid Co. Unified Energy System PJSC | | | 22,135,298 | | | | 63,741 | |
| | |
First Philippine Holdings Corp. | | | 209,100 | | | | 325,116 | |
| | |
Holding Co. ADMIE IPTO SA | | | 110,782 | | | | 264,491 | |
| | |
Inter RAO UES PJSC | | | 2,370,292 | | | | 159,817 | |
| | |
Interconexion Electrica SA ESP | | | 13,366 | | | | 77,148 | |
| | |
Korea District Heating Corp.* | | | 3,034 | | | | 128,041 | |
| | |
Korea Electric Power Corp.* | | | 17,966 | | | | 392,999 | |
| | |
Light SA | | | 221,400 | | | | 1,097,514 | |
| | |
Manila Electric Co. | | | 10,660 | | | | 71,088 | |
| | |
Mosenergo PJSC | | | 8,284,952 | | | | 293,336 | |
| | |
PGE Polska Grupa Energetyczna SA* | | | 60,844 | | | | 130,619 | |
| | |
Power Grid Corp. of India Ltd. | | | 107,420 | | | | 300,397 | |
| | |
ROSSETI PJSC | | | 2,682,436 | | | | 49,968 | |
| | |
RusHydro PJSC | | | 7,821,324 | | | | 62,232 | |
| | |
Tata Power Co. Ltd. (The) | | | 40,668 | | | | 34,000 | |
| | |
Tauron Polska Energia SA* | | | 1,038,858 | | | | 450,126 | |
| | |
Tenaga Nasional Bhd. | | | 90,200 | | | | 299,192 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Electric Utilities – (continued) | |
| | |
Torrent Power Ltd. | | | 5,978 | | | $ | 23,612 | |
| | |
Transmissora Alianca de Energia Eletrica SA | | | 13,900 | | | | 99,998 | |
| | | | | | | | 7,559,860 | |
|
| Electrical Equipment – 0.4% | |
| | |
ABB India Ltd. | | | 2,058 | | | | 42,321 | |
| | |
AcBel Polytech, Inc. | | | 410,000 | | | | 299,010 | |
| | |
Amara Raja Batteries Ltd. | | | 2,733 | | | | 26,280 | |
| | |
Bharat Heavy Electricals Ltd. | | | 37,473 | | | | 29,876 | |
| | |
Bizlink Holding, Inc. | | | 5,103 | | | | 34,785 | |
| | |
China High Speed Transmission Equipment Group Co. Ltd. | | | 20,000 | | | | 11,815 | |
| | |
Doosan Heavy Industries & Construction Co. Ltd.* | | | 10,271 | | | | 54,204 | |
| | |
Ecopro BM Co. Ltd.* | | | 515 | | | | 22,796 | |
| | |
ElSewedy Electric Co. | | | 56,334 | | | | 46,945 | |
| | |
Feelux Co. Ltd.* | | | 1,427 | | | | 8,573 | |
| | |
Finolex Cables Ltd. | | | 2,600 | | | | 14,050 | |
| | |
Fullshare Holdings Ltd.* | | | 305,000 | | | | 7,705 | |
| | |
Graphite India Ltd. | | | 48,052 | | | | 193,011 | |
| | |
Gunkul Engineering PCL, NVDR | | | 144,480 | | | | 13,972 | |
| | |
Havells India Ltd. | | | 6,888 | | | | 67,187 | |
| | |
HEG Ltd. | | | 15,416 | | | | 215,791 | |
| | |
Honbridge Holdings Ltd.* | | | 208,000 | | | | 13,800 | |
| | |
Kung Long Batteries Industrial Co. Ltd. | | | 5,000 | | | | 23,735 | |
| | |
LS Corp. | | | 1,968 | | | | 82,039 | |
| | |
LS Industrial Systems Co. Ltd. | | | 927 | | | | 39,639 | |
| | |
Shanghai Electric Group Co. Ltd., Class H | | | 54,000 | | | | 16,535 | |
| | |
Shihlin Electric & Engineering Corp. | | | 16,000 | | | | 23,758 | |
| | |
Taihan Electric Wire Co. Ltd.* | | | 7,800 | | | | 4,271 | |
| | |
Teco Electric and Machinery Co. Ltd. | | | 82,000 | | | | 72,867 | |
| | |
V-Guard Industries Ltd. | | | 1,032 | | | | 3,635 | |
| | |
Voltronic Power Technology Corp. | | | 1,389 | | | | 30,800 | |
| | |
Walsin Lihwa Corp. | | | 164,000 | | | | 80,275 | |
| | |
WEG SA | | | 24,600 | | | | 156,262 | |
| | |
Yuyang DNU Co. Ltd.* | | | 2,979 | | | | 14,467 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 219 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Electrical Equipment – (continued) | |
| | |
Zhuzhou CRRC Times Electric Co. Ltd., Class H | | | 21,400 | | | $ | 79,591 | |
| | | | | | | | 1,729,995 | |
|
| Electronic Equipment, Instruments & Components – 3.5% | |
| | |
AAC Technologies Holdings, Inc.(a) | | | 23,500 | | | | 152,915 | |
| | |
Asia Optical Co., Inc. | | | 13,000 | | | | 35,873 | |
| | |
AU Optronics Corp. | | | 656,000 | | | | 168,092 | |
| | |
Aurora Corp. | | | 4,900 | | | | 15,163 | |
| | |
BH Co. Ltd.* | | | 21,648 | | | | 425,164 | |
| | |
Camsing International Holding Ltd.(c) | | | 22,000 | | | | 3,256 | |
| | |
Career Technology MFG. Co. Ltd. | | | 11,330 | | | | 14,106 | |
| | |
Chang Wah Electromaterials, Inc. | | | 26,000 | | | | 146,483 | |
| | |
Chilisin Electronics Corp. | | | 215,490 | | | | 608,799 | |
| | |
China Railway Signal & Communication Corp. Ltd., Class H(b) | | | 43,008 | | | | 25,736 | |
| | |
Chin-Poon Industrial Co. Ltd. | | | 332,000 | | | | 336,466 | |
| | |
Chroma ATE, Inc. | | | 16,000 | | | | 80,156 | |
| | |
Compeq Manufacturing Co. Ltd. | | | 82,000 | | | | 115,159 | |
| | |
Concraft Holding Co. Ltd. | | | 3,512 | | | | 21,978 | |
| | |
Coretronic Corp. | | | 410,000 | | | | 530,675 | |
| | |
Daea TI Co. Ltd. | | | 1,964 | | | | 9,521 | |
| | |
Daeduck Electronics Co. | | | 618 | | | | 5,684 | |
| | |
Delta Electronics, Inc. | | | 68,000 | | | | 299,338 | |
| | |
Dreamtech Co. Ltd.* | | | 15,498 | | | | 87,917 | |
| | |
Elite Material Co. Ltd. | | | 11,000 | | | | 46,074 | |
| | |
FLEXium Interconnect, Inc. | | | 27,138 | | | | 98,066 | |
| | |
Flytech Technology Co. Ltd. | | | 235 | | | | 544 | |
| | |
Foxconn Technology Co. Ltd. | | | 82,000 | | | | 175,634 | |
| | |
General Interface Solution Holding Ltd. | | | 20,000 | | | | 75,229 | |
| | |
Genius Electronic Optical Co. Ltd. | | | 3,000 | | | | 43,363 | |
| | |
G-treeBNT Co. Ltd.* | | | 525 | | | | 10,401 | |
| | |
Hana Microelectronics PCL, NVDR | | | 22,400 | | | | 18,917 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
Electronic Equipment, Instruments & Components –
(continued) | |
| | |
Hannstar Board Corp. | | | 292,343 | | | $ | 428,808 | |
| | |
HannStar Display Corp. | | | 103,000 | | | | 21,926 | |
| | |
Hollysys Automation Technologies Ltd. | | | 1,700 | | | | 23,987 | |
| | |
Holy Stone Enterprise Co. Ltd. | | | 146,000 | | | | 484,420 | |
| | |
Hon Hai Precision Industry Co. Ltd. | | | 902,000 | | | | 2,388,305 | |
| | |
Iljin Materials Co. Ltd.* | | | 936 | | | | 31,617 | |
| | |
Inari Amertron Bhd. | | | 78,000 | | | | 36,774 | |
| | |
Innolux Corp. | | | 656,000 | | | | 145,895 | |
| | |
ITEQ Corp. | | | 7,000 | | | | 35,643 | |
| | |
KCE Electronics PCL, NVDR | | | 27,600 | | | | 13,437 | |
| | |
Kingboard Holdings Ltd. | | | 40,500 | | | | 108,256 | |
| | |
Kingboard Laminates Holdings Ltd. | | | 64,000 | | | | 58,793 | |
| | |
L&F Co. Ltd. | | | 574 | | | | 11,273 | |
| | |
Largan Precision Co. Ltd. | | | 3,300 | | | | 484,585 | |
| | |
LG Display Co. Ltd.* | | | 16,318 | | | | 191,448 | |
| | |
LG Innotek Co. Ltd. | | | 553 | | | | 57,513 | |
| | |
Lotes Co. Ltd. | | | 3,256 | | | | 30,645 | |
| | |
Merry Electronics Co. Ltd. | | | 4,161 | | | | 20,367 | |
| | |
Nichidenbo Corp. | | | 156,000 | | | | 248,550 | |
| | |
Pan-International Industrial Corp. | | | 371,000 | | | | 286,411 | |
| | |
Partron Co. Ltd. | | | 1,768 | | | | 18,007 | |
| | |
Prosperity Dielectrics Co. Ltd. | | | 82,000 | | | | 161,357 | |
| | |
Samsung Electro-Mechanics Co. Ltd. | | | 1,968 | | | | 191,142 | |
| | |
Samsung SDI Co. Ltd. | | | 1,891 | | | | 369,765 | |
| | |
SFA Engineering Corp. | | | 1,204 | | | | 43,257 | |
| | |
Simplo Technology Co. Ltd. | | | 6,200 | | | | 57,233 | |
| | |
Sinbon Electronics Co. Ltd. | | | 3,253 | | | | 13,144 | |
| | |
Sunny Optical Technology Group Co. Ltd. | | | 23,200 | | | | 375,335 | |
| | |
Supreme Electronics Co. Ltd. | | | 365,000 | | | | 348,327 | |
| | |
Synnex Technology International Corp. | | | 100,000 | | | | 119,413 | |
| | |
TA-I Technology Co. Ltd. | | | 108,750 | | | | 144,688 | |
| | |
Taiwan PCB Techvest Co. Ltd. | | | 246,000 | | | | 295,777 | |
| | |
Taiwan Union Technology Corp. | | | 7,000 | | | | 30,814 | |
| | |
Telcon RF Pharmaceutical, Inc.* | | | 2,328 | | | | 13,246 | |
See Accompanying Notes to the Financial Statements.
| | |
| 220 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
Electronic Equipment, Instruments & Components –
(continued) | |
| | |
Test Research, Inc. | | | 164,000 | | | $ | 274,766 | |
| | |
Thinking Electronic Industrial Co. Ltd. | | | 82,000 | | | | 220,890 | |
| | |
Tong Hsing Electronic Industries Ltd. | | | 6,000 | | | | 26,708 | |
| | |
Tongda Group Holdings Ltd.(a) | | | 4,390,000 | | | | 358,473 | |
| | |
Tripod Technology Corp. | | | 39,000 | | | | 151,180 | |
| | |
Unimicron Technology Corp. | | | 57,000 | | | | 88,289 | |
| | |
Unitech Printed Circuit Board Corp. | | | 597,000 | | | | 652,100 | |
| | |
VS Industry Bhd. | | | 1,279,200 | | | | 428,594 | |
| | |
Wah Lee Industrial Corp. | | | 185,000 | | | | 328,181 | |
| | |
Walsin Technology Corp. | | | 25,378 | | | | 152,982 | |
| | |
Wintek Corp.*‡ (c) | | | 64,000 | | | | — | |
| | |
WiSoL Co. Ltd. | | | 19,762 | | | | 253,087 | |
| | |
WPG Holdings Ltd. | | | 108,440 | | | | 137,507 | |
| | |
WT Microelectronics Co. Ltd. | | | 27,182 | | | | 31,075 | |
| | |
Yageo Corp. | | | 19,575 | | | | 201,920 | |
| | |
Zhen Ding Technology Holding Ltd. | | | 43,150 | | | | 205,540 | |
| | | | | | | | 14,352,159 | |
|
| Energy Equipment & Services – 0.2% | |
| | |
China Oilfield Services Ltd., Class H | | | 50,000 | | | | 69,791 | |
| | |
Dialog Group Bhd. | | | 139,400 | | | | 116,097 | |
| | |
Gulf International Services QSC* | | | 937,755 | | | | 435,267 | |
| | |
Sapura Energy Bhd. | | | 195,700 | | | | 12,411 | |
| | |
Serba Dinamik Holdings Bhd. | | | 25,800 | | | | 25,747 | |
| | |
TMK PJSC | | | 385,810 | | | | 320,348 | |
| | |
Yinson Holdings Bhd. | | | 25,000 | | | | 41,343 | |
| | | | | | | | 1,021,004 | |
|
| Entertainment – 0.6% | |
| | |
Alibaba Pictures Group Ltd.* | | | 520,000 | | | | 85,586 | |
| | |
CD Projekt SA | | | 2,378 | | | | 157,141 | |
| | |
CJ CGV Co. Ltd. | | | 670 | | | | 19,436 | |
| | |
Com2uSCorp | | | 520 | | | | 43,935 | |
| | |
Gamania Digital Entertainment Co. Ltd. | | | 6,000 | | | | 11,412 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Entertainment – (continued) | |
| | |
iDreamSky Technology Holdings Ltd.* (b) | | | 492,000 | | | $ | 280,598 | |
| | |
IMAX China Holding, Inc.(b) | | | 1,900 | | | | 4,315 | |
| | |
International Games System Co. Ltd. | | | 2,000 | | | | 25,755 | |
| | |
iQIYI, Inc., ADR* (a) | | | 8,605 | | | | 149,985 | |
| | |
Jcontentree Corp.* | | | 239 | | | | 7,642 | |
| | |
JYP Entertainment Corp. | | | 1,093 | | | | 21,044 | |
| | |
Major Cineplex Group PCL, NVDR | | | 25,300 | | | | 20,612 | |
| | |
Nan Hai Corp. Ltd. | | | 16,400,000 | | | | 217,615 | |
| | |
NCSoft Corp. | | | 574 | | | | 254,574 | |
| | |
NetDragon Websoft Holdings Ltd. | | | 12,000 | | | | 27,467 | |
| | |
NetEase, Inc., ADR | | | 2,378 | | | | 679,775 | |
| | |
Netmarble Corp.* (b) | | | 1,394 | | | | 107,715 | |
| | |
NHN Corp.* | | | 624 | | | | 30,947 | |
| | |
Pearl Abyss Corp.* | | | 312 | | | | 58,085 | |
| | |
PVR Ltd. | | | 1,040 | | | | 26,055 | |
| | |
SM Entertainment Co. Ltd.* | | | 831 | | | | 26,499 | |
| | |
SMI Holdings Group Ltd.* (c) | | | 72,000 | | | | 21,496 | |
| | |
Soft-World International Corp. | | | 5,000 | | | | 12,582 | |
| | |
Studio Dragon Corp.* | | | 480 | | | | 32,180 | |
| | |
Webzen, Inc.* | | | 474 | | | | 6,783 | |
| | |
Wemade Co. Ltd. | | | 723 | | | | 16,344 | |
| | |
XPEC Entertainment, Inc.*‡ (c) | | | 14,800 | | | | — | |
| | | | | | | | 2,345,578 | |
|
| Equity Real Estate Investment Trusts (REITs) – 1.0% | |
| | |
Attacq Ltd. | | | 22,672 | | | | 19,732 | |
| | |
Concentradora Fibra Danhos SA de CV | | | 41,600 | | | | 62,969 | |
| | |
CPN Retail Growth Leasehold REIT | | | 76,300 | | | | 89,074 | |
| | |
Emlak Konut Gayrimenkul Yatirim Ortakligi A/S | | | 1,893,298 | | | | 401,028 | |
| | |
Equites Property Fund Ltd. | | | 11,527 | | | | 16,100 | |
| | |
Fibra Uno Administracion SA de CV | | | 114,800 | | | | 174,966 | |
| | |
Fortress REIT Ltd., Class A | | | 84,132 | | | | 117,344 | |
| | |
Fortress REIT Ltd., Class B | | | 37,279 | | | | 22,248 | |
| | |
Growthpoint Properties Ltd. | | | 212,627 | | | | 312,091 | |
| | |
Hyprop Investments Ltd. | | | 1,546 | | | | 6,055 | |
| | |
IGB REIT | | | 68,800 | | | | 31,449 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 221 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Investec Property Fund Ltd. | | | 458,462 | | | $ | 485,139 | |
| | |
KLCCP Stapled Group | | | 18,100 | | | | 34,610 | |
| | |
Korea Asset In Trust Co. Ltd. | | | 47,150 | | | | 137,991 | |
| | |
Macquarie Mexico Real Estate Management SA de CV(b) | | | 19,100 | | | | 27,018 | |
| | |
Pavilion REIT | | | 46,200 | | | | 19,128 | |
| | |
PLA Administradora Industrial S de RL de CV(a) | | | 25,800 | | | | 42,780 | |
| | |
Prologis Property Mexico SA de CV | | | 10,400 | | | | 22,273 | |
| | |
Redefine Properties Ltd. | | | 190,663 | | | | 95,436 | |
| | |
Resilient REIT Ltd. | | | 267,412 | | | | 1,195,086 | |
| | |
SA Corporate Real Estate Ltd.(a) | | | 2,522,296 | | | | 517,403 | |
| | |
Sunway REIT | | | 39,400 | | | | 17,067 | |
| | |
Vukile Property Fund Ltd. | | | 32,833 | | | | 42,154 | |
| | |
YTL Hospitality REIT | | | 43,000 | | | | 13,172 | |
| | |
Yuexiu REIT | | | 56,000 | | | | 37,225 | |
| | | | | | | | 3,939,538 | |
|
| Food & Staples Retailing – 1.1% | |
| | |
Abdullah Al Othaim Markets Co. | | | 1,957 | | | | 36,110 | |
| | |
Al Meera Consumer Goods Co. QSC | | | 1,990 | | | | 8,581 | |
| | |
Almacenes Exito SA | | | 17,802 | | | | 94,321 | |
| | |
Atacadao SA* | | | 15,300 | | | | 72,834 | |
| | |
Avenue Supermarts Ltd.* (b) | | | 3,526 | | | | 99,158 | |
| | |
Berli Jucker PCL | | | 500 | | | | 807 | |
| | |
Berli Jucker PCL, NVDR | | | 48,700 | | | | 78,626 | |
| | |
BGF retail Co. Ltd. | | | 264 | | | | 40,390 | |
| | |
Bid Corp. Ltd. | | | 11,480 | | | | 268,650 | |
| | |
BIM Birlesik Magazalar A/S | | | 15,088 | | | | 124,982 | |
| | |
Cencosud SA | | | 53,546 | | | | 72,766 | |
| | |
Cia Brasileira de Distribuicao (Preference)* | | | 6,300 | | | | 130,240 | |
| | |
Clicks Group Ltd. | | | 9,184 | | | | 149,849 | |
| | |
Cosco Capital, Inc. | | | 3,034,000 | | | | 412,545 | |
| | |
CP ALL PCL, NVDR | | | 147,600 | | | | 381,282 | |
| | |
Dino Polska SA* (b) | | | 1,722 | | | | 67,255 | |
| | |
Dis-Chem Pharmacies Ltd.(b) | | | 17,784 | | | | 28,193 | |
| | |
Dongsuh Cos., Inc. | | | 2,427 | | | | 36,506 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Food & Staples Retailing – (continued) | |
| | |
E-MART, Inc. | | | 1,312 | | | $ | 125,736 | |
| | |
Eurocash SA | | | 4,433 | | | | 25,471 | |
| | |
Grupo Comercial Chedraui SA de CV | | | 10,400 | | | | 14,467 | |
| | |
GS Retail Co. Ltd. | | | 1,264 | | | | 41,556 | |
| | |
Hyundai Greenfood Co. Ltd. | | | 2,808 | | | | 27,031 | |
| | |
InRetail Peru Corp.(b) | | | 1,581 | | | | 55,335 | |
| | |
Magnit PJSC | | | 2,296 | | | | 115,819 | |
| | |
Massmart Holdings Ltd. | | | 5,387 | | | | 15,342 | |
| | |
Migros Ticaret A/S* | | | 94,874 | | | | 340,796 | |
| | |
Organizacion Soriana SAB de CV, Class B | | | 17,200 | | | | 22,330 | |
| | |
Philippine Seven Corp. | | | 12,771 | | | | 37,499 | |
| | |
Pick n Pay Stores Ltd. | | | 14,514 | | | | 63,689 | |
| | |
President Chain Store Corp. | | | 18,000 | | | | 179,760 | |
| | |
Puregold Price Club, Inc. | | | 26,060 | | | | 20,978 | |
| | |
Raia Drogasil SA* | | | 8,200 | | | | 224,691 | |
| | |
Shoprite Holdings Ltd. | | | 14,924 | | | | 134,156 | |
| | |
SMU SA | | | 125,632 | | | | 24,346 | |
| | |
Sok Marketler Ticaret A/S* | | | 7,298 | | | | 11,357 | |
| | |
SPAR Group Ltd. (The) | | | 7,708 | | | | 103,891 | |
| | |
Sumber Alfaria Trijaya Tbk. PT | | | 774,400 | | | | 49,376 | |
| | |
Sun Art Retail Group Ltd. | | | 92,000 | | | | 94,022 | |
| | |
Taiwan FamilyMart Co. Ltd. | | | 3,000 | | | | 21,583 | |
| | |
Taiwan TEA Corp. | | | 8,000 | | | | 4,468 | |
| | |
Wal-Mart de Mexico SAB de CV(a) | | | 172,200 | | | | 518,522 | |
| | | | | | | | 4,375,316 | |
|
| Food Products – 1.8% | |
| | |
Alicorp SAA | | | 18,370 | | | | 50,360 | |
| | |
Almarai Co. JSC | | | 8,938 | | | | 118,926 | |
| | |
Astra Agro Lestari Tbk. PT | | | 20,800 | | | | 16,930 | |
| | |
Astral Foods Ltd. | | | 40,262 | | | | 431,099 | |
| | |
Avanti Feeds Ltd. | | | 2,250 | | | | 14,384 | |
| | |
AVI Ltd. | | | 12,054 | | | | 69,314 | |
| | |
Binggrae Co. Ltd. | | | 321 | | | | 15,175 | |
| | |
BRF SA* | | | 25,200 | | | | 222,911 | |
| | |
Britannia Industries Ltd. | | | 1,886 | | | | 86,859 | |
| | |
Camil Alimentos SA* | | | 131,200 | | | | 211,455 | |
| | |
Century Pacific Food, Inc. | | | 17,700 | | | | 5,232 | |
| | |
Charoen Pokphand Foods PCL, NVDR | | | 106,600 | | | | 89,142 | |
See Accompanying Notes to the Financial Statements.
| | |
| 222 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Food Products – (continued) | |
| | |
Charoen Pokphand Indonesia Tbk. PT | | | 254,400 | | | $ | 114,178 | |
| | |
China Agri-Industries Holdings Ltd. | | | 206,000 | | | | 68,074 | |
| | |
China Foods Ltd. | | | 46,789 | | | | 19,282 | |
| | |
China Huishan Dairy Holdings Co. Ltd.*‡ (c) | | | 158,000 | | | | — | |
| | |
China Huiyuan Juice Group Ltd.* (c) | | | 24,000 | | | | 6,186 | |
| | |
China Mengniu Dairy Co. Ltd.* | | | 98,000 | | | | 391,990 | |
| | |
China Modern Dairy Holdings Ltd.* | | | 2,460,000 | | | | 351,532 | |
| | |
CJ CheilJedang Corp. | | | 206 | | | | 40,458 | |
| | |
CJ CheilJedang Corp. (Preference) | | | 104 | | | | 8,751 | |
| | |
CP Pokphand Co. Ltd. | | | 204,000 | | | | 16,918 | |
| | |
Daesang Corp. | | | 1,133 | | | | 20,889 | |
| | |
Dali Foods Group Co. Ltd.(b) | | | 45,500 | | | | 31,174 | |
| | |
Dongwon F&B Co. Ltd. | | | 79 | | | | 15,550 | |
| | |
Dongwon Industries Co. Ltd. | | | 94 | | | | 17,290 | |
| | |
Dutch Lady Milk Industries Bhd. | | | 700 | | | | 9,730 | |
| | |
Easy Bio, Inc. | | | 43,788 | | | | 199,473 | |
| | |
FGV Holdings Bhd.* | | | 106,100 | | | | 27,931 | |
| | |
Genting Plantations Bhd. | | | 10,400 | | | | 24,740 | |
| | |
GlaxoSmithKline Consumer Healthcare Ltd. | | | 442 | | | | 57,440 | |
| | |
Gruma SAB de CV, Class B | | | 7,790 | | | | 82,016 | |
| | |
Grupo Bimbo SAB de CV, Series A | | | 49,200 | | | | 91,718 | |
| | |
Grupo Lala SAB de CV | | | 16,800 | | | | 16,500 | |
| | |
Grupo Nutresa SA | | | 8,252 | | | | 62,627 | |
| | |
Harim Holdings Co. Ltd. | | | 7 | | | | 54 | |
| | |
Health & Happiness H&H International Holdings Ltd.(a) | | | 10,000 | | | | 39,680 | |
| | |
Hortifrut SA | | | 5,552 | | | | 11,613 | |
| | |
Indofood CBP Sukses Makmur Tbk. PT | | | 57,100 | | | | 47,288 | |
| | |
Indofood Sukses Makmur Tbk. PT | | | 172,200 | | | | 94,460 | |
| | |
Industrias Bachoco SAB de CV, Series B | | | 7,300 | | | | 32,890 | |
| | |
IOI Corp. Bhd. | | | 98,400 | | | | 102,910 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Food Products – (continued) | |
| | |
Japfa Comfeed Indonesia Tbk. PT | | | 350,200 | | | $ | 42,911 | |
| | |
JBS SA | | | 73,800 | | | | 520,078 | |
| | |
Juhayna Food Industries | | | 35,793 | | | | 18,850 | |
| | |
Kernel Holding SA | | | 2,533 | | | | 28,218 | |
| | |
KRBL Ltd. | | | 2,726 | | | | 8,674 | |
| | |
Kuala Lumpur Kepong Bhd. | | | 15,800 | | | | 81,902 | |
| | |
Lien Hwa Industrial Holdings Corp. | | | 23,967 | | | | 27,281 | |
| | |
Lotte Food Co. Ltd. | | | 16 | | | | 5,934 | |
| | |
Mayora Indah Tbk. PT | | | 83,900 | | | | 12,791 | |
| | |
Minerva SA* | | | 139,400 | | | | 359,056 | |
| | |
Namchow Holdings Co. Ltd. | | | 6,000 | | | | 9,777 | |
| | |
Namyang Dairy Products Co. Ltd. | | | 35 | | | | 14,154 | |
| | |
Naturecell Co. Ltd.* | | | 782 | | | | 7,158 | |
| | |
Nestle India Ltd. | | | 738 | | | | 155,521 | |
| | |
Nestle Malaysia Bhd. | | | 1,700 | | | | 58,870 | |
| | |
NongShim Co. Ltd. | | | 208 | | | | 43,264 | |
| | |
Oceana Group Ltd. | | | 2,143 | | | | 9,530 | |
| | |
Orion Corp. | | | 820 | | | | 74,709 | |
| | |
Orion Holdings Corp. | | | 1,890 | | | | 25,667 | |
| | |
Ottogi Corp. | | | 94 | | | | 45,649 | |
| | |
Perusahaan Perkebunan London Sumatra Indonesia Tbk. PT | | | 122,600 | | | | 11,791 | |
| | |
Pioneer Foods Group Ltd.(a) | | | 1,936 | | | | 13,843 | |
| | |
PPB Group Bhd. | | | 21,080 | | | | 91,312 | |
| | |
QL Resources Bhd. | | | 28,330 | | | | 49,358 | |
| | |
RCL Foods Ltd. | | | 6,412 | | | | 4,052 | |
| | |
Samyang Corp. | | | 2,952 | | | | 122,424 | |
| | |
Samyang Foods Co. Ltd. | | | 86 | | | | 6,527 | |
| | |
Samyang Holdings Corp. | | | 5,807 | | | | 316,442 | |
| | |
Sao Martinho SA | | | 7,300 | | | | 31,932 | |
| | |
Savola Group (The)* | | | 9,266 | | | | 76,346 | |
| | |
Sawit Sumbermas Sarana Tbk. PT | | | 135,700 | | | | 7,831 | |
| | |
Sime Darby Plantation Bhd. | | | 88,300 | | | | 103,758 | |
| | |
SLC Agricola SA | | | 90,200 | | | | 406,916 | |
| | |
SPC Samlip Co. Ltd. | | | 191 | | | | 15,087 | |
| | |
Standard Foods Corp. | | | 17,652 | | | | 35,605 | |
| | |
Tata Global Beverages Ltd. | | | 12,584 | | | | 56,241 | |
| | |
Thai Union Group PCL, NVDR | | | 45,100 | | | | 21,807 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 223 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Food Products – (continued) | |
| | |
Thai Vegetable Oil PCL, NVDR | | | 15,570 | | | $ | 13,278 | |
| | |
Tiger Brands Ltd. | | | 6,232 | | | | 88,787 | |
| | |
Tingyi Cayman Islands Holding Corp. | | | 76,000 | | | | 101,234 | |
| | |
Tongaat Hulett Ltd.* (a) (c) | | | 150,870 | | | | 132,306 | |
| | |
Ulker Biskuvi Sanayi A/S | | | 9,138 | | | | 29,417 | |
| | |
Uni-President China Holdings Ltd. | | | 42,000 | | | | 43,406 | |
| | |
Uni-President Enterprises Corp. | | | 174,000 | | | | 429,848 | |
| | |
United Plantations Bhd. | | | 3,700 | | | | 22,084 | |
| | |
Universal Robina Corp. | | | 28,700 | | | | 85,402 | |
| | |
Want Want China Holdings Ltd. | | | 164,000 | | | | 138,520 | |
| | |
Yashili International Holdings Ltd. | | | 34,000 | | | | 3,687 | |
| | |
Yihai International Holding Ltd.* | | | 18,000 | | | | 122,638 | |
| | |
Zhou Hei Ya International Holdings Co. Ltd.(b) | | | 43,000 | | | | 21,671 | |
| | | | | | | | 7,488,673 | |
|
| Gas Utilities – 0.6% | |
| | |
Adani Gas Ltd. | | | 9,888 | | | | 20,507 | |
| | |
Aygaz A/S | | | 91,676 | | | | 174,925 | |
| | |
Beijing Enterprises Holdings Ltd. | | | 33,000 | | | | 155,575 | |
| | |
China Gas Holdings Ltd. | | | 65,600 | | | | 279,970 | |
| | |
China Resources Gas Group Ltd. | | | 26,000 | | | | 156,908 | |
| | |
China Tian Lun Gas Holdings Ltd. | | | 287,000 | | | | 271,339 | |
| | |
ENN Energy Holdings Ltd. | | | 25,900 | | | | 296,748 | |
| | |
GAIL India Ltd. | | | 36,080 | | | | 69,867 | |
| | |
Great Taipei Gas Co. Ltd. | | | 21,000 | | | | 21,421 | |
| | |
Grupo Energia Bogota SA ESP | | | 93,512 | | | | 60,202 | |
| | |
Gujarat State Petronet Ltd. | | | 8,528 | | | | 25,159 | |
| | |
Indraprastha Gas Ltd. | | | 7,224 | | | | 39,879 | |
| | |
Infraestructura Energetica Nova SAB de CV* | | | 21,600 | | | | 95,798 | |
| | |
Korea Gas Corp. | | | 2,050 | | | | 69,247 | |
| | |
Kunlun Energy Co. Ltd. | | | 270,000 | | | | 251,821 | |
| | |
Mahanagar Gas Ltd.(b) | | | 1,456 | | | | 20,933 | |
| | |
Perusahaan Gas Negara Tbk. PT | | | 425,900 | | | | 64,020 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Gas Utilities – (continued) | |
| | |
Petronas Gas Bhd. | | | 27,300 | | | $ | 108,717 | |
| | |
Samchully Co. Ltd. | | | 2,132 | | | | 154,661 | |
| | |
SUI Northern Gas Pipeline | | | 379,400 | | | | 163,516 | |
| | |
Towngas China Co. Ltd.* | | | 58,339 | | | | 45,032 | |
| | |
Zhongyu Gas Holdings Ltd. | | | 10,000 | | | | 9,684 | |
| | | | | | | | 2,555,929 | |
|
| Health Care Equipment & Supplies – 0.1% | |
| | |
Dentium Co. Ltd. | | | 344 | | | | 17,622 | |
| | |
DIO Corp.* | | | 520 | | | | 18,772 | |
| | |
Ginko International Co. Ltd. | | | 3,000 | | | | 17,937 | |
| | |
Hartalega Holdings Bhd. | | | 49,200 | | | | 61,934 | |
| | |
Kossan Rubber Industries | | | 34,400 | | | | 34,165 | |
| | |
Lifetech Scientific Corp.* | | | 82,000 | | | | 13,915 | |
| | |
Microport Scientific Corp.(a) | | | 11,098 | | | | 11,427 | |
| | |
Pihsiang Machinery Manufacturing Co. Ltd.* (c) | | | 5,000 | | | | 2,842 | |
| | |
Shandong Weigao Group Medical Polymer Co. Ltd., Class H | | | 100,000 | | | | 114,957 | |
| | |
St Shine Optical Co. Ltd. | | | 2,000 | | | | 31,307 | |
| | |
Top Glove Corp. Bhd. | | | 59,000 | | | | 61,421 | |
| | |
Value Added Technology Co. Ltd. | | | 510 | | | | 10,959 | |
| | | | | | | | 397,258 | |
|
| Health Care Providers & Services – 0.5% | |
| | |
Apollo Hospitals Enterprise Ltd. | | | 3,529 | | | | 73,875 | |
| | |
Bangkok Chain Hospital PCL, NVDR | | | 4,800 | | | | 2,670 | |
| | |
Bangkok Dusit Medical Services PCL, NVDR | | | 131,200 | | | | 104,282 | |
| | |
Bumrungrad Hospital PCL, NVDR | | | 10,300 | | | | 41,104 | |
| | |
Celltrion Healthcare Co. Ltd.* | | | 2,544 | | | | 120,482 | |
| | |
Chabiotech Co. Ltd.* | | | 1,560 | | | | 20,448 | |
| | |
China Resources Medical Holdings Co. Ltd.(a) | | | 30,000 | | | | 17,263 | |
| | |
Chularat Hospital PCL, NVDR | | | 183,100 | | | | 15,523 | |
| | |
Dr Lal PathLabs Ltd.(b) | | | 430 | | | | 9,321 | |
| | |
Fleury SA | | | 7,200 | | | | 45,646 | |
| | |
Fortis Healthcare Ltd.* | | | 9,651 | | | | 19,974 | |
| | |
Genertec Universal Medical Group Co. Ltd.(b) | | | 1,066,000 | | | | 729,010 | |
See Accompanying Notes to the Financial Statements.
| | |
| 224 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Health Care Providers & Services – (continued) | |
| | |
Global Cord Blood Corp.* | | | 2,900 | | | $ | 14,413 | |
| | |
Hapvida Participacoes e Investimentos SA(b) | | | 5,300 | | | | 74,330 | |
| | |
HLB Life Science Co. Ltd.* | | | 1,132 | | | | 32,011 | |
| | |
IHH Healthcare Bhd. | | | 98,400 | | | | 134,230 | |
| | |
Instituto Hermes Pardini SA | | | 1,800 | | | | 10,425 | |
| | |
KPJ Healthcare Bhd. | | | 145,424 | | | | 32,019 | |
| | |
Life Healthcare Group Holdings Ltd. | | | 53,507 | | | | 84,753 | |
| | |
Medipost Co. Ltd.* | | | 446 | | | | 12,420 | |
| | |
Mitra Keluarga Karyasehat Tbk. PT(b) | | | 157,500 | | | | 29,173 | |
| | |
Mouwasat Medical Services Co. | | | 2,060 | | | | 45,042 | |
| | |
Netcare Ltd. | | | 54,181 | | | | 61,542 | |
| | |
Notre Dame Intermedica Participacoes SA | | | 8,200 | | | | 122,559 | |
| | |
Odontoprev SA | | | 12,000 | | | | 44,211 | |
| | |
Qualicorp Consultoria e Corretora de Seguros SA | | | 6,600 | | | | 52,446 | |
| | |
Shanghai Pharmaceuticals Holding Co. Ltd., Class H | | | 65,600 | | | | 118,684 | |
| | |
Sinopharm Group Co. Ltd., Class H | | | 43,600 | | | | 156,594 | |
| | | | | | | | 2,224,450 | |
|
| Health Care Technology – 0.0%(d) | |
| | |
Alibaba Health Information Technology Ltd.* | | | 128,000 | | | | 129,181 | |
| | |
Ping An Healthcare and Technology Co. Ltd.* (b) | | | 8,200 | | | | 56,287 | |
| | | | | | | | 185,468 | |
|
| Hotels, Restaurants & Leisure – 0.5% | |
| | |
Alsea SAB de CV* (a) | | | 21,900 | | | | 58,622 | |
| | |
Altus San Nicolas Corp.* (c) | | | 2,005 | | | | 205 | |
| | |
AmRest Holdings SE* | | | 4,110 | | | | 50,958 | |
| | |
Ananti, Inc.* | | | 1,058 | | | | 10,367 | |
| | |
Berjaya Sports Toto Bhd. | | | 11,300 | | | | 7,166 | |
| | |
BK Brasil Operacao e Assessoria a Restaurantes SA* | | | 2,800 | | | | 13,043 | |
| | |
Bloomberry Resorts Corp. | | | 88,700 | | | | 17,462 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Hotels, Restaurants & Leisure – (continued) | |
| | |
Central Plaza Hotel PCL | | | 1,600 | | | $ | 1,457 | |
| | |
Central Plaza Hotel PCL, NVDR | | | 31,200 | | | | 28,415 | |
| | |
China Travel International Investment Hong Kong Ltd. | | | 120,200 | | | | 19,017 | |
| | |
Coffee Day Enterprises Ltd.* (b) | | | 1,720 | | | | 741 | |
| | |
CVC Brasil Operadora e Agencia de Viagens SA | | | 5,900 | | | | 75,293 | |
| | |
DoubleUGames Co. Ltd. | | | 312 | | | | 12,872 | |
| | |
Famous Brands Ltd.(a) | | | 4,669 | | | | 24,424 | |
| | |
Formosa International Hotels Corp. | | | 2,311 | | | | 12,299 | |
| | |
Genting Bhd. | | | 172,200 | | | | 239,436 | |
| | |
Genting Malaysia Bhd. | | | 106,600 | | | | 81,892 | |
| | |
Gourmet Master Co. Ltd. | | | 4,868 | | | | 22,229 | |
| | |
Grand Korea Leisure Co. Ltd. | | | 1,040 | | | | 18,995 | |
| | |
Haichang Ocean Park Holdings Ltd.* (b) | | | 49,000 | | | | 5,377 | |
| | |
Haidilao International Holding Ltd.(a) (b) | | | 30,164 | | | | 146,246 | |
| | |
Hana Tour Service, Inc. | | | 403 | | | | 16,817 | |
| | |
Huazhu Group Ltd., ADR(a) | | | 3,608 | | | | 136,599 | |
| | |
Imperial Pacific International Holdings Ltd.* | | | 1,620,000 | | | | 30,177 | |
| | |
Indian Hotels Co. Ltd. (The) | | | 22,940 | | | | 49,160 | |
| | |
Jollibee Foods Corp. | | | 12,380 | | | | 56,600 | |
| | |
Jubilant Foodworks Ltd. | | | 2,807 | | | | 63,356 | |
| | |
Kangwon Land, Inc. | | | 3,936 | | | | 106,058 | |
| | |
Magnum Bhd. | | | 19,400 | | | | 13,000 | |
| | |
Minor International PCL, NVDR | | | 65,600 | | | | 78,212 | |
| | |
MK Restaurants Group PCL, NVDR | | | 10,400 | | | | 26,779 | |
| | |
Modetour Network, Inc. | | | 520 | | | | 7,062 | |
| | |
OPAP SA | | | 5,822 | | | | 63,329 | |
| | |
Paradise Co. Ltd. | | | 2,112 | | | | 33,855 | |
| | |
Saudi Airlines Catering Co. | | | 1,957 | | | | 45,138 | |
| | |
Thomas Cook India Ltd. | | | 2,244 | | | | 4,232 | |
| | |
Travellers International Hotel Group, Inc.(c) | | | 209,900 | | | | 22,419 | |
| | |
Tsogo Sun Gaming Ltd. | | | 18,411 | | | | 15,192 | |
| | |
Xiabuxiabu Catering Management China Holdings Co. Ltd.* (b) | | | 11,500 | | | | 15,377 | |
| | |
Yum China Holdings, Inc. | | | 12,874 | | | | 547,145 | |
| | | | | | | | 2,177,023 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 225 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Household Durables – 0.9% | |
| | |
Arcelik A/S* | | | 19,545 | | | $ | 60,627 | |
| | |
Crompton Greaves Consumer Electricals Ltd. | | | 17,876 | | | | 62,730 | |
| | |
Cyrela Brazil Realty SA Empreendimentos e Participacoes | | | 2,800 | | | | 18,783 | |
| | |
Dom Development SA | | | 8,282 | | | | 184,093 | |
| | |
Ez Tec Empreendimentos e Participacoes SA | | | 3,515 | | | | 36,075 | |
| | |
Haier Electronics Group Co. Ltd. | | | 93,000 | | | | 265,792 | |
| | |
Hanssem Co. Ltd. | | | 650 | | | | 35,421 | |
| | |
Hyundai Livart Furniture Co. Ltd. | | | 12,956 | | | | 157,572 | |
| | |
Kasen International Holdings Ltd.* | | | 32,000 | | | | 19,802 | |
| | |
LG Electronics, Inc. | | | 8,036 | | | | 462,081 | |
| | |
LG Electronics, Inc. (Preference) | | | 1,345 | | | | 31,502 | |
| | |
MRV Engenharia e Participacoes SA | | | 278,800 | | | | 1,221,625 | |
| | |
Nien Made Enterprise Co. Ltd. | | | 4,000 | | | | 36,333 | |
| | |
PIK Group PJSC | | | 5,594 | | | | 30,384 | |
| | |
Skyworth Group Ltd. | | | 1,640,000 | | | | 424,767 | |
| | |
Symphony Ltd. | | | 1,272 | | | | 23,357 | |
| | |
Tatung Co. Ltd.* | | | 73,000 | | | | 43,886 | |
| | |
TCL Electronics Holdings Ltd. | | | 820,000 | | | | 389,196 | |
| | |
TTK Prestige Ltd. | | | 242 | | | | 21,196 | |
| | |
Whirlpool of India Ltd. | | | 1,664 | | | | 51,482 | |
| | |
Woongjin Coway Co. Ltd. | | | 1,886 | | | | 148,812 | |
| | | | | | | | 3,725,516 | |
|
| Household Products – 0.2% | |
| | |
Hindustan Unilever Ltd. | | | 24,928 | | | | 764,530 | |
| | |
Jyothy Labs Ltd. | | | 3,300 | | | | 8,149 | |
| | |
Kimberly-Clark de Mexico SAB de CV, Class A* | | | 44,500 | | | | 90,035 | |
| | |
Unilever Indonesia Tbk. PT | | | 41,000 | | | | 127,714 | |
| | |
Vinda International Holdings Ltd. | | | 3,000 | | | | 5,665 | |
| | | | | | | | 996,093 | |
|
Independent Power and Renewable Electricity
Producers – 1.8% | |
| | |
Aboitiz Power Corp. | | | 34,200 | | | | 26,925 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
Independent Power and Renewable Electricity Producers –
(continued) | |
| | |
Adani Power Ltd.* | | | 20,413 | | | $ | 19,009 | |
| | |
AES Gener SA | | | 216,720 | | | | 46,501 | |
| | |
AES Tiete Energia SA | | | 2 | | | | 1 | |
| | |
AES Tiete Energia SA – UNIT* | | | 158,599 | | | | 462,633 | |
| | |
AES Tiete Energia SA (Preference) | | | 30 | | | | 17 | |
| | |
B Grimm Power PCL, NVDR | | | 41,600 | | | | 66,130 | |
| | |
Banpu Power PCL, NVDR | | | 41,600 | | | | 23,972 | |
| | |
BCPG PCL, NVDR | | | 41,600 | | | | 24,799 | |
| | |
Beijing Enterprises Clean Energy Group Ltd.* | | | 32,800,000 | | | | 372,456 | |
| | |
CGN Power Co. Ltd., Class H(b) (c) | | | 738,000 | | | | 192,087 | |
| | |
China Everbright Greentech Ltd.(b) | | | 574,000 | | | | 320,773 | |
| | |
China Longyuan Power Group Corp. Ltd., Class H | | | 246,000 | | | | 133,080 | |
| | |
China Power International Development Ltd. | | | 246,000 | | | | 51,474 | |
| | |
China Resources Power Holdings Co. Ltd. | | | 136,000 | | | | 171,265 | |
| | |
Cia Energetica de Sao Paulo (Preference), Class B | | | 8,200 | | | | 60,667 | |
| | |
Colbun SA | | | 299,054 | | | | 51,637 | |
| | |
Datang International Power Generation Co. Ltd., Class H | | | 2,788,000 | | | | 551,361 | |
| | |
Electricity Generating PCL, NVDR | | | 9,900 | | | | 113,770 | |
| | |
Energy Absolute PCL, NVDR | | | 57,400 | | | | 77,940 | |
| | |
Engie Brasil Energia SA | | | 9,150 | | | | 103,161 | |
| | |
First Gen Corp. | | | 82,400 | | | | 40,270 | |
| | |
GCL New Energy Holdings Ltd.* (a) | | | 7,544,000 | | | | 245,444 | |
| | |
Global Power Synergy PCL, NVDR | | | 32,368 | | | | 88,169 | |
| | |
Gulf Energy Development PCL, NVDR | | | 27,900 | | | | 149,687 | |
| | |
Huadian Power International Corp. Ltd., Class H | | | 1,642,000 | | | | 615,931 | |
| | |
Huaneng Power International, Inc., Class H | | | 278,000 | | | | 132,302 | |
| | |
Huaneng Renewables Corp. Ltd., Class H | | | 4,920,000 | | | | 1,883,206 | |
See Accompanying Notes to the Financial Statements.
| | |
| 226 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
Independent Power and Renewable Electricity Producers –
(continued) | |
| | |
Hub Power Co. Ltd. (The)* | | | 864,774 | | | $ | 402,394 | |
| | |
JSW Energy Ltd. | | | 22,880 | | | | 21,951 | |
| | |
Malakoff Corp. Bhd. | | | 154,800 | | | | 31,675 | |
| | |
NHPC Ltd. | | | 199,834 | | | | 66,209 | |
| | |
NTPC Ltd. | | | 164,246 | | | | 283,435 | |
| | |
OGK-2 PJSC | | | 31,898,410 | | | | 292,193 | |
| | |
Ratch Group PCL, NVDR | | | 9,300 | | | | 22,638 | |
| | |
SPCG PCL, NVDR | | | 467,400 | | | | 323,519 | |
| | |
Taiwan Cogeneration Corp. | | | 18,000 | | | | 17,326 | |
| | |
Terna Energy SA* | | | 3,821 | | | | 31,204 | |
| | |
TPI Polene Power PCL, NVDR | | | 156,000 | | | | 23,249 | |
| | |
Unipro PJSC | | | 284,000 | | | | 11,702 | |
| | | | | | | | 7,552,162 | |
|
| Industrial Conglomerates – 1.8% | |
| | |
3M India Ltd.* | | | 131 | | | | 41,534 | |
| | |
Aamal Co. | | | 1,733,826 | | | | 335,718 | |
| | |
Aboitiz Equity Ventures, Inc. | | | 75,800 | | | | 83,575 | |
| | |
AG Anadolu Grubu Holding A/S | | | 130,954 | | | | 341,337 | |
| | |
Alfa SAB de CV, Class A | | | 229,600 | | | | 199,756 | |
| | |
Alliance Global Group, Inc. | | | 262,400 | | | | 59,363 | |
| | |
AntarChile SA | | | 9,628 | | | | 88,022 | |
| | |
Ayala Corp. | | | 8,200 | | | | 138,969 | |
| | |
BGF Co. Ltd. | | | 36,818 | | | | 181,962 | |
| | |
Bidvest Group Ltd. (The) | | | 11,644 | | | | 159,283 | |
| | |
Boustead Holdings Bhd. | | | 31,200 | | | | 7,467 | |
| | |
CITIC Ltd. | | | 162,000 | | | | 212,894 | |
| | |
CJ Corp. | | | 984 | | | | 69,691 | |
| | |
DMCI Holdings, Inc. | | | 149,300 | | | | 24,155 | |
| | |
Dogan Sirketler Grubu Holding A/S | | | 1,108,804 | | | | 335,792 | |
| | |
Doosan Co. Ltd. | | | 742 | | | | 49,618 | |
| | |
Doosan Co. Ltd. (Preference) | | | 376 | | | | 21,879 | |
| | |
Dubai Investments PJSC | | | 1,862,919 | | | | 654,314 | |
| | |
Enka Insaat ve Sanayi A/S | | | 110,782 | | | | 111,896 | |
| | |
Far Eastern New Century Corp. | | | 134,000 | | | | 130,300 | |
| | |
Fosun International Ltd. | | | 176,500 | | | | 231,499 | |
| | |
Godrej Industries Ltd. | | | 3,377 | | | | 19,828 | |
| | |
Grupo Carso SAB de CV, Series A1 | | | 18,700 | | | | 62,815 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Industrial Conglomerates – (continued) | |
| | |
GT Capital Holdings, Inc. | | | 6,316 | | | $ | 111,272 | |
| | |
Hanwha Corp. | | | 2,952 | | | | 60,260 | |
| | |
Hanwha Corp. (Preference) | | | 1,425 | | | | 16,657 | |
| | |
HAP Seng Consolidated Bhd. | | | 25,500 | | | | 60,905 | |
| | |
Hong Leong Industries Bhd. | | | 8,600 | | | | 22,228 | |
| | |
Hosken Consolidated Investments Ltd. | | | 43,132 | | | | 257,701 | |
| | |
Hyosung Corp. | | | 721 | | | | 51,250 | |
| | |
Industries Qatar QSC | | | 144,320 | | | | 416,590 | |
| | |
JG Summit Holdings, Inc. | | | 93,480 | | | | 140,464 | |
| | |
KAP Industrial Holdings Ltd. | | | 63,408 | | | | 19,574 | |
| | |
KOC Holding A/S | | | 74,948 | | | | 245,736 | |
| | |
Kolon Corp. | | | 5,002 | | | | 74,593 | |
| | |
LG Corp. | | | 9,594 | | | | 572,284 | |
| | |
Lotte Corp. | | | 2,378 | | | | 74,603 | |
| | |
LT Group, Inc. | | | 131,600 | | | | 34,595 | |
| | |
MMC Corp. Bhd. | | | 713,400 | | | | 172,438 | |
| | |
Mytilineos SA | | | 9,020 | | | | 98,720 | |
| | |
Quinenco SA | | | 12,939 | | | | 28,345 | |
| | |
Reunert Ltd. | | | 4,870 | | | | 23,096 | |
| | |
Samsung C&T Corp. | | | 3,198 | | | | 274,872 | |
| | |
San Miguel Corp. | | | 17,400 | | | | 57,263 | |
| | |
Shanghai Industrial Holdings Ltd. | | | 37,000 | | | | 68,923 | |
| | |
Siemens Ltd. | | | 2,163 | | | | 50,503 | |
| | |
Sigdo Koppers SA | | | 16,555 | | | | 23,873 | |
| | |
Sime Darby Bhd. | | | 114,900 | | | | 62,420 | |
| | |
SK Holdings Co. Ltd. | | | 2,636 | | | | 585,677 | |
| | |
SM Investments Corp. | | | 16,400 | | | | 332,880 | |
| | |
Turkiye Sise ve Cam Fabrikalari A/S | | | 38,243 | | | | 29,121 | |
| | | | | | | | 7,528,510 | |
|
| Insurance – 3.4% | |
| | |
Bajaj Finserv Ltd. | | | 1,394 | | | | 159,869 | |
| | |
BB Seguridade Participacoes SA | | | 24,600 | | | | 208,166 | |
| | |
Bupa Arabia for Cooperative Insurance Co. | | | 1,339 | | | | 38,346 | |
| | |
Cathay Financial Holding Co. Ltd. | | | 574,000 | | | | 759,915 | |
| | |
China Development Financial Holding Corp. | | | 984,000 | | | | 307,091 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 227 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Insurance – (continued) | |
| | |
China Life Insurance Co. Ltd.* | | | 248,935 | | | $ | 205,262 | |
| | |
China Life Insurance Co. Ltd., Class H | | | 260,000 | | | | 676,729 | |
| | |
China Pacific Insurance Group Co. Ltd., Class H | | | 180,400 | | | | 655,983 | |
| | |
China Reinsurance Group Corp., Class H | | | 6,150,000 | | | | 1,004,376 | |
| | |
China Taiping Insurance Holdings Co. Ltd. | | | 108,400 | | | | 244,801 | |
| | |
Cholamandalam Financial Holdings Ltd. | | | 3,206 | | | | 20,620 | |
| | |
Co. for Cooperative Insurance (The)* | | | 2,678 | | | | 50,342 | |
| | |
DB Insurance Co. Ltd. | | | 3,608 | | | | 156,607 | |
| | |
Discovery Ltd. | | | 15,170 | | | | 121,110 | |
| | |
Fanhua, Inc., ADR(a) | | | 1,700 | | | | 42,874 | |
| | |
Fubon Financial Holding Co. Ltd. | | | 514,000 | | | | 752,245 | |
| | |
General Insurance Corp. of India(b) | | | 8,949 | | | | 39,257 | |
| | |
Hanwha General Insurance Co. Ltd. | | | 60,352 | | | | 144,986 | |
| | |
Hanwha Life Insurance Co. Ltd. | | | 22,248 | | | | 42,643 | |
| | |
HDFC Life Insurance Co. Ltd.(b) | | | 16,728 | | | | 147,684 | |
| | |
Hyundai Marine & Fire Insurance Co. Ltd. | | | 4,428 | | | | 96,100 | |
| | |
ICICI Lombard General Insurance Co. Ltd.(b) | | | 3,640 | | | | 68,911 | |
| | |
ICICI Prudential Life Insurance Co. Ltd.(b) | | | 10,117 | | | | 72,809 | |
| | |
IRB Brasil Resseguros S/A | | | 14,700 | | | | 138,380 | |
| | |
Korean Reinsurance Co. | | | 9,676 | | | | 66,034 | |
| | |
Liberty Holdings Ltd. | | | 10,660 | | | | 82,352 | |
| | |
LotteNon-Life Insurance Co. Ltd.* | | | 70,438 | | | | 133,799 | |
| | |
LPI Capital Bhd. | | | 9,127 | | | | 33,376 | |
| | |
Max Financial Services Ltd.* | | | 5,068 | | | | 29,020 | |
| | |
Mercuries Life Insurance Co. Ltd.* | | | 20,268 | | | | 7,191 | |
| | |
Meritz Fire & Marine Insurance Co. Ltd. | | | 4,264 | | | | 67,802 | |
| | |
Mirae Asset Life Insurance Co. Ltd. | | | 1,957 | | | | 6,737 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Insurance – (continued) | |
| | |
Momentum Metropolitan Holdings | | | 57,072 | | | $ | 76,533 | |
| | |
New China Life Insurance Co. Ltd., Class H | | | 31,000 | | | | 120,833 | |
| | |
Old Mutual Ltd. | | | 342,104 | | | | 446,267 | |
| | |
Orange Life Insurance Ltd.(b) | | | 2,378 | | | | 57,230 | |
| | |
Panin Financial Tbk. PT* | | | 12,595,200 | | | | 260,213 | |
| | |
People’s Insurance Co. Group of China Ltd. (The), Class H | | | 542,000 | | | | 228,896 | |
| | |
PICC Property & Casualty Co. Ltd., Class H | | | 518,000 | | | | 657,604 | |
| | |
Ping An Insurance Group Co. of China Ltd., Class H | | | 182,000 | | | | 2,107,315 | |
| | |
Porto Seguro SA | | | 4,000 | | | | 57,194 | |
| | |
Powszechny Zaklad Ubezpieczen SA | | | 19,762 | | | | 191,404 | |
| | |
Qatar Insurance Co. SAQ | | | 112,716 | | | | 95,039 | |
| | |
Qualitas Controladora SAB de CV | | | 188,600 | | | | 816,099 | |
| | |
Rand Merchant Investment Holdings Ltd. | | | 34,358 | | | | 68,107 | |
| | |
Samsung Fire & Marine Insurance Co. Ltd. | | | 2,296 | | | | 427,250 | |
| | |
Samsung Fire & Marine Insurance Co. Ltd. (Preference) | | | 194 | | | | 26,929 | |
| | |
Samsung Life Insurance Co. Ltd. | | | 6,560 | | | | 398,071 | |
| | |
Sanlam Ltd. | | | 61,910 | | | | 327,027 | |
| | |
Santam Ltd. | | | 2,471 | | | | 46,325 | |
| | |
SBI Life Insurance Co. Ltd.(b) | | | 8,392 | | | | 117,310 | |
| | |
Shin Kong Financial Holding Co. Ltd.* | | | 838,234 | | | | 264,904 | |
| | |
Shinkong Insurance Co. Ltd. | | | 212,000 | | | | 266,040 | |
| | |
Sul America SA | | | 10,500 | | | | 126,307 | |
| | |
Tongyang Life Insurance Co. Ltd. | | | 36,982 | | | | 116,498 | |
| | |
ZhongAn Online P&C Insurance Co. Ltd., Class H* (a) (b) | | | 8,100 | | | | 27,077 | |
| | | | | | | | 13,907,889 | |
|
| Interactive Media & Services – 2.6% | |
| | |
58.com, Inc., ADR* | | | 3,116 | | | | 164,556 | |
| | |
AfreecaTV Co. Ltd. | | | 468 | | | | 29,726 | |
See Accompanying Notes to the Financial Statements.
| | |
| 228 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Interactive Media & Services – (continued) | |
| | |
Autohome, Inc., ADR* (a) | | | 1,968 | | | $ | 166,414 | |
| | |
Baidu, Inc., ADR* | | | 9,430 | | | | 960,446 | |
| | |
Bitauto Holdings Ltd., ADR* | | | 1,200 | | | | 18,156 | |
| | |
Info Edge India Ltd. | | | 2,176 | | | | 78,814 | |
| | |
Kakao Corp. | | | 1,722 | | | | 209,431 | |
| | |
Momo, Inc., ADR(a) | | | 4,920 | | | | 164,918 | |
| | |
NAVER Corp. | | | 4,920 | | | | 693,524 | |
| | |
SINA Corp.* | | | 2,214 | | | | 87,674 | |
| | |
Tencent Holdings Ltd. | | | 195,500 | | | | 8,001,888 | |
| | |
Weibo Corp., ADR* (a) | | | 2,214 | | | | 108,907 | |
| | |
YY, Inc., ADR* | | | 1,722 | | | | 97,879 | |
| | | | | | | | 10,782,333 | |
|
| Internet & Direct Marketing Retail – 3.7% | |
| | |
Alibaba Group Holding Ltd., ADR* | | | 52,398 | | | | 9,257,155 | |
| | |
B2W Cia Digital* | | | 7,136 | | | | 90,302 | |
| | |
Baozun, Inc., ADR* (a) | | | 1,300 | | | | 56,576 | |
| | |
CJ ENM Co. Ltd. | | | 412 | | | | 58,430 | |
| | |
Ctrip.com International Ltd., ADR* | | | 13,448 | | | | 443,649 | |
| | |
GS Home Shopping, Inc. | | | 133 | | | | 17,010 | |
| | |
HengTen Networks Group Ltd.* | | | 1,032,000 | | | | 14,879 | |
| | |
Hyundai Home Shopping Network Corp. | | | 293 | | | | 21,280 | |
| | |
JD.com, Inc., ADR* | | | 29,546 | | | | 920,358 | |
| | |
Maoyan Entertainment* (b) | | | 20,600 | | | | 29,753 | |
| | |
Meituan Dianping, Class B* (b) | | | 119,700 | | | | 1,430,254 | |
| | |
momo.com, Inc. | | | 1,000 | | | | 8,673 | |
| | |
Naspers Ltd., Class N | | | 14,924 | | | | 2,125,760 | |
| | |
NS Shopping Co. Ltd. | | | 17,384 | | | | 145,383 | |
| | |
PChome Online, Inc.* | | | 2,763 | | | | 11,981 | |
| | |
Pinduoduo, Inc., ADR* (a) | | | 12,286 | | | | 502,252 | |
| | |
Tongcheng-Elong Holdings Ltd.* (a) (b) | | | 32,800 | | | | 53,567 | |
| | |
Vipshop Holdings Ltd., ADR* | | | 14,100 | | | | 162,714 | |
| | | | | | | | 15,349,976 | |
|
| IT Services – 1.0% | |
| | |
21Vianet Group, Inc., ADR* | | | 2,400 | | | | 20,352 | |
| | |
AGTech Holdings Ltd.* (a) | | | 84,000 | | | | 4,019 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| IT Services – (continued) | |
| | |
Cafe24 Corp.* | | | 360 | | | $ | 18,844 | |
| | |
Cielo SA | | | 82,000 | | | | 154,424 | |
| | |
Digital China Holdings Ltd. | | | 58,000 | | | | 30,267 | |
| | |
GDS Holdings Ltd., ADR* | | | 2,400 | | | | 100,032 | |
| | |
HCL Technologies Ltd. | | | 19,352 | | | | 317,241 | |
| | |
Hexaware Technologies Ltd. | | | 3,640 | | | | 17,076 | |
| | |
Huifu Payment Ltd.* (a) (b) | | | 459,200 | | | | 187,484 | |
| | |
Infosys Ltd. | | | 128,658 | | | | 1,243,613 | |
| | |
Kginicis Co. Ltd. | | | 17,712 | | | | 248,907 | |
| | |
Larsen & Toubro Infotech Ltd.(b) | | | 721 | | | | 17,503 | |
| | |
Mindtree Ltd. | | | 4,608 | | | | 46,308 | |
| | |
Mphasis Ltd. | | | 3,418 | | | | 45,792 | |
| | |
My EG Services Bhd. | | | 41,900 | | | | 11,431 | |
| | |
NIIT Technologies Ltd.* | | | 928 | | | | 20,263 | |
| | |
Persistent Systems Ltd. | | | 900 | | | | 7,862 | |
| | |
Posco ICT Co. Ltd. | | | 2,080 | | | | 8,581 | |
| | |
Samsung SDS Co. Ltd. | | | 1,394 | | | | 241,429 | |
| | |
SONDA SA | | | 24,083 | | | | 25,802 | |
| | |
Systex Corp. | | | 9,000 | | | | 21,879 | |
| | |
Tata Consultancy Services Ltd. | | | 30,340 | | | | 970,850 | |
| | |
Tech Mahindra Ltd. | | | 16,400 | | | | 170,870 | |
| | |
TravelSky Technology Ltd., Class H | | | 38,000 | | | | 86,786 | |
| | |
Wipro Ltd. | | | 49,430 | | | | 180,705 | |
| | | | | | | | 4,198,320 | |
|
| Leisure Products – 0.1% | |
| | |
Giant Manufacturing Co. Ltd. | | | 13,000 | | | | 96,516 | |
| | |
HLB, Inc.* | | | 1,455 | | | | 210,099 | |
| | |
KMC Kuei Meng International, Inc. | | | 3,315 | | | | 11,054 | |
| | |
Merida Industry Co. Ltd. | | | 9,350 | | | | 54,060 | |
| | | | | | | | 371,729 | |
|
| Life Sciences Tools & Services – 0.1% | |
| | |
Divi’s Laboratories Ltd. | | | 3,121 | | | | 77,226 | |
| | |
Genscript Biotech Corp.* (a) | | | 34,000 | | | | 81,728 | |
| | |
LegoChem Biosciences, Inc.* | | | 478 | | | | 19,474 | |
| | |
Samsung Biologics Co. Ltd.* (b) | | | 574 | | | | 196,604 | |
| | |
ST Pharm Co. Ltd. | | | 344 | | | | 5,455 | |
| | |
Syngene International Ltd.(b) | | | 1,720 | | | | 8,036 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 229 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Life Sciences Tools & Services – (continued) | |
| | |
Wuxi Biologics Cayman, Inc.* (b) | | | 16,500 | | | $ | 194,732 | |
| | | | | | | | 583,255 | |
|
| Machinery – 1.1% | |
| | |
AIA Engineering Ltd. | | | 1,599 | | | | 39,074 | |
| | |
Airtac International Group | | | 3,784 | | | | 51,899 | |
| | |
Ashok Leyland Ltd. | | | 52,202 | | | | 56,486 | |
| | |
China Conch Venture Holdings Ltd. | | | 50,000 | | | | 195,848 | |
| | |
China International Marine Containers Group Co. Ltd., Class H | | | 44,880 | | | | 39,568 | |
| | |
CIMC Enric Holdings Ltd. | | | 36,000 | | | | 19,567 | |
| | |
CRRC Corp. Ltd., Class H | | | 153,000 | | | | 102,485 | |
| | |
Cummins India Ltd. | | | 2,280 | | | | 17,485 | |
| | |
Daewoo Shipbuilding & Marine Engineering Co. Ltd.* | | | 1,692 | | | | 40,938 | |
| | |
Doosan Bobcat, Inc. | | | 2,952 | | | | 79,924 | |
| | |
Doosan Infracore Co. Ltd.* | | | 11,726 | | | | 56,944 | |
| | |
Escorts Ltd. | | | 1,997 | | | | 18,564 | |
| | |
Famur SA | | | 305,616 | | | | 289,995 | |
| | |
Haitian International Holdings Ltd. | | | 30,000 | | | | 70,965 | |
| | |
Hiwin Technologies Corp. | | | 9,917 | | | | 85,192 | |
| | |
Hyundai Construction Equipment Co. Ltd. | | | 624 | | | | 14,964 | |
| | |
Hyundai Elevator Co. Ltd. | | | 633 | | | | 40,098 | |
| | |
Hyundai Heavy Industries Holdings Co. Ltd. | | | 656 | | | | 192,551 | |
| | |
Hyundai Mipo Dockyard Co. Ltd. | | | 602 | | | | 22,482 | |
| | |
Hyundai Rotem Co. Ltd.* | | | 1,951 | | | | 26,998 | |
| | |
Iochpe Maxion SA* | | | 131,200 | | | | 569,980 | |
| | |
King Slide Works Co. Ltd. | | | 3,000 | | | | 35,923 | |
| | |
Korea Shipbuilding & Offshore Engineering Co. Ltd.* | | | 1,558 | | | | 163,373 | |
| | |
Lakshmi Machine Works Ltd. | | | 148 | | | | 7,455 | |
| | |
Lonking Holdings Ltd. | | | 1,886,000 | | | | 524,577 | |
| | |
Marcopolo SA (Preference)* | | | 32,659 | | | | 29,532 | |
| | |
Randon SA Implementos e Participacoes (Preference) | | | 11,300 | | | | 29,134 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Machinery – (continued) | |
| | |
Rechi Precision Co. Ltd. | | | 310,000 | | | $ | 242,884 | |
| | |
Samsung Heavy Industries Co. Ltd.* | | | 18,355 | | | | 114,379 | |
| | |
Sany Heavy Equipment International Holdings Co. Ltd. | | | 46,000 | | | | 24,181 | |
| | |
Shanghai Zhenhua Heavy Industries Co. Ltd., Class B | | | 37,440 | | | | 12,617 | |
| | |
Shin Zu Shing Co. Ltd. | | | 4,000 | | | | 15,900 | |
| | |
Sinotruk Hong Kong Ltd. | | | 55,500 | | | | 84,124 | |
| | |
SKF India Ltd. | | | 624 | | | | 19,225 | |
| | |
Sunonwealth Electric Machine Industry Co. Ltd. | | | 8,000 | | | | 9,987 | |
| | |
Weichai Power Co. Ltd., Class H(a) | | | 154,000 | | | | 243,250 | |
| | |
Zoomlion Heavy Industry Science and Technology Co. Ltd., Class H | | | 1,410,400 | | | | 1,038,316 | |
| | | | | | | | 4,626,864 | |
|
| Marine – 0.5% | |
| | |
Cia Sud Americana de Vapores SA* | | | 797,784 | | | | 26,269 | |
| | |
COSCO SHIPPING Holdings Co. Ltd., Class H* | | | 2,624,000 | | | | 984,289 | |
| | |
Evergreen Marine Corp. Taiwan Ltd.* | | | 115,420 | | | | 47,396 | |
| | |
Hyundai Merchant Marine Co. Ltd.* | | | 10,455 | | | | 29,609 | |
| | |
Korea Line Corp.* | | | 14,432 | | | | 275,380 | |
| | |
MISC Bhd. | | | 49,200 | | | | 98,082 | |
| | |
Pan Ocean Co. Ltd.* | | | 5,613 | | | | 21,203 | |
| | |
Qatar Navigation QSC | | | 36,634 | | | | 65,400 | |
| | |
U-Ming Marine Transport Corp. | | | 25,000 | | | | 27,800 | |
| | |
Wan Hai Lines Ltd. | | | 9,000 | | | | 5,366 | |
| | |
Wisdom Marine Lines Co. Ltd.* | | | 352,000 | | | | 353,844 | |
| | |
Yang Ming Marine Transport Corp.* | | | 53,000 | | | | 13,198 | |
| | | | | | | | 1,947,836 | |
|
| Media – 0.4% | |
| | |
Astro Malaysia Holdings Bhd. | | | 90,700 | | | | 29,304 | |
| | |
Cheil Worldwide, Inc. | | | 2,742 | | | | 58,330 | |
See Accompanying Notes to the Financial Statements.
| | |
| 230 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Media – (continued) | |
| | |
China Literature Ltd.* (a) (b) | | | 6,200 | | | $ | 24,404 | |
| | |
CJ Hello Co. Ltd. | | | 625 | | | | 3,282 | |
| | |
Cyfrowy Polsat SA | | | 9,840 | | | | 71,446 | |
| | |
Dish TV India Ltd. | | | 17,517 | | | | 3,087 | |
| | |
Grupo Televisa SAB, Series CPO(a) | | | 90,700 | | | | 200,967 | |
| | |
Innocean Worldwide, Inc. | | | 520 | | | | 28,694 | |
| | |
KT Skylife Co. Ltd. | | | 21,484 | | | | 160,652 | |
| | |
Media Nusantara Citra Tbk. PT | | | 6,560,000 | | | | 614,547 | |
| | |
Megacable Holdings SAB de CV(a) | | | 9,700 | | | | 39,985 | |
| | |
Plan B Media PCL, NVDR | | | 72,800 | | | | 21,096 | |
| | |
Saudi Research & Marketing Group* | | | 1,030 | | | | 18,237 | |
| | |
Sun TV Network Ltd. | | | 4,576 | | | | 34,022 | |
| | |
Surya Citra Media Tbk. PT | | | 342,700 | | | | 29,785 | |
| | |
TV18 Broadcast Ltd.* | | | 16,016 | | | | 5,555 | |
| | |
VGI PCL, NVDR | | | 114,400 | | | | 36,940 | |
| | |
Woongjin Thinkbig Co. Ltd.* | | | 48,134 | | | | 110,463 | |
| | |
Zee Entertainment Enterprises Ltd. | | | 18,040 | | | | 66,281 | |
| | | | | | | | 1,557,077 | |
|
| Metals & Mining – 5.1% | |
| | |
African Rainbow Minerals Ltd. | | | 6,396 | | | | 64,200 | |
| | |
Alrosa PJSC | | | 188,764 | | | | 219,518 | |
| | |
Aluminum Corp. of China Ltd., Class H* | | | 114,000 | | | | 33,890 | |
| | |
Aneka Tambang Tbk. | | | 649,010 | | | | 41,150 | |
| | |
Angang Steel Co. Ltd., Class H(a) | | | 1,476,000 | | | | 495,283 | |
| | |
Anglo American Platinum Ltd.(a) | | | 2,034 | | | | 152,269 | |
| | |
AngloGold Ashanti Ltd. | | | 30,750 | | | | 674,444 | |
| | |
Assore Ltd. | | | 3,526 | | | | 59,441 | |
| | |
Bradespar SA (Preference) | | | 8,200 | | | | 65,385 | |
| | |
CAP SA | | | 74,046 | | | | 543,589 | |
| | |
Century Iron & Steel Industrial Co. Ltd. | | | 8,000 | | | | 18,738 | |
| | |
China Hongqiao Group Ltd. | | | 123,000 | | | | 68,423 | |
| | |
China Metal Products | | | 246,000 | | | | 254,562 | |
| | |
China Metal Recycling Holdings Ltd.*‡ (c) | | | 51,000 | | | | — | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Metals & Mining – (continued) | |
| | |
China Metal Resources Utilization Ltd.* (a) (b) | | | 56,000 | | | $ | 22,149 | |
| | |
China Oriental Group Co. Ltd. | | | 110,000 | | | | 38,455 | |
| | |
China Steel Corp. | | | 450,000 | | | | 346,660 | |
| | |
China Zhongwang Holdings Ltd. | | | 131,200 | | | | 54,571 | |
| | |
Chung Hung Steel Corp. | | | 902,000 | | | | 269,351 | |
| | |
Cia Siderurgica Nacional SA | | | 49,200 | | | | 144,619 | |
| | |
Dongkuk Steel Mill Co. Ltd.* | | | 59,860 | | | | 302,529 | |
| | |
Eregli Demir ve Celik Fabrikalari TAS | | | 91,266 | | | | 104,486 | |
| | |
Ezz Steel Co. SAE* | | | 180,974 | | | | 134,665 | |
| | |
Feng Hsin Steel Co. Ltd. | | | 26,000 | | | | 45,012 | |
| | |
Gerdau SA (Preference) | | | 73,800 | | | | 246,895 | |
| | |
Gloria Material Technology Corp. | | | 18,000 | | | | 11,235 | |
| | |
Gold Fields Ltd. | | | 61,008 | | | | 376,412 | |
| | |
Grupa Kety SA | | | 331 | | | | 26,636 | |
| | |
Grupo Mexico SAB de CV, Series B | | | 229,600 | | | | 606,814 | |
| | |
Harmony Gold Mining Co. Ltd.* (a) | | | 478,552 | | | | 1,661,200 | |
| | |
Hindalco Industries Ltd. | | | 30,586 | | | | 81,027 | |
| | |
Hsin Kuang Steel Co. Ltd. | | | 246,000 | | | | 230,722 | |
| | |
Hyundai Steel Co. | | | 6,314 | | | | 172,577 | |
| | |
Impala Platinum Holdings Ltd.* | | | 25,092 | | | | 172,988 | |
| | |
Industrias CH SAB de CV, Series B* (a) | | | 6,600 | | | | 28,411 | |
| | |
Industrias Penoles SAB de CV(a) | | | 8,200 | | | | 98,732 | |
| | |
Jastrzebska Spolka Weglowa SA | | | 4,841 | | | | 24,567 | |
| | |
Jiangxi Copper Co. Ltd., Class H | | | 82,000 | | | | 96,148 | |
| | |
Jinchuan Group International Resources Co. Ltd. | | | 2,952,000 | | | | 237,284 | |
| | |
Jindal Steel & Power Ltd.* | | | 31,312 | | | | 51,319 | |
| | |
JSW Steel Ltd. | | | 35,506 | | | | 114,134 | |
| | |
KGHM Polska Miedz SA* | | | 10,086 | | | | 221,125 | |
| | |
KISWIRE Ltd. | | | 720 | | | | 13,491 | |
| | |
Korea Zinc Co. Ltd. | | | 410 | | | | 153,118 | |
| | |
Koza Altin Isletmeleri A/S* | | | 2,182 | | | | 26,852 | |
| | |
Kumba Iron Ore Ltd. | | | 2,142 | | | | 52,326 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 231 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Metals & Mining – (continued) | |
| | |
Maanshan Iron & Steel Co. Ltd., Class H(a) | | | 1,804,000 | | | $ | 683,604 | |
| | |
Magnitogorsk Iron & Steel Works PJSC | | | 137,924 | | | | 78,637 | |
| | |
Mechel PJSC* | | | 185,320 | | | | 175,019 | |
| | |
Mechel PJSC (Preference) | | | 87,002 | | | | 120,174 | |
| | |
Metalurgica Gerdau SA | | | 114,800 | | | | 173,012 | |
| | |
Metalurgica Gerdau SA (Preference) | | | 721,600 | | | | 1,130,646 | |
| | |
MMC Norilsk Nickel PJSC | | | 2,050 | | | | 572,338 | |
| | |
National Aluminium Co. Ltd. | | | 443,620 | | | | 283,952 | |
| | |
NMDC Ltd. | | | 54,202 | | | | 86,046 | |
| | |
Northam Platinum Ltd.* | | | 10,806 | | | | 73,171 | |
| | |
Novolipetsk Steel PJSC | | | 77,982 | | | | 152,188 | |
| | |
Polyus PJSC | | | 1,871 | | | | 218,109 | |
| | |
Poongsan Corp. | | | 17,164 | | | | 297,266 | |
| | |
POSCO | | | 5,002 | | | | 909,298 | |
| | |
Press Metal Aluminium Holdings Bhd. | | | 65,600 | | | | 74,729 | |
| | |
Qatar Aluminum Manufacturing Co. | | | 2,811,780 | | | | 633,249 | |
| | |
Raspadskaya OJSC | | | 135,218 | | | | 228,560 | |
| | |
Saudi Arabian Mining Co.* | | | 14,268 | | | | 161,311 | |
| | |
Seah Besteel Corp. | | | 12,874 | | | | 177,046 | |
| | |
Severstal PJSC | | | 13,366 | | | | 184,037 | |
| | |
Shandong Gold Mining Co. Ltd., Class H(b) | | | 9,750 | | | | 22,939 | |
| | |
Shougang Fushan Resources Group Ltd. | | | 3,444,000 | | | | 711,852 | |
| | |
Sibanye Gold Ltd.* (a) | | | 146,288 | | | | 283,088 | |
| | |
Stalprodukt SA | | | 1,804 | | | | 107,814 | |
| | |
Steel Authority of India Ltd. | | | 79,638 | | | | 41,094 | |
| | |
TA Chen Stainless Pipe | | | 44,962 | | | | 48,595 | |
| | |
Tata Steel Ltd. | | | 19,516 | | | | 104,708 | |
| | |
Tung Ho Steel Enterprise Corp. | | | 802,000 | | | | 569,084 | |
| | |
Usinas Siderurgicas de Minas Gerais SA Usiminas | | | 6,900 | | | | 15,194 | |
| | |
Usinas Siderurgicas de Minas Gerais SA Usiminas (Preference), Class A | | | 23,300 | | | | 42,138 | |
| | |
Vale Indonesia Tbk. PT* | | | 134,900 | | | | 35,654 | |
| | |
Vale SA* | | | 230,400 | | | | 2,708,968 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Metals & Mining – (continued) | |
| | |
Vedanta Ltd. | | | 123,328 | | | $ | 257,945 | |
| | |
Volcan Cia Minera SAA, Class B* | | | 176,027 | | | | 20,366 | |
| | |
YC INOX Co. Ltd. | | | 328,000 | | | | 281,769 | |
| | |
Yieh Phui Enterprise Co. Ltd. | | | 1,425,280 | | | | 426,547 | |
| | |
Young Poong Corp. | | | 65 | | | | 34,024 | |
| | |
Zhaojin Mining Industry Co. Ltd., Class H(a) | | | 36,000 | | | | 40,007 | |
| | |
Zijin Mining Group Co. Ltd., Class H | | | 164,000 | | | | 56,705 | |
| | | | | | | | 21,078,285 | |
|
| Multiline Retail – 0.5% | |
| | |
Aeon Co. M Bhd. | | | 28,000 | | | | 11,124 | |
| | |
El Puerto de Liverpool SAB de CV, Class C1(a) | | | 10,300 | | | | 52,660 | |
| | |
Future Retail Ltd.* | | | 7,735 | | | | 41,587 | |
| | |
Golden Eagle Retail Group Ltd. | | | 27,000 | | | | 29,764 | |
| | |
Hyundai Department Store Co. Ltd. | | | 1,394 | | | | 88,544 | |
| | |
Lojas Americanas SA* | | | 5,250 | | | | 19,761 | |
| | |
Lojas Americanas SA (Preference)* | | | 24,600 | | | | 122,498 | |
| | |
Lojas Renner SA | | | 27,870 | | | | 352,332 | |
| | |
Lotte Shopping Co. Ltd. | | | 515 | | | | 55,110 | |
| | |
Magazine Luiza SA | | | 20,800 | | | | 231,295 | |
| | |
Matahari Department Store Tbk. PT | | | 2,173,000 | | | | 563,491 | |
| | |
Mitra Adiperkasa Tbk. PT | | | 258,000 | | | | 18,380 | |
| | |
Poya International Co. Ltd. | | | 3,000 | | | | 41,244 | |
| | |
Ripley Corp. SA | | | 50,856 | | | | 29,374 | |
| | |
Robinson PCL, NVDR | | | 8,700 | | | | 18,800 | |
| | |
SACI Falabella | | | 21,075 | | | | 107,363 | |
| | |
Shinsegae, Inc. | | | 246 | | | | 49,900 | |
| | |
Woolworths Holdings Ltd. | | | 33,784 | | | | 128,937 | |
| | | | | | | | 1,962,164 | |
|
| Multi-Utilities – 0.1% | |
| | |
Qatar Electricity & Water Co. QSC | | | 34,440 | | | | 149,451 | |
| | |
YTL Corp. Bhd. | | | 186,726 | | | | 38,878 | |
| | |
YTL Power International Bhd. | | | 250,900 | | | | 41,131 | |
| | | | | | | | 229,460 | |
See Accompanying Notes to the Financial Statements.
| | |
| 232 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Oil, Gas & Consumable Fuels – 6.2% | |
| | |
Adaro Energy Tbk. PT | | | 1,164,400 | | | $ | 108,667 | |
| | |
Bangchak Corp. PCL, NVDR | | | 41,600 | | | | 34,030 | |
| | |
Banpu PCL, NVDR | | | 139,400 | | | | 53,553 | |
| | |
Bashneft PJSC | | | 720 | | | | 21,863 | |
| | |
Bashneft PJSC (Preference) | | | 1,163 | | | | 31,402 | |
| | |
Bharat Petroleum Corp. Ltd. | | | 57,810 | | | | 429,202 | |
| | |
Bukit Asam Tbk. PT | | | 206,000 | | | | 33,020 | |
| | |
Bumi Resources Tbk. PT* | | | 51,291,000 | | | | 310,589 | |
| | |
China Coal Energy Co. Ltd., Class H | | | 164,000 | | | | 65,494 | |
| | |
China Petroleum & Chemical Corp., Class H | | | 1,804,000 | | | | 1,035,763 | |
| | |
China Shenhua Energy Co. Ltd., Class H | | | 257,000 | | | | 522,676 | |
| | |
CNOOC Ltd. | | | 1,148,000 | | | | 1,722,505 | |
| | |
Coal India Ltd. | | | 46,986 | | | | 137,489 | |
| | |
Cosan SA | | | 6,700 | | | | 96,451 | |
| | |
COSCO SHIPPING Energy Transportation Co. Ltd., Class H | | | 34,000 | | | | 14,662 | |
| | |
Dana Gas PJSC | | | 263,712 | | | | 65,770 | |
| | |
E1 Corp. | | | 4,428 | | | | 185,729 | |
| | |
Ecopetrol SA | | | 175,398 | | | | 157,828 | |
| | |
Empresas COPEC SA | | | 12,300 | | | | 110,068 | |
| | |
Enauta Participacoes SA | | | 4,600 | | | | 15,080 | |
| | |
Esso Thailand PCL, NVDR | | | 135,200 | | | | 32,910 | |
| | |
Exxaro Resources Ltd. | | | 18,696 | | | | 153,046 | |
| | |
Formosa Petrochemical Corp. | | | 59,000 | | | | 187,812 | |
| | |
Gazprom PJSC | | | 405,200 | | | | 1,644,294 | |
| | |
Gazprom PJSC, ADR | | | 3,466 | | | | 27,742 | |
| | |
Great Eastern Shipping Co. Ltd. (The) | | | 878 | | | | 3,712 | |
| | |
Grupa Lotos SA | | | 6,478 | | | | 161,992 | |
| | |
GS Holdings Corp. | | | 3,608 | | | | 153,971 | |
| | |
Hellenic Petroleum SA | | | 6,163 | | | | 58,650 | |
| | |
Hindustan Petroleum Corp. Ltd. | | | 47,232 | | | | 216,586 | |
| | |
IDG Energy Investment Ltd.* | | | 162,000 | | | | 21,083 | |
| | |
Indian Oil Corp. Ltd. | | | 154,816 | | | | 320,420 | |
| | |
Indika Energy Tbk. PT | | | 1,763,000 | | | | 161,392 | |
| | |
Indo Tambangraya Megah Tbk. PT | | | 41,600 | | | | 39,416 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Inner Mongolia Yitai Coal Co. Ltd., Class B | | | 73,800 | | | $ | 64,427 | |
| | |
Inner Mongolia Yitai Coal Co. Ltd., Class H | | | 20,800 | | | | 13,720 | |
| | |
IRPC PCL, NVDR | | | 746,200 | | | | 84,023 | |
| | |
LUKOIL PJSC | | | 15,006 | | | | 1,386,394 | |
| | |
Mangalore Refinery & Petrochemicals Ltd. | | | 15,060 | | | | 11,604 | |
| | |
Mari Petroleum Co. Ltd. | | | 1,984 | | | | 13,889 | |
| | |
Medco Energi Internasional Tbk. PT* | | | 405,400 | | | | 19,061 | |
| | |
MOL Hungarian Oil & Gas plc | | | 35,342 | | | | 349,853 | |
| | |
Motor Oil Hellas Corinth Refineries SA | | | 4,920 | | | | 121,526 | |
| | |
Novatek PJSC | | | 33,538 | | | | 711,890 | |
| | |
Oil & Gas Development Co. Ltd. | | | 72,100 | | | | 59,687 | |
| | |
Oil & Natural Gas Corp. Ltd. | | | 208,690 | | | | 416,917 | |
| | |
Oil India Ltd. | | | 24,249 | | | | 58,683 | |
| | |
Pakistan Oilfields Ltd. | | | 6,240 | | | | 15,727 | |
| | |
Pakistan Petroleum Ltd. | | | 67,830 | | | | 50,152 | |
| | |
Pakistan State Oil Co. Ltd. | | | 285,360 | | | | 282,553 | |
| | |
PetroChina Co. Ltd., Class H | | | 1,476,000 | | | | 725,034 | |
| | |
Petroleo Brasileiro SA* | | | 192,700 | | | | 1,569,672 | |
| | |
Petroleo Brasileiro SA (Preference) | | | 319,800 | | | | 2,420,965 | |
| | |
Petron Corp. | | | 3,066,800 | | | | 302,782 | |
| | |
Petronas Dagangan Bhd. | | | 6,600 | | | | 37,213 | |
| | |
Petronet LNG Ltd. | | | 25,338 | | | | 102,311 | |
| | |
Pilipinas Shell Petroleum Corp. | | | 463,560 | | | | 310,593 | |
| | |
Polski Koncern Naftowy ORLEN SA | | | 21,648 | | | | 592,412 | |
| | |
Polskie Gornictwo Naftowe i Gazownictwo SA | | | 119,474 | | | | 147,315 | |
| | |
PTT Exploration & Production PCL | | | 469 | | | | 1,872 | |
| | |
PTT Exploration & Production PCL, NVDR | | | 48,731 | | | | 194,472 | |
| | |
PTT PCL, NVDR | | | 631,400 | | | | 946,211 | |
| | |
Qatar Fuel QSC | | | 15,580 | | | | 94,567 | |
| | |
Qatar Gas Transport Co. Ltd. | | | 198,747 | | | | 134,827 | |
| | |
Reliance Industries Ltd. | | | 105,288 | | | | 2,173,709 | |
| | |
Rosneft Oil Co. PJSC | | | 35,800 | | | | 238,029 | |
| | |
Rosneft Oil Co. PJSC, GDR(b) | | | 1,920 | | | | 12,714 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 233 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
RussNeft PJSC* | | | 2,048 | | | $ | 17,734 | |
| | |
Semirara Mining & Power Corp. | | | 102,400 | | | | 47,119 | |
| | |
Siamgas & Petrochemicals PCL, NVDR | | | 697,000 | | | | 200,825 | |
| | |
Sinopec Kantons Holdings Ltd. | | | 1,066,000 | | | | 435,230 | |
| | |
SK Gas Ltd. | | | 4,231 | | | | 305,474 | |
| | |
SK Innovation Co. Ltd. | | | 4,182 | | | | 575,117 | |
| | |
S-Oil Corp. | | | 2,870 | | | | 245,940 | |
| | |
S-Oil Corp. (Preference) | | | 208 | | | | 10,745 | |
| | |
Star Petroleum Refining PCL, NVDR | | | 51,900 | | | | 15,298 | |
| | |
Surgutneftegas PJSC | | | 284,294 | | | | 190,798 | |
| | |
Surgutneftegas PJSC, ADR, OTC | | | 9,902 | | | | 58,620 | |
| | |
Surgutneftegas PJSC (Preference) | | | 189,994 | | | | 111,735 | |
| | |
Tatneft PJSC | | | 23,726 | | | | 277,063 | |
| | |
Tatneft PJSC, ADR | | | 4,806 | | | | 336,420 | |
| | |
Tatneft PJSC (Preference) | | | 6,683 | | | | 68,738 | |
| | |
Thai Oil PCL, NVDR | | | 57,400 | | | | 130,217 | |
| | |
Transneft PJSC (Preference) | | | 63 | | | | 163,716 | |
| | |
Tupras Turkiye Petrol Rafinerileri A/S | | | 9,184 | | | | 200,157 | |
| | |
Ultrapar Participacoes SA | | | 24,600 | | | | 115,634 | |
| | |
United Tractors Tbk. PT | | | 98,400 | | | | 151,943 | |
| | |
Yanzhou Coal Mining Co. Ltd., Class H | | | 112,000 | | | | 113,891 | |
| | | | | | | | 25,772,085 | |
|
| Paper & Forest Products – 0.6% | |
| | |
Century Textiles & Industries Ltd. | | | 1,872 | | | | 11,148 | |
| | |
Duratex SA | | | 16,474 | | | | 53,923 | |
| | |
Empresas CMPC SA | | | 40,098 | | | | 91,449 | |
| | |
Hansol Paper Co. Ltd. | | | 17,876 | | | | 225,092 | |
| | |
Indah Kiat Pulp & Paper Corp. Tbk. PT | | | 196,800 | | | | 101,996 | |
| | |
Lee & Man Paper Manufacturing Ltd. | | | 47,000 | | | | 26,205 | |
| | |
Longchen Paper & Packaging Co. Ltd. | | | 700,350 | | | | 311,747 | |
| | |
Nine Dragons Paper Holdings Ltd.(a) | | | 132,000 | | | | 114,860 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Paper & Forest Products – (continued) | |
| | |
Pabrik Kertas Tjiwi Kimia Tbk. PT | | | 90,200 | | | $ | 67,954 | |
| | |
Sappi Ltd. | | | 41,656 | | | | 107,296 | |
| | |
Shandong Chenming Paper Holdings Ltd., Class B | | | 475,600 | | | | 190,539 | |
| | |
Shandong Chenming Paper Holdings Ltd., Class H | | | 369,000 | | | | 153,952 | |
| | |
Suzano SA | | | 41,000 | | | | 333,360 | |
| | |
YFY, Inc. | | | 1,312,000 | | | | 515,051 | |
| | | | | | | | 2,304,572 | |
|
| Personal Products – 0.4% | |
| | |
Amorepacific Corp. | | | 1,066 | | | | 175,918 | |
| | |
AMOREPACIFIC Group | | | 1,066 | | | | 77,514 | |
| | |
AMOREPACIFIC Group (Preference) | | | 312 | | | | 9,533 | |
| | |
Chlitina Holding Ltd. | | | 2,000 | | | | 15,966 | |
| | |
Colgate-Palmolive India Ltd. | | | 2,518 | | | | 54,997 | |
| | |
Cosmax, Inc. | | | 322 | | | | 22,113 | |
| | |
Dabur India Ltd. | | | 18,122 | | | | 118,026 | |
| | |
Emami Ltd. | | | 4,766 | | | | 21,980 | |
| | |
Gillette India Ltd. | | | 103 | | | | 11,754 | |
| | |
Godrej Consumer Products Ltd. | | | 12,956 | | | | 135,234 | |
| | |
Grape King Bio Ltd. | | | 5,000 | | | | 30,962 | |
| | |
Hengan International Group Co. Ltd. | | | 22,500 | | | | 157,317 | |
| | |
It’s Hanbul Co. Ltd. | | | 501 | | | | 8,785 | |
| | |
Kolmar Korea Co. Ltd. | | | 643 | | | | 26,611 | |
| | |
LG Household & Health Care Ltd. | | | 246 | | | | 266,626 | |
| | |
LG Household & Health Care Ltd. (Preference) | | | 82 | | | | 52,085 | |
| | |
Marico Ltd. | | | 14,760 | | | | 76,132 | |
| | |
Natura Cosmeticos SA | | | 13,200 | | | | 102,459 | |
| | |
Procter & Gamble Hygiene & Health Care Ltd. | | | 344 | | | | 59,374 | |
| | |
TCI Co. Ltd. | | | 4,186 | | | | 46,274 | |
| | | | | | | | 1,469,660 | |
|
| Pharmaceuticals – 1.0% | |
| | |
Adcock Ingram Holdings Ltd. | | | 5,074 | | | | 18,944 | |
| | |
Ajanta Pharma Ltd. | | | 1,415 | | | | 20,961 | |
| | |
Alembic Pharmaceuticals Ltd. | | | 2,150 | | | | 16,673 | |
| | |
Alkem Laboratories Ltd. | | | 7 | | | | 197 | |
See Accompanying Notes to the Financial Statements.
| | |
| 234 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Pharmaceuticals – (continued) | |
| | |
Aspen Pharmacare Holdings Ltd.* | | | 27,060 | | | $ | 189,520 | |
| | |
Aurobindo Pharma Ltd. | | | 7,626 | | | | 50,517 | |
| | |
Beijing Tong Ren Tang Chinese Medicine Co. Ltd. | | | 10,000 | | | | 13,575 | |
| | |
Bukwang Pharmaceutical Co. Ltd. | | | 3,090 | | | | 38,776 | |
| | |
Cadila Healthcare Ltd. | | | 4,844 | | | | 17,193 | |
| | |
Caregen Co. Ltd.* (c) | | | 258 | | | | 16,964 | |
| | |
Celltrion Pharm, Inc.* | | | 697 | | | | 23,963 | |
| | |
Center Laboratories, Inc. | | | 4,071 | | | | 8,920 | |
| | |
China Grand Pharmaceutical and Healthcare Holdings Ltd. | | | 32,000 | | | | 18,373 | |
| | |
China Medical System Holdings Ltd. | | | 72,000 | | | | 97,927 | |
| | |
China Resources Pharmaceutical Group Ltd.(b) | | | 41,500 | | | | 38,388 | |
| | |
China Traditional Chinese Medicine Holdings Co. Ltd. | | | 114,000 | | | | 51,053 | |
| | |
Chong Kun Dang Pharmaceutical Corp. | | | 269 | | | | 22,127 | |
| | |
Cipla Ltd. | | | 7,210 | | | | 47,456 | |
| | |
CSPC Pharmaceutical Group Ltd. | | | 164,000 | | | | 421,629 | |
| | |
Daewoong Co. Ltd. | | | 1,791 | | | | 21,936 | |
| | |
Daewoong Pharmaceutical Co. Ltd. | | | 266 | | | | 34,866 | |
| | |
Dong-A Socio Holdings Co. Ltd. | | | 104 | | | | 8,269 | |
| | |
Dong-A ST Co. Ltd. | | | 299 | | | | 26,085 | |
| | |
DongKook Pharmaceutical Co. Ltd. | | | 450 | | | | 26,881 | |
| | |
Dr Reddy’s Laboratories Ltd. | | | 2,706 | | | | 106,182 | |
| | |
Genomma Lab Internacional SAB de CV, Class B* (a) | | | 12,000 | | | | 12,712 | |
| | |
Glenmark Pharmaceuticals Ltd. | | | 990 | | | | 4,402 | |
| | |
Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., Class H | | | 6,000 | | | | 19,023 | |
| | |
Hanall Biopharma Co. Ltd.* | | | 1,501 | | | | 42,897 | |
| | |
Hanmi Pharm Co. Ltd. | | | 194 | | | | 55,610 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Pharmaceuticals – (continued) | |
| | |
Hanmi Science Co. Ltd. | | | 1,199 | | | $ | 44,932 | |
| | |
Hua Han Health Industry Holdings Ltd.* (c) | | | 3,780,000 | | | | 255,611 | |
| | |
Hypera SA* | | | 15,800 | | | | 135,078 | |
| | |
Il Dong Pharmaceutical Co. Ltd. | | | 479 | | | | 6,937 | |
| | |
Ilyang Pharmaceutical Co. Ltd.* | | | 756 | | | | 14,165 | |
| | |
Ipca Laboratories Ltd. | | | 1,664 | | | | 23,009 | |
| | |
Jubilant Life Sciences Ltd. | | | 1,723 | | | | 13,418 | |
| | |
JW Holdings Corp. | | | 41,328 | | | | 221,657 | |
| | |
JW Pharmaceutical Corp. | | | 224 | | | | 5,574 | |
| | |
Kalbe Farma Tbk. PT | | | 519,700 | | | | 59,053 | |
| | |
Kolon Life Science, Inc.* | | | 291 | | | | 5,703 | |
| | |
Komipharm International Co. Ltd.* | | | 1,575 | | | | 18,952 | |
| | |
Livzon Pharmaceutical Group, Inc., Class H | | | 7,030 | | | | 20,585 | |
| | |
Lotus Pharmaceutical Co. Ltd.* | | | 5,000 | | | | 16,015 | |
| | |
Lupin Ltd. | | | 6,888 | | | | 72,358 | |
| | |
Luye Pharma Group Ltd.(a) (b) | | | 75,000 | | | | 55,597 | |
| | |
Mega Lifesciences PCL, NVDR | | | 23,000 | | | | 21,899 | |
| | |
Mezzion Pharma Co. Ltd.* | | | 198 | | | | 32,760 | |
| | |
Natco Pharma Ltd. | | | 2,480 | | | | 20,601 | |
| | |
Oscotec, Inc.* | | | 808 | | | | 14,723 | |
| | |
Pfizer Ltd. | | | 341 | | | | 19,509 | |
| | |
Pharmally International Holding Co. Ltd.* | | | 2,000 | | | | 15,144 | |
| | |
Piramal Enterprises Ltd. | | | 3,198 | | | | 75,936 | |
| | |
Richter Gedeon Nyrt | | | 4,018 | | | | 74,577 | |
| | |
Sam Chun Dang Pharm Co. Ltd. | | | 823 | | | | 23,768 | |
| | |
Samjin Pharmaceutical Co. Ltd. | | | 344 | | | | 7,584 | |
| | |
Sanofi India Ltd. | | | 163 | | | | 15,470 | |
| | |
ScinoPharm Taiwan Ltd. | | | 22,000 | | | | 17,237 | |
| | |
Shanghai Fosun Pharmaceutical Group Co. Ltd., Class H | | | 20,000 | | | | 56,649 | |
| | |
Sihuan Pharmaceutical Holdings Group Ltd. | | | 206,000 | | | | 27,072 | |
| | |
Sino Biopharmaceutical Ltd. | | | 220,000 | | | | 328,974 | |
| | |
SSY Group Ltd. | | | 80,165 | | | | 67,097 | |
| | |
Sun Pharma Advanced Research Co. Ltd.* | | | 4,836 | | | | 9,511 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 235 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Pharmaceuticals – (continued) | |
| | |
Sun Pharmaceutical Industries Ltd. | | | 36,162 | | | $ | 220,963 | |
| | |
Tong Ren Tang Technologies Co. Ltd., Class H(a) | | | 17,000 | | | | 16,940 | |
| | |
Torrent Pharmaceuticals Ltd. | | | 2,009 | | | | 50,312 | |
| | |
TTY Biopharm Co. Ltd. | | | 12,686 | | | | 33,423 | |
| | |
United Laboratories International Holdings Ltd. (The)(a) | | | 656,000 | | | | 377,478 | |
| | |
Wockhardt Ltd.* | | | 175 | | | | 708 | |
| | |
YiChang HEC ChangJiang Pharmaceutical Co. Ltd., Class H(b) | | | 800 | | | | 4,920 | |
| | |
Yuhan Corp. | | | 368 | | | | 71,010 | |
| | |
Yungjin Pharmaceutical Co. Ltd.* | | | 5,316 | | | | 24,399 | |
| | |
YungShin Global Holding Corp. | | | 11,000 | | | | 15,683 | |
| | | | | | | | 4,085,010 | |
|
| Professional Services – 0.0%(d) | |
| | |
51job, Inc., ADR* | | | 1,000 | | | | 78,770 | |
| | |
Benefit Systems SA* | | | 98 | | | | 17,982 | |
| | |
L&T Technology Services Ltd.(b) | | | 103 | | | | 2,183 | |
| | |
Quess Corp. Ltd.* (b) | | | 1,560 | | | | 11,410 | |
| | |
Sporton International, Inc. | | | 2,386 | | | | 14,893 | |
| | | | | | | | 125,238 | |
|
| Real Estate Management & Development – 5.7% | |
| | |
8990 Holdings, Inc. | | | 40,000 | | | | 11,824 | |
| | |
Agile Group Holdings Ltd. | | | 112,000 | | | | 151,473 | |
| | |
Aldar Properties PJSC | | | 268,222 | | | | 171,619 | |
| | |
AP Thailand PCL, NVDR | | | 975,800 | | | | 213,290 | |
| | |
Ayala Land, Inc. | | | 196,800 | | | | 188,287 | |
| | |
Bangkok Land PCL, NVDR | | | 100 | | | | 5 | |
| | |
Barwa Real Estate Co. | | | 130,380 | | | | 122,466 | |
| | |
BR Malls Participacoes SA | | | 32,800 | | | | 125,419 | |
| | |
BR Properties SA* | | | 4,577 | | | | 13,853 | |
| | |
Bumi Serpong Damai Tbk. PT* | | | 336,800 | | | | 33,951 | |
| | |
C C Land Holdings Ltd. | | | 56,000 | | | | 12,575 | |
| | |
C&D International Investment Group Ltd. | | | 246,000 | | | | 247,014 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Real Estate Management & Development – (continued) | |
| | |
Cathay Real Estate Development Co. Ltd. | | | 33,100 | | | $ | 23,813 | |
| | |
Central China Real Estate Ltd. | | | 656,000 | | | | 301,313 | |
| | |
China Aoyuan Group Ltd. | | | 106,000 | | | | 136,055 | |
| | |
China Dili Group* | | | 112,600 | | | | 34,480 | |
| | |
China Evergrande Group* (a) | | | 215,000 | | | | 525,039 | |
| | |
China Jinmao Holdings Group Ltd. | | | 328,000 | | | | 218,870 | |
| | |
China Logistics Property Holdings Co. Ltd.* (b) | | | 59,000 | | | | 22,960 | |
| | |
China Merchants Land Ltd. | | | 1,312,000 | | | | 185,810 | |
| | |
China Oceanwide Holdings Ltd.* | | | 202,000 | | | | 7,732 | |
| | |
China Overseas Grand Oceans Group Ltd. | | | 1,640,000 | | | | 851,627 | |
| | |
China Overseas Land & Investment Ltd. | | | 276,000 | | | | 873,317 | |
| | |
China Overseas Property Holdings Ltd. | | | 70,000 | | | | 42,870 | |
| | |
China Resources Land Ltd. | | | 195,777 | | | | 835,544 | |
| | |
China SCE Group Holdings Ltd. | | | 103,000 | | | | 47,310 | |
| | |
China South City Holdings Ltd.(a) | | | 4,428,000 | | | | 514,115 | |
| | |
China Vanke Co. Ltd., Class H | | | 114,800 | | | | 419,641 | |
| | |
China Vast Industrial Urban Development Co. Ltd.(b) | | | 246,000 | | | | 95,416 | |
| | |
Chong Hong Construction Co. Ltd. | | | 10,000 | | | | 26,938 | |
| | |
CIFI Holdings Group Co. Ltd. | | | 306,047 | | | | 205,002 | |
| | |
Ciputra Development Tbk. PT | | | 365,949 | | | | 28,938 | |
| | |
Corp. Inmobiliaria Vesta SAB de CV | | | 565,800 | | | | 947,033 | |
| | |
Cosmopolitan International Holdings Ltd.* (a) | | | 1,148,000 | | | | 156,725 | |
| | |
Country Garden Holdings Co. Ltd. | | | 538,000 | | | | 749,577 | |
| | |
DaFa Properties Group Ltd. | | | 246,000 | | | | 195,853 | |
| | |
DAMAC Properties Dubai Co. PJSC* | | | 104,520 | | | | 24,502 | |
| | |
Dar Al Arkan Real Estate Development Co.* | | | 19,106 | | | | 61,338 | |
| | |
Dexin China Holdings Co. Ltd.* (a) (b) | | | 738,000 | | | | 301,313 | |
See Accompanying Notes to the Financial Statements.
| | |
| 236 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Real Estate Management & Development – (continued) | |
| | |
DLF Ltd. | | | 19,408 | | | $ | 50,156 | |
| | |
Dongwon Development Co. Ltd. | | | 40,836 | | | | 154,436 | |
| | |
DoubleDragon Properties Corp.* | | | 723,120 | | | | 288,564 | |
| | |
E-House China Enterprise Holdings Ltd.(b) | | | 49,200 | | | | 56,433 | |
| | |
Emaar Development PJSC | | | 61,582 | | | | 67,907 | |
| | |
Emaar Economic City* | | | 17,922 | | | | 44,778 | |
| | |
Emaar Malls PJSC | | | 96,296 | | | | 51,126 | |
| | |
Emaar Properties PJSC | | | 258,464 | | | | 300,490 | |
| | |
Fantasia Holdings Group Co. Ltd.* | | | 1,353,000 | | | | 205,426 | |
| | |
Farglory Land Development Co. Ltd. | | | 21,000 | | | | 26,698 | |
| | |
Filinvest Development Corp. | | | 92,700 | | | | 24,150 | |
| | |
Filinvest Land, Inc. | | | 9,676,000 | | | | 305,086 | |
| | |
Future Land Development Holdings Ltd.(a) | | | 118,000 | | | | 124,810 | |
| | |
Gemdale Properties & Investment Corp. Ltd. | | | 378,000 | | | | 43,888 | |
| | |
Globe Trade Centre SA | | | 103 | | | | 255 | |
| | |
Godrej Properties Ltd.* | | | 1,507 | | | | 21,189 | |
| | |
Greenland Hong Kong Holdings Ltd. | | | 820,000 | | | | 283,527 | |
| | |
Greentown China Holdings Ltd.(a) | | | 88,000 | | | | 81,401 | |
| | |
Guangzhou R&F Properties Co. Ltd., Class H | | | 84,800 | | | | 131,782 | |
| | |
Guorui Properties Ltd.(b) | | | 738,000 | | | | 142,182 | |
| | |
Hanson International Tbk. PT* | | | 2,409,275 | | | | 15,447 | |
| | |
Highwealth Construction Corp. | | | 65,000 | | | | 99,826 | |
| | |
Hopson Development Holdings Ltd. | | | 56,000 | | | | 54,087 | |
| | |
Huaku Development Co. Ltd. | | | 235,000 | | | | 646,162 | |
| | |
Huang Hsiang Construction Corp. | | | 82,000 | | | | 98,458 | |
| | |
Hung Sheng Construction Ltd.* | | | 554,000 | | | | 381,278 | |
| | |
IOI Properties Group Bhd. | | | 145,600 | | | | 36,239 | |
| | |
Jaya Real Property Tbk. PT | | | 3,091,400 | | | | 146,454 | |
| | |
Jiayuan International Group Ltd.(a) | | | 1,148,000 | | | | 459,921 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Real Estate Management & Development – (continued) | |
| | |
Joy City Property Ltd. | | | 136,000 | | | $ | 14,923 | |
| | |
Kaisa Group Holdings Ltd.(a) | | | 164,000 | | | | 71,980 | |
| | |
Kindom Development Co. Ltd. | | | 372,000 | | | | 387,392 | |
| | |
Korea Real Estate Investment & Trust Co. Ltd. | | | 176,054 | | | | 334,419 | |
| | |
KWG Group Holdings Ltd.* | | | 82,000 | | | | 82,861 | |
| | |
LAMDA Development SA* | | | 29,192 | | | | 232,536 | |
| | |
Land & Houses PCL, NVDR | | | 155,700 | | | | 50,018 | |
| | |
Lerthai Group Ltd.* | | | 238,000 | | | | 99,904 | |
| | |
Logan Property Holdings Co. Ltd.(a) | | | 86,000 | | | | 131,452 | |
| | |
Longfor Group Holdings Ltd.(b) | | | 105,000 | | | | 436,735 | |
| | |
LSR Group PJSC | | | 35,670 | | | | 395,163 | |
| | |
LVGEM China Real Estate Investment Co. Ltd. | | | 1,148,000 | | | | 413,050 | |
| | |
Mah Sing Group Bhd. | | | 1,451,400 | | | | 263,986 | |
| | |
MAS Real Estate, Inc. | | | 13,905 | | | | 17,446 | |
| | |
MBK PCL, NVDR | | | 29,800 | | | | 22,403 | |
| | |
Medinet Nasr Housing* | | | 24,052 | | | | 8,017 | |
| | |
Megaworld Corp. | | | 256,200 | | | | 24,386 | |
| | |
Midea Real Estate Holding Ltd.(b) | | | 23,000 | | | | 57,341 | |
| | |
Mingfa Group International Co. Ltd.* (c) | | | 36,000 | | | | 8,681 | |
| | |
Multiplan Empreendimentos Imobiliarios SA* | | | 8,700 | | | | 63,304 | |
| | |
NEPI Rockcastle plc | | | 17,147 | | | | 149,688 | |
| | |
Oberoi Realty Ltd. | | | 4,021 | | | | 28,737 | |
| | |
Origin Property PCL, NVDR | | | 1,026,700 | | | | 234,616 | |
| | |
Origin Property PCL, Class F | | | 78,900 | | | | 18,030 | |
| | |
Pakuwon Jati Tbk. PT | | | 534,400 | | | | 23,794 | |
| | |
Palm Hills Developments SAE* | | | 1,351,934 | | | | 178,415 | |
| | |
Parque Arauco SA | | | 27,306 | | | | 71,856 | |
| | |
Poly Property Group Co. Ltd. | | | 1,968,000 | | | | 713,107 | |
| | |
Powerlong Real Estate Holdings Ltd.(a) | | | 99,000 | | | | 65,809 | |
| | |
Prestige Estates Projects Ltd. | | | 652 | | | | 2,778 | |
| | |
Pruksa Holding PCL, NVDR | | | 62,400 | | | | 32,652 | |
| | |
Quality Houses PCL, NVDR | | | 4,247,600 | | | | 365,748 | |
| | |
Radium Life Tech Co. Ltd. | | | 656,000 | | | | 261,835 | |
| | |
Redco Properties Group Ltd.(b) | | | 52,000 | | | | 33,571 | |
| | |
Redsun Properties Group Ltd. | | | 984,000 | | | | 312,612 | |
| | |
Road King Infrastructure Ltd. | | | 229,000 | | | | 419,567 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 237 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Real Estate Management & Development – (continued) | |
| | |
Robinsons Land Corp. | | | 103,906 | | | $ | 52,112 | |
| | |
Ronshine China Holdings Ltd.* (b) | | | 52,500 | | | | 58,745 | |
| | |
Ruentex Development Co. Ltd.* | | | 33,400 | | | | 51,021 | |
| | |
Sansiri PCL, NVDR | | | 5,461,200 | | | | 206,185 | |
| | |
Shanghai Industrial Urban Development Group Ltd. | | | 37,000 | | | | 4,626 | |
| | |
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., Class B | | | 37,440 | | | | 41,259 | |
| | |
Shenzhen Investment Ltd. | | | 164,000 | | | | 64,657 | |
| | |
Shimao Property Holdings Ltd. | | | 70,500 | | | | 237,018 | |
| | |
Shining Building Business Co. Ltd.* | | | 13,786 | | | | 5,389 | |
| | |
Shui On Land Ltd. | | | 307,000 | | | | 61,888 | |
| | |
Sime Darby Property Bhd. | | | 73,800 | | | | 12,805 | |
| | |
Singha Estate PCL, NVDR | | | 77,400 | | | | 8,151 | |
| | |
Sino-Ocean Group Holding Ltd. | | | 249,267 | | | | 91,912 | |
| | |
Sinyi Realty, Inc. | | | 22,738 | | | | 24,015 | |
| | |
SK D&D Co. Ltd. | | | 258 | | | | 6,420 | |
| | |
Skyfame Realty Holdings Ltd. | | | 2,952,000 | | | | 414,305 | |
| | |
SM Prime Holdings, Inc. | | | 393,600 | | | | 302,501 | |
| | |
SOHO China Ltd. | | | 104,000 | | | | 35,561 | |
| | |
SP Setia Bhd. Group | | | 53,194 | | | | 15,404 | |
| | |
Summarecon Agung Tbk. PT | | | 219,800 | | | | 17,694 | |
| | |
Sunac China Holdings Ltd. | | | 172,000 | | | | 783,444 | |
| | |
Sunway Bhd. | | | 102,249 | | | | 41,599 | |
| | |
Supalai PCL, NVDR | | | 48,600 | | | | 26,075 | |
| | |
Talaat Moustafa Group | | | 51,370 | | | | 31,669 | |
| | |
Tian An China Investment Co. Ltd. | | | 492,000 | | | | 238,539 | |
| | |
Times China Holdings Ltd. | | | 50,000 | | | | 89,567 | |
| | |
UEM Sunrise Bhd.* | | | 71,900 | | | | 11,787 | |
| | |
United Development Co. QSC | | | 1,778,663 | | | | 683,913 | |
| | |
UOA Development Bhd. | | | 18,800 | | | | 8,998 | |
| | |
Vista Land & Lifescapes, Inc. | | | 267,800 | | | | 40,583 | |
| | |
WHA Corp. PCL, NVDR | | | 113,390 | | | | 17,575 | |
| | |
Yuexiu Property Co. Ltd. | | | 492,000 | | | | 108,598 | |
| | |
Yuzhou Properties Co. Ltd. | | | 112,952 | | | | 47,846 | |
| | |
Zall Smart Commerce Group Ltd.* (a) | | | 125,000 | | | | 12,121 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Real Estate Management & Development – (continued) | |
| | |
Zhenro Properties Group Ltd.(b) | | | 119,000 | | | $ | 80,470 | |
| | |
Zhuguang Holdings Group Co. Ltd.* | | | 150,000 | | | | 20,478 | |
| | | | | | | | 23,450,805 | |
|
| Road & Rail – 0.2% | |
| | |
BTS Group Holdings PCL, NVDR | | | 176,540 | | | | 78,345 | |
| | |
CAR, Inc.* | | | 25,000 | | | | 20,414 | |
| | |
Cia de Locacao das Americas* | | | 4,500 | | | | 19,348 | |
| | |
CJ Logistics Corp.* | | | 416 | | | | 56,315 | |
| | |
Container Corp. of India Ltd. | | | 4,571 | | | | 37,916 | |
| | |
Cosan Logistica SA* | | | 4,018 | | | | 20,298 | |
| | |
GMexico Transportes SAB de CV(b) | | | 21,300 | | | | 28,542 | |
| | |
Localiza Rent a Car SA | | | 20,200 | | | | 217,277 | |
| | |
PKP Cargo SA | | | 31,570 | | | | 198,606 | |
| | |
Rumo SA* | | | 32,800 | | | | 186,289 | |
| | | | | | | | 863,350 | |
|
| Semiconductors & Semiconductor Equipment – 4.0% | |
| | |
A-DATA Technology Co. Ltd. | | | 213,000 | | | | 354,061 | |
| | |
Ardentec Corp. | | | 410,000 | | | | 382,517 | |
| | |
ASE Technology Holding Co. Ltd. | | | 222,000 | | | | 579,787 | |
| | |
ASMedia Technology, Inc. | | | 1,104 | | | | 17,771 | |
| | |
ASPEED Technology, Inc. | | | 1,000 | | | | 26,215 | |
| | |
Chang Wah Technology Co. Ltd. | | | 146,000 | | | | 180,818 | |
| | |
Chipbond Technology Corp. | | | 26,000 | | | | 51,589 | |
| | |
ChipMOS Technologies, Inc. | | | 493,000 | | | | 489,105 | |
| | |
Darwin Precisions Corp. | | | 11,000 | | | | 5,999 | |
| | |
DB HiTek Co. Ltd. | | | 36,408 | | | | 531,983 | |
| | |
Elan Microelectronics Corp. | | | 8,400 | | | | 26,022 | |
| | |
Elite Advanced Laser Corp. | | | 3,960 | | | | 7,259 | |
| | |
Elite Semiconductor Memory Technology, Inc. | | | 12,000 | | | | 12,615 | |
| | |
eMemory Technology, Inc. | | | 3,000 | | | | 33,262 | |
| | |
Eo Technics Co. Ltd. | | | 390 | | | | 32,281 | |
| | |
Epistar Corp.* | | | 58,000 | | | | 56,399 | |
| | |
Everlight Electronics Co. Ltd. | | | 22,000 | | | | 20,200 | |
| | |
Faraday Technology Corp. | | | 6,000 | | | | 11,432 | |
| | |
Formosa Advanced Technologies Co. Ltd. | | | 164,000 | | | | 182,638 | |
See Accompanying Notes to the Financial Statements.
| | |
| 238 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Semiconductors & Semiconductor Equipment – (continued) | |
| | |
GCL-Poly Energy Holdings Ltd.* (a) | | | 13,776,000 | | | $ | 553,662 | |
| | |
GemVax & Kael Co. Ltd.* | | | 920 | | | | 20,599 | |
| | |
Global Unichip Corp. | | | 2,000 | | | | 17,575 | |
| | |
Globalwafers Co. Ltd. | | | 16,000 | | | | 191,850 | |
| | |
Greatek Electronics, Inc. | | | 26,000 | | | | 36,599 | |
| | |
Hanmi Semiconductor Co. Ltd. | | | 1,248 | | | | 7,305 | |
| | |
Holtek Semiconductor, Inc. | | | 1,000 | | | | 2,185 | |
| | |
Hua Hong Semiconductor Ltd.(a) (b) | | | 20,000 | | | | 40,369 | |
| | |
Jusung Engineering Co. Ltd. | | | 774 | | | | 4,717 | |
| | |
Koh Young Technology, Inc. | | | 416 | | | | 33,646 | |
| | |
LandMark Optoelectronics Corp. | | | 2,000 | | | | 16,918 | |
| | |
LEENO Industrial, Inc. | | | 416 | | | | 19,022 | |
| | |
Lextar Electronics Corp. | | | 12,000 | | | | 7,037 | |
| | |
Machvision, Inc. | | | 1,000 | | | | 9,970 | |
| | |
Macronix International | | | 82,000 | | | | 83,777 | |
| | |
MediaTek, Inc. | | | 48,000 | | | | 643,353 | |
| | |
Nanya Technology Corp. | | | 31,000 | | | | 71,287 | |
| | |
Novatek Microelectronics Corp. | | | 18,000 | | | | 115,898 | |
| | |
On-Bright Electronics, Inc. | | | 2,000 | | | | 11,794 | |
| | |
Parade Technologies Ltd. | | | 3,400 | | | | 65,787 | |
| | |
Phison Electronics Corp. | | | 6,000 | | | | 54,697 | |
| | |
Pixart Imaging, Inc. | | | 5,000 | | | | 19,300 | |
| | |
Powertech Technology, Inc. | | | 54,000 | | | | 170,299 | |
| | |
Radiant Opto-Electronics Corp. | | | 19,330 | | | | 76,836 | |
| | |
Realtek Semiconductor Corp. | | | 19,070 | | | | 141,895 | |
| | |
SDI Corp. | | | 7,000 | | | | 14,303 | |
| | |
Semiconductor Manufacturing International Corp.* (a) | | | 93,000 | | | | 118,539 | |
| | |
Seoul Semiconductor Co. Ltd. | | | 1,370 | | | | 15,779 | |
| | |
Sigurd Microelectronics Corp. | | | 330,000 | | | | 402,736 | |
| | |
Silergy Corp. | | | 3,000 | | | | 84,558 | |
| | |
Silicon Works Co. Ltd. | | | 416 | | | | 11,942 | |
| | |
Sino-American Silicon Products, Inc. | | | 46,000 | | | | 138,723 | |
| | |
Sitronix Technology Corp. | | | 5,000 | | | | 29,894 | |
| | |
SK Hynix, Inc. | | | 39,278 | | | | 2,768,315 | |
| | |
Taiwan Semiconductor Co. Ltd. | | | 9,000 | | | | 15,079 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Semiconductors & Semiconductor Equipment – (continued) | |
| | |
Taiwan Semiconductor Manufacturing Co. Ltd. | | | 642,000 | | | $ | 6,295,462 | |
| | |
Tokai Carbon Korea Co. Ltd. | | | 86 | | | | 3,955 | |
| | |
Topco Scientific Co. Ltd. | | | 154,000 | | | | 490,728 | |
| | |
Toptec Co. Ltd. | | | 309 | | | | 2,167 | |
| | |
United Microelectronics Corp. | | | 328,000 | | | | 150,852 | |
| | |
United Renewable Energy Co. Ltd.* | | | 42,000 | | | | 11,383 | |
| | |
Vanguard International Semiconductor Corp. | | | 14,000 | | | | 29,986 | |
| | |
Visual Photonics Epitaxy Co. Ltd. | | | 6,000 | | | | 23,554 | |
| | |
Wafer Works Corp. | | | 16,798 | | | | 19,342 | |
| | |
Win Semiconductors Corp. | | | 13,961 | | | | 145,845 | |
| | |
Winbond Electronics Corp. | | | 99,000 | | | | 55,776 | |
| | |
WONIK IPS Co. Ltd. | | | 824 | | | | 23,478 | |
| | |
XinTec, Inc.* | | | 6,000 | | | | 12,398 | |
| | |
Xinyi Solar Holdings Ltd. | | | 115,918 | | | | 65,667 | |
| | | | | | | | 16,348,791 | |
|
| Software – 0.1% | |
| | |
Ahnlab, Inc. | | | 190 | | | | 10,043 | |
| | |
Asseco Poland SA | | | 5,576 | | | | 74,980 | |
| | |
China Youzan Ltd.* | | | 232,000 | | | | 14,208 | |
| | |
Douzone Bizon Co. Ltd. | | | 669 | | | | 42,206 | |
| | |
Kingdee International Software Group Co. Ltd.(a) | | | 76,000 | | | | 83,586 | |
| | |
Kingsoft Corp. Ltd.* (a) | | | 40,000 | | | | 92,374 | |
| | |
Linx SA | | | 3,300 | | | | 28,517 | |
| | |
Oracle Financial Services Software Ltd.* | | | 883 | | | | 39,096 | |
| | |
Tata Elxsi Ltd. | | | 516 | | | | 5,958 | |
| | |
TOTVS SA* | | | 3,500 | | | | 54,300 | |
| | |
Weimob, Inc.* (b) | | | 86,000 | | | | 38,733 | |
| | | | | | | | 484,001 | |
|
| Specialty Retail – 1.3% | |
| | |
Ace Hardware Indonesia Tbk. PT | | | 206,000 | | | | 24,802 | |
| | |
Beauty Community PCL, NVDR | | | 114,400 | | | | 8,108 | |
| | |
Bermaz Auto Bhd. | | | 20,800 | | | | 11,350 | |
| | |
China Yongda Automobiles Services Holdings Ltd.(a) | | | 1,271,000 | | | | 1,081,640 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 239 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Specialty Retail – (continued) | |
| | |
China ZhengTong Auto Services Holdings Ltd.(a) | | | 902,000 | | | $ | 270,449 | |
| | |
Detsky Mir PJSC(b) | | | 249,526 | | | | 373,483 | |
| | |
Foschini Group Ltd. (The) | | | 9,020 | | | | 104,191 | |
| | |
GOME Retail Holdings Ltd.* (a) | | | 279,447 | | | | 25,314 | |
| | |
Grand Baoxin Auto Group Ltd.* | | | 697,000 | | | | 140,508 | |
| | |
Home Product Center PCL, NVDR | | | 106,600 | | | | 60,723 | |
| | |
Hotai Motor Co. Ltd. | | | 12,000 | | | | 212,086 | |
| | |
Hotel Shilla Co. Ltd. | | | 1,180 | | | | 78,602 | |
| | |
Italtile Ltd. | | | 10,931 | | | | 10,159 | |
| | |
Jarir Marketing Co. | | | 2,214 | | | | 93,512 | |
| | |
JUMBO SA | | | 4,182 | | | | 81,649 | |
| | |
LOTTE Himart Co. Ltd. | | | 936 | | | | 24,336 | |
| | |
M.Video PJSC* | | | 81,672 | | | | 542,260 | |
| | |
Motus Holdings Ltd.(a) | | | 188,026 | | | | 894,726 | |
| | |
Mr Price Group Ltd. | | | 8,692 | | | | 92,208 | |
| | |
Padini Holdings Bhd. | | | 17,200 | | | | 15,107 | |
| | |
Pepkor Holdings Ltd.(b) | | | 8,170 | | | | 8,976 | |
| | |
Petrobras Distribuidora SA | | | 49,200 | | | | 346,596 | |
| | |
Pou Sheng International Holdings Ltd. | | | 97,000 | | | | 36,633 | |
| | |
PTG Energy PCL, NVDR | | | 26,300 | | | | 15,678 | |
| | |
Seobu T&D* | | | 508 | | | | 3,375 | |
| | |
Shinsegae International, Inc. | | | 81 | | | | 13,820 | |
| | |
Siam Global House PCL, NVDR | | | 61,282 | | | | 30,849 | |
| | |
Super Group Ltd.* | | | 374,522 | | | | 702,128 | |
| | |
Truworths International Ltd. | | | 17,876 | | | | 63,572 | |
| | |
Via Varejo SA* | | | 17,100 | | | | 31,607 | |
| | |
Zhongsheng Group Holdings Ltd. | | | 41,000 | | | | 136,271 | |
| | | | | | | | 5,534,718 | |
|
| Technology Hardware, Storage & Peripherals – 5.6% | |
| | |
Acer, Inc. | | | 68,858 | | | | 40,265 | |
| | |
Advantech Co. Ltd. | | | 14,220 | | | | 140,843 | |
| | |
Asustek Computer, Inc. | | | 48,000 | | | | 325,619 | |
| | |
Catcher Technology Co. Ltd. | | | 59,000 | | | | 500,057 | |
| | |
Chicony Electronics Co. Ltd. | | | 23,992 | | | | 74,639 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Technology Hardware, Storage & Peripherals – (continued) | |
| | |
Clevo Co. | | | 574,000 | | | $ | 694,860 | |
| | |
CMC Magnetics Corp.* | | | 29,542 | | | | 11,064 | |
| | |
Compal Electronics, Inc. | | | 328,000 | | | | 196,107 | |
| | |
Darfon Electronics Corp. | | | 210,000 | | | | 282,157 | |
| | |
Getac Technology Corp. | | | 16,000 | | | | 26,281 | |
| | |
Gigabyte Technology Co. Ltd. | | | 44,000 | | | | 73,573 | |
| | |
HTC Corp. | | | 29,000 | | | | 35,059 | |
| | |
Innodisk Corp. | | | 67,680 | | | | 296,818 | |
| | |
Inventec Corp. | | | 116,000 | | | | 84,217 | |
| | |
Legend Holdings Corp., Class H(a) (b) | | | 41,000 | | | | 90,394 | |
| | |
Lenovo Group Ltd. | | | 454,000 | | | | 317,430 | |
| | |
Lite-On Technology Corp. | | | 164,000 | | | | 270,455 | |
| | |
Micro-Star International Co. Ltd. | | | 28,000 | | | | 82,784 | |
| | |
Pegatron Corp. | | | 139,000 | | | | 270,781 | |
| | |
Qisda Corp. | | | 126,000 | | | | 94,581 | |
| | |
Quanta Computer, Inc. | | | 82,000 | | | | 157,586 | |
| | |
Ritek Corp.* | | | 32,590 | | | | 8,661 | |
| | |
Samsung Electronics Co. Ltd. | | | 372,606 | | | | 16,141,083 | |
| | |
Samsung Electronics Co. Ltd. (Preference) | | | 59,860 | | | | 2,112,040 | |
| | |
Sindoh Co. Ltd. | | | 16 | | | | 527 | |
| | |
Transcend Information, Inc. | | | 7,000 | | | | 15,200 | |
| | |
Wistron Corp. | | | 82,000 | | | | 75,291 | |
| | |
Wiwynn Corp. | | | 7,000 | | | | 133,145 | |
| | |
Xiaomi Corp., Class B* (a) (b) | | | 459,200 | | | | 521,439 | |
| | | | | | | | 23,072,956 | |
|
| Textiles, Apparel & Luxury Goods – 1.3% | |
| | |
Aditya Birla Fashion and Retail Ltd.* | | | 6,536 | | | | 19,554 | |
| | |
Alpargatas SA (Preference)* | | | 7,375 | | | | 50,044 | |
| | |
ANTA Sports Products Ltd. | | | 35,000 | | | | 342,958 | |
| | |
Arezzo Industria e Comercio SA | | | 1,600 | | | | 23,555 | |
| | |
Bata India Ltd. | | | 122 | | | | 3,108 | |
| | |
Bosideng International Holdings Ltd. | | | 126,000 | | | | 65,269 | |
| | |
CCC SA | | | 1,067 | | | | 31,213 | |
| | |
China Dongxiang Group Co. Ltd. | | | 3,608,000 | | | | 405,098 | |
| | |
China Lilang Ltd. | | | 22,000 | | | | 17,740 | |
| | |
Cia Hering | | | 4,800 | | | | 37,629 | |
See Accompanying Notes to the Financial Statements.
| | |
| 240 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Textiles, Apparel & Luxury Goods – (continued) | |
| | |
Eclat Textile Co. Ltd. | | | 6,698 | | | $ | 90,105 | |
| | |
F&F Co. Ltd. | | | 206 | | | | 17,795 | |
| | |
Feng TAY Enterprise Co. Ltd. | | | 13,834 | | | | 93,619 | |
| | |
FF Group*‡ (c) | | | 3,536 | | | | 1,894 | |
| | |
Fila Korea Ltd. | | | 1,906 | | | | 94,362 | |
| | |
Formosa Taffeta Co. Ltd. | | | 33,000 | | | | 37,563 | |
| | |
Fuguiniao Co. Ltd., Class H* (c) | | | 334,800 | | | | 165,740 | |
| | |
Guararapes Confeccoes SA | | | 2,400 | | | | 11,921 | |
| | |
Handsome Co. Ltd. | | | 1,177 | | | | 29,540 | |
| | |
Hansae Co. Ltd. | | | 1,034 | | | | 16,086 | |
| | |
HS Industries Co. Ltd. | | | 38,950 | | | | 379,976 | |
| | |
Hwaseung Enterprise Co. Ltd. | | | 331 | | | | 4,410 | |
| | |
JNBY Design Ltd.(b) | | | 10,000 | | | | 14,290 | |
| | |
Lao Feng Xiang Co. Ltd., Class B | | | 188,600 | | | | 625,398 | |
| | |
LF Corp. | | | 20,418 | | | | 344,848 | |
| | |
Li Ning Co. Ltd. | | | 66,500 | | | | 226,115 | |
| | |
LPP SA | | | 41 | | | | 87,642 | |
| | |
Makalot Industrial Co. Ltd. | | | 8,032 | | | | 44,856 | |
| | |
Nan Liu Enterprise Co. Ltd. | | | 2,000 | | | | 9,067 | |
| | |
Nishat Mills Ltd. | | | 139,400 | | | | 75,512 | |
| | |
Page Industries Ltd. | | | 206 | | | | 74,789 | |
| | |
Pou Chen Corp. | | | 185,000 | | | | 247,655 | |
| | |
Quang Viet Enterprise Co. Ltd. | | | 4,000 | | | | 19,776 | |
| | |
Rajesh Exports Ltd. | | | 3,055 | | | | 29,222 | |
| | |
Raymond Ltd. | | | 60 | | | | 491 | |
| | |
Roo Hsing Co. Ltd.* | | | 492,000 | | | | 185,871 | |
| | |
Ruentex Industries Ltd.* | | | 37,800 | | | | 90,897 | |
| | |
Shenzhou International Group Holdings Ltd. | | | 25,500 | | | | 353,331 | |
| | |
Shinkong Textile Co. Ltd. | | | 9,000 | | | | 12,639 | |
| | |
Tainan Spinning Co. Ltd. | | | 48,555 | | | | 17,865 | |
| | |
Taiwan Paiho Ltd. | | | 11,000 | | | | 28,764 | |
| | |
Texhong Textile Group Ltd. | | | 265,500 | | | | 268,965 | |
| | |
Titan Co. Ltd. | | | 10,496 | | | | 196,990 | |
| | |
Welspun India Ltd. | | | 11,024 | | | | 8,680 | |
| | |
Xtep International Holdings Ltd. | | | 40,134 | | | | 23,350 | |
| | |
Youngone Corp. | | | 890 | | | | 26,583 | |
| | |
Youngone Holdings Co. Ltd. | | | 5,658 | | | | 255,800 | |
| | | | | | | | 5,208,575 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Thrifts & Mortgage Finance – 0.5% | |
| | |
Housing Development Finance Corp. Ltd. | | | 59,040 | | | $ | 1,774,561 | |
| | |
IIFL Finance Ltd. | | | 3,988 | | | | 6,409 | |
| | |
Indiabulls Housing Finance Ltd. | | | 23,780 | | | | 69,283 | |
| | |
LIC Housing Finance Ltd. | | | 10,414 | | | | 60,550 | |
| | |
Malaysia Building Society Bhd. | | | 100,217 | | | | 20,986 | |
| | |
PNB Housing Finance Ltd.(b) | | | 860 | | | | 6,503 | |
| | |
Sangsangin Co. Ltd.* | | | 907 | | | | 9,433 | |
| | | | | | | | 1,947,725 | |
|
| Tobacco – 0.2% | |
| | |
British American Tobacco Malaysia Bhd. | | | 5,900 | | | | 26,574 | |
| | |
Eastern Co. SAE* | | | 62,894 | | | | 62,738 | |
| | |
Gudang Garam Tbk. PT | | | 17,600 | | | | 70,340 | |
| | |
ITC Ltd. | | | 101,270 | | | | 367,865 | |
| | |
KT&G Corp. | | | 4,428 | | | | 380,592 | |
| | | | | | | | 908,109 | |
|
| Trading Companies & Distributors – 0.6% | |
| | |
Adani Enterprises Ltd. | | | 15,288 | | | | 43,033 | |
| | |
AKR Corporindo Tbk. PT | | | 71,700 | | | | 20,227 | |
| | |
Barloworld Ltd. | | | 6,807 | | | | 54,507 | |
| | |
BOC Aviation Ltd.(b) | | | 16,400 | | | | 154,214 | |
| | |
Brighton-Best International Taiwan, Inc. | | | 16,000 | | | | 16,820 | |
| | |
China Aircraft Leasing Group Holdings Ltd.(b) | | | 287,000 | | | | 296,605 | |
| | |
CITIC Resources Holdings Ltd. | | | 2,460,000 | | | | 160,072 | |
| | |
Ferreycorp SAA | | | 981,376 | | | | 636,647 | |
| | |
LG International Corp. | | | 30,504 | | | | 407,699 | |
| | |
Posco International Corp. | | | 3,775 | | | | 59,215 | |
| | |
Shougang Concord International Enterprises Co. Ltd. | | | 8,364,000 | | | | 394,845 | |
| | |
SK Networks Co. Ltd. | | | 12,371 | | | | 61,778 | |
| | | | | | | | 2,305,662 | |
|
| Transportation Infrastructure – 1.5% | |
| | |
Adani Ports & Special Economic Zone Ltd. | | | 26,711 | | | | 149,054 | |
| | |
Airports of Thailand PCL | | | 54,000 | | | | 140,387 | |
| | |
Airports of Thailand PCL, NVDR | | | 93,600 | | | | 242,563 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 241 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Transportation Infrastructure – (continued) | |
| | |
Bangkok Aviation Fuel Services PCL, NVDR | | | 18,800 | | | $ | 19,924 | |
| | |
Bangkok Expressway & Metro PCL, NVDR | | | 237,800 | | | | 85,055 | |
| | |
Beijing Capital International Airport Co. Ltd., Class H | | | 74,000 | | | | 70,151 | |
| | |
CCR SA | | | 41,000 | | | | 167,905 | |
| | |
China Merchants Port Holdings Co. Ltd. | | | 36,123 | | | | 56,597 | |
| | |
COSCO SHIPPING Ports Ltd. | | | 70,854 | | | | 55,778 | |
| | |
DP World plc | | | 5,576 | | | | 74,105 | |
| | |
EcoRodovias Infraestrutura e Logistica SA | | | 180,400 | | | | 617,901 | |
| | |
GMR Infrastructure Ltd.* | | | 102,144 | | | | 29,882 | |
| | |
Grupo Aeroportuario del Centro Norte SAB de CV | | | 7,400 | | | | 51,478 | |
| | |
Grupo Aeroportuario del Pacifico SAB de CV, Class B | | | 12,500 | | | | 131,494 | |
| | |
Grupo Aeroportuario del Sureste SAB de CV, Class B | | | 6,560 | | | | 107,933 | |
| | |
International Container Terminal Services, Inc. | | | 32,120 | | | | 75,133 | |
| | |
Jasa Marga Persero Tbk. PT | | | 88,423 | | | | 34,331 | |
| | |
Jiangsu Expressway Co. Ltd., Class H | | | 30,000 | | | | 39,884 | |
| | |
Malaysia Airports Holdings Bhd. | | | 32,800 | | | | 62,170 | |
| | |
Novorossiysk Commercial Sea Port PJSC | | | 190,696 | | | | 24,510 | |
| | |
Promotora y Operadora de Infraestructura SAB de CV | | | 8,200 | | | | 76,106 | |
| | |
Promotora y Operadora de Infraestructura SAB de CV, Class L | | | 2,300 | | | | 14,846 | |
| | |
Qingdao Port International Co. Ltd., Class H(b) | | | 1,066,000 | | | | 612,042 | |
| | |
Shenzhen Expressway Co. Ltd., Class H | | | 708,000 | | | | 948,493 | |
| | |
Shenzhen International Holdings Ltd.(a) | | | 33,333 | | | | 67,876 | |
| | |
Taiwan High Speed Rail Corp. | | | 82,000 | | | | 97,111 | |
| | |
TAV Havalimanlari Holding A/S | | | 6,386 | | | | 29,155 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Transportation Infrastructure – (continued) | |
| | |
Tianjin Port Development Holdings Ltd. | | | 1,640,000 | | | $ | 150,656 | |
| | |
Westports Holdings Bhd. | | | 40,400 | | | | 41,381 | |
| | |
Yuexiu Transport Infrastructure Ltd. | | | 820,000 | | | | 757,467 | |
| | |
Zhejiang Expressway Co. Ltd., Class H | | | 1,476,000 | | | | 1,210,901 | |
| | | | | | | | 6,242,269 | |
|
| Water Utilities – 0.5% | |
| | |
Aguas Andinas SA, Class A | | | 112,914 | | | | 51,808 | |
| | |
Beijing Enterprises Water Group Ltd.* | | | 426,000 | | | | 222,846 | |
| | |
China Everbright Water Ltd. | | | 795,400 | | | | 175,333 | |
| | |
China Water Affairs Group Ltd.(a) | | | 886,000 | | | | 678,260 | |
| | |
Cia de Saneamento Basico do Estado de Sao Paulo* | | | 24,600 | | | | 334,708 | |
| | |
Guangdong Investment Ltd. | | | 100,000 | | | | 216,900 | |
| | |
Inversiones Aguas Metropolitanas SA | | | 11,208 | | | | 13,386 | |
| | |
Manila Water Co., Inc. | | | 844,600 | | | | 330,217 | |
| | |
TTW PCL, NVDR | | | 68,000 | | | | 30,628 | |
| | | | | | | | 2,054,086 | |
|
| Wireless Telecommunication Services – 1.8% | |
| | |
Advanced Info Service PCL, NVDR | | | 36,700 | | | | 278,334 | |
| | |
America Movil SAB de CV, Series L | | | 811,800 | | | | 645,307 | |
| | |
Axiata Group Bhd. | | | 165,686 | | | | 170,504 | |
| | |
Bharti Airtel Ltd. | | | 65,190 | | | | 343,970 | |
| | |
China Mobile Ltd. | | | 404,500 | | | | 3,292,688 | |
| | |
DiGi.Com Bhd. | | | 106,600 | | | | 119,904 | |
| | |
Empresa Nacional de Telecomunicaciones SA* | | | 5,699 | | | | 44,614 | |
| | |
Etihad Etisalat Co.* | | | 13,612 | | | | 81,520 | |
| | |
Far EasTone Telecommunications Co. Ltd. | | | 53,000 | | | | 127,100 | |
| | |
Globe Telecom, Inc. | | | 580 | | | | 20,848 | |
| | |
Indosat Tbk. PT* | | | 1,189,000 | | | | 281,220 | |
| | |
Maxis Bhd. | | | 90,200 | | | | 116,352 | |
| | |
Mobile Telecommunications Co.* | | | 14,214 | | | | 45,709 | |
See Accompanying Notes to the Financial Statements.
| | |
| 242 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Wireless Telecommunication Services – (continued) | |
| | |
Mobile TeleSystems PJSC | | | 61,336 | | | $ | 272,833 | |
| | |
MTN Group Ltd. | | | 56,170 | | | | 348,986 | |
| | |
PLAY Communications SA(b) | | | 8,612 | | | | 68,309 | |
| | |
PLDT, Inc. | | | 2,790 | | | | 60,479 | |
| | |
Sistema PJSFC | | | 18,643 | | | | 4,239 | |
| | |
SK Telecom Co. Ltd. | | | 2,296 | | | | 467,706 | |
| | |
Taiwan Mobile Co. Ltd. | | | 56,000 | | | | 208,801 | |
| | |
TIM Participacoes SA* | | | 24,600 | | | | 69,981 | |
| | |
Turkcell Iletisim Hizmetleri A/S | | | 79,950 | | | | 175,923 | |
| | |
Vodacom Group Ltd. | | | 22,714 | | | | 198,814 | |
| | |
Vodafone Idea Ltd.* | | | 468,729 | | | | 25,773 | |
| | |
Vodafone Qatar QSC | | | 101,920 | | | | 34,431 | |
| | |
XL Axiata Tbk. PT* | | | 149,675 | | | | 37,853 | |
| | | | | | | | 7,542,198 | |
Total Common Stocks
(Cost $370,417,495) | | | | 410,925,748 | |
| | | Principal
Amount | | | | |
|
| CORPORATE BONDS – 0.0%(d) | |
|
| Food Products – 0.0%(d) | |
| | |
Britannia Industries Ltd. | | | | | | | | |
8.00%, 8/28/2022 | | | INR 2,231 | | | | 32 | |
|
Independent Power and Renewable Electricity
Producers – 0.0%(d) | |
| |
NTPC Ltd. | | | | | |
| | |
Series 54, 8.49%, 3/25/2025 | | | INR 49,126 | | | | 9,829 | |
Total Corporate Bonds
(Cost $31) | | | | 9,861 | |
| | | Number of
Rights | | | | |
|
| RIGHTS – 0.0%(d) | |
|
| Banks – 0.0%(d) | |
| | |
TMB Bank PCL, expiring 11/22/2019, price 1.40 THB* (c) | | | 624,423 | | | | 827 | |
| | | | | | | | |
| Investments | | Number of
Rights | | | Value | |
|
| Insurance – 0.0%(d) | |
| | |
Cathay Financial Holding Co. Ltd., expiring 11/25/2019, price 35.00 TWD* (c) | | | 19,740 | | | $ | 3,437 | |
|
| Semiconductors & Semiconductor Equipment – 0.0%(d) | |
| | |
Sigurd Microelectronics Corp., expiring 11/12/2019, price 26.50 TWD* (c) | | | 10,552 | | | | 3,692 | |
|
| Technology Hardware, Storage & Peripherals – 0.0% | |
| | |
Legend Holdings Corp., expiring 12/31/2019* ‡ (c) | | | 4,192 | | | | — | |
Total Rights
(Cost $—) | | | | 7,956 | |
| | | Principal
Amount | | | | |
|
| SECURITIES LENDING REINVESTMENTS(e) – 0.5% | |
|
| REPURCHASE AGREEMENTS – 0.5% | |
| | |
Citigroup Global Markets Ltd., 1.75%, dated 10/31/2019, due 11/1/2019, repurchase price $500,024, collateralized by various U.S. Treasury Securities, ranging from 0.63% –3.00%, maturing 11/15/2020 –8/15/2048; total market value $514,314 | | $ | 500,000 | | | | 500,000 | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $1,044,525, collateralized by various U.S. Treasury Securities, ranging from 0.38% –6.88%, maturing 11/30/2020 –9/30/2025; total market value $1,069,312 | | | 1,044,475 | | | | 1,044,475 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 243 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SECURITIES LENDING REINVESTMENTS(e) – (continued) | |
|
| REPURCHASE AGREEMENTS – (continued) | |
| | |
Societe Generale, 1.95%, dated 10/31/2019, due 11/1/2019, repurchase price $600,033, collateralized by various U.S. Treasury Securities, ranging from 1.13% –4.25%, maturing 1/31/2021 –11/15/2040; Common Stocks; total market value $663,193 | | $ | 600,000 | | | $ | 600,000 | |
| | | | | 2,144,475 | |
Total Securities Lending Reinvestments
(Cost $2,144,475) | | | | 2,144,475 | |
Total Investments – 99.9%
(Cost $372,562,001) | | | | 413,088,040 | |
| |
Other Assets Less Liabilities – 0.1% | | | | 326,123 | |
| NET ASSETS – 100.0% | | | $ | 413,414,163 | |
| * | Non-income producing security. |
| ^ | Security subject to restrictions on resale. |
| ‡ | Value determined using significant unobservable inputs. |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $12,983,050, collateralized in the form of cash with a value of $2,144,475 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments; $2,294,618 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.13%, and maturity dates ranging from November 14, 2019 – February 15, 2049 and $9,409,674 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.00% – 6.25%, and |
| | maturity dates ranging from November 25, 2019 – October 22, 2071; a total value of $13,848,767. |
| (b) | Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States and as such may have restrictions on resale. |
| (c) | Security fair valued as of October 31, 2019, using other significant observable inputs, in accordance with procedures approved by the Board of Trustees. Total value of all such securities at October 31, 2019 amounted to $955,535, which represents approximately 0.23% of net assets of the Fund. |
| (d) | Represents less than 0.05% of net assets. |
| (e) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $2,144,475. |
Percentages shown are based on Net Assets.
Abbreviations
ADR – American Depositary Receipt
GDR – Global Depositary Receipt
INR – Indian Rupee
NVDR –Non-Voting Depositary Receipt
OJSC – Open Joint Stock Company
PJSC – Public Joint Stock Company
Preference – A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.
SCA – Limited partnership with share capital
THB – Thai Baht
TWD – Taiwan Dollar
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | |
Aggregate gross unrealized appreciation | | $ | 77,631,677 | |
Aggregate gross unrealized depreciation | | | (43,784,458 | ) |
Net unrealized appreciation | | $ | 33,847,219 | |
Federal income tax cost | | $ | 379,249,871 | |
Futures Contracts
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional
Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | | | | | |
MSCI Emerging MarketsE-Mini Index | | | 49 | | | | 12/20/2019 | | | | USD | | | $ | 2,551,430 | | | $ | 50,750 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
See Accompanying Notes to the Financial Statements.
| | |
| 244 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
Forward Foreign Currency Contracts
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund had the following outstanding contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity Date | | | Unrealized
Appreciation/
(Depreciation) | |
INR* | | | 7,862,914 | | | | | BNP Paribas SA | | USD | | | 110,000 | | | | 12/18/2019 | | | $ | 379 | |
KRW* | | | 247,877,700 | | | | | Citibank NA | | USD | | | 210,000 | | | | 12/18/2019 | | | | 3,285 | |
RUB* | | | 9,699,386 | | | | | Goldman Sachs & Co. | | USD | | | 150,000 | | | | 12/18/2019 | | | | 438 | |
USD | | | 144,501 | | | | | Bank of New York | | HKD | | | 1,132,469 | | | | 12/18/2019 | | | | 40 | |
USD | | | 210,000 | | | | | BNP Paribas SA | | HKD | | | 1,646,059 | | | | 12/18/2019 | | | | 25 | |
Total unrealized appreciation | | | | | | | $ | 4,167 | |
TWD* | | | 23,989,377 | | | | | Citibank NA | | USD | | | 790,000 | | | | 12/18/2019 | | | $ | (346 | ) |
USD | | | 161,318 | | | | | Goldman Sachs & Co. | | BRL* | | | 666,099 | | | | 12/18/2019 | | | | (4,176 | ) |
USD | | | 189,820 | | | | | Toronto-Dominion Bank (The) | | INR* | | | 13,841,415 | | | | 12/18/2019 | | | | (4,484 | ) |
USD | | | 363,179 | | | | | Morgan Stanley | | KRW* | | | 431,677,790 | | | | 12/18/2019 | | | | (8,256 | ) |
USD | | | 242,175 | | | | | Goldman Sachs & Co. | | RUB* | | | 16,042,431 | | | | 12/18/2019 | | | | (6,645 | ) |
USD | | | 1,108,921 | | | | | Toronto-Dominion Bank (The) | | TWD* | | | 34,355,747 | | | | 12/18/2019 | | | | (21,960 | ) |
Total unrealized depreciation | | | | | | | $ | (45,867 | ) |
Net unrealized depreciation | | | | | | | $ | (41,700 | ) |
| * | Non-deliverable forward. See Note 2 in the Notes to Financial Statements. |
Abbreviations:
BRL – Brazilian Real
HKD – Hong Kong Dollar
INR – Indian Rupee
KRW – Korean Won
RUB – Russian Ruble
TWD – Taiwan Dollar
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 245 | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Brazil | | | 6.9 | % |
Chile | | | 0.7 | |
China | | | 31.6 | |
Colombia | | | 0.4 | |
Czech Republic | | | 0.1 | |
Egypt | | | 0.4 | |
Greece | | | 0.6 | |
Hungary | | | 0.3 | |
India | | | 6.4 | |
Indonesia | | | 2.0 | |
Malaysia | | | 1.8 | |
Mexico | | | 2.2 | |
Pakistan | | | 0.6 | |
Peru | | | 0.3 | |
Philippines | | | 1.7 | |
Poland | | | 1.2 | |
Qatar | | | 1.5 | |
Russia | | | 3.5 | |
Saudi Arabia | | | 1.1 | |
South Africa | | | 5.1 | |
South Korea | | | 14.5 | |
Taiwan | | | 12.6 | |
Thailand | | | 1.9 | |
Turkey | | | 1.1 | |
United Arab Emirates | | | 0.9 | |
Other1 | | | 0.6 | |
| | | | 100.0 | % |
| 1 | Includes anynon-equity securities, securities lending reinvestments and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | |
| 246 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® Currency Hedged Morningstar DMex-US Factor Tilt Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| EXCHANGE TRADED FUNDS – 100.2% | |
| | |
FlexShares® Morningstar Developed Marketsex-US Factor Tilt Index Fund(a)
(Cost $8,774,830) | | | 135,852 | | | $ | 8,481,240 | |
| | | | | | | | | |
Total Investments – 100.2%
(Cost $8,774,830) | | | | 8,481,240 | |
| |
Liabilities in excess of other assets – (0.2%) | | | | (15,069 | ) |
| NET ASSETS – 100.0% | | | $ | 8,466,171 | |
| (a) | Investment in affiliated Fund. Northern Trust Investments, Inc. is the Investment Adviser to both the Fund and the affiliated Fund. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | |
Aggregate gross unrealized appreciation | | $ | 1,235 | |
Aggregate gross unrealized depreciation | | | (340,265 | ) |
Net unrealized depreciation | | $ | (339,030 | ) |
Federal income tax cost | | $ | 8,805,355 | |
The FlexShares® Currency Hedged Morningstar DMex-US Factor Tilt Index Fund currently seeks its investment objective by investing a substantial portion of its assets in an affiliated FlexShares® Fund. The Schedule of Investments of the affiliated FlexShares® Fund is located elsewhere in this Report.
Investment in a company which was affiliated for the period ended October 31, 2019, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Security | | Value
October 31, 2018 | | | Purchases
at Cost | | | Sales
Proceeds | | | Shares
October 31, 2019 | | | Value
October 31, 2019 | | | Change in
Unrealized
Appreciation
(Depreciation) | | | Dividend
Income | | | Realized
Loss | |
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund | | $ | 7,846,364 | | | $ | 1,253,686 | | | $ | 1,012,150 | | | | 135,852 | | | $ | 8,481,240 | | | $ | 450,101 | | | $ | 250,684 | | | $ | (56,761 | ) |
Forward Foreign Currency Contracts
FlexShares® Currency Hedged Morningstar DMex-US Factor Tilt Index Fund had the following outstanding contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity Date | | | Unrealized
Appreciation/
(Depreciation) | |
USD | | | 773,074 | | | | | Toronto-Dominion Bank (The) | | CAD | | | 1,015,000 | | | | 11/19/2019 | | | $ | 805 | |
USD | | | 435,742 | | | | | Toronto-Dominion Bank (The) | | CHF | | | 429,000 | | | | 11/19/2019 | | | | 485 | |
USD | | | 93,975 | | | | | Toronto-Dominion Bank (The) | | NOK | | | 862,000 | | | | 11/19/2019 | | | | 79 | |
Total unrealized appreciation | | | | | | | $ | 1,369 | |
USD | | | 435,254 | | | | | Toronto-Dominion Bank (The) | | AUD | | | 635,000 | | | | 11/19/2019 | | | $ | (2,418 | ) |
USD | | | 95,184 | | | | | Toronto-Dominion Bank (The) | | DKK | | | 637,000 | | | | 11/19/2019 | | | | (59 | ) |
USD | | | 2,112,683 | | | | | Toronto-Dominion Bank (The) | | EUR | | | 1,893,000 | | | | 11/19/2019 | | | | (1,375 | ) |
USD | | | 1,377,757 | | | | | Toronto-Dominion Bank (The) | | GBP | | | 1,067,000 | | | | 11/19/2019 | | | | (3,605 | ) |
USD | | | 253,559 | | | | | Morgan Stanley | | HKD | | | 1,988,000 | | | | 11/19/2019 | | | | (64 | ) |
USD | | | 93,221 | | | | | Morgan Stanley | | ILS | | | 330,000 | | | | 11/19/2019 | | | | (506 | ) |
USD | | | 2,396,452 | | | | | Toronto-Dominion Bank (The) | | JPY | | | 259,624,000 | | | | 11/19/2019 | | | | (7,204 | ) |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 247 | |
FlexShares® Currency Hedged Morningstar DMex-US Factor Tilt Index Fund (cont.)
Forward Foreign Currency Contracts (cont.)
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity Date | | | Unrealized
Appreciation/
(Depreciation) | |
USD | | | 26,161 | | | | | Toronto-Dominion Bank (The) | | NZD | | | 41,000 | | | | 11/19/2019 | | | $ | (139 | ) |
USD | | | 226,608 | | | | | Toronto-Dominion Bank (The) | | SEK | | | 2,188,000 | | | | 11/19/2019 | | | | (686 | ) |
USD | | | 84,284 | | | | | Morgan Stanley | | SGD | | | 115,000 | | | | 11/19/2019 | | | | (228 | ) |
Total unrealized depreciation | | | | | | | $ | (16,284 | ) |
Net unrealized depreciation | | | | | | | $ | (14,915 | ) |
Abbreviations:
AUD – Australian Dollar
CAD – Canadian Dollar
CHF – Swiss Franc
DKK – Danish Krone
EUR – Euro
GBP – British Pound
HKD – Hong Kong Dollar
ILS – Israeli Shekel
JPY – Japanese Yen
NOK – Norwegian Krone
NZD – New Zealand Dollar
SEK – Swedish Krona
SGD – Singapore Dollar
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | |
| 248 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® Currency Hedged Morningstar EM Factor Tilt Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| EXCHANGE TRADED FUNDS – 99.4% | |
| | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund(a)
(Cost $5,858,919) | | | 108,528 | | | $ | 5,409,036 | |
| | | | | | | | | |
Total Investments – 99.4%
(Cost $5,858,919) | | | | 5,409,036 | |
| |
Other Assets Less Liabilities – 0.6% | | | | 33,694 | |
| NET ASSETS – 100.0% | | | $ | 5,442,730 | |
| (a) | Investment in affiliated Fund. Northern Trust Investments, Inc. is the Investment Adviser to both the Fund and the affiliated Fund. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 6,488 | |
Aggregate gross unrealized depreciation | | | (537,531 | ) |
Net unrealized depreciation | | $ | (531,043 | ) |
Federal income tax cost | | $ | 5,919,916 | |
The FlexShares® Currency Hedged Morningstar EM Factor Tilt Index Fund currently seeks its investment objective by investing a substantial portion of its assets in an affiliated FlexShares® Fund. The Schedule of Investments of the affiliated FlexShares® Fund is located elsewhere in this Report.
Investment in a company which was affiliated for the period ended October 31, 2019, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Security | | Value
October 31, 2018 | | | Purchases
at Cost | | | Sales
Proceeds | | | Shares
October 31, 2019 | | | Value
October 31, 2019 | | | Change in
Unrealized
Appreciation
(Depreciation) | | | Dividend
Income | | | Realized
Loss | |
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund | | $ | 4,467,575 | | | $ | 959,758 | | | $ | 278,738 | | | | 108,528 | | | $ | 5,409,036 | | | $ | 312,519 | | | $ | 155,422 | | | $ | (52,078 | ) |
Futures Contracts
FlexShares® Currency Hedged Morningstar EM Factor Tilt Index Fund had the following open futures contract as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | |
MSCI Emerging MarketsE-Mini Index | | | 1 | | | | 12/20/2019 | | | | USD | | | $ | 52,070 | | | $ | 943 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 249 | |
FlexShares® Currency Hedged Morningstar EM Factor Tilt Index Fund (cont.)
Forward Foreign Currency Contracts
FlexShares® Currency Hedged Morningstar EM Factor Tilt Index Fund had the following outstanding contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity Date | | | Unrealized
Appreciation/
(Depreciation) | |
USD | | | 45,228 | | | | | Goldman Sachs & Co. | | CLP* | | | 32,090,000 | | | | 11/20/2019 | | | $ | 1,905 | |
USD | | | 286,086 | | | | | Toronto-Dominion Bank (The) | | ZAR | | | 4,250,000 | | | | 11/20/2019 | | | | 4,574 | |
Total unrealized appreciation | | | | | | | $ | 6,479 | |
USD | | | 33,484 | | | | | Toronto-Dominion Bank (The) | | EUR | | | 30,000 | | | | 11/20/2019 | | | $ | (22 | ) |
USD | | | 1,503,774 | | | | | Toronto-Dominion Bank (The) | | HKD | | | 11,790,000 | | | | 11/20/2019 | | | | (348 | ) |
USD | | | 108,252 | | | | | JPMorgan Chase Bank | | IDR* | | | 1,535,120,000 | | | | 11/20/2019 | | | | (929 | ) |
USD | | | 339,180 | | | | | Citibank NA | | INR* | | | 24,190,000 | | | | 11/20/2019 | | | | (1,330 | ) |
USD | | | 792,359 | | | | | BNP Paribas SA | | KRW* | | | 933,510,000 | | | | 11/20/2019 | | | | (10,274 | ) |
USD | | | 119,580 | | | | | Toronto-Dominion Bank (The) | | MXN | | | 2,300,000 | | | | 11/20/2019 | | | | (73 | ) |
USD | | | 97,931 | | | | | Goldman Sachs & Co. | | MYR* | | | 410,000 | | | | 11/20/2019 | | | | (154 | ) |
USD | | | 92,491 | | | | | JPMorgan Chase Bank | | PHP* | | | 4,740,000 | | | | 11/20/2019 | | | | (861 | ) |
USD | | | 65,058 | | | | | Toronto-Dominion Bank (The) | | PLN | | | 250,000 | | | | 11/20/2019 | | | | (479 | ) |
USD | | | 188,204 | | | | | Goldman Sachs & Co. | | RUB* | | | 12,100,000 | | | | 11/20/2019 | | | | (233 | ) |
USD | | | 108,289 | | | | | BNP Paribas SA | | THB | | | 3,280,000 | | | | 11/20/2019 | | | | (352 | ) |
USD | | | 59,823 | | | | | Toronto-Dominion Bank (The) | | TRY | | | 350,000 | | | | 11/20/2019 | | | | (1,182 | ) |
USD | | | 690,199 | | | | | JPMorgan Chase Bank | | TWD* | | | 21,000,000 | | | | 11/20/2019 | | | | (152 | ) |
USD | | | 364,541 | | | | | Goldman Sachs & Co. | | BRL* | | | 1,510,000 | | | | 11/21/2019 | | | | (11,196 | ) |
Total unrealized depreciation | | | | | | | $ | (27,585 | ) |
Net unrealized depreciation | | | | | | | $ | (21,106 | ) |
| * | Non-deliverable forward. See Note 2 in the Notes to Financial Statements. |
Abbreviations:
BRL – Brazilian Real
CLP – Chilean Peso
EUR – Euro
HKD – Hong Kong Dollar
IDR – Indonesian Rupiah
INR – Indian Rupee
KRW – Korean Won
MXN – Mexican Peso
MYR – Malaysian Ringgit
PHP – Philippine Peso
PLN – Polish Zloty
RUB – Russian Ruble
THB – Thai Baht
TRY – Turkish Lira
TWD – Taiwan Dollar
USD – US Dollar
ZAR – South African Rand
See Accompanying Notes to the Financial Statements.
| | |
| 250 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® US Quality Large Cap Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 99.5% | |
|
| Aerospace & Defense – 0.7% | |
| | |
Boeing Co. (The) | | | 354 | | | $ | 120,328 | |
| | |
Textron, Inc.(a) | | | 5,192 | | | | 239,299 | |
| | | | | | | | 359,627 | |
|
| Air Freight & Logistics – 1.0% | |
| | |
CH Robinson Worldwide, Inc.(a) | | | 3,068 | | | | 232,063 | |
| | |
Expeditors International of Washington, Inc. | | | 3,658 | | | | 266,815 | |
| | | | | | | | 498,878 | |
|
| Airlines – 0.5% | |
| | |
Southwest Airlines Co. | | | 4,720 | | | | 264,934 | |
|
| Banks – 4.7% | |
| | |
Bank of America Corp. | | | 10,443 | | | | 326,552 | |
| | |
Citigroup, Inc. | | | 14,101 | | | | 1,013,298 | |
| | |
JPMorgan Chase & Co. | | | 5,900 | | | | 737,028 | |
| | |
M&T Bank Corp. | | | 1,947 | | | | 304,764 | |
| | | | | | | | 2,381,642 | |
|
| Beverages – 2.2% | |
| | |
Molson Coors Brewing Co., Class B(a) | | | 5,074 | | | | 267,501 | |
| | |
Monster Beverage Corp.* | | | 4,720 | | | | 264,934 | |
| | |
PepsiCo, Inc. | | | 4,248 | | | | 582,698 | |
| | | | | | | | 1,115,133 | |
|
| Biotechnology – 3.0% | |
| | |
AbbVie, Inc.(a) | | | 1,357 | | | | 107,949 | |
| | |
Amgen, Inc. | | | 4,189 | | | | 893,304 | |
| | |
Biogen, Inc.* | | | 1,770 | | | | 528,717 | |
| | | | | | | | 1,529,970 | |
|
| Building Products – 0.6% | |
| | |
Johnson Controls International plc | | | 7,670 | | | | 332,341 | |
|
| Capital Markets – 2.9% | |
| | |
E*TRADE Financial Corp. | | | 6,195 | | | | 258,889 | |
| | |
Goldman Sachs Group, Inc. (The) | | | 3,186 | | | | 679,829 | |
| | |
Morgan Stanley | | | 11,918 | | | | 548,824 | |
| | | | | | | | 1,487,542 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Chemicals – 1.5% | |
| | |
Celanese Corp. | | | 1,239 | | | $ | 150,105 | |
| | |
CF Industries Holdings, Inc. | | | 5,428 | | | | 246,160 | |
| | |
Dow, Inc. | | | 7,257 | | | | 366,406 | |
| | | | | | | | 762,671 | |
|
| Communications Equipment – 1.9% | |
| | |
Cisco Systems, Inc. | | | 20,473 | | | | 972,672 | |
|
| Construction & Engineering – 0.6% | |
| | |
Jacobs Engineering Group, Inc. | | | 3,245 | | | | 303,667 | |
|
| Consumer Finance – 2.7% | |
| | |
Ally Financial, Inc. | | | 8,614 | | | | 263,847 | |
| | |
American Express Co. | | | 1,003 | | | | 117,632 | |
| | |
Capital One Financial Corp. | | | 4,602 | | | | 429,137 | |
| | |
Discover Financial Services | | | 3,658 | | | | 293,591 | |
| | |
Synchrony Financial | | | 8,555 | | | | 302,590 | |
| | | | | | | | 1,406,797 | |
|
| Diversified Financial Services – 0.3% | |
| | |
Berkshire Hathaway, Inc., Class B* | | | 649 | | | | 137,964 | |
|
| Diversified Telecommunication Services – 2.2% | |
| | |
AT&T, Inc. | | | 2,242 | | | | 86,295 | |
| | |
CenturyLink, Inc.(a) | | | 17,464 | | | | 225,984 | |
| | |
Verizon Communications, Inc. | | | 13,334 | | | | 806,307 | |
| | | | | | | | 1,118,586 | |
|
| Electric Utilities – 2.8% | |
| | |
Evergy, Inc.(a) | | | 2,065 | | | | 131,974 | |
| | |
Exelon Corp. | | | 9,381 | | | | 426,741 | |
| | |
Pinnacle West Capital Corp. | | | 2,773 | | | | 260,995 | |
| | |
Southern Co. (The) | | | 9,971 | | | | 624,783 | |
| | | | | | | | 1,444,493 | |
|
| Electrical Equipment – 0.7% | |
| | |
Eaton Corp. plc | | | 4,012 | | | | 349,485 | |
|
| Electronic Equipment, Instruments & Components – 0.6% | |
| | |
CDW Corp. | | | 2,478 | | | | 316,961 | |
|
| Energy Equipment & Services – 0.1% | |
| | |
Baker Hughes Co. | | | 2,714 | | | | 58,080 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 251 | |
FlexShares® US Quality Large Cap Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Entertainment – 1.3% | |
| | |
Activision Blizzard, Inc. | | | 7,198 | | | $ | 403,304 | |
| | |
Electronic Arts, Inc.* | | | 295 | | | | 28,438 | |
| | |
Take-Two Interactive Software, Inc.* | | | 177 | | | | 21,302 | |
| | |
Viacom, Inc., Class B | | | 9,204 | | | | 198,438 | |
| | | | | | | | 651,482 | |
|
| Equity Real Estate Investment Trusts (REITs) – 4.8% | |
| | |
American Tower Corp. | | | 2,065 | | | | 450,335 | |
| | |
AvalonBay Communities, Inc. | | | 1,475 | | | | 321,048 | |
| | |
Duke Realty Corp. | | | 826 | | | | 29,026 | |
| | |
Equity Residential | | | 3,658 | | | | 324,318 | |
| | |
Essex Property Trust, Inc. | | | 531 | | | | 173,706 | |
| | |
Host Hotels & Resorts, Inc.(a) | | | 16,815 | | | | 275,598 | |
| | |
Public Storage | | | 1,534 | | | | 341,867 | |
| | |
VEREIT, Inc. | | | 27,553 | | | | 271,122 | |
| | |
Vornado Realty Trust | | | 4,366 | | | | 286,541 | |
| | | | | | | | 2,473,561 | |
|
| Food & Staples Retailing – 1.5% | |
| | |
Sysco Corp. | | | 4,720 | | | | 376,986 | |
| | |
Walgreens Boots Alliance, Inc. | | | 7,316 | | | | 400,771 | |
| | | | | | | | 777,757 | |
|
| Food Products – 0.7% | |
| | |
Archer-Daniels-Midland Co. | | | 413 | | | | 17,363 | |
| | |
Kraft Heinz Co. (The) | | | 11,092 | | | | 358,604 | |
| | | | | | | | 375,967 | |
|
| Gas Utilities – 0.5% | |
| | |
UGI Corp. | | | 4,897 | | | | 233,440 | |
|
| Health Care Equipment & Supplies – 1.7% | |
| | |
Medtronic plc | | | 6,844 | | | | 745,311 | |
| | |
Varian Medical Systems, Inc.* | | | 885 | | | | 106,917 | |
| | | | | | | | 852,228 | |
|
| Health Care Providers & Services – 3.3% | |
| | |
AmerisourceBergen Corp. | | | 118 | | | | 10,075 | |
| | |
Anthem, Inc. | | | 708 | | | | 190,509 | |
| | |
Cardinal Health, Inc. | | | 5,310 | | | | 262,579 | |
| | |
Henry Schein, Inc.* (a) | | | 4,189 | | | | 262,168 | |
| | |
Humana, Inc. | | | 1,298 | | | | 381,872 | |
| | |
McKesson Corp. | | | 2,065 | | | | 274,645 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Health Care Providers & Services – (continued) | |
| | |
UnitedHealth Group, Inc. | | | 1,298 | | | $ | 328,005 | |
| | | | | | | | 1,709,853 | |
|
| Hotels, Restaurants & Leisure –1.2% | |
| | |
Hilton Worldwide Holdings, Inc. | | | 3,127 | | | | 303,194 | |
| | |
Yum! Brands, Inc. | | | 3,009 | | | | 306,045 | |
| | | | | | | | 609,239 | |
|
| Household Durables – 0.6% | |
| | |
PulteGroup, Inc.(a) | | | 7,611 | | | | 298,656 | |
|
| Household Products – 0.9% | |
| | |
Clorox Co. (The) | | | 1,416 | | | | 209,129 | |
| | |
Colgate-Palmolive Co. | | | 3,422 | | | | 234,749 | |
| | | | | | | | 443,878 | |
|
Independent Power and Renewable Electricity
Producers – 1.7% | |
| | |
AES Corp. | | | 16,520 | | | | 281,666 | |
| | |
NRG Energy, Inc. | | | 6,667 | | | | 267,480 | |
| | |
Vistra Energy Corp. | | | 11,033 | | | | 298,222 | |
| | | | | | | | 847,368 | |
|
| Industrial Conglomerates – 0.7% | |
| | |
Honeywell International, Inc. | | | 2,006 | | | | 346,496 | |
|
| Insurance – 3.1% | |
| | |
Aflac, Inc. | | | 7,080 | | | | 376,373 | |
| | |
Allstate Corp. (The) | | | 3,245 | | | | 345,333 | |
| | |
Aon plc | | | 2,301 | | | | 444,461 | |
| | |
Loews Corp. | | | 413 | | | | 20,237 | |
| | |
Progressive Corp. (The) | | | 5,605 | | | | 390,668 | |
| | | | | | | | 1,577,072 | |
|
| Interactive Media & Services – 2.8% | |
| | |
Alphabet, Inc., Class A* | | | 150 | | | | 188,820 | |
| | |
Alphabet, Inc., Class C* | | | 236 | | | | 297,386 | |
| | |
Facebook, Inc., Class A* | | | 2,301 | | | | 440,987 | |
| | |
IAC/InterActiveCorp* | | | 1,121 | | | | 254,747 | |
| | |
Match Group, Inc.(a) | | | 3,127 | | | | 228,240 | |
| | | | | | | | 1,410,180 | |
|
| Internet & Direct Marketing Retail – 3.7% | |
| | |
Amazon.com, Inc.* | | | 472 | | | | 838,584 | |
| | |
Booking Holdings, Inc.* | | | 388 | | | | 794,923 | |
See Accompanying Notes to the Financial Statements.
| | |
| 252 | | FLEXSHARES ANNUAL REPORT |
FlexShares® US Quality Large Cap Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Internet & Direct Marketing Retail – (continued) | |
| | |
eBay, Inc. | | | 7,670 | | | $ | 270,367 | |
| | | | | | | | 1,903,874 | |
|
| IT Services – 4.2% | |
| | |
Cognizant Technology Solutions Corp., Class A | | | 5,251 | | | | 319,996 | |
| | |
Mastercard, Inc., Class A | | | 2,596 | | | | 718,599 | |
| | |
VeriSign, Inc.* | | | 1,357 | | | | 257,857 | |
| | |
Visa, Inc., Class A(a) | | | 4,720 | | | | 844,219 | |
| | | | | | | | 2,140,671 | |
|
| Life Sciences Tools & Services – 0.5% | |
| | |
Waters Corp.* | | | 1,239 | | | | 262,197 | |
|
| Machinery – 1.8% | |
| | |
Cummins, Inc. | | | 1,829 | | | | 315,466 | |
| | |
Dover Corp.(a) | | | 2,950 | | | | 306,476 | |
| | |
Parker-Hannifin Corp. | | | 1,711 | | | | 313,951 | |
| | | | | | | | 935,893 | |
|
| Media – 2.0% | |
| | |
CBS Corp.(Non-Voting), Class B | | | 6,195 | | | | 223,268 | |
| | |
Discovery, Inc., Class C* | | | 10,030 | | | | 253,157 | |
| | |
Interpublic Group of Cos., Inc. (The) | | | 11,623 | | | | 252,800 | |
| | |
Liberty Broadband Corp., Class C* | | | 177 | | | | 20,899 | |
| | |
Liberty Global plc, Class C* (a) | | | 944 | | | | 22,533 | |
| | |
Omnicom Group, Inc.(a) | | | 3,540 | | | | 273,253 | |
| | | | | | | | 1,045,910 | |
|
| Metals & Mining – 0.5% | |
| | |
Nucor Corp. | | | 5,015 | | | | 270,058 | |
|
| Multiline Retail – 0.1% | |
| | |
Kohl’s Corp.(a) | | | 590 | | | | 30,243 | |
|
| Multi-Utilities – 0.6% | |
| | |
DTE Energy Co. | | | 2,242 | | | | 285,451 | |
|
| Oil, Gas & Consumable Fuels – 5.8% | |
| | |
Chevron Corp. | | | 8,968 | | | | 1,041,543 | |
| | |
ConocoPhillips | | | 10,620 | | | | 586,224 | |
| | |
Devon Energy Corp. | | | 1,475 | | | | 29,913 | |
| | |
Exxon Mobil Corp. | | | 2,655 | | | | 179,398 | |
| | |
HollyFrontier Corp. | | | 4,838 | | | | 265,800 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Phillips 66 | | | 4,307 | | | $ | 503,144 | |
| | |
Valero Energy Corp. | | | 3,953 | | | | 383,362 | |
| | | | | | | | 2,989,384 | |
|
| Pharmaceuticals – 4.1% | |
| | |
Allergan plc | | | 3,127 | | | | 550,696 | |
| | |
Johnson & Johnson | | | 9,617 | | | | 1,269,829 | |
| | |
Merck & Co., Inc. | | | 826 | | | | 71,581 | |
| | |
Mylan NV* | | | 9,204 | | | | 176,257 | |
| | |
Pfizer, Inc. | | | 1,239 | | | | 47,540 | |
| | | | | | | | 2,115,903 | |
|
| Semiconductors & Semiconductor Equipment – 5.1% | |
| | |
Broadcom, Inc. | | | 2,950 | | | | 863,908 | |
| | |
Intel Corp. | | | 10,974 | | | | 620,360 | |
| | |
Lam Research Corp.(a) | | | 1,475 | | | | 399,784 | |
| | |
NXP Semiconductors NV | | | 1,416 | | | | 160,971 | |
| | |
Texas Instruments, Inc. | | | 4,602 | | | | 542,990 | |
| | | | | | | | 2,588,013 | |
|
| Software – 6.5% | |
| | |
Check Point Software Technologies Ltd.* (a) | | | 885 | | | | 99,483 | |
| | |
Citrix Systems, Inc. | | | 2,832 | | | | 308,292 | |
| | |
Fair Isaac Corp.* | | | 118 | | | | 35,877 | |
| | |
Intuit, Inc. | | | 2,419 | | | | 622,892 | |
| | |
Microsoft Corp. | | | 9,558 | | | | 1,370,330 | |
| | |
Oracle Corp. | | | 15,989 | | | | 871,241 | |
| | |
VMware, Inc., Class A | | | 118 | | | | 18,676 | |
| | | | | | | | 3,326,791 | |
|
| Specialty Retail – 3.1% | |
| | |
AutoZone, Inc.* | | | 276 | | | | 315,849 | |
| | |
Best Buy Co., Inc. | | | 885 | | | | 63,570 | |
| | |
Home Depot, Inc. (The) | | | 4,956 | | | | 1,162,578 | |
| | |
Lowe’s Cos., Inc. | | | 413 | | | | 46,095 | |
| | | | | | | | 1,588,092 | |
|
| Technology Hardware, Storage & Peripherals – 5.9% | |
| | |
Apple, Inc. | | | 10,679 | | | | 2,656,508 | |
| | |
Hewlett Packard Enterprise Co. | | | 4,307 | | | | 70,678 | |
| | |
HP, Inc. | | | 15,812 | | | | 274,655 | |
| | |
NetApp, Inc. | | | 472 | | | | 26,375 | |
| | | | | | | | 3,028,216 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 253 | |
FlexShares® US Quality Large Cap Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Textiles, Apparel & Luxury Goods – 1.2% | |
| | |
NIKE, Inc., Class B | | | 3,776 | | | $ | 338,141 | |
| | |
VF Corp. | | | 3,422 | | | | 281,596 | |
| | | | | | | | 619,737 | |
|
| Tobacco – 0.1% | |
| | |
Altria Group, Inc. | | | 1,416 | | | | 63,423 | |
|
| Trading Companies & Distributors – 0.5% | |
| | |
WW Grainger, Inc. | | | 885 | | | | 273,323 | |
Total Common Stocks
(Cost $48,035,697) | | | | 50,915,799 | |
| | | Principal
Amount | | | | |
|
| SECURITIES LENDING REINVESTMENTS(b) – 1.9% | |
|
| REPURCHASE AGREEMENTS – 1.9% | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $989,392, collateralized by various U.S. Treasury Securities, ranging from 0.38% – 6.88%, maturing 11/30/2020 – 9/30/2025; total market value $1,012,871
(Cost $989,345) | | $ | 989,345 | | | | 989,345 | |
Total Investments – 101.4%
(Cost $49,025,042) | | | | 51,905,144 | |
| |
Liabilities in excess of other assets – (1.4%) | | | | (734,535 | ) |
| NET ASSETS – 100.0% | | | $ | 51,170,609 | |
| * | Non-income producing security. |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $3,581,360, collateralized in the form of cash with a value of $989,345 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments and $2,705,909 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.75%, and maturity dates ranging from November 14, 2019 – May 15, 2049; a total value of $3,695,254. |
| (b) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $989,345. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 4,432,280 | |
Aggregate gross unrealized depreciation | | | (1,548,603 | ) |
Net unrealized appreciation | | $ | 2,883,677 | |
Federal income tax cost | | $ | 49,024,247 | |
Futures Contracts
FlexShares® US Quality Large Cap Index Fund had the following open futures contract as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | | | | | |
S&P 500E-Mini Index | | | 1 | | | | 12/20/2019 | | | | USD | | | $ | 151,790 | | | $ | 2,780 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Abbreviations:
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | |
| 254 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® STOXX® US ESG Impact Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 98.8% | |
|
| Aerospace & Defense – 0.0%(a) | |
| | |
Spirit AeroSystems Holdings, Inc., Class A | | | 279 | | | $ | 22,828 | |
|
| Air Freight & Logistics – 0.8% | |
| | |
CH Robinson Worldwide, Inc. | | | 651 | | | | 49,242 | |
| | |
FedEx Corp. | | | 713 | | | | 108,847 | |
| | |
United Parcel Service, Inc., Class B | | | 2,449 | | | | 282,051 | |
| | | | | | | | 440,140 | |
|
| Airlines – 0.2% | |
| | |
Alaska Air Group, Inc. | | | 899 | | | | 62,418 | |
| | |
Southwest Airlines Co. | | | 1,116 | | | | 62,641 | |
| | | | | | | | 125,059 | |
|
| Automobiles – 0.8% | |
| | |
Ford Motor Co. | | | 8,153 | | | | 70,034 | |
| | |
General Motors Co. | | | 5,270 | | | | 195,833 | |
| | |
Tesla, Inc.* (b) | | | 527 | | | | 165,963 | |
| | | | | | | | 431,830 | |
|
| Banks – 8.6% | |
| | |
Bank of America Corp. | | | 40,052 | | | | 1,252,426 | |
| | |
BB&T Corp. | | | 1,767 | | | | 93,739 | |
| | |
Citigroup, Inc. | | | 11,253 | | | | 808,641 | |
| | |
Comerica, Inc. | | | 744 | | | | 48,673 | |
| | |
Fifth Third Bancorp | | | 3,503 | | | | 101,867 | |
| | |
Huntington Bancshares, Inc. | | | 5,053 | | | | 71,399 | |
| | |
JPMorgan Chase & Co. | | | 15,128 | | | | 1,889,790 | |
| | |
KeyCorp | | | 5,022 | | | | 90,245 | |
| | |
PNC Financial Services Group, Inc. (The)(b) | | | 1,147 | | | | 168,265 | |
| | |
US Bancorp | | | 5,115 | | | | 291,657 | |
| | | | | | | | 4,816,702 | |
|
| Beverages – 2.8% | |
| | |
Coca-Cola Co. (The) | | | 12,152 | | | | 661,433 | |
| | |
Coca-Cola European Partners plc | | | 558 | | | | 29,859 | |
| | |
PepsiCo, Inc. | | | 6,541 | | | | 897,229 | |
| | | | | | | | 1,588,521 | |
|
| Biotechnology – 1.9% | |
| | |
AbbVie, Inc.(b) | | | 4,619 | | | | 367,441 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Biotechnology – (continued) | |
| | |
Amgen, Inc. | | | 1,426 | | | $ | 304,095 | |
| | |
Biogen, Inc.* | | | 279 | | | | 83,340 | |
| | |
Celgene Corp.* | | | 1,984 | | | | 214,332 | |
| | |
Vertex Pharmaceuticals, Inc.* | | | 465 | | | | 90,898 | |
| | | | | | | | 1,060,106 | |
|
| Building Products – 0.3% | |
| | |
Allegion plc(b) | | | 372 | | | | 43,167 | |
| | |
Johnson Controls International plc | | | 2,728 | | | | 118,204 | |
| | |
Lennox International, Inc. | | | 31 | | | | 7,668 | |
| | | | | | | | 169,039 | |
|
| Capital Markets – 2.8% | |
| | |
Bank of New York Mellon Corp. (The) | | | 1,550 | | | | 72,462 | |
| | |
BlackRock, Inc. | | | 496 | | | | 229,003 | |
| | |
CME Group, Inc. | | | 558 | | | | 114,808 | |
| | |
FactSet Research Systems, Inc.(b) | | | 93 | | | | 23,577 | |
| | |
Goldman Sachs Group, Inc. (The)(b) | | | 1,581 | | | | 337,354 | |
| | |
Morgan Stanley | | | 5,146 | | | | 236,973 | |
| | |
MSCI, Inc.(b) | | | 217 | | | | 50,900 | |
| | |
Nasdaq, Inc. | | | 589 | | | | 58,765 | |
| | |
S&P Global, Inc. | | | 992 | | | | 255,926 | |
| | |
SEI Investments Co. | | | 713 | | | | 42,723 | |
| | |
State Street Corp. | | | 1,054 | | | | 69,638 | |
| | |
T. Rowe Price Group, Inc. | | | 496 | | | | 57,437 | |
| | | | | | | | 1,549,566 | |
|
| Chemicals – 2.1% | |
| | |
Air Products & Chemicals, Inc. | | | 868 | | | | 185,110 | |
| | |
Celanese Corp.(b) | | | 527 | | | | 63,846 | |
| | |
Corteva, Inc. | | | 1,302 | | | | 34,347 | |
| | |
Dow, Inc. | | | 2,480 | | | | 125,215 | |
| | |
DuPont de Nemours, Inc. | | | 3,100 | | | | 204,321 | |
| | |
Eastman Chemical Co. | | | 403 | | | | 30,644 | |
| | |
Ecolab, Inc. | | | 1,395 | | | | 267,938 | |
| | |
International Flavors & Fragrances, Inc.(b) | | | 62 | | | | 7,565 | |
| | |
LyondellBasell Industries NV, Class A | | | 527 | | | | 47,272 | |
| | |
PPG Industries, Inc. | | | 620 | | | | 77,574 | |
| | |
Sherwin-Williams Co. (The) | | | 186 | | | | 106,451 | |
| | | | | | | | 1,150,283 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 255 | |
FlexShares® STOXX® US ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Commercial Services & Supplies – 0.6% | |
| | |
Cintas Corp. | | | 651 | | | $ | 174,904 | |
| | |
Republic Services, Inc. | | | 713 | | | | 62,395 | |
| | |
Waste Management, Inc. | | | 1,085 | | | | 121,748 | |
| | | | | | | | 359,047 | |
|
| Communications Equipment – 1.5% | |
| | |
Cisco Systems, Inc. | | | 16,957 | | | | 805,627 | |
| | |
Motorola Solutions, Inc. | | | 310 | | | | 51,559 | |
| | | | | | | | 857,186 | |
|
| Construction Materials – 0.1% | |
| | |
Martin Marietta Materials, Inc. | | | 186 | | | | 48,715 | |
|
| Consumer Finance – 0.3% | |
| | |
Ally Financial, Inc. | | | 1,333 | | | | 40,830 | |
| | |
Capital One Financial Corp. | | | 1,333 | | | | 124,302 | |
| | |
Synchrony Financial | | | 589 | | | | 20,833 | |
| | | | | | | | 185,965 | |
|
| Containers & Packaging – 0.3% | |
| | |
Ball Corp. | | | 961 | | | | 67,241 | |
| | |
International Paper Co. | | | 31 | | | | 1,354 | |
| | |
Packaging Corp. of America | | | 403 | | | | 44,112 | |
| | |
Westrock Co. | | | 837 | | | | 31,279 | |
| | | | | | | | 143,986 | |
|
| Diversified Financial Services – 0.1% | |
| | |
Voya Financial, Inc.(b) | | | 651 | | | | 35,128 | |
|
| Diversified Telecommunication Services – 4.5% | |
| | |
AT&T, Inc. | | | 34,379 | | | | 1,323,248 | |
| | |
CenturyLink, Inc. | | | 3,596 | | | | 46,532 | |
| | |
Verizon Communications, Inc. | | | 19,406 | | | | 1,173,481 | |
| | | | | | | | 2,543,261 | |
|
| Electric Utilities – 1.3% | |
| | |
Alliant Energy Corp. | | | 1,023 | | | | 54,567 | |
| | |
American Electric Power Co., Inc. | | | 1,116 | | | | 105,339 | |
| | |
Duke Energy Corp. | | | 2,046 | | | | 192,856 | |
| | |
Edison International | | | 496 | | | | 31,198 | |
| | |
Entergy Corp. | | | 527 | | | | 64,020 | |
| | |
Evergy, Inc. | | | 341 | | | | 21,793 | |
| | |
Eversource Energy | | | 1,271 | | | | 106,434 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Electric Utilities – (continued) | |
| | |
FirstEnergy Corp. | | | 1,519 | | | $ | 73,398 | |
| | |
PPL Corp. | | | 1,767 | | | | 59,177 | |
| | | | | | | | 708,782 | |
|
| Electrical Equipment – 0.9% | |
| | |
AMETEK, Inc. | | | 1,054 | | | | 96,599 | |
| | |
Eaton Corp. plc | | | 1,922 | | | | 167,425 | |
| | |
Emerson Electric Co. | | | 2,759 | | | | 193,544 | |
| | |
Rockwell Automation, Inc. | | | 248 | | | | 42,654 | |
| | | | | | | | 500,222 | |
|
| Electronic Equipment, Instruments & Components – 0.3% | |
| | |
CDW Corp. | | | 434 | | | | 55,513 | |
| | |
Cognex Corp. | | | 651 | | | | 33,520 | |
| | |
TE Connectivity Ltd. | | | 837 | | | | 74,911 | |
| | |
Trimble, Inc.* | | | 620 | | | | 24,701 | |
| | | | | | | | 188,645 | |
|
| Energy Equipment & Services – 0.5% | |
| | |
Baker Hughes Co. | | | 1,178 | | | | 25,209 | |
| | |
National Oilwell Varco, Inc. | | | 1,581 | | | | 35,762 | |
| | |
Schlumberger Ltd. | | | 6,882 | | | | 224,973 | |
| | | | | | | | 285,944 | |
|
| Entertainment – 2.2% | |
| | |
Netflix, Inc.* | | | 899 | | | | 258,382 | |
| | |
Spotify Technology SA* | | | 217 | | | | 31,313 | |
| | |
Take-Two Interactive Software, Inc.* | | | 341 | | | | 41,039 | |
| | |
Viacom, Inc., Class B | | | 372 | | | | 8,020 | |
| | |
Walt Disney Co. (The) | | | 6,789 | | | | 882,027 | |
| | | | | | | | 1,220,781 | |
|
| Equity Real Estate Investment Trusts (REITs) – 1.8% | |
| | |
American Tower Corp. | | | 682 | | | | 148,731 | |
| | |
Camden Property Trust | | | 155 | | | | 17,727 | |
| | |
Equity LifeStyle Properties, Inc. | | | 744 | | | | 52,035 | |
| | |
Essex Property Trust, Inc. | | | 155 | | | | 50,705 | |
| | |
HCP, Inc. | | | 2,263 | | | | 85,134 | |
| | |
Host Hotels & Resorts, Inc.(b) | | | 2,387 | | | | 39,123 | |
| | |
Iron Mountain, Inc. | | | 620 | | | | 20,336 | |
| | |
Prologis, Inc. | | | 1,519 | | | | 133,307 | |
| | |
Public Storage | | | 620 | | | | 138,173 | |
| | |
Sun Communities, Inc. | | | 93 | | | | 15,126 | |
See Accompanying Notes to the Financial Statements.
| | |
| 256 | | FLEXSHARES ANNUAL REPORT |
FlexShares® STOXX® US ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Ventas, Inc. | | | 1,457 | | | $ | 94,851 | |
| | |
Vornado Realty Trust | | | 496 | | | | 32,553 | |
| | |
Welltower, Inc. | | | 1,550 | | | | 140,570 | |
| | |
WP Carey, Inc. | | | 558 | | | | 51,370 | |
| | | | | | | | 1,019,741 | |
|
| Food & Staples Retailing – 2.3% | |
| | |
Costco Wholesale Corp. | | | 2,077 | | | | 617,098 | |
| | |
Kroger Co. (The) | | | 1,674 | | | | 41,247 | |
| | |
Sysco Corp. | | | 2,449 | | | | 195,602 | |
| | |
Walgreens Boots Alliance, Inc. | | | 2,573 | | | | 140,949 | |
| | |
Walmart, Inc. | | | 2,294 | | | | 268,994 | |
| | | | | | | | 1,263,890 | |
|
| Food Products – 0.7% | |
| | |
General Mills, Inc. | | | 2,356 | | | | 119,826 | |
| | |
Hershey Co. (The) | | | 682 | | | | 100,165 | |
| | |
JM Smucker Co. (The)(b) | | | 279 | | | | 29,485 | |
| | |
McCormick & Co., Inc.(Non-Voting)(b) | | | 279 | | | | 44,832 | |
| | |
Tyson Foods, Inc., Class A | | | 930 | | | | 76,995 | |
| | | | | | | | 371,303 | |
|
| Health Care Equipment & Supplies – 2.9% | |
| | |
Abbott Laboratories | | | 8,184 | | | | 684,264 | |
| | |
Becton Dickinson and Co. | | | 837 | | | | 214,272 | |
| | |
Boston Scientific Corp.* | | | 3,224 | | | | 134,441 | |
| | |
Hologic, Inc.* | | | 1,333 | | | | 64,397 | |
| | |
IDEXX Laboratories, Inc.* | | | 93 | | | | 26,506 | |
| | |
Insulet Corp.* | | | 93 | | | | 13,515 | |
| | |
Medtronic plc | | | 3,441 | | | | 374,725 | |
| | |
ResMed, Inc. | | | 155 | | | | 22,928 | |
| | |
Varian Medical Systems, Inc.* | | | 248 | | | | 29,961 | |
| | |
West Pharmaceutical Services, Inc.(b) | | | 124 | | | | 17,836 | |
| | |
Zimmer Biomet Holdings, Inc. | | | 341 | | | | 47,136 | |
| | | | | | | | 1,629,981 | |
|
| Health Care Providers & Services – 1.0% | |
| | |
Anthem, Inc. | | | 868 | | | | 233,562 | |
| | |
CVS Health Corp. | | | 4,278 | | | | 284,016 | |
| | |
McKesson Corp.(b) | | | 310 | | | | 41,230 | |
| | | | | | | | 558,808 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Hotels, Restaurants & Leisure – 2.6% | |
| | |
Carnival Corp. | | | 713 | | | $ | 30,581 | |
| | |
Domino’s Pizza, Inc.(b) | | | 31 | | | | 8,420 | |
| | |
Hilton Worldwide Holdings, Inc. | | | 868 | | | | 84,161 | |
| | |
Marriott International, Inc., Class A(b) | | | 682 | | | | 86,307 | |
| | |
McDonald’s Corp. | | | 3,131 | | | | 615,868 | |
| | |
MGM Resorts International | | | 2,046 | | | | 58,311 | |
| | |
Starbucks Corp. | | | 4,991 | | | | 422,039 | |
| | |
Wynn Resorts Ltd. | | | 31 | | | | 3,762 | |
| | |
Yum! Brands, Inc. | | | 1,333 | | | | 135,579 | |
| | | | | | | | 1,445,028 | |
|
| Household Durables – 0.2% | |
| | |
Garmin Ltd. | | | 620 | | | | 58,125 | |
| | |
Lennar Corp., Class A | | | 961 | | | | 57,275 | |
| | |
PulteGroup, Inc. | | | 620 | | | | 24,329 | |
| | | | | | | | 139,729 | |
|
| Household Products – 3.2% | |
| | |
Clorox Co. (The) | | | 403 | | | | 59,519 | |
| | |
Colgate-Palmolive Co. | | | 2,883 | | | | 197,774 | |
| | |
Kimberly-Clark Corp. | | | 465 | | | | 61,789 | |
| | |
Procter & Gamble Co. (The) | | | 11,625 | | | | 1,447,429 | |
| | | | | | | | 1,766,511 | |
|
| Industrial Conglomerates – 1.7% | |
| | |
3M Co. | | | 2,790 | | | | 460,322 | |
| | |
General Electric Co. | | | 37,293 | | | | 372,184 | |
| | |
Roper Technologies, Inc. | | | 341 | | | | 114,904 | |
| | | | | | | | 947,410 | |
|
| Insurance – 1.7% | |
| | |
Aflac, Inc. | | | 2,294 | | | | 121,949 | |
| | |
Allstate Corp. (The) | | | 1,147 | | | | 122,064 | |
| | |
American International Group, Inc. | | | 2,139 | | | | 113,281 | |
| | |
Aon plc | | | 620 | | | | 119,759 | |
| | |
Globe Life, Inc. | | | 465 | | | | 45,258 | |
| | |
Hartford Financial Services Group, Inc. (The) | | | 1,457 | | | | 83,166 | |
| | |
Loews Corp. | | | 217 | | | | 10,633 | |
| | |
Principal Financial Group, Inc. | | | 744 | | | | 39,715 | |
| | |
Progressive Corp. (The) | | | 1,736 | | | | 120,999 | |
| | |
Reinsurance Group of America, Inc. | | | 372 | | | | 60,439 | |
| | |
Travelers Cos., Inc. (The) | | | 465 | | | | 60,943 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 257 | |
FlexShares® STOXX® US ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Insurance – (continued) | |
| | |
Willis Towers Watson plc | | | 341 | | | $ | 63,733 | |
| | |
WR Berkley Corp. | | | 155 | | | | 10,834 | |
| | | | | | | | 972,773 | |
|
| Interactive Media & Services – 5.3% | |
| | |
Alphabet, Inc., Class C* | | | 1,437 | | | | 1,810,778 | |
| | |
Facebook, Inc., Class A* | | | 5,456 | | | | 1,045,642 | |
| | |
Snap, Inc., Class A* (b) | | | 4,464 | | | | 67,228 | |
| | |
Twitter, Inc.* | | | 1,736 | | | | 52,028 | |
| | | | | | | | 2,975,676 | |
|
| Internet & Direct Marketing Retail – 5.0% | |
| | |
Amazon.com, Inc.* | | | 1,488 | | | | 2,643,670 | |
| | |
eBay, Inc. | | | 2,449 | | | | 86,327 | |
| | |
Expedia Group, Inc. | | | 341 | | | | 46,601 | |
| | |
Wayfair, Inc., Class A* | | | 155 | | | | 12,746 | |
| | | | | | | | 2,789,344 | |
|
| IT Services – 5.0% | |
| | |
Accenture plc, Class A | | | 3,162 | | | | 586,298 | |
| | |
Akamai Technologies, Inc.* | | | 682 | | | | 58,993 | |
| | |
Amdocs Ltd. | | | 651 | | | | 42,445 | |
| | |
Booz Allen Hamilton Holding Corp. | | | 496 | | | | 34,903 | |
| | |
Broadridge Financial Solutions, Inc. | | | 403 | | | | 50,464 | |
| | |
Gartner, Inc.* | | | 31 | | | | 4,776 | |
| | |
International Business Machines Corp. | | | 4,216 | | | | 563,806 | |
| | |
Leidos Holdings, Inc. | | | 341 | | | | 29,404 | |
| | |
Mastercard, Inc., Class A | | | 2,728 | | | | 755,138 | |
| | |
Okta, Inc.* (b) | | | 372 | | | | 40,574 | |
| | |
PayPal Holdings, Inc.* | | | 4,650 | | | | 484,065 | |
| | |
Square, Inc., Class A* (b) | | | 713 | | | | 43,799 | |
| | |
Twilio, Inc., Class A* (b) | | | 496 | | | | 47,894 | |
| | |
VeriSign, Inc.* | | | 93 | | | | 17,672 | |
| | |
Western Union Co. (The) | | | 1,860 | | | | 46,612 | |
| | | | | | | | 2,806,843 | |
|
| Leisure Products – 0.1% | |
| | |
Hasbro, Inc. | | | 403 | | | | 39,216 | |
|
| Life Sciences Tools & Services – 0.2% | |
| | |
Agilent Technologies, Inc. | | | 1,240 | | | | 93,930 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Life Sciences Tools & Services – (continued) | |
| | |
Mettler-Toledo International, Inc.* | | | 62 | | | $ | 43,706 | |
| | | | | | | | 137,636 | |
|
| Machinery – 1.7% | |
| | |
Caterpillar, Inc. | | | 1,550 | | | | 213,590 | |
| | |
Cummins, Inc. | | | 434 | | | | 74,856 | |
| | |
Deere & Co. | | | 961 | | | | 167,348 | |
| | |
Dover Corp.(b) | | | 558 | | | | 57,971 | |
| | |
Ingersoll-Rand plc | | | 682 | | | | 86,539 | |
| | |
PACCAR, Inc. | | | 1,147 | | | | 87,241 | |
| | |
Parker-Hannifin Corp. | | | 434 | | | | 79,635 | |
| | |
Stanley Black & Decker, Inc. | | | 620 | | | | 93,824 | |
| | |
Xylem, Inc. | | | 930 | | | | 71,322 | |
| | | | | | | | 932,326 | |
|
| Media – 0.9% | |
| | |
Comcast Corp., Class A | | | 11,005 | | | | 493,244 | |
| | |
Interpublic Group of Cos., Inc. (The) | | | 527 | | | | 11,462 | |
| | | | | | | | 504,706 | |
|
| Metals & Mining – 0.2% | |
| | |
Newmont Goldcorp Corp. | | | 3,162 | | | | 125,626 | |
|
| Mortgage Real Estate Investment Trusts (REITs) – 0.1% | |
| | |
AGNC Investment Corp. | | | 2,697 | | | | 45,984 | |
|
| Multiline Retail – 0.6% | |
| | |
Dollar General Corp. | | | 961 | | | | 154,087 | |
| | |
Kohl’s Corp.(b) | | | 837 | | | | 42,905 | |
| | |
Target Corp. | | | 1,519 | | | | 162,396 | |
| | | | | | | | 359,388 | |
|
| Multi-Utilities – 0.9% | |
| | |
Ameren Corp. | | | 899 | | | | 69,852 | |
| | |
CMS Energy Corp. | | | 1,054 | | | | 67,372 | |
| | |
Consolidated Edison, Inc. | | | 620 | | | | 57,176 | |
| | |
Dominion Energy, Inc. | | | 1,054 | | | | 87,008 | |
| | |
DTE Energy Co. | | | 527 | | | | 67,098 | |
| | |
Sempra Energy(b) | | | 930 | | | | 134,394 | |
| | | | | | | | 482,900 | |
|
| Oil, Gas & Consumable Fuels – 5.5% | |
| | |
Chevron Corp. | | | 8,897 | | | | 1,033,298 | |
| | |
ConocoPhillips | | | 4,743 | | | | 261,814 | |
| | |
Devon Energy Corp. | | | 1,891 | | | | 38,350 | |
See Accompanying Notes to the Financial Statements.
| | |
| 258 | | FLEXSHARES ANNUAL REPORT |
FlexShares® STOXX® US ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Exxon Mobil Corp. | | | 19,964 | | | $ | 1,348,967 | |
| | |
Hess Corp. | | | 1,240 | | | | 81,530 | |
| | |
Marathon Oil Corp. | | | 31 | | | | 357 | |
| | |
Phillips 66 | | | 1,736 | | | | 202,800 | |
| | |
Valero Energy Corp. | | | 1,426 | | | | 138,293 | |
| | | | | | | | 3,105,409 | |
|
| Personal Products – 0.3% | |
| | |
Estee Lauder Cos., Inc. (The), Class A | | | 899 | | | | 167,457 | |
|
| Pharmaceuticals – 1.9% | |
| | |
Allergan plc | | | 1,023 | | | | 180,161 | |
| | |
Eli Lilly & Co. | | | 2,635 | | | | 300,258 | |
| | |
Merck & Co., Inc. | | | 6,417 | | | | 556,097 | |
| | | | | | | | 1,036,516 | |
|
| Professional Services – 0.1% | |
| | |
IHS Markit Ltd.* | | | 589 | | | | 41,242 | |
|
| Real Estate Management & Development – 0.1% | |
| | |
CBRE Group, Inc., Class A* | | | 1,240 | | | | 66,402 | |
|
| Road & Rail – 0.4% | |
| | |
Kansas City Southern | | | 279 | | | | 39,278 | |
| | |
Norfolk Southern Corp. | | | 651 | | | | 118,482 | |
| | |
Uber Technologies, Inc.* (b) | | | 2,480 | | | | 78,120 | |
| | | | | | | | 235,880 | |
|
| Semiconductors & Semiconductor Equipment – 3.9% | |
| | |
Intel Corp. | | | 21,018 | | | | 1,188,147 | |
| | |
Lam Research Corp.(b) | | | 217 | | | | 58,816 | |
| | |
Maxim Integrated Products, Inc. | | | 930 | | | | 54,554 | |
| | |
ON Semiconductor Corp.* (b) | | | 1,767 | | | | 36,047 | |
| | |
QUALCOMM, Inc. | | | 3,007 | | | | 241,883 | |
| | |
Skyworks Solutions, Inc. | | | 310 | | | | 28,228 | |
| | |
Teradyne, Inc. | | | 527 | | | | 32,263 | |
| | |
Texas Instruments, Inc. | | | 4,402 | | | | 519,392 | |
| | | | | | | | 2,159,330 | |
|
| Software – 7.3% | |
| | |
Adobe, Inc.* | | | 1,240 | | | | 344,633 | |
| | |
ANSYS, Inc.* | | | 248 | | | | 54,597 | |
| | |
Autodesk, Inc.* | | | 806 | | | | 118,772 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Software – (continued) | |
| | |
Intuit, Inc. | | | 992 | | | $ | 255,440 | |
| | |
Microsoft Corp. | | | 19,778 | | | | 2,835,572 | |
| | |
Oracle Corp. | | | 5,766 | | | | 314,189 | |
| | |
Splunk, Inc.* | | | 527 | | | | 63,219 | |
| | |
Symantec Corp. | | | 2,573 | | | | 58,870 | |
| | |
Synopsys, Inc.* | | | 372 | | | | 50,499 | |
| | |
Zendesk, Inc.* | | | 93 | | | | 6,571 | |
| | | | | | | | 4,102,362 | |
|
| Specialty Retail – 1.1% | |
| | |
Advance Auto Parts, Inc. | | | 31 | | | | 5,037 | |
| | |
AutoZone, Inc.* | | | 62 | | | | 70,952 | |
| | |
Best Buy Co., Inc. | | | 527 | | | | 37,854 | |
| | |
Burlington Stores, Inc.* | | | 341 | | | | 65,530 | |
| | |
Lowe’s Cos., Inc. | | | 1,953 | | | | 217,974 | |
| | |
TJX Cos., Inc. (The) | | | 4,154 | | | | 239,478 | |
| | |
Ulta Beauty, Inc.* | | | 31 | | | | 7,228 | |
| | | | | | | | 644,053 | |
|
| Technology Hardware, Storage & Peripherals – 5.9% | |
| | |
Apple, Inc. | | | 12,493 | | | | 3,107,759 | |
| | |
Hewlett Packard Enterprise Co. | | | 3,007 | | | | 49,345 | |
| | |
HP, Inc. | | | 5,425 | | | | 94,232 | |
| | |
Seagate Technology plc | | | 713 | | | | 41,375 | |
| | | | | | | | 3,292,711 | |
|
| Textiles, Apparel & Luxury Goods – 0.1% | |
| | |
Lululemon Athletica, Inc.* | | | 403 | | | | 82,321 | |
|
| Tobacco – 0.7% | |
| | |
Altria Group, Inc. | | | 2,108 | | | | 94,417 | |
| | |
Philip Morris International, Inc. | | | 3,844 | | | | 313,056 | |
| | | | | | | | 407,473 | |
|
| Trading Companies & Distributors – 0.3% | |
| | |
Fastenal Co.(b) | | | 3,007 | | | | 108,072 | |
| | |
HD Supply Holdings, Inc.* | | | 930 | | | | 36,772 | |
| | |
United Rentals, Inc.* | | | 279 | | | | 37,266 | |
| | | | | | | | 182,110 | |
|
| Water Utilities – 0.2% | |
| | |
American Water Works Co., Inc. | | | 744 | | | | 91,713 | |
Total Common Stocks
(Cost $48,292,417) | | | | 55,361,534 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 259 | |
FlexShares® STOXX® US ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SECURITIES LENDING REINVESTMENTS(c) – 0.3% | |
|
| REPURCHASE AGREEMENTS – 0.3% | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $151,558, collateralized by various U.S. Treasury Securities, ranging from 0.38% – 6.88%, maturing 11/30/2020 – 9/30/2025; total market value $155,154
(Cost $151,550) | | $ | 151,550 | | | $ | 151,550 | |
Total Investments – 99.1%
(Cost $48,443,967) | | | | 55,513,084 | |
| |
Other Assets Less Liabilities – 0.9% | | | | 511,026 | |
| NET ASSETS – 100.0% | | | $ | 56,024,110 | |
| * | Non-income producing security. |
| (a) | Represents less than 0.05% of net assets. |
| (b) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $1,466,386, collateralized in the form of cash with a value of $151,550 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments; $1,306,667 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.75%, and maturity dates ranging from November 14, 2019 – May 15, 2049 and $59,463 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.13% – 4.75%, and maturity dates ranging from July 22, 2020 – October 22, 2071; a total value of $1,517,680. |
| (c) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $151,550. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | |
Aggregate gross unrealized appreciation | | $ | 7,616,443 | |
Aggregate gross unrealized depreciation | | | (600,576 | ) |
Net unrealized appreciation | | $ | 7,015,867 | |
Federal income tax cost | | $ | 48,506,955 | |
Investment in a company which was affiliated for the period ended October 31, 2019, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Security | | Value
October 31, 2018 | | | Purchases
at Cost | | | Sales
Proceeds | | | Shares
October 31, 2019 | | | Value
October 31, 2019 | | | Change in
Unrealized
Appreciation
(Depreciation) | | | Dividend
Income | | | Realized
Loss | |
Northern Trust Corp. | | $ | — | | | $ | 33,260 | | | $ | 30,430 | | | | — | | | $ | — | | | $ | — | | | $ | 211 | | | $ | (2,830 | ) |
Futures Contracts
FlexShares® STOXX® US ESG Impact Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | |
S&P 500E-Mini Index | | | 4 | | | | 12/20/2019 | | | | USD | | | $ | 607,160 | | | $ | 9,738 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Abbreviations:
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | |
| 260 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® STOXX® Global ESG Impact Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 98.4% | |
|
| Aerospace & Defense – 0.0%(a) | |
| | |
Saab AB, Class B(b) | | | 342 | | | $ | 10,568 | |
|
| Air Freight & Logistics – 0.3% | |
| | |
Deutsche Post AG (Registered) | | | 1,350 | | | | 47,820 | |
| | |
FedEx Corp. | | | 846 | | | | 129,150 | |
| | |
United Parcel Service, Inc., Class B | | | 1,188 | | | | 136,822 | |
| | | | | | | | 313,792 | |
|
| Airlines – 0.2% | |
| | |
AirFrance-KLM* | | | 900 | | | | 10,719 | |
| | |
Alaska Air Group, Inc. | | | 648 | | | | 44,991 | |
| | |
Deutsche Lufthansa AG (Registered) | | | 126 | | | | 2,185 | |
| | |
easyJet plc | | | 72 | | | | 1,153 | |
| | |
International Consolidated Airlines Group SA, DI | | | 396 | | | | 2,722 | |
| | |
Qantas Airways Ltd. | | | 2,268 | | | | 10,016 | |
| | |
Southwest Airlines Co. | | | 1,440 | | | | 80,827 | |
| | | | | | | | 152,613 | |
|
| Auto Components – 0.5% | |
| | |
Bridgestone Corp. | | | 7,200 | | | | 301,240 | |
| | |
Cie Generale des Etablissements Michelin SCA | | | 648 | | | | 78,873 | |
| | |
Continental AG | | | 288 | | | | 38,518 | |
| | |
Hella GmbH & Co. KGaA | | | 252 | | | | 12,264 | |
| | |
Nokian Renkaat OYJ | | | 54 | | | | 1,542 | |
| | |
Pirelli & C SpA(b) (c) | | | 2,160 | | | | 12,488 | |
| | |
Valeo SA | | | 1,296 | | | | 48,206 | |
| | | | | | | | 493,131 | |
|
| Automobiles – 1.3% | |
| | |
Bayerische Motoren Werke AG | | | 558 | | | | 42,774 | |
| | |
Daimler AG (Registered) | | | 1,998 | | | | 116,826 | |
| | |
Ferrari NV | | | 360 | | | | 57,614 | |
| | |
Fiat Chrysler Automobiles NV | | | 1,854 | | | | 28,809 | |
| | |
General Motors Co. | | | 6,804 | | | | 252,837 | |
| | |
Honda Motor Co. Ltd. | | | 16,200 | | | | 440,871 | |
| | |
Peugeot SA | | | 2,016 | | | | 51,056 | |
| | |
Renault SA | | | 774 | | | | 39,514 | |
| | |
Tesla, Inc.* | | | 540 | | | | 170,057 | |
| | | | | | | | 1,200,358 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – 9.8% | |
| | |
ABN AMRO Bank NV, CVA(c) | | | 162 | | | $ | 3,016 | |
| | |
Australia & New Zealand Banking Group Ltd. | | | 7,722 | | | | 142,259 | |
| | |
Banco Bilbao Vizcaya Argentaria SA | | | 16,272 | | | | 85,741 | |
| | |
Banco Santander SA | | | 62,856 | | | | 252,030 | |
| | |
Bank of America Corp. | | | 46,548 | | | | 1,455,556 | |
| | |
Bank of Ireland Group plc | | | 180 | | | | 866 | |
| | |
Bank of Montreal | | | 1,368 | | | | 101,480 | |
| | |
Bank of Nova Scotia (The) | | | 3,546 | | | | 203,800 | |
| | |
Bank Polska Kasa Opieki SA | | | 378 | | | | 10,681 | |
| | |
Bankia SA | | | 5,490 | | | | 10,461 | |
| | |
Bankinter SA | | | 198 | | | | 1,370 | |
| | |
Barclays plc | | | 20,628 | | | | 44,790 | |
| | |
BNP Paribas SA | | | 4,500 | | | | 235,006 | |
| | |
Citigroup, Inc. | | | 13,104 | | | | 941,653 | |
| | |
Commerzbank AG | | | 234 | | | | 1,400 | |
| | |
Commonwealth Bank of Australia | | | 7,902 | | | | 428,232 | |
| | |
DBS Group Holdings Ltd. | | | 5,400 | | | | 103,163 | |
| | |
DNB ASA | | | 2,466 | | | | 44,882 | |
| | |
Erste Group Bank AG | | | 1,098 | | | | 38,795 | |
| | |
Fifth Third Bancorp | | | 1,422 | | | | 41,352 | |
| | |
Hang Seng Bank Ltd. | | | 2,100 | | | | 43,888 | |
| | |
HSBC Holdings plc | | | 58,374 | | | | 440,375 | |
| | |
Intesa Sanpaolo SpA | | | 40,032 | | | | 100,310 | |
| | |
JPMorgan Chase & Co. | | | 14,850 | | | | 1,855,062 | |
| | |
KBC Group NV | | | 180 | | | | 12,627 | |
| | |
KeyCorp | | | 3,528 | | | | 63,398 | |
| | |
Lloyds Banking Group plc | | | 221,364 | | | | 162,701 | |
| | |
Mediobanca Banca di Credito Finanziario SpA | | | 1,980 | | | | 23,526 | |
| | |
Mizuho Financial Group, Inc. | | | 198,000 | | | | 309,166 | |
| | |
National Australia Bank Ltd. | | | 7,704 | | | | 151,852 | |
| | |
Royal Bank of Canada | | | 4,464 | | | | 360,829 | |
| | |
Royal Bank of Scotland Group plc | | | 1,404 | | | | 3,864 | |
| | |
Skandinaviska Enskilda Banken AB, Class A | | | 4,572 | | | | 43,906 | |
| | |
Societe Generale SA | | | 3,960 | | | | 112,437 | |
| | |
Standard Chartered plc | | | 10,890 | | | | 98,783 | |
| | |
Svenska Handelsbanken AB, Class A | | | 5,094 | | | | 51,108 | |
| | |
Swedbank AB, Class A | | | 5,292 | | | | 74,181 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 261 | |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Banks – (continued) | |
| | |
Toronto-Dominion Bank (The) | | | 5,742 | | | $ | 328,570 | |
| | |
UniCredit SpA | | | 8,298 | | | | 105,241 | |
| | |
Unione di Banche Italiane SpA(b) | | | 5,616 | | | | 17,086 | |
| | |
US Bancorp | | | 3,186 | | | | 181,666 | |
| | |
Westpac Banking Corp. | | | 13,860 | | | | 269,373 | |
| | | | | | | | 8,956,482 | |
|
| Beverages – 2.5% | |
| | |
Anheuser-Busch InBev SA/NV | | | 1,638 | | | | 131,648 | |
| | |
Asahi Group Holdings Ltd. | | | 3,600 | | | | 180,824 | |
| | |
Carlsberg A/S, Class B | | | 216 | | | | 30,402 | |
| | |
Coca-Cola Amatil Ltd. | | | 2,142 | | | | 14,979 | |
| | |
Coca-Cola Bottlers Japan Holdings, Inc.(b) | | | 1,200 | | | | 27,384 | |
| | |
Coca-Cola Co. (The) | | | 11,106 | | | | 604,500 | |
| | |
Coca-Cola European Partners plc | | | 684 | | | | 36,601 | |
| | |
Coca-Cola HBC AG, DI* | | | 684 | | | | 20,800 | |
| | |
Diageo plc | | | 5,058 | | | | 207,118 | |
| | |
Heineken Holding NV | | | 252 | | | | 24,010 | |
| | |
Heineken NV(b) | | | 810 | | | | 82,650 | |
| | |
PepsiCo, Inc. | | | 5,328 | | | | 730,842 | |
| | |
Pernod Ricard SA | | | 594 | | | | 109,676 | |
| | |
Remy Cointreau SA | | | 36 | | | | 4,816 | |
| | |
Royal Unibrew A/S | | | 72 | | | | 5,906 | |
| | |
Suntory Beverage & Food Ltd. | | | 400 | | | | 17,094 | |
| | |
Thai Beverage PCL | | | 32,400 | | | | 21,783 | |
| | |
Treasury Wine Estates Ltd. | | | 3,006 | | | | 36,387 | |
| | | | | | | | 2,287,420 | |
|
| Biotechnology – 1.5% | |
| | |
AbbVie, Inc. | | | 4,896 | | | | 389,477 | |
| | |
Amgen, Inc. | | | 1,800 | | | | 383,850 | |
| | |
Biogen, Inc.* | | | 180 | | | | 53,768 | |
| | |
Celgene Corp.* | | | 1,890 | | | | 204,177 | |
| | |
CSL Ltd. | | | 1,206 | | | | 212,728 | |
| | |
Vertex Pharmaceuticals, Inc.* | | | 630 | | | | 123,152 | |
| | | | | | | | 1,367,152 | |
|
| Building Products – 0.8% | |
| | |
AGC, Inc. | | | 3,600 | | | | 127,543 | |
| | |
Assa Abloy AB, Class B | | | 3,600 | | | | 85,569 | |
| | |
Cie de Saint-Gobain | | | 306 | | | | 12,451 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Building Products – (continued) | |
| | |
Daikin Industries Ltd. | | | 2,700 | | | $ | 380,380 | |
| | |
Geberit AG (Registered) | | | 144 | | | | 73,054 | |
| | |
LIXIL Group Corp.(b) | | | 3,600 | | | | 67,468 | |
| | | | | | | | 746,465 | |
|
| Capital Markets – 2.1% | |
| | |
3i Group plc | | | 2,574 | | | | 37,571 | |
| | |
BlackRock, Inc. | | | 360 | | | | 166,212 | |
| | |
Credit Suisse Group AG (Registered)* | | | 9,630 | | | | 119,356 | |
| | |
Deutsche Bank AG (Registered) | | | 10,800 | | | | 78,246 | |
| | |
Deutsche Boerse AG | | | 522 | | | | 80,920 | |
| | |
Goldman Sachs Group, Inc. (The) | | | 1,674 | | | | 357,198 | |
| | |
Hong Kong Exchanges & Clearing Ltd. | | | 2,627 | | | | 82,118 | |
| | |
Investec plc | | | 4,320 | | | | 24,462 | |
| | |
Julius Baer Group Ltd.* | | | 972 | | | | 42,870 | |
| | |
Jupiter Fund Management plc | | | 2,052 | | | | 9,097 | |
| | |
London Stock Exchange Group plc | | | 1,350 | | | | 121,480 | |
| | |
Macquarie Group Ltd. | | | 1,494 | | | | 137,843 | |
| | |
Morgan Stanley | | | 5,922 | | | | 272,708 | |
| | |
Nasdaq, Inc. | | | 720 | | | | 71,834 | |
| | |
Natixis SA | | | 72 | | | | 330 | |
| | |
S&P Global, Inc. | | | 576 | | | | 148,602 | |
| | |
Schroders plc | | | 90 | | | | 3,605 | |
| | |
UBS Group AG (Registered)* | | | 18,090 | | | | 213,395 | |
| | | | | | | | 1,967,847 | |
|
| Chemicals – 1.6% | |
| | |
Air Liquide SA | | | 1,069 | | | | 142,042 | |
| | |
Air Products & Chemicals, Inc. | | | 540 | | | | 115,161 | |
| | |
Akzo Nobel NV | | | 324 | | | | 29,839 | |
| | |
Arkema SA | | | 18 | | | | 1,840 | |
| | |
BASF SE | | | 1,764 | | | | 134,277 | |
| | |
Celanese Corp. | | | 360 | | | | 43,614 | |
| | |
Chr Hansen Holding A/S | | | 36 | | | | 2,765 | |
| | |
Clariant AG (Registered)* | | | 774 | | | | 15,853 | |
| | |
Corteva, Inc. | | | 1,908 | | | | 50,333 | |
| | |
Croda International plc | | | 385 | | | | 23,993 | |
| | |
Dow, Inc. | | | 1,494 | | | | 75,432 | |
| | |
DuPont de Nemours, Inc. | | | 864 | | | | 56,946 | |
| | |
Ecolab, Inc. | | | 1,206 | | | | 231,637 | |
| | |
FUCHS PETROLUB SE (Preference) | | | 306 | | | | 13,068 | |
See Accompanying Notes to the Financial Statements.
| | |
| 262 | | FLEXSHARES ANNUAL REPORT |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Chemicals – (continued) | |
| | |
Givaudan SA (Registered) | | | 18 | | | $ | 52,846 | |
| | |
Hexpol AB | | | 1,260 | | | | 11,247 | |
| | |
Johnson Matthey plc | | | 810 | | | | 32,178 | |
| | |
Koninklijke DSM NV(b) | | | 666 | | | | 78,946 | |
| | |
Mitsubishi Chemical Holdings Corp. | | | 16,200 | | | | 124,469 | |
| | |
Mitsui Chemicals, Inc. | | | 1,900 | | | | 45,749 | |
| | |
Novozymes A/S, Class B | | | 666 | | | | 31,372 | |
| | |
Nutrien Ltd. | | | 1,566 | | | | 75,074 | |
| | |
Sika AG (Registered) | | | 270 | | | | 46,380 | |
| | |
Symrise AG | | | 198 | | | | 19,059 | |
| | | | | | | | 1,454,120 | |
|
| Commercial Services & Supplies – 0.5% | |
| | |
Brambles Ltd. | | | 8,028 | | | | 66,205 | |
| | |
Cintas Corp. | | | 630 | | | | 169,262 | |
| | |
Downer EDI Ltd. | | | 900 | | | | 4,991 | |
| | |
Edenred | | | 972 | | | | 51,184 | |
| | |
Elis SA | | | 1,008 | | | | 19,264 | |
| | |
ISS A/S | | | 54 | | | | 1,414 | |
| | |
Rentokil Initial plc | | | 8,352 | | | | 49,120 | |
| | |
Republic Services, Inc. | | | 504 | | | | 44,105 | |
| | |
Securitas AB, Class B | | | 1,782 | | | | 28,559 | |
| | |
SPIE SA | | | 594 | | | | 12,525 | |
| | | | | | | | 446,629 | |
|
| Communications Equipment – 1.0% | |
| | |
Cisco Systems, Inc. | | | 15,138 | | | | 719,206 | |
| | |
Motorola Solutions, Inc. | | | 486 | | | | 80,832 | |
| | |
Nokia OYJ | | | 5,886 | | | | 21,628 | |
| | |
Telefonaktiebolaget LM Ericsson, Class B | | | 7,776 | | | | 68,088 | |
| | | | | | | | 889,754 | |
|
| Construction & Engineering – 0.5% | |
| | |
Balfour Beatty plc | | | 738 | | | | 2,153 | |
| | |
Bouygues SA | | | 1,116 | | | | 47,312 | |
| | |
Eiffage SA | | | 234 | | | | 25,146 | |
| | |
Ferrovial SA | | | 983 | | | | 29,018 | |
| | |
Kajima Corp. | | | 3,600 | | | | 49,818 | |
| | |
Skanska AB, Class B | | | 1,980 | | | | 42,233 | |
| | |
Taisei Corp. | | | 1,400 | | | | 55,687 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Construction & Engineering – (continued) | |
| | |
Vinci SA | | | 1,836 | | | $ | 206,062 | |
| | | | | | | | 457,429 | |
|
| Construction Materials – 0.2% | |
| | |
Boral Ltd. | | | 1,458 | | | | 5,053 | |
| | |
CRH plc | | | 3,168 | | | | 115,503 | |
| | |
LafargeHolcim Ltd. (Registered)* | | | 1,536 | | | | 79,201 | |
| | |
Wienerberger AG | | | 342 | | | | 9,249 | |
| | | | | | | | 209,006 | |
|
| Containers & Packaging – 0.1% | |
| | |
Amcor plc | | | 2,862 | | | | 27,467 | |
| | |
DS Smith plc | | | 5,166 | | | | 23,905 | |
| | |
Orora Ltd. | | | 4,572 | | | | 9,733 | |
| | |
Smurfit Kappa Group plc | | | 630 | | | | 21,015 | |
| | | | | | | | 82,120 | |
|
| Diversified Financial Services – 0.1% | |
| | |
Eurazeo SE | | | 96 | | | | 6,694 | |
| | |
EXOR NV | | | 450 | | | | 34,501 | |
| | |
Kinnevik AB, Class B | | | 828 | | | | 22,680 | |
| | |
L E Lundbergforetagen AB, Class B | | | 594 | | | | 22,405 | |
| | |
Wendel SA | | | 36 | | | | 5,101 | |
| | | | | | | | 91,381 | |
|
| Diversified Telecommunication Services – 3.6% | |
| | |
AT&T, Inc. | | | 27,342 | | | | 1,052,393 | |
| | |
BCE, Inc. | | | 1,494 | | | | 71,020 | |
| | |
BT Group plc | | | 16,344 | | | | 43,292 | |
| | |
CenturyLink, Inc. | | | 2,898 | | | | 37,500 | |
| | |
Deutsche Telekom AG (Registered) | | | 9,918 | | | | 174,473 | |
| | |
Elisa OYJ | | | 486 | | | | 26,552 | |
| | |
Inmarsat plc | | | 1,224 | | | | 8,714 | |
| | |
Koninklijke KPN NV | | | 16,578 | | | | 51,417 | |
| | |
Nippon Telegraph & Telephone Corp. | | | 7,200 | | | | 358,052 | |
| | |
Orange SA | | | 7,038 | | | | 113,382 | |
| | |
Proximus SADP | | | 702 | | | | 21,561 | |
| | |
Singapore Telecommunications Ltd. | | | 28,800 | | | | 69,833 | |
| | |
Spark New Zealand Ltd. | | | 8,496 | | | | 24,409 | |
| | |
Swisscom AG (Registered) | | | 108 | | | | 55,163 | |
| | |
Telecom Italia SpA* | | | 36,810 | | | | 21,548 | |
| | |
Telenor ASA | | | 2,304 | | | | 43,201 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 263 | |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Diversified Telecommunication Services – (continued) | |
| | |
Telia Co. AB | | | 9,666 | | | $ | 42,590 | |
| | |
Telstra Corp. Ltd. | | | 55,962 | | | | 134,557 | |
| | |
TELUS Corp. | | | 1,080 | | | | 38,497 | |
| | |
Verizon Communications, Inc. | | | 15,480 | | | | 936,076 | |
| | | | | | | | 3,324,230 | |
|
| Electric Utilities – 1.0% | |
| | |
Alliant Energy Corp. | | | 1,062 | | | | 56,647 | |
| | |
CLP Holdings Ltd. | | | 5,000 | | | | 51,897 | |
| | |
EDP – Energias de Portugal SA | | | 5,562 | | | | 22,897 | |
| | |
Electricite de France SA | | | 486 | | | | 5,016 | |
| | |
Endesa SA | | | 468 | | | | 12,740 | |
| | |
Enel SpA | | | 13,482 | | | | 104,386 | |
| | |
Eversource Energy | | | 1,062 | | | | 88,932 | |
| | |
Fortis, Inc. | | | 1,188 | | | | 49,460 | |
| | |
Fortum OYJ | | | 1,620 | | | | 39,563 | |
| | |
Iberdrola SA | | | 18,839 | | | | 193,531 | |
| | |
Orsted A/S(c) | | | 522 | | | | 45,810 | |
| | |
PPL Corp. | | | 1,710 | | | | 57,268 | |
| | |
Red Electrica Corp. SA | | | 702 | | | | 14,136 | |
| | |
Spark Infrastructure Group | | | 5,796 | | | | 8,066 | |
| | |
SSE plc | | | 5,796 | | | | 96,263 | |
| | |
Terna Rete Elettrica Nazionale SpA | | | 6,174 | | | | 40,805 | |
| | | | | | | | 887,417 | |
|
| Electrical Equipment – 0.7% | |
| | |
ABB Ltd. (Registered) | | | 6,480 | | | | 135,872 | |
| | |
AMETEK, Inc. | | | 756 | | | | 69,288 | |
| | |
Eaton Corp. plc | | | 1,512 | | | | 131,710 | |
| | |
Legrand SA | | | 684 | | | | 53,402 | |
| | |
Prysmian SpA | | | 1,134 | | | | 26,201 | |
| | |
Rockwell Automation, Inc. | | | 432 | | | | 74,300 | |
| | |
Schneider Electric SE | | | 1,134 | | | | 105,336 | |
| | |
Siemens Gamesa Renewable Energy SA(b) | | | 558 | | | | 7,673 | |
| | |
Signify NV(b) (c) | | | 198 | | | | 5,796 | |
| | |
Vestas Wind Systems A/S | | | 594 | | | | 48,509 | |
| | | | | | | | 658,087 | |
|
| Electronic Equipment, Instruments & Components – 0.5% | |
| | |
AAC Technologies Holdings, Inc.(b) | | | 2,000 | | | | 13,014 | |
| | |
Electrocomponents plc | | | 3,798 | | | | 33,429 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
Electronic Equipment, Instruments & Components –
(continued) | |
| | |
Halma plc | | | 1,152 | | | $ | 27,928 | |
| | |
Hexagon AB, Class B | | | 954 | | | | 48,808 | |
| | |
Hitachi Ltd. | | | 5,400 | | | | 203,252 | |
| | |
Ingenico Group SA | | | 108 | | | | 11,536 | |
| | |
Omron Corp. | | | 1,800 | | | | 106,563 | |
| | |
TE Connectivity Ltd. | | | 666 | | | | 59,607 | |
| | | | | | | | 504,137 | |
|
| Energy Equipment & Services – 0.3% | |
| | |
John Wood Group plc | | | 72 | | | | 315 | |
| | |
Saipem SpA* | | | 3,402 | | | | 15,409 | |
| | |
Schlumberger Ltd. | | | 7,110 | | | | 232,426 | |
| | |
TGS NOPEC Geophysical Co. ASA | | | 396 | | | | 10,274 | |
| | |
Worley Ltd. | | | 1,663 | | | | 15,651 | |
| | | | | | | | 274,075 | |
|
| Entertainment – 1.6% | |
| | |
Netflix, Inc.* | | | 684 | | | | 196,588 | |
| | |
Spotify Technology SA* | | | 252 | | | | 36,364 | |
| | |
Take-Two Interactive Software, Inc.* | | | 360 | | | | 43,326 | |
| | |
Ubisoft Entertainment SA* | | | 396 | | | | 23,389 | |
| | |
Viacom, Inc., Class B | | | 1,800 | | | | 38,808 | |
| | |
Vivendi SA | | | 2,808 | | | | 78,193 | |
| | |
Walt Disney Co. (The) | | | 8,370 | | | | 1,087,430 | |
| | | | | | | | 1,504,098 | |
|
| Equity Real Estate Investment Trusts (REITs) – 1.2% | |
| | |
British Land Co. plc (The) | | | 450 | | | | 3,614 | |
| | |
Cofinimmo SA | | | 72 | | | | 10,651 | |
| | |
Covivio | | | 131 | | | | 14,834 | |
| | |
Derwent London plc(b) | | | 36 | | | | 1,654 | |
| | |
Dexus | | | 2,052 | | | | 16,922 | |
| | |
Equity LifeStyle Properties, Inc. | | | 1,044 | | | | 73,017 | |
| | |
Gecina SA | | | 342 | | | | 58,683 | |
| | |
GPT Group (The) | | | 3,780 | | | | 15,495 | |
| | |
Hammerson plc | | | 234 | | | | 878 | |
| | |
HCP, Inc. | | | 2,934 | | | | 110,377 | |
| | |
Host Hotels & Resorts, Inc. | | | 3,222 | | | | 52,809 | |
| | |
ICADE | | | 162 | | | | 15,869 | |
| | |
Klepierre SA | | | 864 | | | | 32,185 | |
| | |
Land Securities Group plc | | | 450 | | | | 5,474 | |
| | |
Link REIT | | | 4,500 | | | | 49,061 | |
See Accompanying Notes to the Financial Statements.
| | |
| 264 | | FLEXSHARES ANNUAL REPORT |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Mapletree Commercial Trust | | | 3,600 | | | $ | 6,163 | |
| | |
Merlin Properties Socimi SA | | | 2,610 | | | | 38,436 | |
| | |
Mirvac Group | | | 10,530 | | | | 23,287 | |
| | |
Prologis, Inc. | | | 1,512 | | | | 132,693 | |
| | |
Public Storage | | | 432 | | | | 96,276 | |
| | |
Stockland | | | 12,006 | | | | 40,448 | |
| | |
Suntec REIT | | | 7,200 | | | | 9,840 | |
| | |
Unibail-Rodamco-Westfield | | | 36 | | | | 5,569 | |
| | |
Ventas, Inc. | | | 648 | | | | 42,185 | |
| | |
Vicinity Centres | | | 14,814 | | | | 27,250 | |
| | |
Vornado Realty Trust | | | 936 | | | | 61,430 | |
| | |
Welltower, Inc. | | | 792 | | | | 71,826 | |
| | |
WP Carey, Inc. | | | 432 | | | | 39,770 | |
| | | | | | | | 1,056,696 | |
|
| Food & Staples Retailing – 2.3% | |
| | |
Carrefour SA | | | 2,168 | | | | 36,898 | |
| | |
Casino Guichard Perrachon SA(b) | | | 180 | | | | 9,714 | |
| | |
Colruyt SA(b) | | | 90 | | | | 5,004 | |
| | |
Costco Wholesale Corp. | | | 2,430 | | | | 721,977 | |
| | |
J Sainsbury plc | | | 6,426 | | | | 16,921 | |
| | |
Jeronimo Martins SGPS SA | | | 774 | | | | 12,992 | |
| | |
Kesko OYJ, Class B | | | 198 | | | | 13,183 | |
| | |
Koninklijke Ahold Delhaize NV | | | 4,374 | | | | 108,943 | |
| | |
Loblaw Cos. Ltd. | | | 846 | | | | 45,211 | |
| | |
Sysco Corp. | | | 2,646 | | | | 211,336 | |
| | |
Tesco plc | | | 32,022 | | | | 97,459 | |
| | |
Walgreens Boots Alliance, Inc. | | | 3,330 | | | | 182,417 | |
| | |
Walmart, Inc. | | | 4,266 | | | | 500,231 | |
| | |
Woolworths Group Ltd. | | | 4,536 | | | | 116,628 | |
| | | | | | | | 2,078,914 | |
|
| Food Products – 2.2% | |
| | |
AAK AB | | | 432 | | | | 7,672 | |
| | |
Ajinomoto Co., Inc. | | | 5,400 | | | | 102,875 | |
| | |
Danone SA | | | 2,214 | | | | 183,673 | |
| | |
General Mills, Inc. | | | 2,196 | | | | 111,689 | |
| | |
Hershey Co. (The) | | | 576 | | | | 84,597 | |
| | |
Kerry Group plc, Class A | | | 342 | | | | 41,360 | |
| | |
Mowi ASA | | | 1,602 | | | | 39,120 | |
| | |
Nestle SA (Registered) | | | 12,906 | | | | 1,377,512 | |
| | |
Salmar ASA | | | 126 | | | | 5,881 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Food Products – (continued) | |
| | |
Tate & Lyle plc | | | 1,332 | | | $ | 11,600 | |
| | |
Tyson Foods, Inc., Class A | | | 612 | | | | 50,667 | |
| | |
Vitasoy International Holdings Ltd. | | | 2,000 | | | | 8,140 | |
| | | | | | | | 2,024,786 | |
|
| Gas Utilities – 0.2% | |
| | |
Enagas SA | | | 612 | | | | 15,151 | |
| | |
Italgas SpA | | | 378 | | | | 2,433 | |
| | |
Rubis SCA | | | 334 | | | | 19,358 | |
| | |
Snam SpA | | | 8,190 | | | | 42,031 | |
| | |
Tokyo Gas Co. Ltd. | | | 3,600 | | | | 88,114 | |
| | | | | | | | 167,087 | |
|
| Health Care Equipment & Supplies – 2.6% | |
| | |
Abbott Laboratories | | | 7,974 | | | | 666,706 | |
| | |
Alcon, Inc.* | | | 918 | | | | 54,201 | |
| | |
Ansell Ltd. | | | 1,206 | | | | 22,932 | |
| | |
Becton Dickinson and Co. | | | 864 | | | | 221,184 | |
| | |
Boston Scientific Corp.* | | | 3,762 | | | | 156,875 | |
| | |
Cochlear Ltd. | | | 234 | | | | 34,103 | |
| | |
Coloplast A/S, Class B | | | 306 | | | | 36,890 | |
| | |
Edwards Lifesciences Corp.* | | | 522 | | | | 124,434 | |
| | |
Fisher & Paykel Healthcare Corp. Ltd. | | | 1,224 | | | | 15,032 | |
| | |
Getinge AB, Class B | | | 558 | | | | 9,539 | |
| | |
Hologic, Inc.* | | | 630 | | | | 30,435 | |
| | |
IDEXX Laboratories, Inc.* | | | 252 | | | | 71,823 | |
| | |
Koninklijke Philips NV | | | 2,196 | | | | 96,210 | |
| | |
Medtronic plc | | | 4,716 | | | | 513,573 | |
| | |
Sartorius AG (Preference) | | | 198 | | | | 38,481 | |
| | |
Sonova Holding AG (Registered) | | | 270 | | | | 61,839 | |
| | |
Straumann Holding AG (Registered) | | | 54 | | | | 48,147 | |
| | |
Sysmex Corp. | | | 1,000 | | | | 65,557 | |
| | |
Varian Medical Systems, Inc.* | | | 234 | | | | 28,270 | |
| | |
Zimmer Biomet Holdings, Inc. | | | 576 | | | | 79,621 | |
| | | | | | | | 2,375,852 | |
|
| Health Care Providers & Services – 0.8% | |
| | |
Anthem, Inc. | | | 792 | | | | 213,111 | |
| | |
CVS Health Corp. | | | 5,220 | | | | 346,556 | |
| | |
Fresenius SE & Co. KGaA | | | 1,512 | | | | 79,493 | |
| | |
NMC Health plc | | | 252 | | | | 7,119 | |
| | |
Orpea | | | 126 | | | | 15,168 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 265 | |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Health Care Providers & Services – (continued) | |
| | |
Ramsay Health Care Ltd. | | | 270 | | | $ | 12,740 | |
| | |
Ryman Healthcare Ltd. | | | 360 | | | | 2,981 | |
| | |
Sonic Healthcare Ltd. | | | 2,358 | | | | 46,364 | |
| | | | | | | | 723,532 | |
|
| Hotels, Restaurants & Leisure – 1.9% | |
| | |
Accor SA | | | 1,080 | | | | 46,413 | |
| | |
Aristocrat Leisure Ltd. | | | 864 | | | | 18,822 | |
| | |
Carnival Corp. | | | 972 | | | | 41,689 | |
| | |
Carnival plc | | | 144 | | | | 5,761 | |
| | |
Compass Group plc | | | 5,040 | | | | 134,087 | |
| | |
Domino’s Pizza Enterprises Ltd.(b) | | | 270 | | | | 9,489 | |
| | |
Flight Centre Travel Group Ltd. | | | 216 | | | | 6,338 | |
| | |
Genting Singapore Ltd. | | | 12,600 | | | | 8,703 | |
| | |
Hilton Worldwide Holdings, Inc. | | | 936 | | | | 90,755 | |
| | |
InterContinental Hotels Group plc | | | 546 | | | | 32,924 | |
| | |
Marriott International, Inc., Class A | | | 702 | | | | 88,838 | |
| | |
McDonald’s Corp. | | | 2,952 | | | | 580,658 | |
| | |
Merlin Entertainments plc(c) | | | 4,806 | | | | 28,265 | |
| | |
MGM Resorts International | | | 1,368 | | | | 38,988 | |
| | |
Sands China Ltd. | | | 7,200 | | | | 35,597 | |
| | |
Sodexo SA | | | 342 | | | | 37,621 | |
| | |
SSP Group plc | | | 1,301 | | | | 10,724 | |
| | |
Starbucks Corp. | | | 3,654 | | | | 308,982 | |
| | |
TUI AG, DI | | | 2,322 | | | | 30,347 | |
| | |
Whitbread plc | | | 882 | | | | 46,349 | |
| | |
Wynn Resorts Ltd. | | | 252 | | | | 30,578 | |
| | |
Yum! Brands, Inc. | | | 972 | | | | 98,862 | |
| | | | | | | | 1,730,790 | |
|
| Household Durables – 1.5% | |
| | |
Barratt Developments plc | | | 3,492 | | | | 28,522 | |
| | |
Berkeley Group Holdings plc | | | 522 | | | | 29,727 | |
| | |
Garmin Ltd. | | | 450 | | | | 42,188 | |
| | |
Husqvarna AB, Class B | | | 2,034 | | | | 15,593 | |
| | |
Persimmon plc | | | 72 | | | | 2,121 | |
| | |
SEB SA | | | 108 | | | | 16,399 | |
| | |
Sekisui Chemical Co. Ltd. | | | 5,400 | | | | 94,858 | |
| | |
Sony Corp. | | | 18,000 | | | | 1,103,094 | |
| | |
Taylor Wimpey plc | | | 1,350 | | | | 2,891 | |
| | | | | | | | 1,335,393 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Household Products – 2.1% | |
| | |
Clorox Co. (The) | | | 288 | | | $ | 42,535 | |
| | |
Colgate-Palmolive Co. | | | 2,268 | | | | 155,585 | |
| | |
Essity AB, Class B | | | 2,178 | | | | 68,114 | |
| | |
Procter & Gamble Co. (The) | | | 11,142 | | | | 1,387,290 | |
| | |
Reckitt Benckiser Group plc | | | 1,296 | | | | 100,018 | |
| | |
Unicharm Corp. | | | 5,400 | | | | 184,271 | |
| | | | | | | | 1,937,813 | |
|
| Industrial Conglomerates – 1.0% | |
| | |
3M Co. | | | 2,448 | | | | 403,896 | |
| | |
General Electric Co. | | | 35,928 | | | | 358,561 | |
| | |
Rheinmetall AG | | | 144 | | | | 17,327 | |
| | |
Siemens AG (Registered) | | | 1,476 | | | | 170,236 | |
| | |
Smiths Group plc | | | 252 | | | | 5,261 | |
| | | | | | | | 955,281 | |
|
| Insurance – 2.3% | |
| | |
Admiral Group plc | | | 522 | | | | 13,658 | |
| | |
Aegon NV | | | 126 | | | | 545 | |
| | |
Aflac, Inc. | | | 2,610 | | | | 138,748 | |
| | |
AIA Group Ltd. | | | 28,800 | | | | 288,268 | |
| | |
ASR Nederland NV | | | 126 | | | | 4,612 | |
| | |
Aviva plc | | | 12,564 | | | | 67,502 | |
| | |
AXA SA | | | 6,948 | | | | 183,595 | |
| | |
CNP Assurances | | | 828 | | | | 16,424 | |
| | |
Direct Line Insurance Group plc | | | 594 | | | | 2,091 | |
| | |
Hartford Financial Services Group, Inc. (The) | | | 1,170 | | | | 66,784 | |
| | |
Hiscox Ltd. | | | 378 | | | | 7,283 | |
| | |
Insurance Australia Group Ltd. | | | 8,748 | | | | 47,854 | |
| | |
Japan Post Holdings Co. Ltd. | | | 16,200 | | | | 149,255 | |
| | |
Legal & General Group plc | | | 6,732 | | | | 22,971 | |
| | |
Manulife Financial Corp. | | | 3,474 | | | | 64,836 | |
| | |
Mapfre SA | | | 2,340 | | | | 6,527 | |
| | |
Medibank Pvt Ltd. | | | 7,938 | | | | 18,485 | |
| | |
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Registered) | | | 396 | | | | 110,008 | |
| | |
Phoenix Group Holdings plc | | | 2,106 | | | | 19,191 | |
| | |
Poste Italiane SpA(c) | | | 2,268 | | | | 27,530 | |
| | |
Power Corp. of Canada | | | 396 | | | | 9,183 | |
| | |
Principal Financial Group, Inc. | | | 702 | | | | 37,473 | |
| | |
Prudential plc | | | 5,922 | | | | 103,337 | |
See Accompanying Notes to the Financial Statements.
| | |
| 266 | | FLEXSHARES ANNUAL REPORT |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Insurance – (continued) | |
| | |
Reinsurance Group of America, Inc. | | | 486 | | | $ | 78,960 | |
| | |
Sampo OYJ, Class A | | | 900 | | | | 36,890 | |
| | |
Sompo Holdings, Inc. | | | 3,600 | | | | 142,328 | |
| | |
Storebrand ASA | | | 4,158 | | | | 29,437 | |
| | |
Sun Life Financial, Inc. | | | 1,710 | | | | 76,877 | |
| | |
Suncorp Group Ltd. | | | 663 | | | | 6,144 | |
| | |
Swiss Life Holding AG (Registered) | | | 144 | | | | 71,974 | |
| | |
Swiss Re AG | | | 1,116 | | | | 116,831 | |
| | |
Tryg A/S | | | 306 | | | | 8,551 | |
| | |
Zurich Insurance Group AG | | | 396 | | | | 154,708 | |
| | | | | | | | 2,128,860 | |
|
| Interactive Media & Services – 2.2% | |
| | |
Alphabet, Inc., Class C* | | | 1,440 | | | | 1,814,558 | |
| | |
Scout24 AG(c) | | | 90 | | | | 5,568 | |
| | |
Snap, Inc., Class A* | | | 5,526 | | | | 83,222 | |
| | |
Twitter, Inc.* | | | 1,818 | | | | 54,485 | |
| | |
Z Holdings Corp. | | | 23,400 | | | | 72,296 | |
| | | | | | | | 2,030,129 | |
|
| Internet & Direct Marketing Retail – 4.5% | |
| | |
Amazon.com, Inc.* | | | 2,286 | | | | 4,061,445 | |
| | |
eBay, Inc. | | | 2,448 | | | | 86,292 | |
| | | | | | | | 4,147,737 | |
|
| IT Services – 3.3% | |
| | |
Accenture plc, Class A | | | 3,762 | | | | 697,550 | |
| | |
Akamai Technologies, Inc.* | | | 432 | | | | 37,368 | |
| | |
Alten SA | | | 54 | | | | 5,931 | |
| | |
Altran Technologies SA | | | 504 | | | | 8,001 | |
| | |
Amadeus IT Group SA | | | 1,206 | | | | 89,259 | |
| | |
Amdocs Ltd. | | | 342 | | | | 22,298 | |
| | |
Atos SE | | | 61 | | | | 4,724 | |
| | |
Broadridge Financial Solutions, Inc. | | | 558 | | | | 69,873 | |
| | |
Capgemini SE | | | 468 | | | | 52,709 | |
| | |
Computershare Ltd. | | | 648 | | | | 7,072 | |
| | |
Fujitsu Ltd. | | | 1,800 | | | | 160,194 | |
| | |
International Business Machines Corp. | | | 4,806 | | | | 642,706 | |
| | |
Link Administration Holdings Ltd. | | | 468 | | | | 1,806 | |
| | |
Mastercard, Inc., Class A | | | 2,556 | | | | 707,526 | |
| | |
PayPal Holdings, Inc.* | | | 3,096 | | | | 322,294 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| IT Services – (continued) | |
| | |
Sopra Steria Group | | | 36 | | | $ | 4,936 | |
| | |
Twilio, Inc., Class A* | | | 630 | | | | 60,833 | |
| | |
VeriSign, Inc.* | | | 342 | | | | 64,987 | |
| | |
Wirecard AG | | | 270 | | | | 34,204 | |
| | | | | | | | 2,994,271 | |
|
| Leisure Products – 0.1% | |
| | |
Hasbro, Inc. | | | 558 | | | | 54,299 | |
|
| Life Sciences Tools & Services – 0.3% | |
| | |
Agilent Technologies, Inc. | | | 990 | | | | 74,992 | |
| | |
Eurofins Scientific SE(b) | | | 36 | | | | 18,242 | |
| | |
Evotec SE* | | | 324 | | | | 7,407 | |
| | |
Illumina, Inc.* | | | 360 | | | | 106,387 | |
| | |
Lonza Group AG (Registered)* | | | 126 | | | | 45,331 | |
| | |
Mettler-Toledo International, Inc.* | | | 54 | | | | 38,067 | |
| | | | | | | | 290,426 | |
|
| Machinery – 1.2% | |
| | |
Alfa Laval AB | | | 1,242 | | | | 28,761 | |
| | |
Alstom SA | | | 540 | | | | 23,345 | |
| | |
Atlas Copco AB, Class A | | | 2,124 | | | | 75,200 | |
| | |
CNH Industrial NV | | | 3,384 | | | | 36,802 | |
| | |
Deere & Co. | | | 720 | | | | 125,381 | |
| | |
Dover Corp. | | | 378 | | | | 39,270 | |
| | |
GEA Group AG | | | 468 | | | | 14,311 | |
| | |
IHI Corp. | | | 1,800 | | | | 44,973 | |
| | |
IMI plc | | | 972 | | | | 12,615 | |
| | |
Ingersoll-Rand plc | | | 702 | | | | 89,077 | |
| | |
Kawasaki Heavy Industries Ltd. | | | 1,800 | | | | 43,674 | |
| | |
KION Group AG | | | 234 | | | | 15,554 | |
| | |
Kone OYJ, Class B | | | 1,350 | | | | 85,909 | |
| | |
Konecranes OYJ | | | 270 | | | | 8,329 | |
| | |
Metso OYJ | | | 288 | | | | 10,886 | |
| | |
PACCAR, Inc. | | | 792 | | | | 60,239 | |
| | |
Parker-Hannifin Corp. | | | 396 | | | | 72,662 | |
| | |
Rotork plc | | | 3,816 | | | | 14,883 | |
| | |
Sandvik AB | | | 2,538 | | | | 44,876 | |
| | |
Schindler Holding AG | | | 180 | | | | 43,999 | |
| | |
SKF AB, Class B | | | 1,368 | | | | 24,785 | |
| | |
Trelleborg AB, Class B | | | 90 | | | | 1,457 | |
| | |
Valmet OYJ | | | 288 | | | | 6,439 | |
| | |
Volvo AB, Class B | | | 6,750 | | | | 101,170 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 267 | |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Machinery – (continued) | |
| | |
Xylem, Inc. | | | 882 | | | $ | 67,641 | |
| | | | | | | | 1,092,238 | |
|
| Marine – 0.1% | |
| | |
AP Moller – Maersk A/S, Class B | | | 18 | | | | 22,953 | |
| | |
Kuehne + Nagel International AG (Registered) | | | 162 | | | | 26,161 | |
| | | | | | | | 49,114 | |
|
| Media – 0.8% | |
| | |
Comcast Corp., Class A | | | 13,068 | | | | 585,708 | |
| | |
Eutelsat Communications SA | | | 612 | | | | 11,607 | |
| | |
ITV plc | | | 504 | | | | 872 | |
| | |
JCDecaux SA | | | 90 | | | | 2,460 | |
| | |
Lagardere SCA | | | 702 | | | | 15,679 | |
| | |
Pearson plc | | | 4,158 | | | | 36,706 | |
| | |
Publicis Groupe SA | | | 18 | | | | 774 | |
| | |
SES SA, FDR | | | 1,440 | | | | 27,906 | |
| | |
Telenet Group Holding NV* | | | 234 | | | | 11,492 | |
| | | | | | | | 693,204 | |
|
| Metals & Mining – 1.3% | |
| | |
Agnico Eagle Mines Ltd. | | | 433 | | | | 26,668 | |
| | |
Alumina Ltd. | | | 8,604 | | | | 13,456 | |
| | |
Anglo American plc | | | 18 | | | | 462 | |
| | |
ArcelorMittal(b) | | | 90 | | | | 1,328 | |
| | |
BHP Group Ltd. | | | 11,556 | | | | 286,216 | |
| | |
BHP Group plc | | | 7,704 | | | | 162,973 | |
| | |
BlueScope Steel Ltd. | | | 2,286 | | | | 20,994 | |
| | |
Boliden AB | | | 864 | | | | 23,285 | |
| | |
Evraz plc | | | 900 | | | | 4,276 | |
| | |
Fortescue Metals Group Ltd. | | | 10,296 | | | | 63,202 | |
| | |
Glencore plc* | | | 22,662 | | | | 68,224 | |
| | |
Newcrest Mining Ltd. | | | 4,140 | | | | 89,276 | |
| | |
Newmont Goldcorp Corp. | | | 3,528 | | | | 140,148 | |
| | |
Norsk Hydro ASA | | | 252 | | | | 891 | |
| | |
Northern Star Resources Ltd.(b) | | | 1,620 | | | | 10,927 | |
| | |
OZ Minerals Ltd. | | | 2,610 | | | | 18,251 | |
| | |
Rio Tinto Ltd. | | | 1,476 | | | | 92,415 | |
| | |
Rio Tinto plc | | | 3,744 | | | | 194,468 | |
| | |
South32 Ltd. | | | 3,852 | | | | 6,767 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Metals & Mining – (continued) | |
| | |
Teck Resources Ltd., Class B | | | 486 | | | $ | 7,699 | |
| | | | | | | | 1,231,926 | |
|
| Multiline Retail – 0.7% | |
| | |
Dollar General Corp. | | | 1,062 | | | | 170,281 | |
| | |
J Front Retailing Co. Ltd. | | | 5,400 | | | | 69,183 | |
| | |
Kohl’s Corp. | | | 540 | | | | 27,680 | |
| | |
Marks & Spencer Group plc(b) | | | 10,062 | | | | 23,632 | |
| | |
Marui Group Co. Ltd. | | | 1,800 | | | | 40,244 | |
| | |
Next plc | | | 468 | | | | 39,860 | |
| | |
Target Corp. | | | 1,224 | | | | 130,858 | |
| | |
Wesfarmers Ltd. | | | 5,724 | | | | 156,796 | |
| | | | | | | | 658,534 | |
|
| Multi-Utilities – 0.5% | |
| | |
A2A SpA | | | 9,900 | | | | 19,870 | |
| | |
AGL Energy Ltd. | | | 2,448 | | | | 33,360 | |
| | |
CMS Energy Corp. | | | 198 | | | | 12,656 | |
| | |
E.ON SE | | | 6,912 | | | | 69,688 | |
| | |
Engie SA | | | 4,338 | | | | 72,571 | |
| | |
National Grid plc | | | 15,606 | | | | 182,010 | |
| | |
Veolia Environnement SA | | | 2,160 | | | | 56,799 | |
| | | | | | | | 446,954 | |
|
| Oil, Gas & Consumable Fuels – 5.3% | |
| | |
Aker BP ASA(b) | | | 72 | | | | 1,991 | |
| | |
BP plc | | | 78,570 | | | | 497,469 | |
| | |
Caltex Australia Ltd. | | | 702 | | | | 13,189 | |
| | |
Canadian Natural Resources Ltd. | | | 3,798 | | | | 95,965 | |
| | |
Chevron Corp. | | | 10,728 | | | | 1,245,950 | |
| | |
ConocoPhillips | | | 4,158 | | | | 229,522 | |
| | |
Eni SpA | | | 6,426 | | | | 97,286 | |
| | |
Equinor ASA | | | 2,016 | | | | 37,350 | |
| | |
Exxon Mobil Corp. | | | 19,728 | | | | 1,333,021 | |
| | |
Galp Energia SGPS SA | | | 846 | | | | 13,478 | |
| | |
Koninklijke Vopak NV | | | 342 | | | | 18,768 | |
| | |
Lundin Petroleum AB | | | 342 | | | | 11,317 | |
| | |
Neste OYJ | | | 1,404 | | | | 50,688 | |
| | |
OMV AG | | | 504 | | | | 29,419 | |
| | |
Phillips 66 | | | 954 | | | | 111,446 | |
| | |
Polski Koncern Naftowy ORLEN SA | | | 774 | | | | 21,181 | |
| | |
Royal Dutch Shell plc, Class A(b) | | | 14,364 | | | | 417,216 | |
| | |
Santos Ltd. | | | 1,854 | | | | 10,372 | |
See Accompanying Notes to the Financial Statements.
| | |
| 268 | | FLEXSHARES ANNUAL REPORT |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
TOTAL SA | | | 9,522 | | | $ | 500,725 | |
| | |
Woodside Petroleum Ltd. | | | 3,888 | | | | 86,252 | |
| | | | | | | | 4,822,605 | |
|
| Paper & Forest Products – 0.1% | |
| | |
Mondi plc | | | 2,214 | | | | 45,767 | |
| | |
Stora Enso OYJ, Class R | | | 756 | | | | 9,805 | |
| | |
Svenska Cellulosa AB SCA, Class B(b) | | | 2,718 | | | | 27,749 | |
| | |
UPM-Kymmene OYJ | | | 1,098 | | | | 35,696 | |
| | | | | | | | 119,017 | |
|
| Personal Products – 1.5% | |
| | |
Beiersdorf AG | | | 306 | | | | 36,238 | |
| | |
Estee Lauder Cos., Inc. (The), Class A | | | 828 | | | | 154,232 | |
| | |
L’Oreal SA | | | 810 | | | | 236,582 | |
| | |
Shiseido Co. Ltd. | | | 4,800 | | | | 398,191 | |
| | |
Unilever NV | | | 5,310 | | | | 313,681 | |
| | |
Unilever plc | | | 4,032 | | | | 241,175 | |
| | | | | | | | 1,380,099 | |
|
| Pharmaceuticals – 4.8% | |
| | |
Allergan plc | | | 1,350 | | | | 237,749 | |
| | |
Astellas Pharma, Inc. | | | 23,400 | | | | 402,284 | |
| | |
AstraZeneca plc | | | 4,752 | | | | 461,243 | |
| | |
Bayer AG (Registered) | | | 2,538 | | | | 197,017 | |
| | |
Eli Lilly & Co. | | | 2,610 | | | | 297,410 | |
| | |
GlaxoSmithKline plc | | | 15,606 | | | | 357,154 | |
| | |
Hikma Pharmaceuticals plc | | | 234 | | | | 6,086 | |
| | |
Ipsen SA | | | 90 | | | | 9,589 | |
| | |
Merck & Co., Inc. | | | 9,162 | | | | 793,979 | |
| | |
Merck KGaA | | | 450 | | | | 53,668 | |
| | |
Mylan NV* | | | 1,368 | | | | 26,197 | |
| | |
Novo Nordisk A/S, Class B | | | 5,346 | | | | 292,107 | |
| | |
Recordati SpA | | | 126 | | | | 5,295 | |
| | |
Roche Holding AG | | | 3,096 | | | | 931,232 | |
| | |
Sanofi | | | 3,672 | | | | 338,467 | |
| | | | | | | | 4,409,477 | |
|
| Professional Services – 0.5% | |
| | |
Adecco Group AG (Registered) | | | 1,206 | | | | 71,474 | |
| | |
Bureau Veritas SA | | | 1,278 | | | | 32,637 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Professional Services – (continued) | |
| | |
Capita plc* | | | 5,274 | | | $ | 10,653 | |
| | |
RELX plc | | | 6,480 | | | | 155,796 | |
| | |
SEEK Ltd. | | | 666 | | | | 10,406 | |
| | |
Teleperformance | | | 234 | | | | 53,048 | |
| | |
Wolters Kluwer NV | | | 1,188 | | | | 87,502 | |
| | | | | | | | 421,516 | |
|
| Real Estate Management & Development – 0.3% | |
| | |
Aroundtown SA | | | 1,566 | | | | 13,219 | |
| | |
CapitaLand Ltd. | | | 9,000 | | | | 23,807 | |
| | |
Castellum AB | | | 1,008 | | | | 20,637 | |
| | |
Fabege AB | | | 1,116 | | | | 16,680 | |
| | |
LEG Immobilien AG | | | 72 | | | | 8,266 | |
| | |
Sun Hung Kai Properties Ltd. | | | 4,500 | | | | 68,266 | |
| | |
Vonovia SE | | | 1,818 | | | | 96,768 | |
| | | | | | | | 247,643 | |
|
| Road & Rail – 0.6% | |
| | |
Aurizon Holdings Ltd. | | | 6,876 | | | | 27,950 | |
| | |
Canadian National Railway Co. | | | 2,178 | | | | 195,205 | |
| | |
Canadian Pacific Railway Ltd. | | | 324 | | | | 73,832 | |
| | |
Kansas City Southern | | | 342 | | | | 48,147 | |
| | |
MTR Corp. Ltd.(b) | | | 2,549 | | | | 14,635 | |
| | |
Nippon Express Co. Ltd. | | | 1,300 | | | | 74,677 | |
| | |
Uber Technologies, Inc.* | | | 3,258 | | | | 102,627 | |
| | | | | | | | 537,073 | |
|
| Semiconductors & Semiconductor Equipment – 3.5% | |
| | |
Advantest Corp. | | | 1,200 | | | | 54,891 | |
| | |
ams AG* | | | 234 | | | | 10,458 | |
| | |
ASML Holding NV | | | 1,224 | | | | 320,906 | |
| | |
Infineon Technologies AG | | | 5,076 | | | | 98,412 | |
| | |
Intel Corp. | | | 24,138 | | | | 1,364,521 | |
| | |
Lam Research Corp. | | | 342 | | | | 92,696 | |
| | |
Maxim Integrated Products, Inc. | | | 1,278 | | | | 74,967 | |
| | |
QUALCOMM, Inc. | | | 3,708 | | | | 298,271 | |
| | |
Renesas Electronics Corp.* | | | 9,000 | | | | 61,607 | |
| | |
Skyworks Solutions, Inc. | | | 648 | | | | 59,007 | |
| | |
STMicroelectronics NV | | | 1,170 | | | | 26,550 | |
| | |
Teradyne, Inc. | | | 828 | | | | 50,690 | |
| | |
Texas Instruments, Inc. | | | 4,230 | | | | 499,098 | |
| | |
Tokyo Electron Ltd. | | | 1,000 | | | | 204,200 | |
| | | | | | | | 3,216,274 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 269 | |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Software – 6.9% | |
| | |
Adobe, Inc.* | | | 1,422 | | | $ | 395,216 | |
| | |
Autodesk, Inc.* | | | 774 | | | | 114,057 | |
| | |
Constellation Software, Inc. | | | 36 | | | | 35,630 | |
| | |
Dassault Systemes SE | | | 470 | | | | 71,338 | |
| | |
Intuit, Inc. | | | 936 | | | | 241,020 | |
| | |
Micro Focus International plc | | | 43 | | | | 590 | |
| | |
Microsoft Corp. | | | 32,526 | | | | 4,663,253 | |
| | |
Oracle Corp. | | | 4,572 | | | | 249,128 | |
| | |
SAP SE | | | 2,178 | | | | 288,670 | |
| | |
SimCorp A/S | | | 378 | | | | 33,788 | |
| | |
Splunk, Inc.* | | | 306 | | | | 36,708 | |
| | |
Symantec Corp. | | | 2,160 | | | | 49,421 | |
| | |
Synopsys, Inc.* | | | 576 | | | | 78,192 | |
| | |
Zendesk, Inc.* | | | 918 | | | | 64,857 | |
| | | | | | | | 6,321,868 | |
|
| Specialty Retail – 1.2% | |
| | |
AutoZone, Inc.* | | | 54 | | | | 61,797 | |
| | |
Best Buy Co., Inc. | | | 972 | | | | 69,819 | |
| | |
Burlington Stores, Inc.* | | | 306 | | | | 58,804 | |
| | |
Fast Retailing Co. Ltd. | | | 400 | | | | 248,092 | |
| | |
Hennes & Mauritz AB, Class B | | | 2,376 | | | | 49,755 | |
| | |
Industria de Diseno Textil SA | | | 1,908 | | | | 59,496 | |
| | |
JBHi-Fi Ltd. | | | 828 | | | | 21,129 | |
| | |
Kingfisher plc | | | 612 | | | | 1,641 | |
| | |
Lowe’s Cos., Inc. | | | 1,728 | | | | 192,862 | |
| | |
TJX Cos., Inc. (The) | | | 4,986 | | | | 287,443 | |
| | |
Ulta Beauty, Inc.* | | | 180 | | | | 41,967 | |
| | | | | | | | 1,092,805 | |
|
| Technology Hardware, Storage & Peripherals – 5.8% | |
| | |
Apple, Inc. | | | 20,052 | | | | 4,988,136 | |
| | |
Hewlett Packard Enterprise Co. | | | 2,538 | | | | 41,649 | |
| | |
HP, Inc. | | | 5,112 | | | | 88,795 | |
| | |
Logitech International SA (Registered) | | | 180 | | | | 7,362 | |
| | |
NEC Corp. | | | 1,800 | | | | 71,597 | |
| | |
NetApp, Inc. | | | 306 | | | | 17,099 | |
| | |
Seagate Technology plc | | | 954 | | | | 55,361 | |
| | |
Seiko Epson Corp. | | | 5,400 | | | | 76,825 | |
| | | | | | | | 5,346,824 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Textiles, Apparel & Luxury Goods – 1.3% | |
| | |
adidas AG | | | 558 | | | $ | 172,348 | |
| | |
Burberry Group plc | | | 1,710 | | | | 45,228 | |
| | |
Cie Financiere Richemont SA (Registered) | | | 1,368 | | | | 107,582 | |
| | |
EssilorLuxottica SA – IM | | | 282 | | | | 43,134 | |
| | |
EssilorLuxottica SA – MO | | | 924 | | | | 141,022 | |
| | |
Hermes International | | | 54 | | | | 38,858 | |
| | |
HUGO BOSS AG | | | 54 | | | | 2,272 | |
| | |
Kering SA | | | 270 | | | | 153,685 | |
| | |
Lululemon Athletica, Inc.* | | | 360 | | | | 73,537 | |
| | |
LVMH Moet Hennessy Louis Vuitton SE | | | 846 | | | | 361,019 | |
| | |
Pandora A/S | | | 18 | | | | 886 | |
| | |
Swatch Group AG (The) | | | 198 | | | | 54,780 | |
| | | | | | | | 1,194,351 | |
|
| Tobacco – 0.6% | |
| | |
British American Tobacco plc | | | 1,782 | | | | 62,306 | |
| | |
Imperial Brands plc | | | 2,106 | | | | 46,121 | |
| | |
Japan Tobacco, Inc. | | | 10,800 | | | | 245,361 | |
| | |
Philip Morris International, Inc. | | | 2,340 | | | | 190,569 | |
| | | | | | | | 544,357 | |
|
| Trading Companies & Distributors – 0.3% | |
| | |
Brenntag AG | | | 396 | | | | 19,881 | |
| | |
Bunzl plc | | | 1,656 | | | | 43,029 | |
| | |
Fastenal Co. | | | 1,080 | | | | 38,815 | |
| | |
Ferguson plc | | | 738 | | | | 62,895 | |
| | |
Rexel SA | | | 162 | | | | 2,006 | |
| | |
Sojitz Corp. | | | 9,000 | | | | 28,472 | |
| | |
Toyota Tsusho Corp. | | | 1,800 | | | | 62,772 | |
| | | | | | | | 257,870 | |
|
| Transportation Infrastructure – 0.2% | |
| | |
Aeroports de Paris | | | 198 | | | | 37,641 | |
| | |
Atlas Arteria Ltd. | | | 972 | | | | 5,378 | |
| | |
Auckland International Airport Ltd.(b) | | | 4,786 | | | | 28,544 | |
| | |
Flughafen Zurich AG (Registered) | | | 90 | | | | 16,208 | |
| | |
Fraport AG Frankfurt Airport Services Worldwide | | | 162 | | | | 13,544 | |
| | |
Getlink SE(b) | | | 1,818 | | | | 30,444 | |
See Accompanying Notes to the Financial Statements.
| | |
| 270 | | FLEXSHARES ANNUAL REPORT |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Transportation Infrastructure – (continued) | |
| | |
Transurban Group | | | 7,182 | | | $ | 73,429 | |
| | | | | | | | 205,188 | |
|
| Water Utilities – 0.1% | |
| | |
American Water Works Co., Inc. | | | 486 | | | | 59,909 | |
| | |
Severn Trent plc | | | 1,224 | | | | 35,716 | |
| | |
United Utilities Group plc | | | 180 | | | | 2,027 | |
| | | | | | | | 97,652 | |
|
| Wireless Telecommunication Services – 1.6% | |
| | |
KDDI Corp. | | | 16,200 | | | | 449,413 | |
| | |
NTT DOCOMO, Inc. | | | 7,200 | | | | 198,141 | |
| | |
Rogers Communications, Inc., Class B | | | 684 | | | | 32,270 | |
| | |
Softbank Corp.(b) | | | 9,000 | | | | 123,630 | |
| | |
SoftBank Group Corp. | | | 9,900 | | | | 383,710 | |
| | |
Tele2 AB, Class B | | | 1,422 | | | | 20,376 | |
| | |
Vodafone Group plc | | | 112,626 | | | | 229,392 | |
| | | | | | | | 1,436,932 | |
Total Common Stocks
(Cost $79,710,932) | | | | 90,133,698 | |
| | | Number of
Rights | | | | |
|
| RIGHTS – 0.0%(a) | |
|
| Equity Real Estate Investment Trusts (REITs) – 0.0%(a) | |
| | |
Mapletree Commercial Trust, expiring 11/7/2019, price 2.24 SGD* (d)
(Cost $–) | | | 255 | | | | 17 | |
| | | Principal
Amount | | | | |
|
| SECURITIES LENDING REINVESTMENTS(e) – 0.5% | |
|
| REPURCHASE AGREEMENTS – 0.5% | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $426,070, collateralized by various U.S. Treasury Securities, ranging from 0.38% – 6.88%, maturing 11/30/2020 – 9/30/2025; total market value $436,181 | | $ | 426,049 | | | | 426,049 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| REPURCHASE AGREEMENTS – (continued) | |
| | |
NatWest Markets Securities, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $10,000, collateralized by various U.S. Treasury Securities, ranging from 0.13% – 2.88%, maturing 1/15/2022 – 11/15/2027; total market value $10,150 | | $ | 10,000 | | | $ | 10,000 | |
| | | | | 436,049 | |
Total Securities Lending Reinvestments
(Cost $436,049) | | | | 436,049 | |
Total Investments – 98.9%
(Cost $80,146,981) | | | | 90,569,764 | |
| |
Other Assets Less Liabilities – 1.1% | | | | 1,020,641 | |
| NET ASSETS – 100.0% | | | $ | 91,590,405 | |
| * | Non-income producing security. |
| (a) | Represents less than 0.05% of net assets. |
| (b) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $769,515, collateralized in the form of cash with a value of $436,049 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments; $75,922 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.13%, and maturity dates ranging from November 14, 2019 – November 15, 2046 and $317,937 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.00% – 4.75%, and maturity dates ranging from November 25, 2019 – October 22, 2071; a total value of $829,908. |
| (c) | Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States and as such may have restrictions on resale. |
| (d) | Security fair valued as of October 31, 2019, using other significant observable inputs, in accordance with procedures approved by the Board of Trustees. Total value of all such securities at October 31, 2019 amounted to $17, which represents approximately 0.00% of net assets of the Fund. |
| (e) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $436,049. |
Percentages shown are based on Net Assets.
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 271 | |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
Abbreviations
CVA – Dutch Certification
DI – Depositary Interest
FDR – Fiduciary Depositary Receipt
OYJ – Public Limited Company
Preference – A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.
SCA – Limited partnership with share capital
SGD – Singapore Dollar
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 11,845,019 | |
Aggregate gross unrealized depreciation | | | (1,442,848 | ) |
Net unrealized appreciation | | $ | 10,402,171 | |
Federal income tax cost | | $ | 80,195,825 | |
Investment in a company which was affiliated for the period ended October 31, 2019, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Security | | Value
October 31, 2018 | | | Purchases
at Cost | | | Sales
Proceeds | | | Shares
October 31, 2019 | | | Value
October 31, 2019 | | | Change in
Unrealized
Appreciation
(Depreciation) | | | Dividend
Income | | | Realized
Loss | |
Northern Trust Corp. | | $ | — | | | $ | 33,303 | | | $ | 30,517 | | | | — | | | $ | — | | | $ | — | | | $ | 211 | | | $ | (2,786 | ) |
Futures Contracts
FlexShares® STOXX® Global ESG Impact Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | | | | | |
EURO STOXX 50 Index | | | 1 | | | | 12/20/2019 | | | | EUR | | | $ | 40,264 | | | $ | 186 | |
MSCI EAFEE-Mini Index | | | 5 | | | | 12/20/2019 | | | | USD | | | | 489,300 | | | | 13,513 | |
S&P 500E-Mini Index | | | 6 | | | | 12/20/2019 | | | | USD | | | | 910,740 | | | | 14,533 | |
| | | | | | | | | | | | | | | | | | | $ | 28,232 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Abbreviations:
EUR – Euro
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | |
| 272 | | FLEXSHARES ANNUAL REPORT |
FlexShares® STOXX® Global ESG Impact Index Fund (cont.)
FlexShares® STOXX® Global ESG Impact Index Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Australia | | | 3.5 | % |
Austria | | | 0.1 | |
Belgium | | | 0.2 | |
Canada | | | 2.1 | |
Denmark | | | 0.6 | |
Finland | | | 0.4 | |
France | | | 5.1 | |
Germany | | | 2.5 | |
Hong Kong | | | 0.7 | |
Ireland | | | 0.2 | |
Italy | | | 0.9 | |
Japan | | | 9.0 | |
Luxembourg | | | 0.0 | † |
Netherlands | | | 1.3 | |
New Zealand | | | 0.1 | |
Norway | | | 0.2 | |
Poland | | | 0.0 | † |
Portugal | | | 0.0 | † |
Singapore | | | 0.3 | |
Spain | | | 0.9 | |
Sweden | | | 1.2 | |
Switzerland | | | 4.4 | |
United Kingdom | | | 6.4 | |
United States | | | 58.3 | |
Other1 | | | 1.6 | |
| | | | 100.0 | % |
| † | Amount represents less than 0.05%. |
| 1 | Includes anynon-equity securities, securities lending reinvestments and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 273 | |
Schedule of Investments
FlexShares® Morningstar Global Upstream Natural Resources Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 99.7% | |
|
| Building Products – 0.2% | |
| | |
Universal Forest Products, Inc. | | | 207,090 | | | $ | 10,429,052 | |
|
| Chemicals – 11.9% | |
| | |
CF Industries Holdings, Inc. | | | 1,709,370 | | | | 77,519,929 | |
| | |
FMC Corp. | | | 1,035,450 | | | | 94,743,675 | |
| | |
Israel Chemicals Ltd. | | | 5,282,550 | | | | 23,462,675 | |
| | |
K+S AG (Registered) | | | 1,463,670 | | | | 20,836,358 | |
| | |
Mosaic Co. (The) | | | 2,397,330 | | | | 47,658,920 | |
| | |
Nutrien Ltd.(a) | | | 4,601,610 | | | | 220,601,397 | |
| | |
PhosAgro PJSC | | | 263,250 | | | | 9,971,832 | |
| | |
Sasol Ltd.(a) | | | 649,350 | | | | 11,823,097 | |
| | |
Saudi Arabian Fertilizer Co. | | | 1,333,800 | | | | 27,776,386 | |
| | |
ScottsMiracle-Gro Co. (The)(a) | | | 326,430 | | | | 32,770,308 | |
| | |
UPL Ltd. | | | 4,334,850 | | | | 36,452,373 | |
| | |
Yara International ASA | | | 1,354,860 | | | | 52,814,926 | |
| | | | | | | | 656,431,876 | |
|
| Diversified Financial Services – 0.1% | |
| | |
Metro Pacific Investments Corp. | | | 38,610,000 | | | | 3,652,143 | |
|
| Equity Real Estate Investment Trusts (REITs) – 1.5% | |
| | |
Rayonier, Inc.(a) | | | 431,730 | | | | 11,648,075 | |
| | |
Weyerhaeuser Co. | | | 2,474,550 | | | | 72,281,606 | |
| | | | | | | | 83,929,681 | |
|
| Food Products – 15.8% | |
| | |
a2 Milk Co. Ltd.* (a) | | | 5,809,050 | | | | 48,429,465 | |
| | |
Archer-Daniels-Midland Co. | | | 4,194,450 | | | | 176,334,678 | |
| | |
Bunge Ltd. | | | 1,053,000 | | | | 56,862,000 | |
| | |
Charoen Pokphand Foods PCL, NVDR | | | 33,345,000 | | | | 27,884,128 | |
| | |
Charoen Pokphand Indonesia Tbk. PT | | | 54,054,000 | | | | 24,260,184 | |
| | |
CJ CheilJedang Corp. | | | 70,200 | | | | 13,787,185 | |
| | |
Costa Group Holdings Ltd.(a) | | | 2,193,750 | | | | 4,307,444 | |
| | |
Golden Agri-Resources Ltd. | | | 52,299,000 | | | | 7,877,802 | |
| | |
GrainCorp Ltd., Class A(a) | | | 1,793,610 | | | | 8,934,166 | |
| | |
IOI Corp. Bhd. | | | 19,656,000 | | | | 20,556,832 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Food Products – (continued) | |
| | |
Kuala Lumpur Kepong Bhd. | | | 3,510,000 | | | $ | 18,194,711 | |
| | |
Maruha Nichiro Corp. | | | 351,000 | | | | 9,133,370 | |
| | |
Mowi ASA | | | 3,615,300 | | | | 88,283,695 | |
| | |
PPB Group Bhd. | | | 4,212,000 | | | | 18,245,112 | |
| | |
Salmar ASA | | | 452,790 | | | | 21,132,370 | |
| | |
Sime Darby Plantation Bhd. | | | 22,464,000 | | | | 26,396,611 | |
| | |
Tyson Foods, Inc., Class A | | | 2,692,170 | | | | 222,884,754 | |
| | |
Wilmar International Ltd. | | | 28,782,000 | | | | 79,306,734 | |
| | | | | | | | 872,811,241 | |
|
| Metals & Mining – 30.1% | |
| | |
Agnico Eagle Mines Ltd. | | | 861,475 | | | | 53,057,710 | |
| | |
Alcoa Corp.* (a) | | | 501,930 | | | | 10,435,125 | |
| | |
Anglo American plc | | | 4,366,440 | | | | 111,963,833 | |
| | |
AngloGold Ashanti Ltd. | | | 1,537,380 | | | | 33,719,586 | |
| | |
Antofagasta plc(a) | | | 1,105,650 | | | | 12,407,126 | |
| | |
Barrick Gold Corp.(a) | | | 6,547,985 | | | | 113,986,303 | |
| | |
BHP Group Ltd.(a) | | | 9,491,040 | | | | 235,071,719 | |
| | |
Boliden AB | | | 800,280 | | | | 21,568,012 | |
| | |
First Quantum Minerals Ltd.(a) | | | 2,011,230 | | | | 17,031,224 | |
| | |
Fortescue Metals Group Ltd.(a) | | | 5,121,090 | | | | 31,436,037 | |
| | |
Franco-Nevada Corp.(a) | | | 654,412 | | | | 63,631,341 | |
| | |
Freeport-McMoRan, Inc.(a) | | | 4,415,580 | | | | 43,360,996 | |
| | |
Glencore plc* | | | 37,525,410 | | | | 112,969,907 | |
| | |
Grupo Mexico SAB de CV, Series B | | | 11,934,000 | | | | 31,540,569 | |
| | |
Kinross Gold Corp.* (a) | | | 4,296,240 | | | | 20,919,798 | |
| | |
Kirkland Lake Gold Ltd. | | | 684,450 | | | | 32,208,493 | |
| | |
Korea Zinc Co. Ltd. | | | 42,120 | | | | 15,730,061 | |
| | |
MMC Norilsk Nickel PJSC | | | 58,433 | | | | 16,313,862 | |
| | |
MMC Norilsk Nickel PJSC, ADR | | | 1,409,350 | | | | 39,038,995 | |
| | |
Newcrest Mining Ltd. | | | 2,709,720 | | | | 58,432,765 | |
| | |
Newmont Goldcorp Corp. | | | 2,818,530 | | | | 111,980,197 | |
| | |
Norsk Hydro ASA | | | 3,794,310 | | | | 13,410,596 | |
| | |
Rio Tinto plc | | | 3,541,590 | | | | 183,954,290 | |
| | |
Royal Gold, Inc.(a) | | | 235,170 | | | | 27,148,025 | |
| | |
South32 Ltd. | | | 15,988,050 | | | | 28,088,165 | |
| | |
Sumitomo Metal Mining Co. Ltd. | | | 809,200 | | | | 27,366,312 | |
See Accompanying Notes to the Financial Statements.
| | |
| 274 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Global Upstream Natural Resources Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Metals & Mining – (continued) | |
| | |
Teck Resources Ltd., Class B | | | 1,502,280 | | | $ | 23,796,911 | |
| | |
Vale SA* | | | 9,709,300 | | | | 114,158,768 | |
| | |
Vedanta Ltd. | | | 5,967,000 | | | | 12,480,192 | |
| | |
Wheaton Precious Metals Corp.(a) | | | 1,558,440 | | | | 43,776,471 | |
| | | | | | | | 1,660,983,389 | |
|
| Multi-Utilities – 1.2% | |
| | |
Suez | | | 1,323,270 | | | | 20,631,378 | |
| | |
Veolia Environnement SA | | | 1,730,430 | | | | 45,503,163 | |
| | | | | | | | 66,134,541 | |
|
| Oil, Gas & Consumable Fuels – 28.9% | |
| | |
BP plc | | | 22,449,960 | | | | 142,142,862 | |
| | |
Cameco Corp.(a) | | | 1,228,500 | | | | 10,991,867 | |
| | |
Canadian Natural Resources Ltd.(a) | | | 1,295,190 | | | | 32,725,880 | |
| | |
Chevron Corp. | | | 2,127,060 | | | | 247,036,748 | |
| | |
China Petroleum & Chemical Corp., Class H | | | 28,080,000 | | | | 16,122,077 | |
| | |
CNOOC Ltd. | | | 17,550,000 | | | | 26,332,725 | |
| | |
Concho Resources, Inc. | | | 224,640 | | | | 15,167,693 | |
| | |
ConocoPhillips | | | 1,186,380 | | | | 65,488,176 | |
| | |
Devon Energy Corp.(a) | | | 421,200 | | | | 8,541,936 | |
| | |
Diamondback Energy, Inc.(a) | | | 175,500 | | | | 15,050,880 | |
| | |
Eni SpA | | | 2,850,120 | | | | 43,149,022 | |
| | |
EOG Resources, Inc. | | | 610,740 | | | | 42,330,389 | |
| | |
Equinor ASA | | | 1,105,650 | | | | 20,484,366 | |
| | |
Exxon Mobil Corp. | | | 3,846,960 | | | | 259,939,087 | |
| | |
Gazprom PJSC | | | 7,928,860 | | | | 32,175,174 | |
| | |
Gazprom PJSC, ADR | | | 2,635,194 | | | | 21,092,093 | |
| | |
Gazprom PJSC, ADR, OTC | | | 155,011 | | | | 1,242,026 | |
| | |
Hess Corp. | | | 284,310 | | | | 18,693,382 | |
| | |
LUKOIL PJSC | | | 79,754 | | | | 7,368,419 | |
| | |
LUKOIL PJSC, ADR | | | 334,332 | | | | 30,745,171 | |
| | |
Marathon Oil Corp.(a) | | | 856,440 | | | | 9,874,753 | |
| | |
Novatek PJSC | | | 951,210 | | | | 20,190,735 | |
| | |
Occidental Petroleum Corp. | | | 968,760 | | | | 39,234,780 | |
| | |
Petroleo Brasileiro SA (Preference) | | | 4,563,000 | | | | 34,543,038 | |
| | |
Pioneer Natural Resources Co. | | | 179,010 | | | | 22,021,810 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Repsol SA | | | 1,389,960 | | | $ | 22,795,420 | |
| | |
Royal Dutch Shell plc, Class A | | | 4,875,390 | | | | 140,874,489 | |
| | |
Suncor Energy, Inc. | | | 1,730,430 | | | | 51,556,769 | |
| | |
Tatneft PJSC | | | 1,762,020 | | | | 20,576,208 | |
| | |
TOTAL SA | | | 2,804,490 | | | | 147,477,365 | |
| | |
Woodside Petroleum Ltd. | | | 1,056,510 | | | | 23,437,817 | |
| | | | | | | | 1,589,403,157 | |
|
| Paper & Forest Products – 3.6% | |
| | |
Canfor Corp.* (a) | | | 217,620 | | | | 2,635,912 | |
| | |
Duratex SA | | | 1,053,000 | | | | 3,446,697 | |
| | |
Empresas CMPC SA | | | 3,784,263 | | | | 8,630,542 | |
| | |
Interfor Corp.* (a) | | | 207,090 | | | | 2,473,704 | |
| | |
Mondi plc | | | 1,639,170 | | | | 33,884,348 | |
| | |
Oji Holdings Corp. | | | 3,510,000 | | | | 18,344,665 | |
| | |
Stella-Jones, Inc.(a) | | | 196,560 | | | | 5,461,537 | |
| | |
Stora Enso OYJ, Class R | | | 1,849,770 | | | | 23,990,464 | |
| | |
Suzano SA | | | 1,949,100 | | | | 15,847,605 | |
| | |
Svenska Cellulosa AB SCA, Class B | | | 2,011,230 | | | | 20,533,363 | |
| | |
UPM-Kymmene OYJ | | | 1,762,020 | | | | 57,283,342 | |
| | |
West Fraser Timber Co. Ltd.(a) | | | 175,500 | | | | 8,131,738 | |
| | | | | | | | 200,663,917 | |
|
| Trading Companies & Distributors – 2.3% | |
| | |
Marubeni Corp.(a) | | | 12,987,000 | | | | 91,998,007 | |
| | |
Mitsui & Co. Ltd. | | | 1,852,300 | | | | 31,998,245 | |
| | | | | | | | 123,996,252 | |
|
| Water Utilities – 4.1% | |
| | |
Aguas Andinas SA, Class A | | | 8,118,630 | | | | 3,725,047 | |
| | |
American States Water Co.(a) | | | 115,830 | | | | 11,018,908 | |
| | |
American Water Works Co., Inc. | | | 575,640 | | | | 70,959,143 | |
| | |
Aqua America, Inc.(a) | | | 670,410 | | | | 30,389,685 | |
| | |
California Water Service Group(a) | | | 150,930 | | | | 8,447,552 | |
| | |
Cia de Saneamento Basico do Estado de Sao Paulo* | | | 1,053,000 | | | | 14,327,137 | |
| | |
Cia de Saneamento de Minas Gerais-COPASA* | | | 188,400 | | | | 3,167,376 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 275 | |
FlexShares® Morningstar Global Upstream Natural Resources Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Water Utilities – (continued) | |
| | |
Guangdong Investment Ltd. | | | 8,869,576 | | | $ | 19,238,143 | |
| | |
Pennon Group plc | | | 1,263,600 | | | | 14,686,454 | |
| | |
Severn Trent plc | | | 737,100 | | | | 21,508,357 | |
| | |
SJW Group | | | 73,710 | | | | 5,332,919 | |
| | |
United Utilities Group plc | | | 2,130,570 | | | | 23,991,044 | |
| | | | | | | | 226,791,765 | |
Total Common Stocks
(Cost $5,006,398,912) | | | | 5,495,227,014 | |
| | | Number of
Rights | | | | |
|
| RIGHTS – 0.0%(b) | |
|
| Food Products – 0.0%(b) | |
| | |
Costa Group Holdings Ltd., expiring 11/18/2019, price 2.20 AUD* (Cost $–) | | | 548,437 | | | | 253,157 | |
| | | Principal
Amount | | | | |
|
| SECURITIES LENDING REINVESTMENTS(c) – 1.7% | |
|
| BANK NOTES – 0.1% | |
| | |
Bank of America NA
(US Federal Funds Effective Rate (continuous series) + 0.26%), 2.08%, 2/3/2020(d) (Cost $5,000,000) | | $ | 5,000,000 | | | | 5,000,000 | |
| | |
| | | | | | | | |
|
| CERTIFICATES OF DEPOSIT – 0.5% | |
| | |
Bank of Montreal, Chicago
(US Federal Funds Effective Rate (continuous series) + 0.35%), 2.17%, 8/6/2020(d) | | | 4,000,000 | | | | 3,999,992 | |
| | |
Bank of Nova Scotia, Houston
(ICE LIBOR USD 3 Month + 0.22%), 2.18%, 12/30/2019(d) | | | 3,000,000 | | | | 3,000,719 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CERTIFICATES OF DEPOSIT – (continued) | |
| | |
Cooperatieve Rabobank UA, London
(ICE LIBOR USD 1 Month + 0.19%), 1.99%, 4/24/2020(d) | | $ | 5,000,000 | | | $ | 4,999,300 | |
| | |
Credit Agricole CIB, New York
(ICE LIBOR USD 1 Month + 0.21%), 2.06%, 12/20/2019(d) | | | 5,000,000 | | | | 5,000,000 | |
| | |
Credit Suisse, New York (SOFR + 0.38%), 2.20%, 3/6/2020(d) | | | 2,000,045 | | | | 2,000,419 | |
| | |
Standard Chartered, New York
(US Federal Funds Effective Rate (continuous series) + 0.35%), 2.17%, 2/26/2020(d) | | | 4,000,000 | | | | 3,999,984 | |
| | |
Toronto-Dominion Bank, New York
(US Federal Funds Effective Rate (continuous series) + 0.30%), 2.12%, 2/27/2020(d) | | | 2,000,000 | | | | 1,999,532 | |
| | |
Westpac Banking Corp., New York
(US Federal Funds Effective Rate (continuous series) + 0.30%), 2.12%, 2/14/2020(d) | | | 4,000,000 | | | | 3,999,993 | |
Total Certificates of Deposit
(Cost $29,000,722) | | | | 28,999,939 | |
| | |
| | | | | | | | |
|
| COMMERCIAL PAPER – 0.2% | |
| | |
Bank of Nova Scotia, Houston
(ICE LIBOR USD 1 Month + 0.17%), 2.09%, 5/15/2020(d) (e) | | | 5,000,000 | | | | 4,997,775 | |
| | |
UBS AG, London
(ICE LIBOR USD 1 Month + 0.34%), 2.14%, 7/28/2020(d) (e) | | | 3,000,000 | | | | 3,000,000 | |
Total Commercial Paper
(Cost $8,000,000) | | | | 7,997,775 | |
See Accompanying Notes to the Financial Statements.
| | |
| 276 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Global Upstream Natural Resources Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SECURITIES LENDING REINVESTMENTS(c) – (continued) | |
|
| FUNDING AGREEMENTS – 0.1% | |
| | |
United of Omaha Life Insurance
(ICE LIBOR USD 3 Month + 0.12%), 2.26%, 12/2/2019(d) (Cost $3,000,000) | | $ | 3,000,000 | | | $ | 3,000,000 | |
| | |
| | | | | | | | |
|
| REPURCHASE AGREEMENTS – 0.8% | |
| | |
BofA Securities, Inc., 2.25%, dated 10/31/2019, due 1/31/2020, repurchase price $8,046,000, collateralized by various Common Stocks; total market value $8,758,854 | | | 8,000,000 | | | | 8,000,000 | |
| | |
Citadel Clearing LLC, 2.41%, dated 10/31/2019, due 1/31/2020, repurchase price $5,030,794, collateralized by various Common Stocks; total market value $5,468,705 | | | 5,000,000 | | | | 5,000,000 | |
| | |
Citigroup Global Markets Ltd., 1.75%, dated 10/31/2019, due 11/1/2019, repurchase price $4,000,194, collateralized by various U.S. Treasury Securities, ranging from 0.63% – 3.00%, maturing 11/15/2020 – 8/15/2048; total market value $4,114,511 | | | 4,000,000 | | | | 4,000,000 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| REPURCHASE AGREEMENTS – (continued) | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $2,270,171, collateralized by various U.S. Treasury Securities, ranging from 0.38% – 6.88%, maturing 11/30/2020 – 9/30/2025; total market value $2,324,043 | | $ | 2,270,063 | | | $ | 2,270,063 | |
| | |
NatWest Markets Securities, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $2,000,096, collateralized by various U.S. Treasury Securities, ranging from 0.13% – 2.88%, maturing 1/15/2022 – 11/15/2027; total market value $2,030,000 | | | 2,000,000 | | | | 2,000,000 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 277 | |
FlexShares® Morningstar Global Upstream Natural Resources Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SECURITIES LENDING REINVESTMENTS(c) – (continued) | |
|
| REPURCHASE AGREEMENTS – (continued) | |
| | |
Societe Generale, 1.95%, dated 10/31/2019, due 11/1/2019, repurchase price $25,001,354, collateralized by various U.S. Treasury Securities, ranging from 1.13% – 4.25%, maturing 1/31/2021 – 11/15/2040; Common Stocks; total market value $27,633,029 | | $ | 25,000,000 | | | $ | 25,000,000 | |
Total Repurchase Agreements
(Cost $46,270,063) | | | | 46,270,063 | |
Total Securities Lending Reinvestments
(Cost $91,270,785) | | | | 91,267,777 | |
Total Investments – 101.4%
(Cost $5,097,669,697) | | | | 5,586,747,948 | |
| |
Liabilities in excess of other assets – (1.4%) | | | | (76,546,826 | ) |
| NET ASSETS – 100.0% | | | $ | 5,510,201,122 | |
| * | Non-income producing security. |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $220,889,254, collateralized in the form of cash with a value of $91,272,813 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments; $64,871,746 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.75%, and maturity dates ranging from November 14, 2019 – May 15, 2049 and $77,693,650 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.00% – 6.00%, and maturity dates ranging from November 25, 2019 – October 22, 2071; a total value of $233,838,209. |
| (b) | Represents less than 0.05% of net assets. |
| (c) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $91,267,777. |
| (d) | Variable or floating rate security, linked to the referenced benchmark. The interest rate shown is the rate in effect as of October 31, 2019. |
| (e) | Security exempt from registration under Section 4(2) of the Securities Act of 1933. Such securities may be sold in transactions exempt from registration normally to qualified institutional buyers. |
Percentages shown are based on Net Assets.
Abbreviations
ADR – American Depositary Receipt
AUD – Australian Dollar
ICE – Intercontinental Exchange
LIBOR – London Interbank Offered Rate
NVDR –Non-Voting Depositary Receipt
OYJ – Public Limited Company
PJSC – Public Joint Stock Company
Preference – A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.
SCA – Limited partnership with share capital
SOFR – Secured Overnight Financing Rate
USD – US Dollar
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 744,527,899 | |
Aggregate gross unrealized depreciation | | | (282,152,994 | ) |
Net unrealized appreciation | | $ | 462,374,905 | |
Federal income tax cost | | $ | 5,124,382,474 | |
See Accompanying Notes to the Financial Statements.
| | |
| 278 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Global Upstream Natural Resources Index Fund (cont.)
Futures Contracts
FlexShares® Morningstar Global Upstream Natural Resources Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional Amount | | | Value and Unrealized
Appreciation/ (Depreciation)* | |
Long Contracts | | | | | |
EURO STOXX 50 Index | | | 1 | | | | 12/20/2019 | | | | EUR | | | $ | 40,264 | | | $ | 1,012 | |
FTSE 100 Index | | | 50 | | | | 12/20/2019 | | | | GBP | | | | 4,688,162 | | | | (39,784 | ) |
FTSE/JSE Top 40 Index | | | 10 | | | | 12/19/2019 | | | | ZAR | | | | 335,958 | | | | (1,338 | ) |
Hang Seng Index | | | 1 | | | | 11/28/2019 | | | | HKD | | | | 172,142 | | | | 1,241 | |
MSCI Emerging MarketsE-Mini Index | | | 14 | | | | 12/20/2019 | | | | USD | | | | 728,980 | | | | 21,427 | |
S&P Midcap 400E-Mini Index | | | 11 | | | | 12/20/2019 | | | | USD | | | | 2,150,500 | | | | 28,799 | |
S&P/TSX 60 Index | | | 32 | | | | 12/19/2019 | | | | CAD | | | | 4,795,800 | | | | (14,368 | ) |
SPI 200 Index | | | 19 | | | | 12/19/2019 | | | | AUD | | | | 2,172,621 | | | | 3,827 | |
TOPIX Index | | | 1 | | | | 12/12/2019 | | | | JPY | | | | 154,341 | | | | 13,832 | |
| | | | | | | | | | | | | | | | | | | $ | 14,648 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Forward Foreign Currency Contracts
FlexShares® Morningstar Global Upstream Natural Resources Index Fund had the following outstanding contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity
Date | | | Unrealized
Appreciation/
(Depreciation) | |
AUD | | | 462,115 | | | | | Goldman Sachs & Co. | | USD | | | 310,000 | | | | 12/18/2019 | | | $ | 8,761 | |
AUD | | | 5,289,398 | | | | | Morgan Stanley | | USD | | | 3,634,325 | | | | 12/18/2019 | | | | 14,238 | |
CAD | | | 474,729 | | | | | Goldman Sachs & Co. | | USD | | | 360,000 | | | | 12/18/2019 | | | | 1,267 | |
CAD | | | 398,077 | | | | | Morgan Stanley | | USD | | | 300,000 | | | | 12/18/2019 | | | | 2,935 | |
CAD | | | 10,343,733 | | | | | Toronto-Dominion Bank (The) | | USD | | | 7,839,282 | | | | 12/18/2019 | | | | 32,264 | |
EUR | | | 3,581,737 | | | | | Goldman Sachs & Co. | | USD | | | 3,945,722 | | | | 12/18/2019 | | | | 62,886 | |
EUR | | | 315,180 | | | | | Morgan Stanley | | USD | | | 350,000 | | | | 12/18/2019 | | | | 2,743 | |
GBP | | | 455,311 | | | | | Citibank NA | | USD | | | 560,329 | | | | 12/18/2019 | | | | 29,750 | |
GBP | | | 2,348,232 | | | | | Toronto-Dominion Bank (The) | | USD | | | 2,925,000 | | | | 12/18/2019 | | | | 118,282 | |
KRW* | | | 263,075,230 | | | | | BNP Paribas SA | | USD | | | 220,000 | | | | 12/18/2019 | | | | 6,362 | |
MXN | | | 5,962,406 | | | | | Citibank NA | | USD | | | 300,000 | | | | 12/18/2019 | | | | 8,847 | |
NZD | | | 949,384 | | | | | Toronto-Dominion Bank (The) | | USD | | | 600,000 | | | | 12/18/2019 | | | | 9,343 | |
SEK | | | 3,896,288 | | | | | Toronto-Dominion Bank (The) | | USD | | | 400,000 | | | | 12/18/2019 | | | | 5,504 | |
SGD | | | 387,911 | | | | | Morgan Stanley | | USD | | | 280,000 | | | | 12/18/2019 | | | | 5,161 | |
USD | | | 1,968,072 | | | | | Bank of New York | | HKD | | | 15,423,983 | | | | 12/18/2019 | | | | 548 | |
USD | | | 3,156,000 | | | | | Toronto-Dominion Bank (The) | | JPY | | | 339,356,140 | | | | 12/18/2019 | | | | 7,502 | |
USD | | | 1,435,000 | | | | | Toronto-Dominion Bank (The) | | NOK | | | 12,958,713 | | | | 12/18/2019 | | | | 23,114 | |
Total unrealized appreciation | | | | | | | $ | 339,507 | |
HKD | | | 6,265,517 | | | | | Citibank NA | | USD | | | 800,000 | | | | 12/18/2019 | | | $ | (754 | ) |
INR* | | | 19,921,440 | | | | | Morgan Stanley | | USD | | | 280,000 | | | | 12/18/2019 | | | | (346 | ) |
JPY | | | 31,224,533 | | | | | Goldman Sachs & Co. | | USD | | | 291,641 | | | | 12/18/2019 | | | | (1,944 | ) |
MYR* | | | 697,463 | | | | | Morgan Stanley | | USD | | | 167,079 | | | | 12/18/2019 | | | | (312 | ) |
NOK | | | 1,360,700 | | | | | Morgan Stanley | | USD | | | 150,000 | | | | 12/18/2019 | | | | (1,748 | ) |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 279 | |
FlexShares® Morningstar Global Upstream Natural Resources Index Fund (cont.)
Forward Foreign Currency Contracts (cont.)
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity
Date | | | Unrealized
Appreciation/
(Depreciation) | |
NOK | | | 16,470,014 | | | | | Toronto-Dominion Bank (The) | | USD | | | 1,833,816 | | | | 12/18/2019 | | | $ | (39,365 | ) |
NZD | | | 835,740 | | | | | Citibank NA | | USD | | | 538,199 | | | | 12/18/2019 | | | | (1,796 | ) |
USD | | | 3,788,000 | | | | | Toronto-Dominion Bank (The) | | AUD | | | 5,576,813 | | | | 12/18/2019 | | | | (58,819 | ) |
USD | | | 111,634 | | | | | Goldman Sachs & Co. | | BRL* | | | 460,946 | | | | 12/18/2019 | | | | (2,890 | ) |
USD | | | 6,904,000 | | | | | Toronto-Dominion Bank (The) | | CAD | | | 9,149,271 | | | | 12/18/2019 | | | | (58,564 | ) |
USD | | | 976,417 | | | | | Morgan Stanley | | CHF | | | 961,534 | | | | 12/18/2019 | | | | (1,557 | ) |
USD | | | 1,800,000 | | | | | Citibank NA | | EUR | | | 1,634,296 | | | | 12/18/2019 | | | | (29,071 | ) |
USD | | | 1,707,000 | | | | | Toronto-Dominion Bank (The) | | EUR | | | 1,540,808 | | | | 12/18/2019 | | | | (17,441 | ) |
USD | | | 1,700,000 | | | | | Citibank NA | | GBP | | | 1,378,622 | | | | 12/18/2019 | | | | (86,678 | ) |
USD | | | 178,222 | | | | | Toronto-Dominion Bank (The) | | INR* | | | 12,995,730 | | | | 12/18/2019 | | | | (4,210 | ) |
USD | | | 110,000 | | | | | Morgan Stanley | | JPY | | | 11,876,820 | | | | 12/18/2019 | | | | (192 | ) |
USD | | | 185,381 | | | | | Morgan Stanley | | KRW* | | | 220,345,728 | | | | 12/18/2019 | | | | (4,214 | ) |
USD | | | 299,189 | | | | | BNP Paribas SA | | MXN | | | 5,934,115 | | | | 12/18/2019 | | | | (8,193 | ) |
USD | | | 310,000 | | | | | Morgan Stanley | | MYR* | | | 1,300,884 | | | | 12/18/2019 | | | | (1,048 | ) |
USD | | | 1,045,000 | | | | | Toronto-Dominion Bank (The) | | NZD | | | 1,664,734 | | | | 12/18/2019 | | | | (23,475 | ) |
USD | | | 346,764 | | | | | Toronto-Dominion Bank (The) | | SEK | | | 3,340,832 | | | | 12/18/2019 | | | | (931 | ) |
USD | | | 87,486 | | | | | JPMorgan Chase Bank | | SGD | | | 120,609 | | | | 12/18/2019 | | | | (1,176 | ) |
Total unrealized depreciation | | | | | | | $ | (344,724 | ) |
Net unrealized depreciation | | | | | | | $ | (5,217 | ) |
| * | Non-deliverable forward. See Note 2 in the Notes to Financial Statements. |
Abbreviations:
AUD – Australian Dollar
BRL – Brazilian Real
CAD – Canadian Dollar
CHF – Swiss Franc
EUR – Euro
GBP – British Pound
HKD – Hong Kong Dollar
INR – Indian Rupee
JPY – Japanese Yen
KRW – Korean Won
MXN – Mexican Peso
MYR – Malaysian Ringgit
NOK – Norwegian Krone
NZD – New Zealand Dollar
SEK – Swedish Krona
SGD – Singapore Dollar
USD – US Dollar
ZAR – South African Rand
FlexShares® Morningstar Global Upstream Natural Resources Index Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Australia | | | 7.1 | % |
Brazil | | | 3.4 | |
Canada | | | 12.8 | |
Chile | | | 0.2 | |
China | | | 1.1 | |
See Accompanying Notes to the Financial Statements.
| | |
| 280 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Morningstar Global Upstream Natural Resources Index Fund (cont.)
| | | | |
Finland | | | 1.5 | % |
France | | | 3.9 | |
Germany | | | 0.4 | |
India | | | 0.9 | |
Indonesia | | | 0.4 | |
Israel | | | 0.4 | |
Italy | | | 0.8 | |
Japan | | | 3.2 | |
Malaysia | | | 1.5 | |
Mexico | | | 0.6 | |
New Zealand | | | 0.9 | |
Norway | | | 3.6 | |
Philippines | | | 0.1 | |
Russia | | | 3.6 | |
Saudi Arabia | | | 0.5 | |
Singapore | | | 1.6 | |
South Africa | | | 0.8 | |
South Korea | | | 0.5 | |
Spain | | | 0.4 | |
Sweden | | | 0.8 | |
Thailand | | | 0.5 | |
United Kingdom | | | 14.5 | |
United States | | | 33.7 | |
Other1 | | | 0.3 | |
| | | | 100.0 | % |
| 1 | Includes anynon-equity securities, securities lending reinvestments and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 281 | |
Schedule of Investments
FlexShares® STOXX® Global Broad Infrastructure Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 99.2% | |
|
| Air Freight & Logistics – 2.5% | |
| | |
bpost SA(a) | | | 88,234 | | | $ | 1,008,992 | |
| | |
CTT-Correios de Portugal SA(a) | | | 118,582 | | | | 378,896 | |
| | |
Deutsche Post AG (Registered) | | | 880,654 | | | | 31,194,427 | |
| | |
Oesterreichische Post AG | | | 28,662 | | | | 1,055,233 | |
| | |
Royal Mail plc | | | 898,076 | | | | 2,459,025 | |
| | |
Singapore Post Ltd. | | | 1,292,600 | | | | 911,787 | |
| | | | | | | | 37,008,360 | |
|
| Commercial Services & Supplies – 3.3% | |
| | |
Advanced Disposal Services, Inc.* (a) | | | 21,356 | | | | 700,050 | |
| | |
Bingo Industries Ltd.(a) (b) | | | 435,550 | | | | 720,173 | |
| | |
China Everbright International Ltd. | | | 2,810,000 | | | | 2,126,045 | |
| | |
Clean Harbors, Inc.* | | | 12,926 | | | | 1,065,878 | |
| | |
Cleanaway Waste Management Ltd. | | | 1,834,368 | | | | 2,331,688 | |
| | |
Covanta Holding Corp. | | | 29,786 | | | | 430,110 | |
| | |
Daiseki Co. Ltd.(a) | | | 37,700 | | | | 1,107,234 | |
| | |
Insun ENT Co. Ltd.* | | | 26,414 | | | | 161,646 | |
| | |
Koentec Co. Ltd. | | | 18,546 | | | | 158,608 | |
| | |
Republic Services, Inc. | | | 53,390 | | | | 4,672,159 | |
| | |
Shanghai Youngsun Investment Co. Ltd., Class B* ^ (c) | | | 57,800 | | | | 168,892 | |
| | |
Stericycle, Inc.* (a) | | | 22,480 | | | | 1,294,848 | |
| | |
Waste Connections, Inc.(a) | | | 236,040 | | | | 21,848,538 | |
| | |
Waste Management, Inc. | | | 106,218 | | | | 11,918,722 | |
| | | | | | | | 48,704,591 | |
|
| Diversified Financial Services – 0.1% | |
| | |
Metro Pacific Investments Corp. | | | 11,802,000 | | | | 1,116,358 | |
|
| Diversified Telecommunication Services – 15.0% | |
| | |
AT&T, Inc. | | | 1,825,376 | | | | 70,258,722 | |
| | |
BCE, Inc.(a) | | | 247,842 | | | | 11,781,617 | |
| | |
BT Group plc | | | 2,379,508 | | | | 6,302,884 | |
| | |
Cellnex Telecom SA* (a) (b) | | | 68,708 | | | | 2,963,447 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Diversified Telecommunication Services – (continued) | |
| | |
CenturyLink, Inc.(a) | | | 245,032 | | | $ | 3,170,714 | |
| | |
China Telecom Corp. Ltd., Class H | | | 3,372,000 | | | | 1,436,962 | |
| | |
China Tower Corp. Ltd., Class H(b) | | | 12,364,000 | | | | 2,729,081 | |
| | |
Chunghwa Telecom Co. Ltd. | | | 1,232,000 | | | | 4,532,908 | |
| | |
Deutsche Telekom AG (Registered) | | | 892,456 | | | | 15,699,701 | |
| | |
Infrastrutture Wireless Italiane SpA(b) | | | 66,316 | | | | 680,666 | |
| | |
Nippon Telegraph & Telephone Corp. | | | 349,700 | | | | 17,390,382 | |
| | |
Swisscom AG (Registered) | | | 7,306 | | | | 3,731,669 | |
| | |
Telefonica SA | | | 1,274,054 | | | | 9,772,113 | |
| | |
Telstra Corp. Ltd. | | | 3,254,542 | | | | 7,825,336 | |
| | |
Verizon Communications, Inc. | | | 1,034,642 | | | | 62,564,802 | |
| | | | | | | | 220,841,004 | |
|
| Electric Utilities – 12.9% | |
| | |
American Electric Power Co., Inc. | | | 123,640 | | | | 11,670,380 | |
| | |
CLP Holdings Ltd. | | | 1,124,000 | | | | 11,666,356 | |
| | |
Duke Energy Corp. | | | 182,088 | | | | 17,163,615 | |
| | |
Enel SpA | | | 4,722,486 | | | | 36,564,371 | |
| | |
Eversource Energy | | | 79,242 | | | | 6,635,725 | |
| | |
Exelon Corp. | | | 242,784 | | | | 11,044,244 | |
| | |
Iberdrola SA | | | 3,536,104 | | | | 36,326,061 | |
| | |
NextEra Energy, Inc. | | | 119,706 | | | | 28,530,728 | |
| | |
PPL Corp. | | | 180,402 | | | | 6,041,663 | |
| | |
Southern Co. (The) | | | 260,206 | | | | 16,304,508 | |
| | |
Xcel Energy, Inc.(a) | | | 128,698 | | | | 8,173,610 | |
| | | | | | | | 190,121,261 | |
|
| Equity Real Estate Investment Trusts (REITs) – 4.6% | |
| | |
American Tower Corp. | | | 110,714 | | | | 24,144,509 | |
| | |
CoreCivic, Inc.(a) | | | 29,786 | | | | 454,534 | |
| | |
Crown Castle International Corp. | | | 103,970 | | | | 14,429,996 | |
| | |
CyrusOne, Inc.(a) | | | 26,976 | | | | 1,922,849 | |
| | |
Digital Realty Trust, Inc.(a) | | | 52,266 | | | | 6,639,873 | |
| | |
Equinix, Inc. | | | 21,356 | | | | 12,104,154 | |
See Accompanying Notes to the Financial Statements.
| | |
| 282 | | FLEXSHARES ANNUAL REPORT |
FlexShares® STOXX® Global Broad Infrastructure Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
GEO Group, Inc. (The)(a) | | | 30,348 | | | $ | 461,897 | |
| | |
Keppel DC REIT | | | 309,822 | | | | 455,303 | |
| | |
QTS Realty Trust, Inc., Class A | | | 14,050 | | | | 752,939 | |
| | |
SBA Communications Corp. | | | 28,100 | | | | 6,762,265 | |
| | | | | | | | 68,128,319 | |
|
| Gas Utilities – 1.1% | |
| | |
APA Group | | | 602,464 | | | | 4,835,537 | |
| | |
Beijing Enterprises Holdings Ltd. | | | 281,000 | | | | 1,324,745 | |
| | |
Enagas SA | | | 138,252 | | | | 3,422,604 | |
| | |
Petronas Gas Bhd. | | | 224,800 | | | | 895,219 | |
| | |
Snam SpA | | | 1,271,244 | | | | 6,524,011 | |
| | | | | | | | 17,002,116 | |
|
| Health Care Providers & Services – 2.7% | |
| | |
Acadia Healthcare Co., Inc.* (a) | | | 21,918 | | | | 657,321 | |
| | |
Bangkok Chain Hospital PCL, NVDR | | | 1,236,400 | | | | 687,913 | |
| | |
Bangkok Dusit Medical Services PCL, NVDR | | | 9,891,200 | | | | 7,861,858 | |
| | |
Bumrungrad Hospital PCL, NVDR | | | 393,400 | | | | 1,569,952 | |
| | |
Encompass Health Corp. | | | 24,728 | | | | 1,583,086 | |
| | |
Hapvida Participacoes e Investimentos SA(b) | | | 168,600 | | | | 2,364,533 | |
| | |
HCA Healthcare, Inc. | | | 68,564 | | | | 9,156,037 | |
| | |
IHH Healthcare Bhd. | | | 2,248,000 | | | | 3,066,555 | |
| | |
Life Healthcare Group Holdings Ltd.(a) | | | 1,127,372 | | | | 1,785,713 | |
| | |
Netcare Ltd. | | | 1,079,040 | | | | 1,225,636 | |
| | |
Ramsay Health Care Ltd.(a) | | | 123,078 | | | | 5,807,581 | |
| | |
Tenet Healthcare Corp.* (a) | | | 25,852 | | | | 655,090 | |
| | |
Universal Health Services, Inc., Class B | | | 20,794 | | | | 2,858,343 | |
| | | | | | | | 39,279,618 | |
|
| IT Services – 0.0%(d) | |
| | |
NEXTDC Ltd.* (a) | | | 95,540 | | | | 421,921 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Media – 5.9% | |
| | |
Charter Communications, Inc., Class A* (a) | | | 42,712 | | | $ | 19,983,236 | |
| | |
Comcast Corp., Class A | | | 1,133,554 | | | | 50,805,890 | |
| | |
DISH Network Corp., Class A* | | | 62,944 | | | | 2,164,015 | |
| | |
Liberty Broadband Corp., Class C* | | | 38,216 | | | | 4,512,163 | |
| | |
Liberty Global plc, Class C* (a) | | | 128,136 | | | | 3,058,606 | |
| | |
SES SA, FDR | | | 105,656 | | | | 2,047,491 | |
| | |
Shaw Communications, Inc., Class B | | | 121,889 | | | | 2,492,773 | |
| | |
Sirius XM Holdings, Inc.(a) | | | 362,490 | | | | 2,435,933 | |
| | | | | | | | 87,500,107 | |
|
| Multi-Utilities – 8.9% | |
| | |
Consolidated Edison, Inc. | | | 83,176 | | | | 7,670,491 | |
| | |
Dominion Energy, Inc. | | | 200,634 | | | | 16,562,337 | |
| | |
DTE Energy Co. | | | 46,084 | | | | 5,867,415 | |
| | |
E.ON SE | | | 1,338,122 | | | | 13,491,118 | |
| | |
Engie SA | | | 1,130,744 | | | | 18,916,410 | |
| | |
National Grid plc | | | 2,117,054 | | | | 24,690,824 | |
| | |
Public Service Enterprise Group, Inc.(a) | | | 126,450 | | | | 8,005,549 | |
| | |
Sempra Energy(a) | | | 68,564 | | | | 9,908,184 | |
| | |
Suez | | | 345,068 | | | | 5,380,027 | |
| | |
Veolia Environnement SA | | | 506,924 | | | | 13,330,008 | |
| | |
WEC Energy Group, Inc.(a) | | | 78,680 | | | | 7,427,392 | |
| | | | | | | | 131,249,755 | |
|
| Oil, Gas & Consumable Fuels – 8.5% | |
| | |
Enbridge, Inc. | | | 1,230,218 | | | | 44,899,424 | |
| | |
Equitrans Midstream Corp.(a) | | | 50,580 | | | | 704,074 | |
| | |
Inter Pipeline Ltd.(a) | | | 243,346 | | | | 4,093,567 | |
| | |
Keyera Corp. | | | 128,698 | | | | 2,989,424 | |
| | |
Kinder Morgan, Inc. | | | 500,742 | | | | 10,004,825 | |
| | |
Koninklijke Vopak NV | | | 40,464 | | | | 2,220,617 | |
| | |
ONEOK, Inc.(a) | | | 103,408 | | | | 7,220,981 | |
| | |
Pembina Pipeline Corp. | | | 310,224 | | | | 10,944,639 | |
| | |
Plains GP Holdings LP, Class A* (a) | | | 38,216 | | | | 709,289 | |
| | |
Polskie Gornictwo Naftowe i Gazownictwo SA | | | 991,930 | | | | 1,223,077 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 283 | |
FlexShares® STOXX® Global Broad Infrastructure Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Tallgrass Energy LP, Class A(a) | | | 42,150 | | | $ | 786,519 | |
| | |
Targa Resources Corp.(a) | | | 58,448 | | | | 2,272,458 | |
| | |
TC Energy Corp. | | | 564,810 | | | | 28,529,490 | |
| | |
Transneft PJSC (Preference) | | | 807 | | | | 2,097,126 | |
| | |
Williams Cos., Inc. (The) | | | 302,918 | | | | 6,758,101 | |
| | | | | | | | 125,453,611 | |
|
| Road & Rail – 18.4% | |
| | |
Aurizon Holdings Ltd. | | | 1,783,788 | | | | 7,250,750 | |
| | |
Canadian National Railway Co. | | | 648,548 | | | | 58,126,796 | |
| | |
Canadian Pacific Railway Ltd.(a) | | | 125,326 | | | | 28,558,900 | |
| | |
Central Japan Railway Co. | | | 184,200 | | | | 37,988,428 | |
| | |
CSX Corp. | | | 202,320 | | | | 14,217,026 | |
| | |
East Japan Railway Co. | | | 337,200 | | | | 30,720,899 | |
| | |
Hankyu Hanshin Holdings, Inc. | | | 224,800 | | | | 9,045,650 | |
| | |
Kansas City Southern | | | 25,290 | | | | 3,560,326 | |
| | |
Keisei Electric Railway Co. Ltd. | | | 168,600 | | | | 6,932,399 | |
| | |
Kyushu Railway Co. | | | 142,600 | | | | 4,722,335 | |
| | |
MTR Corp. Ltd.(a) | | | 1,405,000 | | | | 8,066,780 | |
| | |
Norfolk Southern Corp. | | | 66,316 | | | | 12,069,512 | |
| | |
Tobu Railway Co. Ltd. | | | 189,600 | | | | 6,357,708 | |
| | |
Union Pacific Corp. | | | 177,030 | | | | 29,291,384 | |
| | |
West Japan Railway Co. | | | 168,600 | | | | 14,686,705 | |
| | | | | | | | 271,595,598 | |
|
| Transportation Infrastructure – 8.5% | |
| | |
Adani Ports & Special Economic Zone Ltd. | | | 787,904 | | | | 4,396,700 | |
| | |
Aena SME SA(b) | | | 65,754 | | | | 12,067,465 | |
| | |
Aeroports de Paris | | | 25,290 | | | | 4,807,800 | |
| | |
Airports of Thailand PCL, NVDR | | | 3,821,600 | | | | 9,903,633 | |
| | |
Atlantia SpA | | | 418,690 | | | | 10,341,848 | |
| | |
Atlas Arteria Ltd.(a) | | | 612,580 | | | | 3,388,957 | |
| | |
Auckland International Airport Ltd. | | | 859,544 | | | | 5,126,397 | |
| | |
Bangkok Expressway & Metro PCL, NVDR | | | 7,418,400 | | | | 2,653,377 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Transportation Infrastructure – (continued) | |
| | |
CCR SA | | | 1,124,000 | | | $ | 4,603,069 | |
| | |
China Merchants Port Holdings Co. Ltd. | | | 1,124,000 | | | | 1,761,068 | |
| | |
COSCO SHIPPING Ports Ltd. | | | 1,124,000 | | | | 884,836 | |
| | |
Flughafen Zurich AG (Registered) | | | 16,860 | | | | 3,036,252 | |
| | |
Getlink SE(a) | | | 391,714 | | | | 6,559,606 | |
| | |
Grupo Aeroportuario del Pacifico SAB de CV, Class B | | | 393,400 | | | | 4,138,374 | |
| | |
Grupo Aeroportuario del Sureste SAB de CV, Class B | | | 182,650 | | | | 3,005,170 | |
| | |
International Container Terminal Services, Inc. | | | 1,551,120 | | | | 3,628,297 | |
| | |
Jiangsu Expressway Co. Ltd., Class H | | | 1,124,000 | | | | 1,494,326 | |
| | |
Promotora y Operadora de Infraestructura SAB de CV | | | 185,460 | | | | 1,721,299 | |
| | |
Qube Holdings Ltd.(a) | | | 1,299,344 | | | | 2,909,345 | |
| | |
Shenzhen International Holdings Ltd.(a) | | | 843,000 | | | | 1,716,611 | |
| | |
Sydney Airport | | | 2,022,638 | | | | 12,234,898 | |
| | |
Transurban Group | | | 2,428,402 | | | | 24,828,025 | |
| | |
Westshore Terminals Investment Corp.(a) | | | 41,588 | | | | 722,692 | |
| | | | | | | | 125,930,045 | |
|
| Water Utilities – 2.9% | |
| | |
Aguas Andinas SA, Class A | | | 2,464,370 | | | | 1,130,720 | |
| | |
American States Water Co.(a) | | | 8,992 | | | | 855,409 | |
| | |
American Water Works Co., Inc. | | | 44,960 | | | | 5,542,219 | |
| | |
Aqua America, Inc.(a) | | | 53,952 | | | | 2,445,644 | |
| | |
Beijing Enterprises Water Group Ltd.* | | | 4,496,000 | | | | 2,351,914 | |
| | |
California Water Service Group | | | 11,802 | | | | 660,558 | |
| | |
Cia de Saneamento Basico do Estado de Sao Paulo* | | | 337,200 | | | | 4,587,949 | |
| | |
Cia de Saneamento de Minas Gerais-COPASA* | | | 56,200 | | | | 944,833 | |
See Accompanying Notes to the Financial Statements.
| | |
| 284 | | FLEXSHARES ANNUAL REPORT |
FlexShares® STOXX® Global Broad Infrastructure Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Water Utilities – (continued) | |
| | |
Cia de Saneamento do Parana (Preference) | | | 281,000 | | | $ | 1,271,164 | |
| | |
Guangdong Investment Ltd. | | | 2,540,000 | | | | 5,509,269 | |
| | |
Pennon Group plc | | | 377,664 | | | | 4,389,478 | |
| | |
Severn Trent plc | | | 216,932 | | | | 6,330,011 | |
| | |
United Utilities Group plc | | | 611,456 | | | | 6,885,232 | |
| | | | | | | | 42,904,400 | |
|
| Wireless Telecommunication Services – 3.9% | |
| | |
China Mobile Ltd. | | | 1,532,500 | | | | 12,474,769 | |
| | |
KDDI Corp. | | | 473,300 | | | | 13,130,075 | |
| | |
SoftBank Group Corp. | | | 449,600 | | | | 17,425,873 | |
| | |
Vodafone Group plc | | | 7,358,828 | | | | 14,988,137 | |
| | | | | | | | 58,018,854 | |
Total Common Stocks
(Cost $1,276,195,611) | | | | 1,465,275,918 | |
| | | Principal
Amount | | | | |
|
| SECURITIES LENDING REINVESTMENTS(e) – 2.2% | |
|
| REPURCHASE AGREEMENTS – 2.2% | |
| | |
BofA Securities, Inc., 2.25%, dated 10/31/2019, due 1/31/2020, repurchase price $2,011,500, collateralized by various Common Stocks; total market value $2,189,713 | | $ | 2,000,000 | | | | 2,000,000 | |
| | |
Citigroup Global Markets Ltd., 1.75%, dated 10/31/2019, due 11/1/2019, repurchase price $22,001,069, collateralized by various U.S. Treasury Securities, ranging from 0.63% – 3.00%, maturing 11/15/2020 – 8/15/2048; total market value $22,629,811 | | | 22,000,000 | | | | 22,000,000 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| REPURCHASE AGREEMENTS – (continued) | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $1,790,639, collateralized by various U.S. Treasury Securities, ranging from 0.38% – 6.88%, maturing 11/30/2020 – 9/30/2025; total market value $1,833,132 | | $ | 1,790,554 | | | $ | 1,790,554 | |
| | |
NatWest Markets Securities, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $7,000,334, collateralized by various U.S. Treasury Securities, ranging from 0.13% – 2.88%, maturing 1/15/2022 – 11/15/2027; total market value $7,105,001 | | | 7,000,000 | | | | 7,000,000 | |
| | | | | 32,790,554 | |
Total Securities Lending Reinvestments
(Cost $32,790,554) | | | | 32,790,554 | |
Total Investments – 101.4%
(Cost $1,308,986,165) | | | | 1,498,066,472 | |
| |
Liabilities in excess of other assets – (1.4%) | | | | (21,036,348 | ) |
| NET ASSETS – 100.0% | | | $ | 1,477,030,124 | |
| * | Non-income producing security. |
| ^ | Security subject to restrictions on resale. |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $88,042,081, collateralized in the form of cash with a value of $32,790,554 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments; $30,191,024 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.75%, and maturity dates ranging from November 14, 2019 – May 15, |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 285 | |
FlexShares® STOXX® Global Broad Infrastructure Index Fund (cont.)
| | 2049 and $28,189,449 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.00% – 5.75%, and maturity dates ranging from March 7, 2020 – October 22, 2071; a total value of $91,171,027. |
| (b) | Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States and as such may have restrictions on resale. |
| (c) | Security fair valued as of October 31, 2019, using other significant observable inputs, in accordance with procedures approved by the Board of Trustees. Total value of all such securities at October 31, 2019 amounted to $168,892, which represents approximately 0.01% of net assets of the Fund. |
| (d) | Represents less than 0.05% of net assets. |
| (e) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $32,790,554. |
Percentages shown are based on Net Assets.
Abbreviations
FDR – Fiduciary Depositary Receipt
NVDR –Non-Voting Depositary Receipt
PJSC – Public Joint Stock Company
Preference – A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 219,505,691 | |
Aggregate gross unrealized depreciation | | | (33,180,856 | ) |
Net unrealized appreciation | | $ | 186,324,835 | |
Federal income tax cost | | $ | 1,312,032,477 | |
Futures Contracts
FlexShares® STOXX® Global Broad Infrastructure Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional Amount | | | Value and Unrealized
Appreciation/ (Depreciation)* | |
Long Contracts | | | | | |
EURO STOXX 50 Index | | | 43 | | | | 12/20/2019 | | | | EUR | | | $ | 1,731,344 | | | $ | 48,632 | |
FTSE 100 Index | | | 9 | | | | 12/20/2019 | | | | GBP | | | | 843,869 | | | | (6,830 | ) |
S&P 500E-Mini Index | | | 29 | | | | 12/20/2019 | | | | USD | | | | 4,401,910 | | | | 92,434 | |
S&P/TSX 60 Index | | | 15 | | | | 12/19/2019 | | | | CAD | | | | 2,248,031 | | | | 4,035 | |
SPI 200 Index | | | 6 | | | | 12/19/2019 | | | | AUD | | | | 686,091 | | | | 328 | |
TOPIX Index | | | 12 | | | | 12/12/2019 | | | | JPY | | | | 1,852,088 | | | | 140,718 | |
| | | | | | | | | | | | | | | | | | | $ | 279,317 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Forward Foreign Currency Contracts
FlexShares® STOXX® Global Broad Infrastructure Index Fund had the following outstanding contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity Date | | | Unrealized
Appreciation/
(Depreciation) | |
AUD | | | 289,236 | | | | | Morgan Stanley | | USD | | | 195,000 | | | | 12/18/2019 | | | $ | 4,512 | |
CAD | | | 834,571 | | | | | Toronto-Dominion Bank (The) | | USD | | | 632,692 | | | | 12/18/2019 | | | | 2,414 | |
EUR | | | 934,017 | | | | | Goldman Sachs & Co. | | USD | | | 1,028,934 | | | | 12/18/2019 | | | | 16,399 | |
EUR | | | 336,085 | | | | | Toronto-Dominion Bank (The) | | USD | | | 370,000 | | | | 12/18/2019 | | | | 6,139 | |
GBP | | | 104,460 | | | | | Toronto-Dominion Bank (The) | | USD | | | 129,000 | | | | 12/18/2019 | | | | 6,379 | |
THB | | | 7,100,000 | | | | | BNP Paribas SA | | USD | | | 232,326 | | | | 12/18/2019 | | | | 2,924 | |
USD | | | 140,784 | | | | | Bank of New York | | HKD | | | 1,103,338 | | | | 12/18/2019 | | | | 39 | |
See Accompanying Notes to the Financial Statements.
| | |
| 286 | | FLEXSHARES ANNUAL REPORT |
FlexShares® STOXX® Global Broad Infrastructure Index Fund (cont.)
Forward Foreign Currency Contracts (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity Date | | | Unrealized
Appreciation/
(Depreciation) | |
USD | | | 1,204,000 | | | | | Toronto-Dominion Bank (The) | | | JPY | | | | 129,485,466 | | | | 12/18/2019 | | | $ | 2,652 | |
Total unrealized appreciation | | | | | | | $ | 41,458 | |
JPY | | | 81,448,033 | | | | | Goldman Sachs & Co. | | | USD | | | | 760,735 | | | | 12/18/2019 | | | $ | (5,072 | ) |
JPY | | | 18,712,322 | | | | | Morgan Stanley | | | USD | | | | 175,000 | | | | 12/18/2019 | | | | (1,390 | ) |
USD | | | 535,054 | | | | | Morgan Stanley | | | AUD | | | | 777,298 | | | | 12/18/2019 | | | | (1,116 | ) |
USD | | | 125,000 | | | | | Toronto-Dominion Bank (The) | | | CAD | | | | 165,652 | | | | 12/18/2019 | | | | (1,060 | ) |
USD | | | 210,000 | | | | | Toronto-Dominion Bank (The) | | | EUR | | | | 189,555 | | | | 12/18/2019 | | | | (2,146 | ) |
USD | | | 378,140 | | | | | Citibank NA | | | GBP | | | | 306,554 | | | | 12/18/2019 | | | | (19,151 | ) |
Total unrealized depreciation | | | | | | | $ | (29,935 | ) |
Net unrealized appreciation | | | | | | | $ | 11,523 | |
Abbreviations:
AUD – Australian Dollar
CAD – Canadian Dollar
EUR – Euro
GBP – British Pound
HKD – Hong Kong Dollar
JPY – Japanese Yen
THB – Thai Baht
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 287 | |
FlexShares® STOXX® Global Broad Infrastructure Index Fund (cont.)
FlexShares® STOXX® Global Broad Infrastructure Index Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Australia | | | 4.9 | % |
Austria | | | 0.1 | |
Belgium | | | 0.1 | |
Brazil | | | 0.9 | |
Canada | | | 14.6 | |
Chile | | | 0.1 | |
China | | | 2.3 | |
France | | | 3.3 | |
Germany | | | 4.1 | |
Hong Kong | | | 1.3 | |
India | | | 0.3 | |
Italy | | | 3.7 | |
Japan | | | 10.8 | |
Luxembourg | | | 0.1 | |
Malaysia | | | 0.3 | |
Mexico | | | 0.6 | |
Netherlands | | | 0.2 | |
New Zealand | | | 0.3 | |
Philippines | | | 0.3 | |
Poland | | | 0.1 | |
Portugal | | | 0.0 | † |
Russia | | | 0.1 | |
Singapore | | | 0.1 | |
South Africa | | | 0.2 | |
South Korea | | | 0.0 | † |
Spain | | | 4.4 | |
Switzerland | | | 0.5 | |
Taiwan | | | 0.3 | |
Thailand | | | 1.5 | |
United Kingdom | | | 4.5 | |
United States | | | 39.2 | |
Other1 | | | 0.8 | |
| | | | 100.0 | % |
| † | Amount represents less than 0.05%. |
| 1 | Includes anynon-equity securities, securities lending reinvestments and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | |
| 288 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® Global Quality Real Estate Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 99.0% | |
|
| Equity Real Estate Investment Trusts (REITs) – 81.3% | |
| | |
AEON REIT Investment Corp. | | | 791 | | | $ | 1,137,056 | |
| | |
alstria officeREIT-AG | | | 76,388 | | | | 1,431,734 | |
| | |
American Homes 4 Rent, Class A | | | 136,504 | | | | 3,613,261 | |
| | |
Apartment Investment & Management Co., Class A | | | 75,258 | | | | 4,130,159 | |
| | |
Argosy Property Ltd. | | | 915,865 | | | | 828,155 | |
| | |
Ascendas Hospitality Trust | | | 1,062,200 | | | | 897,557 | |
| | |
AvalonBay Communities, Inc. | | | 70,512 | | | | 15,347,642 | |
| | |
Brixmor Property Group, Inc. | | | 150,742 | | | | 3,319,339 | |
| | |
BWP Trust | | | 360,809 | | | | 1,031,604 | |
| | |
Camden Property Trust | | | 49,042 | | | | 5,608,934 | |
| | |
Canadian Apartment Properties REIT | | | 39,324 | | | | 1,640,756 | |
| | |
Charter Hall Group | | | 184,981 | | | | 1,440,102 | |
| | |
Columbia Property Trust, Inc. | | | 59,099 | | | | 1,212,712 | |
| | |
Corporate Office Properties Trust | | | 44,070 | | | | 1,306,235 | |
| | |
Crombie REIT(a) | | | 68,478 | | | | 824,226 | |
| | |
Derwent London plc(a) | | | 53,675 | | | | 2,465,668 | |
| | |
Dexus | | | 536,750 | | | | 4,426,433 | |
| | |
DiamondRock Hospitality Co.(a) | | | 109,723 | | | | 1,095,036 | |
| | |
Dream Global REIT | | | 98,988 | | | | 1,256,225 | |
| | |
Dream Office REIT(a) | | | 40,228 | | | | 896,778 | |
| | |
Duke Realty Corp. | | | 182,834 | | | | 6,424,787 | |
| | |
EastGroup Properties, Inc. | | | 18,984 | | | | 2,542,907 | |
| | |
EPR Properties | | | 38,646 | | | | 3,006,272 | |
| | |
Equinix, Inc. | | | 1,130 | | | | 640,461 | |
| | |
Equity Commonwealth | | | 61,698 | | | | 1,985,442 | |
| | |
Equity LifeStyle Properties, Inc. | | | 87,462 | | | | 6,117,092 | |
| | |
Equity Residential | | | 187,580 | | | | 16,630,843 | |
| | |
Essex Property Trust, Inc. | | | 33,222 | | | | 10,867,913 | |
| | |
Frasers Centrepoint Trust | | | 485,900 | | | | 981,833 | |
| | |
Frontier Real Estate Investment Corp. | | | 226 | | | | 1,008,695 | |
| | |
Fukuoka REIT Corp.(a) | | | 565 | | | | 968,452 | |
| | |
Gecina SA | | | 1,808 | | | | 310,229 | |
| | |
Getty Realty Corp. | | | 28,250 | | | | 947,505 | |
| | |
Goodman Group | | | 592,007 | | | | 5,869,152 | |
| | |
Goodman Property Trust | | | 697,436 | | | | 952,676 | |
| | |
Granite REIT | | | 19,097 | | | | 947,622 | |
| | |
Green REIT plc | | | 451,661 | | | | 960,425 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Growthpoint Properties Australia Ltd. | | | 281,257 | | | $ | 825,469 | |
| | |
H&R REIT | | | 70,964 | | | | 1,202,935 | |
| | |
Hannon Armstrong Sustainable Infrastructure Capital, Inc.(a) | | | 36,612 | | | | 1,093,234 | |
| | |
Hansteen Holdings plc | | | 71,981 | | | | 95,751 | |
| | |
HCP, Inc. | | | 248,487 | | | | 9,348,081 | |
| | |
Healthcare Trust of America, Inc., Class A(a) | | | 103,734 | | | | 3,215,754 | |
| | |
Heiwa Real Estate REIT, Inc. | | | 678 | | | | 895,596 | |
| | |
Hibernia REIT plc | | | 557,429 | | | | 868,166 | |
| | |
Host Hotels & Resorts, Inc. | | | 374,821 | | | | 6,143,316 | |
| | |
Ichigo Office REIT Investment | | | 904 | | | | 929,045 | |
| | |
Inmobiliaria Colonial Socimi SA | | | 128,481 | | | | 1,659,875 | |
| | |
InterRent REIT | | | 34,917 | | | | 414,695 | |
| | |
Investors Real Estate Trust | | | 12,317 | | | | 932,027 | |
| | |
iStar, Inc.(a) | | | 65,653 | | | | 854,146 | |
| | |
Japan Rental Housing Investments, Inc.(a) | | | 1,017 | | | | 974,619 | |
| | |
Kenedix Office Investment Corp. | | | 201 | | | | 1,572,971 | |
| | |
Kenedix Residential Next Investment Corp. | | | 565 | | | | 1,162,874 | |
| | |
Killam Apartment REIT(a) | | | 54,014 | | | | 801,775 | |
| | |
Kimco Realty Corp.(a) | | | 213,570 | | | | 4,604,569 | |
| | |
Lexington Realty Trust(a) | | | 106,898 | | | | 1,163,050 | |
| | |
Liberty Property Trust | | | 75,032 | | | | 4,432,140 | |
| | |
Life Storage, Inc. | | | 23,617 | | | | 2,572,364 | |
| | |
Link REIT | | | 1,073,500 | | | | 11,703,762 | |
| | |
LTC Properties, Inc. | | | 21,357 | | | | 1,107,361 | |
| | |
Mack-Cali Realty Corp. | | | 47,686 | | | | 1,021,434 | |
| | |
Mapletree Commercial Trust | | | 949,200 | | | | 1,625,068 | |
| | |
Mapletree North Asia Commercial Trust(b) | | | 1,130,000 | | | | 1,062,787 | |
| | |
Medical Properties Trust, Inc. | | | 195,490 | | | | 4,052,508 | |
| | |
Merlin Properties Socimi SA | | | 178,201 | | | | 2,624,291 | |
| | |
MGM Growth Properties LLC, Class A | | | 39,663 | | | | 1,237,882 | |
| | |
Mirvac Group | | | 470,984 | | | | 1,041,595 | |
| | |
Mori Trust Sogo Reit, Inc. | | | 565 | | | | 1,026,988 | |
| | |
National Health Investors, Inc.(a) | | | 21,809 | | | | 1,870,994 | |
| | |
National Retail Properties, Inc. | | | 82,716 | | | | 4,872,800 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 289 | |
FlexShares® Global Quality Real Estate Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Nippon Accommodations Fund, Inc. | | | 226 | | | $ | 1,421,581 | |
| | |
Nippon Building Fund, Inc. | | | 605 | | | | 4,589,057 | |
| | |
NIPPON REIT Investment Corp. | | | 188 | | | | 815,614 | |
| | |
NSI NV | | | 19,549 | | | | 893,113 | |
| | |
Park Hotels & Resorts, Inc. | | | 123,469 | | | | 2,870,654 | |
| | |
Parkway Life REIT | | | 384,200 | | | | 923,130 | |
| | |
Piedmont Office Realty Trust, Inc., Class A | | | 63,619 | | | | 1,427,610 | |
| | |
Precinct Properties New Zealand Ltd. | | | 789,079 | | | | 920,986 | |
| | |
Premier Investment Corp. | | | 791 | | | | 1,186,079 | |
| | |
Prologis, Inc. | | | 236,622 | | | | 20,765,947 | |
| | |
PS Business Parks, Inc.(a) | | | 10,396 | | | | 1,876,998 | |
| | |
Public Storage | | | 56,274 | | | | 12,541,224 | |
| | |
Rayonier, Inc.(a) | | | 65,540 | | | | 1,768,269 | |
| | |
Regency Centers Corp. | | | 80,456 | | | | 5,409,861 | |
| | |
Retail Properties of America, Inc., Class A | | | 108,028 | | | | 1,486,465 | |
| | |
RioCan REIT | | | 75,258 | | | | 1,513,348 | |
| | |
Sabra Health Care REIT, Inc. | | | 90,852 | | | | 2,234,959 | |
| | |
Safestore Holdings plc(a) | | | 122,040 | | | | 1,106,228 | |
| | |
Segro plc | | | 539,393 | | | | 5,892,301 | |
| | |
Simon Property Group, Inc. | | | 5,537 | | | | 834,315 | |
| | |
SITE Centers Corp. | | | 76,953 | | | | 1,195,080 | |
| | |
SL Green Realty Corp.(a) | | | 41,697 | | | | 3,485,869 | |
| | |
SmartCentres REIT(a) | | | 40,680 | | | | 985,469 | |
| | |
Spirit Realty Capital, Inc.(a) | | | 50,059 | | | | 2,494,941 | |
| | |
STORE Capital Corp. | | | 101,022 | | | | 4,091,391 | |
| | |
Summit Hotel Properties, Inc.(a) | | | 81,925 | | | | 1,004,401 | |
| | |
Summit Industrial Income REIT(a) | | | 83,394 | | | | 810,876 | |
| | |
Sunstone Hotel Investors, Inc. | | | 115,712 | | | | 1,563,269 | |
| | |
Terreno Realty Corp.(a) | | | 31,188 | | | | 1,759,315 | |
| | |
Tritax Big Box REIT plc(a) | | | 777,892 | | | | 1,512,908 | |
| | |
UNITE Group plc (The)(a) | | | 139,103 | | | | 2,024,992 | |
| | |
Urstadt Biddle Properties, Inc., Class A(a) | | | 36,612 | | | | 890,770 | |
| | |
VEREIT, Inc. | | | 492,341 | | | | 4,844,635 | |
| | |
VICI Properties, Inc.(a) | | | 213,570 | | | | 5,029,574 | |
| | |
Weingarten Realty Investors | | | 61,811 | | | | 1,961,263 | |
| | |
WP Carey, Inc. | | | 84,976 | | | | 7,822,891 | |
| | | | | | | | 306,037,223 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Household Durables – 0.4% | |
| | |
Iida Group Holdings Co. Ltd. | | | 79,100 | | | $ | 1,325,833 | |
|
| Real Estate Management & Development – 17.3% | |
| | |
ADO Properties SA(a) (b) | | | 17,741 | | | | 722,435 | |
| | |
Aeon Mall Co. Ltd. | | | 56,500 | | | | 907,303 | |
| | |
Aroundtown SA | | | 410,868 | | | | 3,468,140 | |
| | |
Atrium Ljungberg AB, Class B | | | 43,505 | | | | 867,905 | |
| | |
Aveo Group | | | 561,158 | | | | 827,345 | |
| | |
Castellum AB | | | 131,306 | | | | 2,688,323 | |
| | |
City Developments Ltd. | | | 214,700 | | | | 1,702,203 | |
| | |
CK Asset Holdings Ltd. | | | 847,500 | | | | 5,914,777 | |
| | |
CLS Holdings plc | | | 28,815 | | | | 94,522 | |
| | |
Daejan Holdings plc | | | 1,243 | | | | 78,170 | |
| | |
DREAM Unlimited Corp., Class A | | | 12,204 | | | | 93,688 | |
| | |
Entra ASA(b) | | | 66,783 | | | | 1,000,887 | |
| | |
Fabege AB | | | 133,905 | | | | 2,001,424 | |
| | |
Fastighets AB Balder, Class B* | | | 9,605 | | | | 372,863 | |
| | |
First Capital Realty, Inc., REIT(a) | | | 88,705 | | | | 1,471,274 | |
| | |
Goldcrest Co. Ltd.(a) | | | 39,900 | | | | 826,752 | |
| | |
Heiwa Real Estate Co. Ltd. | | | 33,900 | | | | 820,649 | |
| | |
Helical plc | | | 17,854 | | | | 90,449 | |
| | |
Henderson Land Development Co. Ltd. | | | 733,053 | | | | 3,671,017 | |
| | |
Hongkong Land Holdings Ltd. | | | 587,600 | | | | 3,231,800 | |
| | |
Hufvudstaden AB, Class A | | | 57,065 | | | | 956,582 | |
| | |
Kenedix, Inc. | | | 169,500 | | | | 926,641 | |
| | |
Kennedy-Wilson Holdings, Inc.(a) | | | 64,862 | | | | 1,492,475 | |
| | |
Kungsleden AB | | | 112,096 | | | | 1,020,398 | |
| | |
Nomura Real Estate Holdings, Inc. | | | 67,800 | | | | 1,614,330 | |
| | |
PSP Swiss Property AG (Registered) | | | 20,905 | | | | 2,764,735 | |
| | |
Realogy Holdings Corp.(a) | | | 11,752 | | | | 92,606 | |
| | |
S IMMO AG | | | 41,245 | | | | 1,044,540 | |
| | |
Sagax AB, Class B | | | 82,038 | | | | 945,187 | |
| | |
St Joe Co. (The)* (a) | | | 45,765 | | | | 848,941 | |
| | |
St Modwen Properties plc | | | 161,816 | | | | 944,348 | |
| | |
Sumitomo Realty & Development Co. Ltd. | | | 169,500 | | | | 6,182,309 | |
| | |
Swire Pacific Ltd., Class A | | | 247,000 | | | | 2,354,122 | |
| | |
Swire Pacific Ltd., Class B | | | 282,500 | | | | 418,107 | |
| | |
Swire Properties Ltd. | | | 587,600 | | | | 1,851,783 | |
See Accompanying Notes to the Financial Statements.
| | |
| 290 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Global Quality Real Estate Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Real Estate Management & Development – (continued) | |
| | |
TAG Immobilien AG | | | 65,653 | | | $ | 1,595,293 | |
| | |
Takara Leben Co. Ltd. | | | 214,700 | | | | 917,547 | |
| | |
Tricon Capital Group, Inc.(a) | | | 26,329 | | | | 213,541 | |
| | |
Vonovia SE | | | 74,806 | | | | 3,981,748 | |
| | |
Wharf Real Estate Investment Co. Ltd. | | | 388,000 | | | | 2,287,099 | |
| | |
Wihlborgs Fastigheter AB | | | 70,173 | | | | 1,062,686 | |
| | |
Wing Tai Holdings Ltd. | | | 67,800 | | | | 101,131 | |
| | |
Yanlord Land Group Ltd. | | | 621,500 | | | | 552,566 | |
| | | | | | | | 65,020,641 | |
Total Common Stocks
(Cost $313,756,196) | | | | 372,383,697 | |
| | | Number of
Rights | | | | |
|
| RIGHTS – 0.0%(c) | |
|
| Equity Real Estate Investment Trusts (REITs) – 0.0%(c) | |
| | |
Mapletree Commercial Trust, expiring 11/7/2019, price 2.24 SGD* (d)
(Cost $–) | | | 67,393 | | | | 4,457 | |
| | | Principal
Amount | | | | |
|
| SECURITIES LENDING REINVESTMENTS(e) – 3.9% | |
|
| REPURCHASE AGREEMENTS – 3.9% | |
| | |
Citigroup Global Markets Ltd., 1.75%, dated 10/31/2019, due 11/1/2019, repurchase price $5,000,243, collateralized by various U.S. Treasury Securities, ranging from 0.63% – 3.00%, maturing 11/15/2020 – 8/15/2048; total market value $5,143,139 | | $ | 5,000,000 | | | | 5,000,000 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| REPURCHASE AGREEMENTS – (continued) | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $1,662,471, collateralized by various U.S. Treasury Securities, ranging from 0.38% – 6.88%, maturing 11/30/2020 – 9/30/2025; total market value $1,701,922 | | $ | 1,662,391 | | | $ | 1,662,391 | |
| | |
NatWest Markets Securities, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $8,000,382, collateralized by various U.S. Treasury Securities, ranging from 0.13% – 2.88%, maturing 1/15/2022 – 11/15/2027; total market value $8,120,001 | | | 8,000,000 | | | | 8,000,000 | |
| | | | | 14,662,391 | |
Total Securities Lending Reinvestments
(Cost $14,662,391) | | | | 14,662,391 | |
Total Investments – 102.9%
(Cost $328,418,587) | | | | 387,050,545 | |
| |
Liabilities in excess of other assets – (2.9%) | | | | (10,786,148 | ) |
| NET ASSETS – 100.0% | | | $ | 376,264,397 | |
| * | Non-income producing security. |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $26,368,677, collateralized in the form of cash with a value of $14,662,391 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments; $5,230,996 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.75%, and maturity dates ranging from November 14, 2019 – May 15, 2049 and $7,793,688 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.00% – 6.25%, and maturity dates ranging from January 15, 2020 – October 22, 2071; a total value of $27,687,075. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 291 | |
FlexShares® Global Quality Real Estate Index Fund (cont.)
| (b) | Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States and as such may have restrictions on resale. |
| (c) | Represents less than 0.05% of net assets. |
| (d) | Security fair valued as of October 31, 2019, using other significant observable inputs, in accordance with procedures approved by the Board of Trustees. Total value of all such securities at October 31, 2019 amounted to $4,457, which represents approximately 0.00% of net assets of the Fund. |
| (e) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $14,662,391. |
Percentages shown are based on Net Assets.
Abbreviations
SGD – Singapore Dollar
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 59,525,266 | |
Aggregate gross unrealized depreciation | | | (7,016,859 | ) |
Net unrealized appreciation | | $ | 52,508,407 | |
Federal income tax cost | | $ | 334,597,192 | |
Futures Contracts
FlexShares® Global Quality Real Estate Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional
Amount | | | Value and Unrealized
Appreciation/ (Depreciation)* | |
Long Contracts | | | | | |
EURO STOXX 50 Index | | | 5 | | | | 12/20/2019 | | | | EUR | | | $ | 201,319 | | | $ | 4,917 | |
Hang Seng Index | | | 3 | | | | 11/28/2019 | | | | HKD | | | | 516,427 | | | | 3,722 | |
S&P 500E-Mini Index | | | 6 | | | | 12/20/2019 | | | | USD | | | | 910,740 | | | | 20,662 | |
S&P Midcap 400E-Mini Index | | | 6 | | | | 12/20/2019 | | | | USD | | | | 1,173,000 | | | | 4,876 | |
SPI 200 Index | | | 6 | | | | 12/19/2019 | | | | AUD | | | | 686,091 | | | | (150 | ) |
TOPIX Mini Index | | | 21 | | | | 12/12/2019 | | | | JPY | | | | 324,115 | | | | 21,741 | |
| | | | | | | | | | | | | | | | | | | $ | 55,768 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Forward Foreign Currency Contracts
FlexShares® Global Quality Real Estate Index Fund had the following outstanding contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity Date | | | Unrealized
Appreciation/
(Depreciation) | |
CAD | | | 72,402 | | | | | Toronto-Dominion Bank (The) | | USD | | | 54,888 | | | | 12/18/2019 | | | $ | 210 | |
USD | | | 36,205 | | | | | Bank of New York | | HKD | | | 283,739 | | | | 12/18/2019 | | | | 10 | |
USD | | | 81,510 | | | | | Goldman Sachs & Co. | | JPY | | | 8,726,909 | | | | 12/18/2019 | | | | 543 | |
Total unrealized appreciation | | | | | | | $ | 763 | |
USD | | | 217,831 | | | | | Morgan Stanley | | AUD | | | 316,453 | | | | 12/18/2019 | | | $ | (455 | ) |
USD | | | 17,642 | | | | | Morgan Stanley | | CHF | | | 17,373 | | | | 12/18/2019 | | | | (28 | ) |
USD | | | 56,412 | | | | | Goldman Sachs & Co. | | EUR | | | 51,208 | | | | 12/18/2019 | | | | (899 | ) |
USD | | | 1,290 | | | | | Citibank NA | | GBP | | | 1,046 | | | | 12/18/2019 | | | | (65 | ) |
USD | | | 2,248 | | | | | JPMorgan Chase Bank | | SGD | | | 3,099 | | | | 12/18/2019 | | | | (30 | ) |
Total unrealized depreciation | | | | | | | $ | (1,477 | ) |
Net unrealized depreciation | | | | | | | $ | (714 | ) |
See Accompanying Notes to the Financial Statements.
| | |
| 292 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Global Quality Real Estate Index Fund (cont.)
Abbreviations:
AUD – Australian Dollar
CAD – Canadian Dollar
CHF – Swiss Franc
EUR – Euro
GBP – British Pound
HKD – Hong Kong Dollar
JPY – Japanese Yen
SGD – Singapore Dollar
USD – US Dollar
FlexShares® Global Quality Real Estate Index Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Australia | | | 4.1 | % |
Austria | | | 0.3 | |
Canada | | | 3.5 | |
France | | | 0.1 | |
Germany | | | 3.0 | |
Hong Kong | | | 7.5 | |
Ireland | | | 0.5 | |
Japan | | | 8.3 | |
Netherlands | | | 0.2 | |
New Zealand | | | 0.7 | |
Norway | | | 0.3 | |
Singapore | | | 3.0 | |
Spain | | | 1.1 | |
Sweden | | | 2.6 | |
Switzerland | | | 0.7 | |
United Kingdom | | | 3.8 | |
United States | | | 59.3 | |
Other1 | | | 1.0 | |
| | | | 100.0 | % |
| 1 | Includes anynon-equity securities, securities lending reinvestments and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 293 | |
Schedule of Investments
FlexShares® Real Assets Allocation Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| EXCHANGE TRADED FUNDS – 100.0% | |
| | |
FlexShares® Global Quality Real Estate Index Fund(a) | | | 69,135 | | | $ | 4,608,580 | |
| | |
FlexShares® Global Upstream Natural Resources Index Fund(a) | | | 32,505 | | | | 1,020,332 | |
| | |
FlexShares® STOXX® Global Broad Infrastructure Index Fund(a) | | | 108,960 | | | | 5,729,117 | |
Total Exchange Traded Funds
(Cost $10,681,337) | | | | 11,358,029 | |
| | | | | | | | | |
Total Investments – 100.0%
(Cost $10,681,337) | | | | 11,358,029 | |
| |
Other Assets Less Liabilities – 0.0%(b) | | | | 3,306 | |
| NET ASSETS – 100.0% | | | $ | 11,361,335 | |
| (a) | Investment in affiliated Fund. Northern Trust Investments, Inc. is the Investment Adviser to both the Fund and the affiliated Funds. |
| (b) | Represents less than 0.05% of net assets. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 697,157 | |
Aggregate gross unrealized depreciation | | | (36,279 | ) |
Net unrealized appreciation | | $ | 660,878 | |
Federal income tax cost | | $ | 10,697,151 | |
The underlying index of the FlexShares® Real Assets Allocation Index Fund is comprised of securities of affiliated FlexShares® Funds. The Schedules of Investments of the affiliated FlexShares® Funds are located elsewhere in this Report.
Investment in a company which was affiliated for the period ended October 31, 2019, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Security | | Value
October 31,
2018 | | | Purchases
at Cost | | | Sales
Proceeds | | | Shares
October 31,
2019 | | | Value
October 31,
2019 | | | Change in
Unrealized
Appreciation
(Depreciation) | | | Dividend
Income | | | Realized
Gain | |
FlexShares® Global Quality Real Estate Index Fund | | $ | 5,511,512 | | | $ | 1,078,108 | | | $ | 2,652,622 | | | | 69,135 | | | $ | 4,608,580 | | | $ | 544,537 | | | $ | 137,868 | | | $ | 127,045 | |
FlexShares® Global Upstream Natural Resources Index Fund | | | 1,361,164 | | | | 283,746 | | | | 625,863 | | | | 32,505 | | | | 1,020,332 | | | | (59,293 | ) | | | 36,384 | | | | 60,578 | |
FlexShares® STOXX® Global Broad Infrastructure Index Fund | | | 7,009,193 | | | | 1,271,712 | | | | 3,475,284 | | | | 108,960 | | | | 5,729,117 | | | | 738,822 | | | | 142,843 | | | | 184,674 | |
| | | $ | 13,881,869 | | | $ | 2,633,566 | | | $ | 6,753,769 | | | | 210,600 | | | $ | 11,358,029 | | | $ | 1,224,066 | | | $ | 317,095 | | | $ | 372,297 | |
See Accompanying Notes to the Financial Statements.
| | |
| 294 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® Quality Dividend Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 98.7% | |
|
| Aerospace & Defense – 2.1% | |
| | |
Boeing Co. (The) | | | 30,954 | | | $ | 10,521,574 | |
| | |
Lockheed Martin Corp. | | | 68,541 | | | | 25,818,024 | |
| | | | | | | | 36,339,598 | |
|
| Auto Components – 0.7% | |
| | |
Lear Corp. | | | 99,495 | | | | 11,717,526 | |
|
| Banks – 7.4% | |
| | |
Bank of America Corp. | | | 484,946 | | | | 15,164,262 | |
| | |
Citigroup, Inc. | | | 139,293 | | | | 10,009,595 | |
| | |
JPMorgan Chase & Co. | | | 596,970 | | | | 74,573,492 | |
| | |
M&T Bank Corp. | | | 2,211 | | | | 346,088 | |
| | |
TCF Financial Corp. | | | 327,228 | | | | 12,954,957 | |
| | |
Wells Fargo & Co. | | | 38,324 | | | | 1,978,668 | |
| | |
Western Alliance Bancorp | | | 243,210 | | | | 11,997,549 | |
| | | | | | | | 127,024,611 | |
|
| Beverages – 3.6% | |
| | |
Coca-Cola Co. (The) | | | 137,082 | | | | 7,461,373 | |
| | |
PepsiCo, Inc. | | | 387,662 | | | | 53,175,597 | |
| | | | | | | | 60,636,970 | |
|
| Biotechnology – 3.9% | |
| | |
AbbVie, Inc.(a) | | | 368,500 | | | | 29,314,175 | |
| | |
Amgen, Inc. | | | 175,406 | | | | 37,405,330 | |
| | | | | | | | 66,719,505 | |
|
| Capital Markets – 2.8% | |
| | |
Ameriprise Financial, Inc. | | | 55,275 | | | | 8,340,445 | |
| | |
Eaton Vance Corp.(a) | | | 254,265 | | | | 11,594,484 | |
| | |
Evercore, Inc., Class A | | | 33,165 | | | | 2,442,270 | |
| | |
Lazard Ltd., Class A(a) | | | 283,008 | | | | 10,564,689 | |
| | |
T. Rowe Price Group, Inc. | | | 134,871 | | | | 15,618,062 | |
| | |
TD Ameritrade Holding Corp. | | | 737 | | | | 28,286 | |
| | | | | | | | 48,588,236 | |
|
| Chemicals – 1.6% | |
| | |
Dow, Inc. | | | 255,739 | | | | 12,912,262 | |
| | |
Eastman Chemical Co. | | | 182,039 | | | | 13,842,246 | |
| | | | | | | | 26,754,508 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Communications Equipment – 2.7% | |
| | |
Cisco Systems, Inc. | | | 963,259 | | | $ | 45,764,435 | |
|
| Consumer Finance – 1.6% | |
| | |
Navient Corp.(a) | | | 336,809 | | | | 4,637,860 | |
| | |
Santander Consumer USA Holdings, Inc.(a) | | | 305,118 | | | | 7,652,359 | |
| | |
Synchrony Financial | | | 447,359 | | | | 15,823,088 | |
| | | | | | | | 28,113,307 | |
|
| Containers & Packaging – 0.7% | |
| | |
International Paper Co. | | | 271,953 | | | | 11,878,907 | |
|
| Diversified Consumer Services – 0.1% | |
| | |
H&R Block, Inc.(a) | | | 87,703 | | | | 2,191,698 | |
|
| Diversified Telecommunication Services – 3.1% | |
| | |
AT&T, Inc. | | | 639,716 | | | | 24,622,669 | |
| | |
CenturyLink, Inc.(a) | | | 315,436 | | | | 4,081,742 | |
| | |
Verizon Communications, Inc. | | | 389,136 | | | | 23,531,054 | |
| | | | | | | | 52,235,465 | |
|
| Electric Utilities – 3.4% | |
| | |
Evergy, Inc.(a) | | | 134,134 | | | | 8,572,504 | |
| | |
Exelon Corp. | | | 238,788 | | | | 10,862,466 | |
| | |
OGE Energy Corp. | | | 238,051 | | | | 10,250,476 | |
| | |
Pinnacle West Capital Corp. | | | 53,801 | | | | 5,063,750 | |
| | |
Portland General Electric Co. | | | 151,085 | | | | 8,593,715 | |
| | |
PPL Corp. | | | 109,076 | | | | 3,652,955 | |
| | |
Southern Co. (The) | | | 167,299 | | | | 10,482,956 | |
| | | | | | | | 57,478,822 | |
|
| Electrical Equipment – 0.2% | |
| | |
Rockwell Automation, Inc. | | | 22,110 | | | | 3,802,699 | |
|
| Electronic Equipment, Instruments & Components – 0.8% | |
| | |
CDW Corp.(a) | | | 109,076 | | | | 13,951,911 | |
|
| Entertainment – 0.9% | |
| | |
Activision Blizzard, Inc. | | | 276,375 | | | | 15,485,291 | |
| | |
Viacom, Inc., Class B | | | 28,006 | | | | 603,810 | |
| | | | | | | | 16,089,101 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 295 | |
FlexShares® Quality Dividend Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – 6.5% | |
| | |
Apple Hospitality REIT, Inc.(a) | | | 737,737 | | | $ | 12,157,906 | |
| | |
Brixmor Property Group, Inc.(a) | | | 523,270 | | | | 11,522,405 | |
| | |
Host Hotels & Resorts, Inc.(a) | | | 205,623 | | | | 3,370,161 | |
| | |
Kimco Realty Corp.(a) | | | 591,074 | | | | 12,743,556 | |
| | |
Lamar Advertising Co., Class A(a) | | | 122,342 | | | | 9,788,583 | |
| | |
Life Storage, Inc. | | | 63,382 | | | | 6,903,568 | |
| | |
Public Storage | | | 39,798 | | | | 8,869,382 | |
| | |
Simon Property Group, Inc. | | | 50,853 | | | | 7,662,530 | |
| | |
SL Green Realty Corp.(a) | | | 141,504 | | | | 11,829,734 | |
| | |
Spirit Realty Capital, Inc. | | | 215,204 | | | | 10,725,767 | |
| | |
VEREIT, Inc. | | | 880,715 | | | | 8,666,236 | |
| | |
Vornado Realty Trust | | | 92,125 | | | | 6,046,164 | |
| | | | | | | | 110,285,992 | |
|
| Food & Staples Retailing – 0.9% | |
| | |
Walgreens Boots Alliance, Inc. | | | 243,947 | | | | 13,363,417 | |
| | |
Walmart, Inc. | | | 16,214 | | | | 1,901,253 | |
| | | | | | | | 15,264,670 | |
|
| Food Products – 0.6% | |
| | |
Bunge Ltd. | | | 187,935 | | | | 10,148,490 | |
|
| Gas Utilities – 0.2% | |
| | |
National Fuel Gas Co. | | | 83,281 | | | | 3,773,462 | |
|
| Health Care Equipment & Supplies – 0.5% | |
| | |
Medtronic plc | | | 41,272 | | | | 4,494,521 | |
| | |
ResMed, Inc. | | | 28,743 | | | | 4,251,664 | |
| | | | | | | | 8,746,185 | |
|
| Health Care Providers & Services – 2.0% | |
| | |
AmerisourceBergen Corp. | | | 46,431 | | | | 3,964,279 | |
| | |
Cardinal Health, Inc. | | | 199,727 | | | | 9,876,500 | |
| | |
McKesson Corp. | | | 90,651 | | | | 12,056,583 | |
| | |
UnitedHealth Group, Inc. | | | 34,639 | | | | 8,753,275 | |
| | | | | | | | 34,650,637 | |
|
| Hotels, Restaurants & Leisure – 0.9% | |
| | |
Las Vegas Sands Corp. | | | 80,333 | | | | 4,967,793 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Hotels, Restaurants & Leisure – (continued) | |
| | |
Wyndham Destinations, Inc. | | | 228,470 | | | $ | 10,603,292 | |
| | | | | | | | 15,571,085 | |
|
| Household Durables – 0.7% | |
| | |
Whirlpool Corp.(a) | | | 80,333 | | | | 12,220,256 | |
|
| Household Products – 1.0% | |
| | |
Clorox Co. (The)(a) | | | 32,428 | | | | 4,789,291 | |
| | |
Procter & Gamble Co. (The) | | | 95,810 | | | | 11,929,303 | |
| | | | | | | | 16,718,594 | |
|
| Industrial Conglomerates – 0.1% | |
| | |
Honeywell International, Inc. | | | 12,529 | | | | 2,164,134 | |
|
| Insurance – 2.1% | |
| | |
Aflac, Inc. | | | 217,415 | | | | 11,557,781 | |
| | |
Allstate Corp. (The) | | | 95,810 | | | | 10,196,100 | |
| | |
Principal Financial Group, Inc. | | | 92,862 | | | | 4,956,974 | |
| | |
Travelers Cos., Inc. (The) | | | 72,226 | | | | 9,465,940 | |
| | | | | | | | 36,176,795 | |
|
| IT Services – 2.5% | |
| | |
Broadridge Financial Solutions, Inc. | | | 83,281 | | | | 10,428,447 | |
| | |
International Business Machines Corp. | | | 149,611 | | | | 20,007,479 | |
| | |
Mastercard, Inc., Class A | | | 13,266 | | | | 3,672,161 | |
| | |
Visa, Inc., Class A(a) | | | 45,694 | | | | 8,172,829 | |
| | | | | | | | 42,280,916 | |
|
| Machinery – 2.8% | |
| | |
Caterpillar, Inc. | | | 89,914 | | | | 12,390,149 | |
| | |
Cummins, Inc. | | | 87,703 | | | | 15,127,013 | |
| | |
Illinois Tool Works, Inc. | | | 116,446 | | | | 19,630,467 | |
| | | | | | | | 47,147,629 | |
|
| Media – 2.8% | |
| | |
CBS Corp.(Non-Voting), Class B | | | 90,651 | | | | 3,267,062 | |
| | |
Comcast Corp., Class A | | | 579,282 | | | | 25,963,419 | |
| | |
Interpublic Group of Cos., Inc. (The) | | | 535,062 | | | | 11,637,599 | |
| | |
Nexstar Media Group, Inc., Class A(a) | | | 43,483 | | | | 4,230,461 | |
See Accompanying Notes to the Financial Statements.
| | |
| 296 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Quality Dividend Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Media – (continued) | |
| | |
Omnicom Group, Inc.(a) | | | 33,902 | | | $ | 2,616,895 | |
| | | | | | | | 47,715,436 | |
|
| Metals & Mining – 1.2% | |
| | |
Nucor Corp. | | | 233,629 | | | | 12,580,922 | |
| | |
Steel Dynamics, Inc. | | | 245,421 | | | | 7,450,981 | |
| | | | | | | | 20,031,903 | |
|
| Multiline Retail – 0.9% | |
| | |
Kohl’s Corp.(a) | | | 184,987 | | | | 9,482,434 | |
| | |
Macy’s, Inc. | | | 128,975 | | | | 1,955,261 | |
| | |
Nordstrom, Inc. | | | 123,816 | | | | 4,444,994 | |
| | | | | | | | 15,882,689 | |
|
| Multi-Utilities – 1.0% | |
| | |
NorthWestern Corp. | | | 224,785 | | | | 16,301,408 | |
|
| Oil, Gas & Consumable Fuels – 6.3% | |
| | |
Chevron Corp. | | | 314,699 | | | | 36,549,142 | |
| | |
CVR Energy, Inc. | | | 237,314 | | | | 11,253,430 | |
| | |
Exxon Mobil Corp. | | | 210,782 | | | | 14,242,540 | |
| | |
HollyFrontier Corp. | | | 210,045 | | | | 11,539,872 | |
| | |
Occidental Petroleum Corp. | | | 737 | | | | 29,849 | |
| | |
Phillips 66 | | | 162,877 | | | | 19,027,291 | |
| | |
Valero Energy Corp. | | | 159,192 | | | | 15,438,440 | |
| | | | | | | | 108,080,564 | |
|
| Pharmaceuticals – 6.9% | |
| | |
Eli Lilly & Co. | | | 42,009 | | | | 4,786,925 | |
| | |
Johnson & Johnson | | | 428,197 | | | | 56,539,132 | |
| | |
Merck & Co., Inc. | | | 345,653 | | | | 29,954,289 | |
| | |
Pfizer, Inc. | | | 670,670 | | | | 25,733,608 | |
| | | | | | | | 117,013,954 | |
|
| Professional Services – 0.3% | |
| | |
ManpowerGroup, Inc. | | | 64,119 | | | | 5,829,699 | |
|
| Semiconductors & Semiconductor Equipment – 5.6% | |
| | |
Broadcom, Inc. | | | 119,394 | | | | 34,964,533 | |
| | |
Intel Corp. | | | 120,131 | | | | 6,791,005 | |
| | |
Lam Research Corp. | | | 50,853 | | | | 13,783,197 | |
| | |
Maxim Integrated Products, Inc. | | | 143,715 | | | | 8,430,322 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Semiconductors & Semiconductor Equipment – (continued) | |
| | |
Texas Instruments, Inc. | | | 271,216 | | | $ | 32,000,776 | |
| | | | | | | | 95,969,833 | |
|
| Software – 4.4% | |
| | |
Intuit, Inc. | | | 52,327 | | | | 13,474,202 | |
| | |
Microsoft Corp. | | | 417,142 | | | | 59,805,649 | |
| | |
Oracle Corp. | | | 22,110 | | | | 1,204,774 | |
| | | | | | | | 74,484,625 | |
|
| Specialty Retail – 4.0% | |
| | |
Best Buy Co., Inc. | | | 187,198 | | | | 13,446,432 | |
| | |
Foot Locker, Inc. | | | 13,266 | | | | 577,204 | |
| | |
Home Depot, Inc. (The) | | | 230,681 | | | | 54,113,149 | |
| | | | | | | | 68,136,785 | |
|
| Technology Hardware, Storage & Peripherals – 5.3% | |
| | |
Apple, Inc. | | | 213,730 | | | | 53,167,475 | |
| | |
HP, Inc. | | | 506,319 | | | | 8,794,761 | |
| | |
NetApp, Inc. | | | 237,314 | | | | 13,261,106 | |
| | |
Seagate Technology plc(a) | | | 252,791 | | | | 14,669,462 | |
| | | | | | | | 89,892,804 | |
|
| Textiles, Apparel & Luxury Goods – 0.7% | |
| | |
Hanesbrands, Inc.(a) | | | 397,243 | | | | 6,042,066 | |
| | |
VF Corp. | | | 72,226 | | | | 5,943,478 | |
| | | | | | | | 11,985,544 | |
|
| Tobacco – 1.9% | |
| | |
Philip Morris International, Inc. | | | 408,298 | | | | 33,251,789 | |
|
| Trading Companies & Distributors – 1.0% | |
| | |
MSC Industrial Direct Co., Inc., Class A | | | 50,853 | | | | 3,722,948 | |
| | |
WW Grainger, Inc. | | | 40,535 | | | | 12,518,830 | |
| | | | | | | | 16,241,778 | |
Total Common Stocks
(Cost $1,378,719,056) | | | | 1,685,254,955 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 297 | |
FlexShares® Quality Dividend Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SECURITIES LENDING REINVESTMENTS(b) – 6.2% | |
|
| BANK NOTES – 0.3% | |
| |
Bank of America NA | | | | | |
(US Federal Funds Effective Rate (continuous series) + 0.26%), 2.08%, 2/3/2020(c)
(Cost $5,000,000) | | $ | 5,000,000 | | | $ | 5,000,000 | |
|
| CERTIFICATES OF DEPOSIT – 2.0% | |
| |
Bank of Montreal, Chicago | | | | | |
(US Federal Funds Effective Rate (continuous series) + 0.35%), 2.17%, 8/6/2020(c) | | | 4,000,000 | | | | 3,999,992 | |
| |
Bank of Nova Scotia, Houston | | | | | |
(ICE LIBOR USD 3 Month + 0.22%), 2.18%, 12/30/2019(c) | | | 3,000,000 | | | | 3,000,719 | |
| |
Cooperatieve Rabobank UA, London | | | | | |
(ICE LIBOR USD 1 Month + 0.19%), 1.99%, 4/24/2020(c) | | | 5,000,000 | | | | 4,999,300 | |
| |
Credit Agricole CIB, New York | | | | | |
(ICE LIBOR USD 1 Month + 0.21%), 2.06%, 12/20/2019(c) | | | 5,000,000 | | | | 5,000,000 | |
| |
Credit Suisse, New York | | | | | |
(SOFR + 0.38%), 2.20%, 3/6/2020(c) | | | 4,000,090 | | | | 4,000,838 | |
| |
Standard Chartered, New York | | | | | |
(US Federal Funds Effective Rate (continuous series) + 0.35%), 2.17%, 2/26/2020(c) | | | 4,000,000 | | | | 3,999,984 | |
| |
Svenska Handelsbanken, New York | | | | | |
(ICE LIBOR USD 1 Month + 0.16%), 2.22%, 7/8/2020(c) | | | 2,010,000 | | | | 2,008,834 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CERTIFICATES OF DEPOSIT – (continued) | |
| |
Toronto-Dominion Bank, New York | | | | | |
(US Federal Funds Effective Rate (continuous series) + 0.30%), 2.12%, 2/27/2020(c) | | $ | 3,000,000 | | | $ | 2,999,298 | |
| |
Westpac Banking Corp., New York | | | | | |
(US Federal Funds Effective Rate (continuous series) + 0.30%), 2.12%, 2/14/2020(c) | | | 4,000,000 | | | | 3,999,993 | |
Total Certificates of Deposit
(Cost $34,009,640) | | | | 34,008,958 | |
| | |
| | | | | | | | |
|
| COMMERCIAL PAPER – 0.4% | |
| |
Bank of Nova Scotia, Houston | | | | | |
(ICE LIBOR USD 1 Month + 0.17%), 2.09%, 5/15/2020(c) (d) | | | 2,500,000 | | | | 2,498,887 | |
| |
UBS AG, London | | | | | |
(ICE LIBOR USD 1 Month + 0.34%), 2.14%, 7/28/2020(c) (d) | | | 4,000,000 | | | | 4,000,000 | |
Total Commercial Paper
(Cost $6,500,000) | | | | 6,498,887 | |
| | |
| | | | | | | | |
|
| REPURCHASE AGREEMENTS – 3.5% | |
| | |
BofA Securities, Inc., 2.25%, dated 10/31/2019, due 1/31/2020, repurchase price $8,046,000, collateralized by various Common Stocks; total market value $8,758,854 | | | 8,000,000 | | | | 8,000,000 | |
See Accompanying Notes to the Financial Statements.
| | |
| 298 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Quality Dividend Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SECURITIES LENDING REINVESTMENTS(b) – (continued) | |
|
| REPURCHASE AGREEMENTS – (continued) | |
| | |
Citadel Clearing LLC, 2.41%, dated 10/31/2019, due 1/31/2020, repurchase price $5,030,794, collateralized by various Common Stocks; total market value $5,468,705 | | $ | 5,000,000 | | | $ | 5,000,000 | |
| | |
Citigroup Global Markets Ltd., 1.75%, dated 10/31/2019, due 11/1/2019, repurchase price $11,000,535, collateralized by various U.S. Treasury Securities, ranging from 0.63% – 3.00%, maturing 11/15/2020 – 8/15/2048; total market value $11,314,906 | | | 11,000,000 | | | | 11,000,000 | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $5,808,446, collateralized by various U.S. Treasury Securities, ranging from 0.38% – 6.88%, maturing 11/30/2020 – 9/30/2025; total market value $5,946,283 | | | 5,808,169 | | | | 5,808,169 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| REPURCHASE AGREEMENTS – (continued) | |
NatWest Markets Securities, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $5,000,239, collateralized by various U.S. Treasury Securities, ranging from 0.13% – 2.88%, maturing 1/15/2022 – 11/15/2027; total market value $5,075,001 | | $ | 5,000,000 | | | $ | 5,000,000 | |
| | |
Societe Generale, 1.95%, dated 10/31/2019, due 11/1/2019, repurchase price $25,701,392, collateralized by various U.S. Treasury Securities, ranging from 1.13% – 4.25%, maturing 1/31/2021 – 11/15/2040; Common Stocks; total market value $28,406,754 | | | 25,700,000 | | | | 25,700,000 | |
Total Repurchase Agreements
(Cost $60,508,169) | | | | 60,508,169 | |
Total Securities Lending Reinvestments
(Cost $106,017,809) | | | | 106,016,014 | |
Total Investments – 104.9%
(Cost $1,484,736,865) | | | | 1,791,270,969 | |
| |
Liabilities in excess of other assets – (4.9%) | | | | (83,926,994 | ) |
| NET ASSETS – 100.0% | | | $ | 1,707,343,975 | |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $120,902,643, collateralized in the form of cash with a value of $106,021,374 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments; $29,399,436 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.75%, and maturity dates ranging from November 14, 2019 – May 15, 2049 and $7,556,807 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.13% – 4.75%, and maturity dates ranging from July 22, 2020 – October 22, 2071; a total value of $142,977,617. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 299 | |
FlexShares® Quality Dividend Index Fund (cont.)
| (b) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $106,016,014. |
| (c) | Variable or floating rate security, linked to the referenced benchmark. The interest rate shown is the rate in effect as of October 31, 2019. |
| (d) | Security exempt from registration under Section 4(2) of the Securities Act of 1933. Such securities may be sold in transactions exempt from registration normally to qualified institutional buyers. |
Percentages shown are based on Net Assets.
Abbreviations
ICE – Intercontinental Exchange
LIBOR – London Interbank Offered Rate
SOFR – Secured Overnight Financing Rate
USD – US Dollar
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 306,887,555 | |
Aggregate gross unrealized depreciation | | | (1,496,343 | ) |
Net unrealized appreciation | | $ | 305,391,212 | |
Federal income tax cost | | $ | 1,486,202,349 | |
Futures Contracts
FlexShares® Quality Dividend Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | Notional
Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | | | | | |
S&P 500E-Mini Index | | | 143 | | | | 12/20/2019 | | | USD | | $ | 21,705,970 | | | $ | 322,592 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Abbreviations:
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | |
| 300 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® Quality Dividend Defensive Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 98.2% | |
|
| Aerospace & Defense – 2.1% | |
| | |
Boeing Co. (The) | | | 6,435 | | | $ | 2,187,321 | |
| | |
Lockheed Martin Corp. | | | 18,915 | | | | 7,124,902 | |
| | | | | | | | 9,312,223 | |
|
| Air Freight & Logistics – 0.7% | |
| | |
CH Robinson Worldwide, Inc.(a) | | | 30,030 | | | | 2,271,469 | |
| | |
Expeditors International of Washington, Inc. | | | 13,650 | | | | 995,631 | |
| | | | | | | | 3,267,100 | |
|
| Automobiles – 0.8% | |
| | |
Harley-Davidson, Inc.(a) | | | 90,480 | | | | 3,520,577 | |
|
| Banks – 4.7% | |
| | |
Bank of America Corp. | | | 68,640 | | | | 2,146,373 | |
| | |
Citigroup, Inc. | | | 6,240 | | | | 448,406 | |
| | |
JPMorgan Chase & Co. | | | 31,590 | | | | 3,946,223 | |
| | |
Wells Fargo & Co. | | | 281,385 | | | | 14,527,908 | |
| | | | | | | | 21,068,910 | |
|
| Beverages – 1.1% | |
| | |
Coca-Cola Co. (The) | | | 20,280 | | | | 1,103,841 | |
| | |
PepsiCo, Inc. | | | 27,495 | | | | 3,771,489 | |
| | | | | | | | 4,875,330 | |
|
| Biotechnology – 1.9% | |
| | |
AbbVie, Inc. | | | 105,690 | | | | 8,407,639 | |
|
| Building Products – 0.0%(b) | |
| | |
Johnson Controls International plc | | | 390 | | | | 16,899 | |
|
| Capital Markets – 1.6% | |
| | |
Intercontinental Exchange, Inc. | | | 8,385 | | | | 790,873 | |
| | |
Lazard Ltd., Class A | | | 3,900 | | | | 145,587 | |
| | |
MarketAxess Holdings, Inc. | | | 5,850 | | | | 2,156,252 | |
| | |
MSCI, Inc. | | | 12,090 | | | | 2,835,830 | |
| | |
T. Rowe Price Group, Inc. | | | 9,555 | | | | 1,106,469 | |
| | | | | | | | 7,035,011 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Chemicals – 1.3% | |
| | |
Dow, Inc. | | | 71,760 | | | $ | 3,623,162 | |
| | |
LyondellBasell Industries NV, Class A | | | 4,485 | | | | 402,305 | |
| | |
NewMarket Corp. | | | 3,900 | | | | 1,893,411 | |
| | | | | | | | 5,918,878 | |
|
| Commercial Services & Supplies – 0.1% | |
| | |
Rollins, Inc.(a) | | | 15,015 | | | | 572,222 | |
|
| Communications Equipment – 3.1% | |
| | |
Cisco Systems, Inc. | | | 247,065 | | | | 11,738,058 | |
| | |
Motorola Solutions, Inc. | | | 14,820 | | | | 2,464,863 | |
| | | | | | | | 14,202,921 | |
|
| Consumer Finance – 1.1% | |
| | |
Santander Consumer USA Holdings, Inc. | | | 82,290 | | | | 2,063,833 | |
| | |
Synchrony Financial | | | 85,800 | | | | 3,034,746 | |
| | | | | | | | 5,098,579 | |
|
| Diversified Consumer Services – 0.4% | |
| | |
H&R Block, Inc.(a) | | | 75,465 | | | | 1,885,870 | |
|
| Diversified Telecommunication Services – 3.4% | |
| | |
AT&T, Inc. | | | 196,560 | | | | 7,565,594 | |
| | |
CenturyLink, Inc.(a) | | | 98,085 | | | | 1,269,220 | |
| | |
Verizon Communications, Inc. | | | 109,785 | | | | 6,638,699 | |
| | | | | | | | 15,473,513 | |
|
| Electric Utilities – 4.0% | |
| | |
American Electric Power Co., Inc. | | | 14,040 | | | | 1,325,235 | |
| | |
Edison International | | | 558 | | | | 35,098 | |
| | |
Evergy, Inc.(a) | | | 7,020 | | | | 448,648 | |
| | |
Exelon Corp. | | | 66,885 | | | | 3,042,599 | |
| | |
FirstEnergy Corp. | | | 9,165 | | | | 442,853 | |
| | |
OGE Energy Corp. | | | 43,095 | | | | 1,855,671 | |
| | |
Pinnacle West Capital Corp. | | | 4,875 | | | | 458,835 | |
| | |
Portland General Electric Co.(a) | | | 44,265 | | | | 2,517,793 | |
| | |
PPL Corp. | | | 102,765 | | | | 3,441,600 | |
| | |
Southern Co. (The) | | | 72,150 | | | | 4,520,919 | |
| | | | | | | | 18,089,251 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 301 | |
FlexShares® Quality Dividend Defensive Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Electrical Equipment – 0.6% | |
| | |
Eaton Corp. plc | | | 33,345 | | | $ | 2,904,683 | |
|
| Electronic Equipment, Instruments & Components – 0.1% | |
| | |
CDW Corp. | | | 3,348 | | | | 428,243 | |
|
| Energy Equipment & Services – 0.4% | |
| | |
Helmerich & Payne, Inc.(a) | | | 47,385 | | | | 1,776,937 | |
|
| Entertainment – 1.0% | |
| | |
Activision Blizzard, Inc. | | | 65,715 | | | | 3,682,011 | |
| | |
Viacom, Inc., Class B | | | 28,860 | | | | 622,222 | |
| | | | | | | | 4,304,233 | |
|
| Equity Real Estate Investment Trusts (REITs) – 6.5% | |
| | |
Apple Hospitality REIT, Inc.(a) | | | 61,620 | | | | 1,015,498 | |
| | |
Brixmor Property Group, Inc. | | | 127,335 | | | | 2,803,917 | |
| | |
CubeSmart | | | 61,035 | | | | 1,934,809 | |
| | |
EPR Properties | | | 18,720 | | | | 1,456,229 | |
| | |
HCP, Inc. | | | 56,940 | | | | 2,142,083 | |
| | |
Healthcare Trust of America, Inc., Class A | | | 2,925 | | | | 90,675 | |
| | |
Iron Mountain, Inc. | | | 13,065 | | | | 428,532 | |
| | |
Kimco Realty Corp.(a) | | | 179,985 | | | | 3,880,477 | |
| | |
Medical Properties Trust, Inc. | | | 108,615 | | | | 2,251,589 | |
| | |
National Retail Properties, Inc. | | | 19,305 | | | | 1,137,257 | |
| | |
Omega Healthcare Investors, Inc.(a) | | | 4,680 | | | | 206,107 | |
| | |
Public Storage | | | 5,265 | | | | 1,173,358 | |
| | |
Simon Property Group, Inc. | | | 12,870 | | | | 1,939,252 | |
| | |
Spirit Realty Capital, Inc.(a) | | | 54,015 | | | | 2,692,108 | |
| | |
Ventas, Inc. | | | 6,435 | | | | 418,918 | |
| | |
VEREIT, Inc. | | | 177,645 | | | | 1,748,027 | |
| | |
Weingarten Realty Investors | | | 63,570 | | | | 2,017,076 | |
| | |
WP Carey, Inc. | | | 21,840 | | | | 2,010,590 | |
| | | | | | | | 29,346,502 | |
|
| Food & Staples Retailing – 2.0% | |
| | |
Sysco Corp. | | | 32,565 | | | | 2,600,967 | |
| | |
Walmart, Inc. | | | 54,990 | | | | 6,448,127 | |
| | | | | | | | 9,049,094 | |
|
| Food Products – 0.5% | |
| | |
Kellogg Co. | | | 12,675 | | | | 805,243 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Food Products – (continued) | |
| | |
Kraft Heinz Co. (The) | | | 47,970 | | | $ | 1,550,870 | |
| | | | | | | | 2,356,113 | |
|
| Health Care Equipment & Supplies – 0.4% | |
| | |
Abbott Laboratories(a) | | | 195 | | | | 16,304 | |
| | |
Medtronic plc | | | 2,535 | | | | 276,061 | |
| | |
ResMed, Inc. | | | 11,505 | | | | 1,701,820 | |
| | | | | | | | 1,994,185 | |
|
| Health Care Providers & Services – 3.5% | |
| | |
AmerisourceBergen Corp. | | | 12,675 | | | | 1,082,192 | |
| | |
Anthem, Inc. | | | 1,692 | | | | 455,283 | |
| | |
Cardinal Health, Inc. | | | 32,565 | | | | 1,610,339 | |
| | |
UnitedHealth Group, Inc. | | | 49,920 | | | | 12,614,784 | |
| | | | | | | | 15,762,598 | |
|
| Hotels, Restaurants & Leisure – 3.0% | |
| | |
Cracker Barrel Old Country Store, Inc.(a) | | | 2,145 | | | | 333,548 | |
| | |
Darden Restaurants, Inc. | | | 3,705 | | | | 415,960 | |
| | |
International Game Technology plc | | | 57,330 | | | | 759,049 | |
| | |
Las Vegas Sands Corp. | | | 8,775 | | | | 542,646 | |
| | |
McDonald’s Corp. | | | 1,914 | | | | 376,484 | |
| | |
Starbucks Corp. | | | 86,580 | | | | 7,321,205 | |
| | |
Vail Resorts, Inc.(a) | | | 2,730 | | | | 634,370 | |
| | |
Wyndham Destinations, Inc. | | | 39,390 | | | | 1,828,090 | |
| | |
Yum! Brands, Inc. | | | 13,455 | | | | 1,368,508 | |
| | | | | | | | 13,579,860 | |
|
| Household Durables – 0.1% | |
| | |
Newell Brands, Inc.(a) | | | 33,150 | | | | 628,855 | |
|
| Household Products – 3.5% | |
| | |
Clorox Co. (The) | | | 8,385 | | | | 1,238,380 | |
| | |
Colgate-Palmolive Co. | | | 52,065 | | | | 3,571,659 | |
| | |
Kimberly-Clark Corp. | | | 23,010 | | | | 3,057,569 | |
| | |
Procter & Gamble Co. (The) | | | 63,180 | | | | 7,866,542 | |
| | | | | | | | 15,734,150 | |
|
| Industrial Conglomerates – 0.5% | |
| | |
3M Co. | | | 14,040 | | | | 2,316,460 | |
See Accompanying Notes to the Financial Statements.
| | |
| 302 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Quality Dividend Defensive Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Insurance – 4.0% | |
| | |
Aflac, Inc. | | | 51,675 | | | $ | 2,747,043 | |
| | |
Allstate Corp. (The) | | | 17,550 | | | | 1,867,671 | |
| | |
Fidelity National Financial, Inc. | | | 47,970 | | | | 2,198,945 | |
| | |
First American Financial Corp. | | | 34,515 | | | | 2,132,337 | |
| | |
Hanover Insurance Group, Inc. (The)(a) | | | 2,535 | | | | 333,885 | |
| | |
Marsh & McLennan Cos., Inc. | | | 29,640 | | | | 3,071,297 | |
| | |
Progressive Corp. (The) | | | 36,465 | | | | 2,541,610 | |
| | |
Reinsurance Group of America, Inc. | | | 12,870 | | | | 2,090,989 | |
| | |
White Mountains Insurance Group Ltd. | | | 975 | | | | 1,044,225 | |
| | | | | | | | 18,028,002 | |
|
| IT Services – 3.5% | |
| | |
Amdocs Ltd. | | | 35,880 | | | | 2,339,376 | |
| | |
Broadridge Financial Solutions, Inc. | | | 17,160 | | | | 2,148,775 | |
| | |
International Business Machines Corp. | | | 29,640 | | | | 3,963,757 | |
| | |
Mastercard, Inc., Class A | | | 4,485 | | | | 1,241,493 | |
| | |
Paychex, Inc. | | | 17,355 | | | | 1,451,572 | |
| | |
Visa, Inc., Class A(a) | | | 11,700 | | | | 2,092,662 | |
| | |
Western Union Co. (The)(a) | | | 106,080 | | | | 2,658,365 | |
| | | | | | | | 15,896,000 | |
|
| Machinery – 0.5% | |
| | |
Cummins, Inc. | | | 6,825 | | | | 1,177,176 | |
| | |
Illinois Tool Works, Inc. | | | 7,020 | | | | 1,183,432 | |
| | | | | | | | 2,360,608 | |
|
| Media – 2.2% | |
| | |
Cable One, Inc. | | | 613 | | | | 812,452 | |
| | |
CBS Corp.(Non-Voting), Class B | | | 40,560 | | | | 1,461,782 | |
| | |
Comcast Corp., Class A | | | 146,640 | | | | 6,572,405 | |
| | |
Fox Corp., Class A | | | 390 | | | | 12,496 | |
| | |
Omnicom Group, Inc. | | | 12,870 | | | | 993,435 | |
| | | | | | | | 9,852,570 | |
|
| Metals & Mining – 0.6% | |
| | |
Royal Gold, Inc.(a) | | | 23,400 | | | | 2,701,296 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Multiline Retail – 2.0% | |
| | |
Kohl’s Corp. | | | 20,865 | | | $ | 1,069,540 | |
| | |
Macy’s, Inc. | | | 33,735 | | | | 511,423 | |
| | |
Nordstrom, Inc.(a) | | | 96,525 | | | | 3,465,247 | |
| | |
Target Corp. | | | 37,830 | | | | 4,044,405 | |
| | | | | | | | 9,090,615 | |
|
| Multi-Utilities – 2.0% | |
| | |
Consolidated Edison, Inc. | | | 9,750 | | | | 899,145 | |
| | |
DTE Energy Co. | | | 11,895 | | | | 1,514,471 | |
| | |
NorthWestern Corp. | | | 46,605 | | | | 3,379,795 | |
| | |
WEC Energy Group, Inc.(a) | | | 36,075 | | | | 3,405,480 | |
| | | | | | | | 9,198,891 | |
|
| Oil, Gas & Consumable Fuels – 5.8% | |
| | |
Antero Midstream Corp.(a) | | | 115,830 | | | | 745,945 | |
| | |
Cabot Oil & Gas Corp. | | | 157,755 | | | | 2,940,553 | |
| | |
Chevron Corp. | | | 66,300 | | | | 7,700,082 | |
| | |
CVR Energy, Inc. | | | 62,790 | | | | 2,977,502 | |
| | |
Exxon Mobil Corp. | | | 121,095 | | | | 8,182,389 | |
| | |
Occidental Petroleum Corp. | | | 16,380 | | | | 663,390 | |
| | |
Phillips 66 | | | 23,595 | | | | 2,756,368 | |
| | |
Plains GP Holdings LP, Class A* (a) | | | 4,875 | | | | 90,480 | |
| | | | | | | | 26,056,709 | |
|
| Pharmaceuticals – 7.0% | |
| | |
Eli Lilly & Co. | | | 57,720 | | | | 6,577,194 | |
| | |
Johnson & Johnson | | | 115,050 | | | | 15,191,202 | |
| | |
Merck & Co., Inc. | | | 46,995 | | | | 4,072,587 | |
| | |
Pfizer, Inc. | | | 147,615 | | | | 5,663,987 | |
| | | | | | | | 31,504,970 | |
|
| Professional Services – 0.1% | |
| | |
Thomson Reuters Corp. | | | 5,952 | | | | 400,331 | |
|
| Semiconductors & Semiconductor Equipment – 4.5% | |
| | |
Broadcom, Inc. | | | 28,470 | | | | 8,337,439 | |
| | |
Intel Corp. | | | 22,035 | | | | 1,245,638 | |
| | |
KLA Corp. | | | 2,790 | | | | 471,622 | |
| | |
Lam Research Corp. | | | 2,046 | | | | 554,548 | |
| | |
Skyworks Solutions, Inc. | | | 21,060 | | | | 1,917,724 | |
| | |
Texas Instruments, Inc. | | | 65,520 | | | | 7,730,705 | |
| | | | | | | | 20,257,676 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 303 | |
FlexShares® Quality Dividend Defensive Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Software – 4.5% | |
| | |
CDK Global, Inc. | | | 53,430 | | | $ | 2,700,352 | |
| | |
Microsoft Corp. | | | 102,180 | | | | 14,649,547 | |
| | |
Oracle Corp. | | | 52,260 | | | | 2,847,647 | |
| | | | | | | | 20,197,546 | |
|
| Specialty Retail – 4.1% | |
| | |
Aaron’s, Inc. | | | 29,055 | | | | 2,177,091 | |
| | |
Best Buy Co., Inc. | | | 2,730 | | | | 196,096 | |
| | |
Dick’s Sporting Goods, Inc.(a) | | | 5,265 | | | | 204,967 | |
| | |
Foot Locker, Inc. | | | 46,605 | | | | 2,027,784 | |
| | |
Home Depot, Inc. (The) | | | 48,750 | | | | 11,435,775 | |
| | |
L Brands, Inc. | | | 21,255 | | | | 362,185 | |
| | |
Williams-Sonoma, Inc.(a) | | | 32,565 | | | | 2,175,016 | |
| | | | | | | | 18,578,914 | |
|
| Technology Hardware, Storage & Peripherals – 3.8% | |
| | |
Apple, Inc. | | | 52,845 | | | | 13,145,722 | |
| | |
Seagate Technology plc | | | 64,935 | | | | 3,768,178 | |
| | | | | | | | 16,913,900 | |
|
| Textiles, Apparel & Luxury Goods – 1.3% | |
| | |
Hanesbrands, Inc.(a) | | | 193,245 | | | | 2,939,256 | |
| | |
Tapestry, Inc. | | | 107,250 | | | | 2,773,485 | |
| | | | | | | | 5,712,741 | |
|
| Tobacco – 2.4% | |
| | |
Altria Group, Inc. | | | 62,595 | | | | 2,803,630 | |
| | |
Philip Morris International, Inc. | | | 96,915 | | | | 7,892,758 | |
| | | | | | | | 10,696,388 | |
|
| Trading Companies & Distributors – 1.3% | |
| | |
MSC Industrial Direct Co., Inc., Class A | | | 41,730 | | | | 3,055,053 | |
| | |
WW Grainger, Inc. | | | 8,970 | | | | 2,770,295 | |
| | | | | | | | 5,825,348 | |
|
| Transportation Infrastructure – 0.2% | |
| | |
Macquarie Infrastructure Corp.(a) | | | 17,355 | | | | 748,695 | |
Total Common Stocks
(Cost $367,466,211) | | | | 442,948,036 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SECURITIES LENDING REINVESTMENTS(c) – 7.1% | |
|
| REPURCHASE AGREEMENTS – 7.1% | |
| | |
BofA Securities, Inc., 2.25%, dated 10/31/2019, due 1/31/2020, repurchase price $1,005,750, collateralized by various Common Stocks; total market value $1,094,857 | | $ | 1,000,000 | | | $ | 1,000,000 | |
| | |
Citigroup Global Markets Ltd., 1.75%, dated 10/31/2019, due 11/1/2019, repurchase price $15,000,729, collateralized by various U.S. Treasury Securities, ranging from 0.63% – 3.00%, maturing 11/15/2020 – 8/15/2048; total market value $15,429,417 | | | 15,000,000 | | | | 15,000,000 | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $2,467,291, collateralized by various U.S. Treasury Securities, ranging from 0.38% – 6.88%, maturing 11/30/2020 – 9/30/2025; total market value $2,525,841 | | | 2,467,173 | | | | 2,467,173 | |
| | |
NatWest Markets Securities, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $7,000,334, collateralized by various U.S. Treasury Securities, ranging from 0.13% – 2.88%, maturing 1/15/2022 – 11/15/2027; total market value $7,105,001 | | | 7,000,000 | | | | 7,000,000 | |
See Accompanying Notes to the Financial Statements.
| | |
| 304 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Quality Dividend Defensive Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SECURITIES LENDING REINVESTMENTS(c) – (continued) | |
|
| REPURCHASE AGREEMENTS – (continued) | |
Societe Generale, 1.95%, dated 10/31/2019, due 11/1/2019, repurchase price $6,530,589, collateralized by various U.S. Treasury Securities, ranging from 1.13% – 4.25%, maturing 1/31/2021 – 11/15/2040; Common Stocks; total market value $7,218,007 | | $ | 6,530,235 | | | $ | 6,530,235 | |
| | | | | 31,997,408 | |
Total Securities Lending Reinvestments
(Cost $31,997,408) | | | | 31,997,408 | |
Total Investments – 105.3%
(Cost $399,463,619) | | | | 474,945,444 | |
| |
Liabilities in excess of other assets – (5.3%) | | | | (23,982,720 | ) |
| NET ASSETS – 100.0% | | | $ | 450,962,724 | |
| * | Non-income producing security. |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $31,493,594, collateralized in the form of cash with a value of $31,997,408 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments; $8,561,712 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.75%, and maturity dates ranging from November 14, 2019 – May 15, 2049 and $536,970 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.13% – 4.75%, and maturity dates ranging from July 22, 2020 – October 22, 2071; a total value of $41,096,090. |
| (b) | Represents less than 0.05% of net assets. |
| (c) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $31,997,408. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 75,719,772 | |
Aggregate gross unrealized depreciation | | | (1,155,532 | ) |
Net unrealized appreciation | | $ | 74,564,240 | |
Federal income tax cost | | $ | 400,492,261 | |
Futures Contracts
FlexShares® Quality Dividend Defensive Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | Notional Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | | | | | |
S&P 500E-Mini Index | | | 53 | | | | 12/20/2019 | | | USD | | $ | 8,044,870 | | | $ | 111,057 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Abbreviations:
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 305 | |
Schedule of Investments
FlexShares® Quality Dividend Dynamic Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 98.7% | |
|
| Aerospace & Defense – 0.6% | |
| | |
Boeing Co. (The) | | | 253 | | | $ | 85,997 | |
| | |
L3Harris Technologies, Inc. | | | 989 | | | | 204,041 | |
| | | | | | | | 290,038 | |
|
| Auto Components – 0.5% | |
| | |
Gentex Corp. | | | 9,729 | | | | 272,898 | |
|
| Automobiles – 0.2% | |
| | |
General Motors Co. | | | 2,277 | | | | 84,613 | |
|
| Banks – 8.7% | |
| | |
Bank of America Corp. | | | 12,305 | | | | 384,777 | |
| | |
Citigroup, Inc. | | | 12,627 | | | | 907,376 | |
| | |
Comerica, Inc. | | | 2,806 | | | | 183,569 | |
| | |
Huntington Bancshares, Inc. | | | 6,187 | | | | 87,422 | |
| | |
JPMorgan Chase & Co. | | | 16,629 | | | | 2,077,295 | |
| | |
PacWest Bancorp(a) | | | 2,392 | | | | 88,480 | |
| | |
Popular, Inc. | | | 5,106 | | | | 278,073 | |
| | |
Regions Financial Corp. | | | 17,273 | | | | 278,095 | |
| | |
SunTrust Banks, Inc. | | | 1,219 | | | | 83,307 | |
| | |
Wells Fargo & Co. | | | 2,392 | | | | 123,499 | |
| | |
Zions Bancorp NA(a) | | | 805 | | | | 39,018 | |
| | | | | | | | 4,530,911 | |
|
| Beverages – 0.4% | |
| | |
Coca-Cola Co. (The) | | | 2,553 | | | | 138,960 | |
| | |
PepsiCo, Inc. | | | 667 | | | | 91,492 | |
| | | | | | | | 230,452 | |
|
| Biotechnology – 4.0% | |
| | |
AbbVie, Inc.(a) | | | 12,420 | | | | 988,011 | |
| | |
Amgen, Inc. | | | 5,290 | | | | 1,128,093 | |
| | | | | | | | 2,116,104 | |
|
| Building Products – 0.4% | |
| | |
Armstrong World Industries, Inc. | | | 2,484 | | | | 232,329 | |
|
| Capital Markets – 3.7% | |
| | |
Ameriprise Financial, Inc. | | | 1,955 | | | | 294,990 | |
| | |
BlackRock, Inc. | | | 368 | | | | 169,906 | |
| | |
Blackstone Group, Inc. (The), Class A | | | 2,507 | | | | 133,272 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Capital Markets – (continued) | |
| | |
Eaton Vance Corp.(a) | | | 5,750 | | | $ | 262,200 | |
| | |
Evercore, Inc., Class A | | | 3,335 | | | | 245,589 | |
| | |
Lazard Ltd., Class A | | | 6,946 | | | | 259,294 | |
| | |
LPL Financial Holdings, Inc. | | | 2,829 | | | | 228,696 | |
| | |
T. Rowe Price Group, Inc. | | | 2,622 | | | | 303,628 | |
| | |
TD Ameritrade Holding Corp. | | | 874 | | | | 33,544 | |
| | | | | | | | 1,931,119 | |
|
| Chemicals – 1.7% | |
| | |
Celanese Corp. | | | 2,553 | | | | 309,296 | |
| | |
Dow, Inc. | | | 7,176 | | | | 362,316 | |
| | |
Huntsman Corp. | | | 1,610 | | | | 35,629 | |
| | |
LyondellBasell Industries NV, Class A | | | 805 | | | | 72,209 | |
| | |
ScottsMiracle-Gro Co. (The)(a) | | | 897 | | | | 90,050 | |
| | | | | | | | 869,500 | |
|
| Communications Equipment – 3.0% | |
| | |
Cisco Systems, Inc. | | | 32,890 | | | | 1,562,604 | |
|
| Consumer Finance – 2.2% | |
| | |
Discover Financial Services | | | 3,404 | | | | 273,205 | |
| | |
Navient Corp. | | | 20,332 | | | | 279,972 | |
| | |
Santander Consumer USA Holdings, Inc. | | | 10,304 | | | | 258,424 | |
| | |
Synchrony Financial | | | 9,108 | | | | 322,150 | |
| | | | | | | | 1,133,751 | |
|
| Containers & Packaging – 0.6% | |
| | |
International Paper Co. | | | 6,233 | | | | 272,258 | |
| | |
Packaging Corp. of America(a) | | | 414 | | | | 45,316 | |
| | | | | | | | 317,574 | |
|
| Diversified Telecommunication Services – 2.9% | |
| | |
AT&T, Inc. | | | 19,872 | | | | 764,873 | |
| | |
CenturyLink, Inc.(a) | | | 6,762 | | | | 87,500 | |
| | |
Verizon Communications, Inc. | | | 11,316 | | | | 684,279 | |
| | | | | | | | 1,536,652 | |
|
| Electrical Equipment – 2.6% | |
| | |
Eaton Corp. plc | | | 3,496 | | | | 304,536 | |
| | |
Emerson Electric Co. | | | 2,484 | | | | 174,253 | |
| | |
Hubbell, Inc. | | | 2,024 | | | | 286,801 | |
See Accompanying Notes to the Financial Statements.
| | |
| 306 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Quality Dividend Dynamic Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Electrical Equipment – (continued) | |
| | |
nVent Electric plc | | | 13,110 | | | $ | 302,316 | |
| | |
Rockwell Automation, Inc. | | | 1,610 | | | | 276,904 | |
| | | | | | | | 1,344,810 | |
|
| Electronic Equipment, Instruments & Components – 0.6% | |
| | |
CDW Corp. | | | 2,576 | | | | 329,496 | |
|
| Energy Equipment & Services – 0.2% | |
| | |
Helmerich & Payne, Inc. | | | 2,070 | | | | 77,625 | |
|
| Entertainment – 0.3% | |
| | |
Viacom, Inc., Class B | | | 8,257 | | | | 178,021 | |
|
| Equity Real Estate Investment Trusts (REITs) – 7.2% | |
| | |
Apple Hospitality REIT, Inc.(a) | | | 15,180 | | | | 250,166 | |
| | |
Brixmor Property Group, Inc. | | | 14,950 | | | | 329,199 | |
| | |
Brookfield Property REIT, Inc., Class A(a) | | | 3,404 | | | | 64,336 | |
| | |
EPR Properties | | | 1,058 | | | | 82,302 | |
| | |
Gaming and Leisure Properties, Inc. | | | 2,024 | | | | 81,689 | |
| | |
Host Hotels & Resorts, Inc. | | | 17,411 | | | | 285,366 | |
| | |
Iron Mountain, Inc.(a) | | | 1,633 | | | | 53,562 | |
| | |
Kimco Realty Corp.(a) | | | 13,225 | | | | 285,131 | |
| | |
Lamar Advertising Co., Class A(a) | | | 3,151 | | | | 252,112 | |
| | |
Liberty Property Trust | | | 4,554 | | | | 269,005 | |
| | |
Macerich Co. (The)(a) | | | 2,254 | | | | 61,985 | |
| | |
Medical Properties Trust, Inc. | | | 4,669 | | | | 96,788 | |
| | |
Omega Healthcare Investors, Inc.(a) | | | 1,173 | | | | 51,659 | |
| | |
Park Hotels & Resorts, Inc. | | | 1,334 | | | | 31,016 | |
| | |
RLJ Lodging Trust | | | 4,002 | | | | 65,673 | |
| | |
Ryman Hospitality Properties, Inc.(a) | | | 966 | | | | 81,308 | |
| | |
Service Properties Trust | | | 2,323 | | | | 58,772 | |
| | |
Simon Property Group, Inc. | | | 736 | | | | 110,901 | |
| | |
SITE Centers Corp. | | | 17,986 | | | | 279,323 | |
| | |
Spirit Realty Capital, Inc. | | | 5,612 | | | | 279,702 | |
| | |
VEREIT, Inc. | | | 26,404 | | | | 259,815 | |
| | |
VICI Properties, Inc. | | | 2,024 | | | | 47,665 | |
| | |
Weingarten Realty Investors | | | 9,269 | | | | 294,105 | |
| | |
WP Carey, Inc. | | | 1,104 | | | | 101,634 | |
| | | | | | | | 3,773,214 | |
|
| Food & Staples Retailing – 0.7% | |
| | |
Walgreens Boots Alliance, Inc. | | | 6,164 | | | | 337,664 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Food & Staples Retailing – (continued) | |
| | |
Walmart, Inc. | | | 437 | | | $ | 51,243 | |
| | | | | | | | 388,907 | |
|
| Food Products – 0.6% | |
| | |
General Mills, Inc. | | | 5,612 | | | | 285,426 | |
|
| Health Care Equipment & Supplies – 0.9% | |
| | |
Abbott Laboratories | | | 5,635 | | | | 471,143 | |
| | |
Medtronic plc | | | 138 | | | | 15,028 | |
| | | | | | | | 486,171 | |
|
| Health Care Providers & Services – 1.0% | |
| | |
AmerisourceBergen Corp. | | | 322 | | | | 27,493 | |
| | |
Cardinal Health, Inc. | | | 6,394 | | | | 316,183 | |
| | |
Chemed Corp. | | | 46 | | | | 18,120 | |
| | |
UnitedHealth Group, Inc. | | | 529 | | | | 133,678 | |
| | | | | | | | 495,474 | |
|
| Hotels, Restaurants & Leisure – 1.3% | |
| | |
Las Vegas Sands Corp. | | | 5,221 | | | | 322,866 | |
| | |
Restaurant Brands International, Inc. | | | 1,357 | | | | 88,802 | |
| | |
Wyndham Destinations, Inc. | | | 6,026 | | | | 279,667 | |
| | | | | | | | 691,335 | |
|
| Household Durables – 0.6% | |
| | |
Whirlpool Corp.(a) | | | 1,932 | | | | 293,896 | |
|
| Household Products – 0.6% | |
| | |
Procter & Gamble Co. (The) | | | 2,369 | | | | 294,964 | |
|
Independent Power and Renewable Electricity
Producers – 0.5% | |
| | |
AES Corp. | | | 15,801 | | | | 269,407 | |
|
| Industrial Conglomerates – 0.3% | |
| | |
Honeywell International, Inc. | | | 1,035 | | | | 178,776 | |
|
| Insurance – 1.7% | |
| | |
Lincoln National Corp. | | | 5,313 | | | | 300,078 | |
| | |
MetLife, Inc. | | | 2,691 | | | | 125,912 | |
| | |
Primerica, Inc. | | | 2,277 | | | | 287,312 | |
| | |
Principal Financial Group, Inc. | | | 1,656 | | | | 88,398 | |
| | |
Prudential Financial, Inc. | | | 1,173 | | | | 106,907 | |
| | | | | | | | 908,607 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 307 | |
FlexShares® Quality Dividend Dynamic Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Internet & Direct Marketing Retail – 0.5% | |
| | |
eBay, Inc. | | | 7,797 | | | $ | 274,844 | |
|
| IT Services – 2.6% | |
| | |
Broadridge Financial Solutions, Inc. | | | 1,679 | | | | 210,244 | |
| | |
International Business Machines Corp. | | | 3,404 | | | | 455,217 | |
| | |
Mastercard, Inc., Class A | | | 897 | | | | 248,299 | |
| | |
Paychex, Inc. | | | 1,357 | | | | 113,499 | |
| | |
Visa, Inc., Class A(a) | | | 1,702 | | | | 304,420 | |
| | | | | | | | 1,331,679 | |
|
| Life Sciences Tools & Services – 0.1% | |
| | |
Bruker Corp. | | | 1,357 | | | | 60,387 | |
|
| Machinery – 4.7% | |
| | |
Caterpillar, Inc. | | | 4,646 | | | | 640,219 | |
| | |
Cummins, Inc. | | | 1,771 | | | | 305,462 | |
| | |
Dover Corp.(a) | | | 3,105 | | | | 322,578 | |
| | |
Illinois Tool Works, Inc. | | | 2,622 | | | | 442,017 | |
| | |
Kennametal, Inc. | | | 2,645 | | | | 81,863 | |
| | |
Oshkosh Corp. | | | 3,979 | | | | 339,727 | |
| | |
Parker-Hannifin Corp. | | | 1,840 | | | | 337,621 | |
| | | | | | | | 2,469,487 | |
|
| Media – 3.0% | |
| | |
CBS Corp.(Non-Voting), Class B | | | 4,577 | | | | 164,955 | |
| | |
Comcast Corp., Class A | | | 12,788 | | | | 573,158 | |
| | |
Interpublic Group of Cos., Inc. (The) | | | 4,094 | | | | 89,044 | |
| | |
New York Times Co. (The), Class A | | | 828 | | | | 25,585 | |
| | |
Nexstar Media Group, Inc., Class A(a) | | | 2,392 | | | | 232,718 | |
| | |
Omnicom Group, Inc. | | | 3,174 | | | | 245,001 | |
| | |
Sinclair Broadcast Group, Inc., Class A(a) | | | 5,658 | | | | 225,415 | |
| | | | | | | | 1,555,876 | |
|
| Metals & Mining – 1.6% | |
| | |
Cleveland-Cliffs, Inc. | | | 2,599 | | | | 18,791 | |
| | |
Nucor Corp. | | | 4,945 | | | | 266,288 | |
| | |
Reliance Steel & Aluminum Co.(a) | | | 2,714 | | | | 314,933 | |
| | |
Steel Dynamics, Inc. | | | 7,590 | | | | 230,432 | |
| | | | | | | | 830,444 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Multiline Retail – 0.2% | |
| | |
Kohl’s Corp. | | | 1,863 | | | $ | 95,497 | |
| | |
Macy’s, Inc.(a) | | | 2,047 | | | | 31,033 | |
| | | | | | | | 126,530 | |
|
| Oil, Gas & Consumable Fuels – 6.1% | |
| | |
Antero Midstream Corp.(a) | | | 8,372 | | | | 53,916 | |
| | |
Chevron Corp. | | | 13,892 | | | | 1,613,417 | |
| | |
CVR Energy, Inc. | | | 5,313 | | | | 251,942 | |
| | |
EnLink Midstream LLC* (a) | | | 8,648 | | | | 54,050 | |
| | |
Exxon Mobil Corp. | | | 10,465 | | | | 707,120 | |
| | |
Murphy Oil Corp.(a) | | | 92 | | | | 1,898 | |
| | |
Plains GP Holdings LP, Class A* (a) | | | 9,913 | | | | 183,985 | |
| | |
Valero Energy Corp. | | | 3,496 | | | | 339,042 | |
| | | | | | | | 3,205,370 | |
|
| Pharmaceuticals – 4.7% | |
| | |
Johnson & Johnson | | | 3,266 | | | | 431,243 | |
| | |
Merck & Co., Inc. | | | 8,303 | | | | 719,538 | |
| | |
Pfizer, Inc. | | | 33,350 | | | | 1,279,639 | |
| | | | | | | | 2,430,420 | |
|
| Professional Services – 0.5% | |
| | |
Insperity, Inc. | | | 253 | | | | 26,724 | |
| | |
ManpowerGroup, Inc. | | | 2,507 | | | | 227,937 | |
| | | | | | | | 254,661 | |
|
| Road & Rail – 0.3% | |
| | |
Norfolk Southern Corp. | | | 828 | | | | 150,696 | |
|
| Semiconductors & Semiconductor Equipment – 6.6% | |
| | |
Broadcom, Inc. | | | 3,450 | | | | 1,010,332 | |
| | |
Intel Corp. | | | 2,392 | | | | 135,220 | |
| | |
Lam Research Corp.(a) | | | 1,541 | | | | 417,673 | |
| | |
Maxim Integrated Products, Inc. | | | 4,462 | | | | 261,741 | |
| | |
QUALCOMM, Inc. | | | 7,314 | | | | 588,338 | |
| | |
Texas Instruments, Inc. | | | 8,257 | | | | 974,243 | |
| | |
Xilinx, Inc. | | | 943 | | | | 85,568 | |
| | | | | | | | 3,473,115 | |
|
| Software – 4.7% | |
| | |
Intuit, Inc. | | | 2,185 | | | | 562,638 | |
| | |
Microsoft Corp. | | | 13,179 | | | | 1,889,473 | |
| | |
Oracle Corp. | | | 506 | | | | 27,572 | |
| | | | | | | | 2,479,683 | |
See Accompanying Notes to the Financial Statements.
| | |
| 308 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Quality Dividend Dynamic Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Specialty Retail – 5.4% | |
| | |
Best Buy Co., Inc. | | | 3,657 | | | $ | 262,682 | |
| | |
Home Depot, Inc. (The) | | | 7,567 | | | | 1,775,067 | |
| | |
Lowe’s Cos., Inc. | | | 6,831 | | | | 762,408 | |
| | | | | | | | 2,800,157 | |
|
| Technology Hardware, Storage & Peripherals – 7.3% | |
| | |
Apple, Inc. | | | 12,466 | | | | 3,101,042 | |
| | |
HP, Inc. | | | 13,524 | | | | 234,912 | |
| | |
NetApp, Inc. | | | 2,691 | | | | 150,373 | |
| | |
Seagate Technology plc | | | 6,026 | | | | 349,689 | |
| | | | | | | | 3,836,016 | |
|
| Tobacco – 2.3% | |
| | |
Altria Group, Inc. | | | 3,105 | | | | 139,073 | |
| | |
Philip Morris International, Inc. | | | 13,133 | | | | 1,069,551 | |
| | | | | | | | 1,208,624 | |
|
| Transportation Infrastructure – 0.1% | |
| | |
Macquarie Infrastructure Corp.(a) | | | 759 | | | | 32,743 | |
Total Common Stocks
(Cost $44,279,045) | | | | 51,625,406 | |
| | | Principal
Amount | | | | |
|
| SECURITIES LENDING REINVESTMENTS(b) – 3.7% | |
|
| REPURCHASE AGREEMENTS – 3.7% | |
| | |
Citigroup Global Markets Ltd., 1.75%, dated 10/31/2019, due 11/1/2019, repurchase price $500,024, collateralized by various U.S. Treasury Securities, ranging from 0.63% – 3.00%, maturing 11/15/2020 – 8/15/2048; total market value $514,314 | | $ | 500,000 | | | | 500,000 | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $736,776, collateralized by various U.S. Treasury Securities, ranging from 0.38% – 6.88%, maturing 11/30/2020 – 9/30/2025; total market value $754,260 | | | 736,741 | | | | 736,741 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| REPURCHASE AGREEMENTS – (continued) | |
| | |
Societe Generale, 1.95%, dated 10/31/2019, due 11/1/2019, repurchase price $700,038, collateralized by various U.S. Treasury Securities, ranging from 1.13% – 4.25%, maturing 1/31/2021 – 11/15/2040; Common Stocks; total market value $773,725 | | $ | 700,000 | | | $ | 700,000 | |
| | | | | 1,936,741 | |
Total Securities Lending Reinvestments
(Cost $1,936,741) | | | | 1,936,741 | |
Total Investments – 102.4%
(Cost $46,215,786) | | | | 53,562,147 | |
| |
Liabilities in excess of other assets – (2.4%) | | | | (1,254,106 | ) |
| NET ASSETS – 100.0% | | | $ | 52,308,041 | |
| * | Non-income producing security. |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $4,425,163, collateralized in the form of cash with a value of $1,936,741 that was reinvested in the securities shown in the Securities Lending Reinvestment section of the Schedule of Investments; $2,332,049 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 8.75%, and maturity dates ranging from November 14, 2019 – May 15, 2049 and $310,942 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.13% – 4.75%, and maturity dates ranging from July 22, 2020 – October 22, 2071; a total value of $4,579,732. |
| (b) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $1,936,741. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 7,916,060 | |
Aggregate gross unrealized depreciation | | | (571,728 | ) |
Net unrealized appreciation | | $ | 7,344,332 | |
Federal income tax cost | | $ | 46,227,194 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 309 | |
FlexShares® Quality Dividend Dynamic Index Fund (cont.)
Futures Contracts
FlexShares® Quality Dividend Dynamic Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional
Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | | | | | |
S&P500E-Mini Index | | | 4 | | | | 12/20/2019 | | | | USD | | | $ | 607,160 | | | $ | 9,379 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Abbreviations:
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | |
| 310 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® International Quality Dividend Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 97.9% | |
|
| Auto Components – 1.8% | |
| | |
Bridgestone Corp. | | | 168,000 | | | $ | 7,028,944 | |
| | |
Nokian Renkaat OYJ | | | 38,304 | | | | 1,093,987 | |
| | |
Xinyi Glass Holdings Ltd.(a) | | | 5,376,000 | | | | 6,056,634 | |
| | | | | | | | 14,179,565 | |
|
| Automobiles – 2.7% | |
| | |
Fiat Chrysler Automobiles NV | | | 469,392 | | | | 7,293,776 | |
| | |
Ford Otomotiv Sanayi A/S | | | 464,688 | | | | 5,246,759 | |
| | |
Subaru Corp. | | | 67,200 | | | | 1,941,313 | |
| | |
Tofas Turk Otomobil Fabrikasi A/S | | | 1,626,240 | | | | 6,371,104 | |
| | | | | | | | 20,852,952 | |
|
| Banks – 11.1% | |
| | |
ABN AMRO Bank NV, CVA(b) | | | 95,760 | | | | 1,783,070 | |
| | |
Agricultural Bank of China Ltd., Class H | | | 4,704,000 | | | | 1,938,569 | |
| | |
Australia & New Zealand Banking Group Ltd. | | | 250,992 | | | | 4,623,906 | |
| | |
Bank of China Ltd., Class H | | | 7,056,000 | | | | 2,889,848 | |
| | |
Bank Polska Kasa Opieki SA | | | 65,184 | | | | 1,841,897 | |
| | |
China Construction Bank Corp., Class H | | | 4,368,000 | | | | 3,516,603 | |
| | |
China Minsheng Banking Corp. Ltd., Class H | | | 2,352,000 | | | | 1,647,483 | |
| | |
Commonwealth Bank of Australia | | | 30,576 | | | | 1,656,999 | |
| | |
Danske Bank A/S | | | 422,352 | | | | 6,029,094 | |
| | |
ING Groep NV | | | 342,720 | | | | 3,872,497 | |
| | |
KBC Group NV | | | 65,184 | | | | 4,572,793 | |
| | |
National Australia Bank Ltd. | | | 261,072 | | | | 5,145,953 | |
| | |
National Bank of Canada(a) | | | 74,592 | | | | 3,860,271 | |
| | |
Nordea Bank Abp | | | 344,736 | | | | 2,527,293 | |
| | |
Royal Bank of Canada(a) | | | 218,736 | | | | 17,680,612 | |
| | |
Sberbank of Russia PJSC | | | 185,132 | | | | 678,708 | |
| | |
Sberbank of Russia PJSC (Preference) | | | 447,876 | | | | 1,485,784 | |
| | |
Skandinaviska Enskilda Banken AB, Class A | | | 683,760 | | | | 6,566,276 | |
| | |
Sumitomo Mitsui Financial Group, Inc. | | | 33,600 | | | | 1,205,939 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – (continued) | |
| | |
Swedbank AB, Class A | | | 449,232 | | | $ | 6,297,166 | |
| | |
Toronto-Dominion Bank (The) | | | 4,368 | | | | 249,947 | |
| | |
Westpac Banking Corp.(a) | | | 310,128 | | | | 6,027,424 | |
| | | | | | | | 86,098,132 | |
|
| Beverages – 0.7% | |
| | |
Coca-Cola Amatil Ltd. | | | 754,656 | | | | 5,277,190 | |
| | |
Diageo plc | | | 2,016 | | | | 82,553 | |
| | | | | | | | 5,359,743 | |
|
| Capital Markets – 2.0% | |
| | |
CI Financial Corp. | | | 371,280 | | | | 5,415,177 | |
| | |
Macquarie Group Ltd. | | | 73,920 | | | | 6,820,168 | |
| | |
Moscow ExchangeMICEX-RTS PJSC | | | 140,748 | | | | 208,757 | |
| | |
Natixis SA | | | 400,848 | | | | 1,838,464 | |
| | |
SBI Holdings, Inc. | | | 67,200 | | | | 1,473,234 | |
| | | | | | | | 15,755,800 | |
|
| Chemicals – 1.6% | |
| | |
Mitsubishi Chemical Holdings Corp. | | | 268,800 | | | | 2,065,263 | |
| | |
Showa Denko KK | | | 201,600 | | | | 5,734,425 | |
| | |
Sinopec Shanghai Petrochemical Co. Ltd., Class H | | | 16,800,000 | | | | 4,672,800 | |
| | | | | | | | 12,472,488 | |
|
| Commercial Services & Supplies – 0.7% | |
| | |
Edenred | | | 110,208 | | | | 5,803,408 | |
|
| Diversified Financial Services – 0.8% | |
| | |
Mitsubishi UFJ Lease & Finance Co. Ltd. | | | 134,400 | | | | 831,725 | |
| | |
REC Ltd. | | | 2,645,664 | | | | 5,214,582 | |
| | | | | | | | 6,046,307 | |
|
| Diversified Telecommunication Services – 3.7% | |
| | |
BT Group plc | | | 1,025,136 | | | | 2,715,398 | |
| | |
O2 Czech Republic A/S | | | 566,160 | | | | 5,348,748 | |
| | |
Proximus SADP | | | 159,600 | | | | 4,901,929 | |
| | |
Spark New Zealand Ltd. | | | 2,096,976 | | | | 6,024,662 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 311 | |
FlexShares® International Quality Dividend Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Diversified Telecommunication Services – (continued) | |
| | |
Telefonica Deutschland Holding AG | | | 616,896 | | | $ | 1,958,043 | |
| | |
Telefonica SA | | | 46,032 | | | | 353,070 | |
| | |
Telenor ASA | | | 285,264 | | | | 5,348,778 | |
| | |
Telia Co. AB | | | 415,296 | | | | 1,829,849 | |
| | | | | | | | 28,480,477 | |
|
| Electric Utilities – 2.7% | |
| | |
Endesa SA | | | 219,408 | | | | 5,972,694 | |
| | |
Federal Grid Co. Unified Energy System PJSC | | | 2,042,172,348 | | | | 5,880,653 | |
| | |
Red Electrica Corp. SA | | | 78,624 | | | | 1,583,289 | |
| | |
SSE plc | | | 439,488 | | | | 7,299,232 | |
| | | | | | | | 20,735,868 | |
|
| Electrical Equipment – 0.8% | |
| | |
Mitsubishi Electric Corp. | | | 134,400 | | | | 1,935,097 | |
| | |
Signify NV(a) (b) | | | 136,416 | | | | 3,993,531 | |
| | | | | | | | 5,928,628 | |
|
| Electronic Equipment, Instruments & Components – 1.2% | |
| | |
Walsin Technology Corp. | | | 336,000 | | | | 2,025,459 | |
| | |
Yageo Corp. | | | 672,000 | | | | 6,931,818 | |
| | | | | | | | 8,957,277 | |
|
| Entertainment – 0.9% | |
| | |
Nintendo Co. Ltd. | | | 19,600 | | | | 7,002,007 | |
|
| Equity Real Estate Investment Trusts (REITs) – 1.6% | |
| | |
Covivio | | | 14,448 | | | | 1,636,069 | |
| | |
Growthpoint Properties Ltd. | | | 1,055,688 | | | | 1,549,524 | |
| | |
H&R REIT | | | 86,352 | | | | 1,463,783 | |
| | |
Hui Xian REIT | | | 3,360,000 | | | | 1,561,702 | |
| | |
ICADE | | | 18,144 | | | | 1,777,279 | |
| | |
Klepierre SA | | | 54,768 | | | | 2,040,193 | |
| | |
Redefine Properties Ltd.(a) | | | 2,929,920 | | | | 1,466,565 | |
| | |
RioCan REIT | | | 47,040 | | | | 945,918 | |
| | | | | | | | 12,441,033 | |
|
| Food & Staples Retailing – 1.1% | |
| | |
Casino Guichard Perrachon SA(a) | | | 36,288 | | | | 1,958,245 | |
| | |
Magnit PJSC | | | 8,736 | | | | 440,677 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Food & Staples Retailing – (continued) | |
| | |
President Chain Store Corp. | | | 589,000 | | | $ | 5,882,164 | |
| | | | | | | | 8,281,086 | |
|
| Food Products – 2.5% | |
| | |
Nestle SA (Registered) | | | 79,296 | | | | 8,463,597 | |
| | |
Salmar ASA | | | 114,240 | | | | 5,331,747 | |
| | |
Uni-President Enterprises Corp. | | | 2,352,000 | | | | 5,810,365 | |
| | | | | | | | 19,605,709 | |
|
| Gas Utilities – 1.0% | |
| | |
Enagas SA | | | 246,960 | | | | 6,113,809 | |
| | |
Naturgy Energy Group SA(a) | | | 64,848 | | | | 1,766,007 | |
| | | | | | | | 7,879,816 | |
|
| Health Care Providers & Services – 0.5% | |
| | |
Netcare Ltd. | | | 3,484,992 | | | | 3,958,457 | |
|
| Hotels, Restaurants & Leisure – 0.8% | |
| | |
Sands China Ltd. | | | 1,209,600 | | | | 5,980,326 | |
|
| Household Durables – 2.0% | |
| | |
Barratt Developments plc | | | 224,448 | | | | 1,833,230 | |
| | |
Persimmon plc | | | 248,304 | | | | 7,316,123 | |
| | |
Taylor Wimpey plc | | | 2,801,568 | | | | 5,999,754 | |
| | | | | | | | 15,149,107 | |
|
Independent Power and Renewable Electricity
Producers – 0.6% | |
| | |
AES Gener SA | | | 6,344,352 | | | | 1,361,302 | |
| | |
Unipro PJSC | | | 80,044,360 | | | | 3,298,158 | |
| | | | | | | | 4,659,460 | |
|
| Insurance – 8.3% | |
| | |
Admiral Group plc | | | 59,472 | | | | 1,556,066 | |
| | |
Aegon NV(a) | | | 393,743 | | | | 1,702,647 | |
| | |
Allianz SE (Registered) | | | 51,744 | | | | 12,642,474 | |
| | |
BB Seguridade Participacoes SA | | | 672,000 | | | | 5,686,489 | |
| | |
Direct Line Insurance Group plc | | | 1,544,256 | | | | 5,437,285 | |
| | |
Legal & General Group plc | | | 691,152 | | | | 2,358,403 | |
| | |
MS&AD Insurance Group Holdings, Inc. | | | 168,000 | | | | 5,453,143 | |
| | |
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Registered) | | | 1,008 | | | | 280,019 | |
See Accompanying Notes to the Financial Statements.
| | |
| 312 | | FLEXSHARES ANNUAL REPORT |
FlexShares® International Quality Dividend Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Insurance – (continued) | |
| | |
Orange Life Insurance Ltd.(b) | | | 158,592 | | | $ | 3,816,731 | |
| | |
Poste Italiane SpA(b) | | | 531,552 | | | | 6,452,123 | |
| | |
Powszechny Zaklad Ubezpieczen SA | | | 364,560 | | | | 3,530,928 | |
| | |
Sampo OYJ, Class A | | | 66,864 | | | | 2,740,687 | |
| | |
Tokio Marine Holdings, Inc. | | | 120,500 | | | | 6,540,808 | |
| | |
Zurich Insurance Group AG | | | 15,120 | | | | 5,907,028 | |
| | | | | | | | 64,104,831 | |
|
| Interactive Media & Services – 0.6% | |
| | |
Tencent Holdings Ltd. | | | 122,000 | | | | 4,993,506 | |
|
| IT Services – 0.2% | |
| | |
Nomura Research Institute Ltd. | | | 85,500 | | | | 1,827,765 | |
|
| Machinery – 3.3% | |
| | |
Alstom SA | | | 129,696 | | | | 5,606,944 | |
| | |
Atlas Copco AB, Class A(a) | | | 22,848 | | | | 808,928 | |
| | |
Atlas Copco AB, Class B | | | 14,448 | | | | 448,543 | |
| | |
FANUC Corp. | | | 37,600 | | | | 7,512,696 | |
| | |
Komatsu Ltd. | | | 134,400 | | | | 3,181,440 | |
| | |
Kone OYJ, Class B | | | 50,736 | | | | 3,228,670 | |
| | |
Sinotruk Hong Kong Ltd.(a) | | | 3,192,000 | | | | 4,838,277 | |
| | | | | | | | 25,625,498 | |
|
| Marine – 0.2% | |
| | |
Kuehne + Nagel International AG (Registered) | | | 11,424 | | | | 1,844,859 | |
|
| Media – 1.2% | |
| | |
Eutelsat Communications SA | | | 307,776 | | | | 5,837,295 | |
| | |
ITV plc | | | 1,182,720 | | | | 2,046,963 | |
| | |
ProSiebenSat.1 Media SE | | | 123,984 | | | | 1,831,393 | |
| | | | | | | | 9,715,651 | |
|
| Metals & Mining – 5.4% | |
| | |
Alumina Ltd.(a) | | | 3,702,720 | | | | 5,790,745 | |
| | |
BHP Group plc | | | 64,848 | | | | 1,371,815 | |
| | |
Eregli Demir ve Celik Fabrikalari TAS | | | 4,938,528 | | | | 5,653,863 | |
| | |
Evraz plc | | | 903,504 | | | | 4,293,061 | |
| | |
Kumba Iron Ore Ltd. | | | 106,512 | | | | 2,601,937 | |
| | |
Magnitogorsk Iron & Steel Works PJSC | | | 9,333,096 | | | | 5,321,232 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Metals & Mining – (continued) | |
| | |
Novolipetsk Steel PJSC | | | 2,562,644 | | | $ | 5,001,198 | |
| | |
Rio Tinto plc | | | 132,048 | | | | 6,858,726 | |
| | |
Severstal PJSC | | | 375,984 | | | | 5,176,941 | |
| | | | | | | | 42,069,518 | |
|
| Multiline Retail – 0.4% | |
| | |
Wesfarmers Ltd. | | | 104,496 | | | | 2,862,423 | |
|
| Multi-Utilities – 1.1% | |
| | |
AGL Energy Ltd. | | | 404,544 | | | | 5,512,895 | |
| | |
Engie SA | | | 159,600 | | | | 2,669,976 | |
| | | | | | | | 8,182,871 | |
|
| Oil, Gas & Consumable Fuels – 8.2% | |
| | |
Aker BP ASA(a) | | | 206,976 | | | | 5,723,784 | |
| | |
BP plc | | | 1,829,520 | | | | 11,583,683 | |
| | |
Bukit Asam Tbk. PT | | | 30,777,600 | | | | 4,933,362 | |
| | |
China Petroleum & Chemical Corp., Class H | | | 3,360,000 | | | | 1,929,137 | |
| | |
Ecopetrol SA | | | 6,737,136 | | | | 6,062,270 | |
| | |
Eni SpA | | | 223,776 | | | | 3,387,828 | |
| | |
Equinor ASA | | | 226,800 | | | | 4,201,921 | |
| | |
Exxaro Resources Ltd. | | | 166,656 | | | | 1,364,248 | |
| | |
Formosa Petrochemical Corp. | | | 1,008,000 | | | | 3,208,725 | |
| | |
Inter Pipeline Ltd. | | | 94,416 | | | | 1,588,266 | |
| | |
Lundin Petroleum AB | | | 58,128 | | | | 1,923,462 | |
| | |
Royal Dutch Shell plc, Class A | | | 68,208 | | | | 1,970,872 | |
| | |
Royal Dutch Shell plc, Class B | | | 33,264 | | | | 954,707 | |
| | |
TC Energy Corp. | | | 84,672 | | | | 4,276,923 | |
| | |
TOTAL SA | | | 127,680 | | | | 6,714,201 | |
| | |
Tupras Turkiye Petrol Rafinerileri A/S | | | 69,552 | | | | 1,515,825 | |
| | |
Woodside Petroleum Ltd. | | | 20,832 | | | | 462,141 | |
| | |
Yanzhou Coal Mining Co. Ltd., Class H | | | 2,016,000 | | | | 2,050,030 | |
| | | | | | | | 63,851,385 | |
|
| Paper & Forest Products – 0.8% | |
| | |
UPM-Kymmene OYJ | | | 180,096 | | | | 5,854,928 | |
|
| Personal Products – 0.3% | |
| | |
L’Oreal SA | | | 1,680 | | | | 490,690 | |
| | |
Pola Orbis Holdings, Inc. | | | 67,200 | | | | 1,530,423 | |
| | | | | | | | 2,021,113 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 313 | |
FlexShares® International Quality Dividend Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Pharmaceuticals – 6.6% | |
| | |
Astellas Pharma, Inc. | | | 168,000 | | | $ | 2,888,192 | |
| | |
AstraZeneca plc | | | 7,056 | | | | 684,876 | |
| | |
GlaxoSmithKline plc | | | 893,424 | | | | 20,446,619 | |
| | |
Livzon Pharmaceutical Group, Inc., Class H | | | 571,200 | | | | 1,672,562 | |
| | |
Novartis AG (Registered) | | | 79,296 | | | | 6,918,260 | |
| | |
Orion OYJ, Class B | | | 149,520 | | | | 6,629,108 | |
| | |
Roche Holding AG | | | 39,648 | | | | 11,925,540 | |
| | |
Roche Holding AG – BR | | | 1,008 | | | | 300,127 | |
| | | | | | | | 51,465,284 | |
|
| Professional Services – 0.2% | |
| | |
Adecco Group AG (Registered) | | | 31,248 | | | | 1,851,921 | |
|
| Real Estate Management & Development – 1.9% | |
| | |
Agile Group Holdings Ltd. | | | 1,344,000 | | | | 1,817,676 | |
| | |
Daito Trust Construction Co. Ltd. | | | 5,500 | | | | 731,095 | |
| | |
Land & Houses PCL, NVDR | | | 15,590,400 | | | | 5,008,342 | |
| | |
Logan Property Holdings Co. Ltd. | | | 4,032,000 | | | | 6,162,951 | |
| | |
Yuzhou Properties Co. Ltd. | | | 3,360,000 | | | | 1,423,274 | |
| | | | | | | | 15,143,338 | |
|
| Road & Rail – 0.7% | |
| | |
Aurizon Holdings Ltd. | | | 1,396,752 | | | | 5,677,524 | |
|
| Semiconductors & Semiconductor Equipment – 2.9% | |
| | |
Globalwafers Co. Ltd. | | | 226,000 | | | | 2,709,876 | |
| | |
Nanya Technology Corp. | | | 672,000 | | | | 1,545,310 | |
| | |
Novatek Microelectronics Corp. | | | 1,008,000 | | | | 6,490,301 | |
| | |
Taiwan Semiconductor Manufacturing Co. Ltd. | | | 462,222 | | | | 4,532,556 | |
| | |
Tokyo Electron Ltd. | | | 17,600 | | | | 3,593,913 | |
| | |
Vanguard International Semiconductor Corp. | | | 1,520,000 | | | | 3,255,663 | |
| | | | | | | | 22,127,619 | |
|
| Software – 1.0% | |
| | |
Micro Focus International plc | | | 57,792 | | | | 792,698 | |
| | |
Oracle Corp. Japan | | | 10,300 | | | | 912,761 | |
| | |
SAP SE | | | 5,040 | | | | 667,997 | |
| | |
Trend Micro, Inc. | | | 110,900 | | | | 5,642,200 | |
| | | | | | | | 8,015,656 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Specialty Retail – 0.9% | |
| | |
Hennes & Mauritz AB, Class B | | | 325,920 | | | $ | 6,825,027 | |
|
| Technology Hardware, Storage & Peripherals – 2.4% | |
| | |
Brother Industries Ltd. | | | 134,400 | | | | 2,554,849 | |
| | |
Canon, Inc. | | | 235,200 | | | | 6,444,312 | |
| | |
Chicony Electronics Co. Ltd. | | | 336,000 | | | | 1,045,292 | |
| | |
Compal Electronics, Inc. | | | 2,688,000 | | | | 1,607,122 | |
| | |
Inventec Corp. | | | 2,016,000 | | | | 1,463,629 | |
| | |
Lite-On Technology Corp. | | | 1,008,000 | | | | 1,662,312 | |
| | |
Samsung Electronics Co. Ltd. | | | 80,976 | | | | 3,507,835 | |
| | | | | | | | 18,285,351 | |
|
| Textiles, Apparel & Luxury Goods – 1.3% | |
| | |
HUGO BOSS AG | | | 98,112 | | | | 4,128,780 | |
| | |
Kering SA | | | 9,408 | | | | 5,355,077 | |
| | |
LVMH Moet Hennessy Louis Vuitton SE | | | 1,008 | | | | 430,150 | |
| | | | | | | | 9,914,007 | |
|
| Tobacco – 2.7% | |
| | |
British American Tobacco Malaysia Bhd. | | | 235,200 | | | | 1,059,343 | |
| | |
British American Tobacco plc | | | 206,640 | | | | 7,224,936 | |
| | |
Imperial Brands plc | | | 244,608 | | | | 5,356,831 | |
| | |
Japan Tobacco, Inc. | | | 302,400 | | | | 6,870,121 | |
| | |
KT&G Corp. | | | 1,008 | | | | 86,639 | |
| | | | | | | | 20,597,870 | |
|
| Trading Companies & Distributors – 2.0% | |
| | |
ITOCHU Corp. | | | 134,400 | | | | 2,823,388 | |
| | |
Marubeni Corp. | | | 840,000 | | | | 5,950,437 | |
| | |
Sumitomo Corp. | | | 403,200 | | | | 6,575,474 | |
| | | | | | | | 15,349,299 | |
|
| Transportation Infrastructure – 2.3% | |
| | |
Aena SME SA(b) | | | 31,584 | | | | 5,796,436 | |
| | |
ALEATICA SAB de CV(a) | | | 1,524,412 | | | | 1,590,248 | |
| | |
Sydney Airport | | | 736,848 | | | | 4,457,179 | |
| | |
TAV Havalimanlari Holding A/S | | | 1,331,568 | | | | 6,079,123 | |
| | | | | | | | 17,922,986 | |
|
| Wireless Telecommunication Services – 2.2% | |
| | |
Intouch Holdings PCL, NVDR | | | 1,377,600 | | | | 3,011,147 | |
| | |
Mobile TeleSystems PJSC | | | 408,552 | | | | 1,817,310 | |
See Accompanying Notes to the Financial Statements.
| | |
| 314 | | FLEXSHARES ANNUAL REPORT |
FlexShares® International Quality Dividend Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Wireless Telecommunication Services – (continued) | |
| | |
NTT DOCOMO, Inc. | | | 268,800 | | | $ | 7,397,253 | |
| | |
Vodafone Group plc | | | 2,368,464 | | | | 4,823,983 | |
| | | | | | | | 17,049,693 | |
Total Common Stocks
(Cost $734,373,572) | | | | 758,807,569 | |
| | | Principal
Amount | | | | |
|
| SECURITIES LENDING REINVESTMENTS(c) – 0.1% | |
|
| REPURCHASE AGREEMENTS – 0.1% | |
| | |
Citigroup Global Markets, Inc., 1.72%, dated 10/31/2019, due 11/1/2019, repurchase price $687,279, collateralized by various U.S. Treasury Securities, ranging from 0.38% – 6.88%, maturing 11/30/2020 – 9/30/2025; total market value $703,588
(Cost $687,246) | | $ | 687,246 | | | | 687,246 | |
Total Investments – 98.0%
(Cost $735,060,818) | | | | 759,494,815 | |
| |
Other Assets Less Liabilities – 2.0% | | | | 15,189,811 | |
| NET ASSETS – 100.0% | | | $ | 774,684,626 | |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $24,830,474, collateralized in the form of cash with a value of $687,246 that was reinvested in the securities shown in the |
| | Securities Lending Reinvestment section of the Schedule of Investments; $4,090,670 of collateral in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 4.38%, and maturity dates ranging from November 14, 2019 – February 15, 2049 and $22,140,196 of collateral in the form of Foreign Government Fixed Income Securities, interest rates ranging from 0.00% – 5.75%, and maturity dates ranging from November 25, 2019 – October 22, 2071; a total value of $26,918,112. |
| (b) | Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States and as such may have restrictions on resale. |
| (c) | The security was purchased with cash collateral held from securities on loan at October 31, 2019. The total value of securities purchased was $687,246. |
Percentages shown are based on Net Assets.
Abbreviations
CVA – Dutch Certification
NVDR –Non-Voting Depositary Receipt
OYJ – Public Limited Company
PJSC – Public Joint Stock Company
Preference – A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 64,932,371 | |
Aggregate gross unrealized depreciation | | | (42,934,443 | ) |
Net unrealized appreciation | | $ | 21,997,928 | |
Federal income tax cost | | $ | 737,774,884 | |
Futures Contracts
FlexShares® International Quality Dividend Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional Amount | | | Value and Unrealized
Appreciation/ (Depreciation)* | |
Long Contracts | | | | | |
EURO STOXX 50 Index | | | 106 | | | | 12/20/2019 | | | | EUR | | | $ | 4,267,963 | | | $ | 111,685 | |
FTSE 100 Index | | | 30 | | | | 12/20/2019 | | | | GBP | | | | 2,812,897 | | | | (19,996 | ) |
Hang Seng Index | | | 2 | | | | 11/28/2019 | | | | HKD | | | | 344,285 | | | | 2,481 | |
MSCI Emerging MarketsE-Mini Index | | | 68 | | | | 12/20/2019 | | | | USD | | | | 3,540,760 | | | | 63,149 | |
S&P/TSX 60 Index | | | 6 | | | | 12/19/2019 | | | | CAD | | | | 899,212 | | | | (1,599 | ) |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 315 | |
FlexShares® International Quality Dividend Index Fund (cont.)
Futures Contracts (cont.)
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional Amount | | | Value and Unrealized
Appreciation/ (Depreciation)* | |
SPI 200 Index | | | 12 | | | | 12/19/2019 | | | | AUD | | | | 1,372,182 | | | $ | (3,164 | ) |
TOPIX Index | | | 17 | | | | 12/12/2019 | | | | JPY | | | | 2,623,792 | | | | 198,026 | |
| | | | | | | | | | | | | | | | | | | $ | 350,582 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Forward Foreign Currency Contracts
FlexShares® International Quality Dividend Index Fund had the following outstanding contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity
Date | | | Unrealized
Appreciation/
(Depreciation) | |
CAD | | | 274,850 | | | | | Toronto-Dominion Bank (The) | | USD | | | 208,365 | | | | 12/18/2019 | | | $ | 795 | |
CHF | | | 168,813 | | | | | Morgan Stanley | | USD | | | 171,000 | | | | 12/18/2019 | | | | 699 | |
EUR | | | 238,003 | | | | | Goldman Sachs & Co. | | USD | | | 262,190 | | | | 12/18/2019 | | | | 4,179 | |
EUR | | | 192,110 | | | | | Morgan Stanley | | USD | | | 214,000 | | | | 12/18/2019 | | | | 1,005 | |
GBP | | | 157,095 | | | | | Toronto-Dominion Bank (The) | | USD | | | 194,000 | | | | 12/18/2019 | | | | 9,593 | |
KRW* | | | 351,449,680 | | | | | Citibank NA | | USD | | | 296,000 | | | | 12/18/2019 | | | | 6,403 | |
RUB* | | | 49,982,471 | | | | | Morgan Stanley | | USD | | | 770,000 | | | | 12/18/2019 | | | | 5,233 | |
SEK | | | 4,369,945 | | | | | Toronto-Dominion Bank (The) | | USD | | | 453,698 | | | | 12/18/2019 | | | | 1,102 | |
SGD | | | 17,194 | | | | | JPMorgan Chase Bank | | USD | | | 12,472 | | | | 12/18/2019 | | | | 168 | |
TRY | | | 3,180,031 | | | | | Citibank NA | | USD | | | 545,000 | | | | 12/18/2019 | | | | 5,085 | |
TWD* | | | 15,210,100 | | | | | Morgan Stanley | | USD | | | 500,000 | | | | 12/18/2019 | | | | 668 | |
USD | | | 27,449 | | | | | Bank of New York | | HKD | | | 215,122 | | | | 12/18/2019 | | | | 8 | |
USD | | | 824,000 | | | | | Toronto-Dominion Bank (The) | | JPY | | | 88,678,391 | | | | 12/18/2019 | | | | 1,254 | |
USD | | | 210,000 | | | | | Toronto-Dominion Bank (The) | | NOK | | | 1,896,397 | | | | 12/18/2019 | | | | 3,383 | |
USD | | | 26,874 | | | | | JPMorgan Chase Bank | | ZAR | | | 399,672 | | | | 12/18/2019 | | | | 503 | |
Total unrealized appreciation | | | | | | | $ | 40,078 | |
JPY | | | 38,420,226 | | | | | Goldman Sachs & Co. | | USD | | | 358,850 | | | | 12/18/2019 | | | $ | (2,392 | ) |
JPY | | | 54,714,589 | | | | | Morgan Stanley | | USD | | | 509,000 | | | | 12/18/2019 | | | | (1,366 | ) |
NOK | | | 2,656,372 | | | | | Citibank NA | | USD | | | 298,000 | | | | 12/18/2019 | | | | (8,581 | ) |
NOK | | | 902,040 | | | | | Toronto-Dominion Bank (The) | | USD | | | 100,675 | | | | 12/18/2019 | | | | (2,396 | ) |
USD | | | 319,848 | | | | | Morgan Stanley | | AUD | | | 464,658 | | | | 12/18/2019 | | | | (668 | ) |
USD | | | 674,081 | | | | | Goldman Sachs & Co. | | BRL* | | | 2,783,346 | | | | 12/18/2019 | | | | (17,448 | ) |
USD | | | 103,497 | | | | | Morgan Stanley | | CHF | | | 101,919 | | | | 12/18/2019 | | | | (165 | ) |
USD | | | 350,000 | | | | | Toronto-Dominion Bank (The) | | CHF | | | 345,018 | | | | 12/18/2019 | | | | (917 | ) |
USD | | | 324,673 | | | | | BNP Paribas SA | | CZK | | | 7,627,008 | | | | 12/18/2019 | | | | (9,169 | ) |
USD | | | 643,081 | | | | | Citibank NA | | GBP | | | 521,340 | | | | 12/18/2019 | | | | (32,569 | ) |
USD | | | 100,669 | | | | | Toronto-Dominion Bank (The) | | INR* | | | 7,340,681 | | | | 12/18/2019 | | | | (2,378 | ) |
USD | | | 250,780 | | | | | Morgan Stanley | | KRW* | | | 298,079,395 | | | | 12/18/2019 | | | | (5,701 | ) |
USD | | | 110,000 | | | | | Toronto-Dominion Bank (The) | | NZD | | | 174,054 | | | | 12/18/2019 | | | | (1,713 | ) |
USD | | | 178,643 | | | | | Goldman Sachs & Co. | | RUB* | | | 11,833,870 | | | | 12/18/2019 | | | | (4,902 | ) |
USD | | | 250,000 | | | | | Morgan Stanley | | TRY | | | 1,479,388 | | | | 12/18/2019 | | | | (5,906 | ) |
USD | | | 622,069 | | | | | Toronto-Dominion Bank (The) | | TWD* | | | 19,272,463 | | | | 12/18/2019 | | | | (12,319 | ) |
See Accompanying Notes to the Financial Statements.
| | |
| 316 | | FLEXSHARES ANNUAL REPORT |
FlexShares® International Quality Dividend Index Fund (cont.)
Forward Foreign Currency Contracts (cont.)
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity
Date | | | Unrealized
Appreciation/
(Depreciation) | |
ZAR | | | 2,423,756 | | | | | Morgan Stanley | | USD | | | 164,000 | | | | 12/18/2019 | | | $ | (4,073 | ) |
Total unrealized depreciation | | | | | | | $ | (112,663 | ) |
Net unrealized depreciation | | | | | | | $ | (72,585 | ) |
| * | Non-deliverable forward. See Note 2 in the Notes to Financial Statements. |
Abbreviations:
AUD – Australian Dollar
BRL – Brazilian Real
CAD – Canadian Dollar
CHF – Swiss Franc
CZK – Czech Koruna
EUR – Euro
GBP – British Pound
HKD – Hong Kong Dollar
INR – Indian Rupee
JPY – Japanese Yen
KRW – Korean Won
NOK – Norwegian Krone
NZD – New Zealand Dollar
RUB – Russian Ruble
SEK – Swedish Krona
SGD – Singapore Dollar
TRY – Turkish Lira
TWD – Taiwan Dollar
USD – US Dollar
ZAR – South African Rand
FlexShares® International Quality Dividend Index Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Australia | | | 7.0 | % |
Belgium | | | 1.2 | |
Brazil | | | 0.7 | |
Canada | | | 4.6 | |
Chile | | | 0.2 | |
China | | | 5.3 | |
Colombia | | | 0.8 | |
Czech Republic | | | 0.7 | |
Denmark | | | 0.8 | |
Finland | | | 2.5 | |
France | | | 5.4 | |
Germany | | | 2.8 | |
Hong Kong | | | 1.5 | |
India | | | 0.7 | |
Indonesia | | | 0.6 | |
Italy | | | 2.2 | |
Japan | | | 13.9 | |
Malaysia | | | 0.1 | |
Mexico | | | 0.2 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 317 | |
FlexShares® International Quality Dividend Index Fund (cont.)
| | | | |
Netherlands | | | 1.5 | % |
New Zealand | | | 0.8 | |
Norway | | | 2.7 | |
Poland | | | 0.7 | |
Russia | | | 3.8 | |
South Africa | | | 1.4 | |
South Korea | | | 1.0 | |
Spain | | | 2.8 | |
Sweden | | | 3.5 | |
Switzerland | | | 4.8 | |
Taiwan | | | 6.2 | |
Thailand | | | 1.0 | |
Turkey | | | 3.2 | |
United Kingdom | | | 13.3 | |
Other1 | | | 2.1 | |
| | | | 100.0 | % |
| 1 | Includes anynon-equity securities, securities lending reinvestments and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | |
| 318 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® International Quality Dividend Defensive Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 98.9% | |
|
| Airlines – 0.7% | |
| | |
Japan Airlines Co. Ltd. | | | 18,000 | | | $ | 561,787 | |
|
| Auto Components – 1.3% | |
| | |
Bridgestone Corp. | | | 18,000 | | | | 753,101 | |
| | |
Nokian Renkaat OYJ | | | 10,044 | | | | 286,863 | |
| | | | | | | | 1,039,964 | |
|
| Automobiles – 1.3% | |
| | |
Ford Otomotiv Sanayi A/S | | | 11,304 | | | | 127,633 | |
| | |
Subaru Corp. | | | 7,800 | | | | 225,331 | |
| | |
Tofas Turk Otomobil Fabrikasi A/S | | | 160,524 | | | | 628,883 | |
| | | | | | | | 981,847 | |
|
| Banks – 13.0% | |
| | |
ABN AMRO Bank NV, CVA(a) | | | 10,188 | | | | 189,703 | |
| | |
Australia & New Zealand Banking Group Ltd. | | | 26,064 | | | | 480,165 | |
| | |
Bank of China Ltd., Class H | | | 720,000 | | | | 294,882 | |
| | |
Bank of Communications Co. Ltd., Class H | | | 180,000 | | | | 123,097 | |
| | |
Bank Polska Kasa Opieki SA | | | 5,760 | | | | 162,760 | |
| | |
China Minsheng Banking Corp. Ltd., Class H | | | 252,000 | | | | 176,516 | |
| | |
Commonwealth Bank of Australia | | | 16,416 | | | | 889,629 | |
| | |
Danske Bank A/S | | | 44,352 | | | | 633,127 | |
| | |
DNB ASA | | | 12,060 | | | | 219,495 | |
| | |
Grupo Financiero Banorte SAB de CV, Class O | | | 111,600 | | | | 611,204 | |
| | |
KBC Group NV | | | 9,180 | | | | 643,996 | |
| | |
National Australia Bank Ltd. | | | 27,324 | | | | 538,579 | |
| | |
National Bank of Canada | | | 9,612 | | | | 497,438 | |
| | |
Nordea Bank Abp | | | 31,068 | | | | 227,763 | |
| | |
Royal Bank of Canada(b) | | | 19,764 | | | | 1,597,540 | |
| | |
Sberbank of Russia PJSC | | | 209,880 | | | | 769,436 | |
| | |
Sberbank of Russia PJSC (Preference) | | | 55,224 | | | | 183,200 | |
| | |
Skandinaviska Enskilda Banken AB, Class A | | | 64,368 | | | | 618,138 | |
| | |
Swedbank AB, Class A | | | 47,196 | | | | 661,576 | |
| | |
Toronto-Dominion Bank (The) | | | 756 | | | | 43,260 | |
| | |
Westpac Banking Corp. | | | 33,012 | | | | 641,597 | |
| | | | | | | | 10,203,101 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Beverages – 0.7% | |
| | |
Coca-Cola Amatil Ltd. | | | 78,948 | | | $ | 552,071 | |
| | |
Diageo plc | | | 540 | | | | 22,112 | |
| | | | | | | | 574,183 | |
|
| Capital Markets – 0.8% | |
| | |
CI Financial Corp. | | | 12,420 | | | | 181,148 | |
| | |
Natixis SA | | | 43,020 | | | | 197,308 | |
| | |
Singapore Exchange Ltd. | | | 43,200 | | | | 283,778 | |
| | | | | | | | 662,234 | |
|
| Chemicals – 0.3% | |
| | |
Israel Chemicals Ltd. | | | 5,472 | | | | 24,304 | |
| | |
Sinopec Shanghai Petrochemical Co. Ltd., Class H | | | 792,000 | | | | 220,289 | |
| | | | | | | | 244,593 | |
|
| Commercial Services & Supplies – 0.8% | |
| | |
Edenred | | | 828 | | | | 43,601 | |
| | |
Societe BIC SA(b) | | | 8,784 | | | | 610,042 | |
| | | | | | | | 653,643 | |
|
| Construction & Engineering – 0.5% | |
| | |
CIMIC Group Ltd. | | | 15,768 | | | | 358,600 | |
| | |
HOCHTIEF AG | | | 252 | | | | 31,432 | |
| | | | | | | | 390,032 | |
|
| Diversified Financial Services – 0.7% | |
| | |
REC Ltd. | | | 275,724 | | | | 543,450 | |
|
| Diversified Telecommunication Services – 4.7% | |
| | |
BCE, Inc. | | | 3,888 | | | | 184,823 | |
| | |
BT Group plc | | | 109,404 | | | | 289,791 | |
| | |
Deutsche Telekom AG (Registered) | | | 31,392 | | | | 552,235 | |
| | |
Nippon Telegraph & Telephone Corp. | | | 6,300 | | | | 313,295 | |
| | |
O2 Czech Republic A/S | | | 57,492 | | | | 543,151 | |
| | |
Proximus SADP | | | 6,264 | | | | 192,392 | |
| | |
Spark New Zealand Ltd. | | | 220,968 | | | | 634,846 | |
| | |
Telefonica Deutschland Holding AG | | | 65,988 | | | | 209,447 | |
| | |
Telenor ASA | | | 30,060 | | | | 563,633 | |
| | |
Telia Co. AB | | | 45,324 | | | | 199,704 | |
| | | | | | | | 3,683,317 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 319 | |
FlexShares® International Quality Dividend Defensive Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Electric Utilities – 4.8% | |
| | |
Emera, Inc.(b) | | | 3,816 | | | $ | 158,319 | |
| | |
Endesa SA | | | 22,824 | | | | 621,312 | |
| | |
Enel SpA | | | 153,000 | | | | 1,184,619 | |
| | |
Federal Grid Co. Unified Energy System PJSC | | | 218,301,300 | | | | 628,622 | |
| | |
Fortis, Inc. | | | 5,071 | | | | 211,120 | |
| | |
Fortum OYJ | | | 8,676 | | | | 211,881 | |
| | |
SSE plc | | | 44,640 | | | | 741,403 | |
| | | | | | | | 3,757,276 | |
|
| Electrical Equipment – 0.1% | |
| | |
Signify NV(a) (b) | | | 2,304 | | | | 67,449 | |
|
| Electronic Equipment, Instruments & Components – 1.4% | |
| | |
AU Optronics Corp. | | | 468,000 | | | | 119,919 | |
| | |
Kingboard Laminates Holdings Ltd. | | | 18,000 | | | | 16,535 | |
| | |
Walsin Technology Corp. | | | 36,000 | | | | 217,014 | |
| | |
Yageo Corp. | | | 72,000 | | | | 742,695 | |
| | | | | | | | 1,096,163 | |
|
| Equity Real Estate Investment Trusts (REITs) – 2.9% | |
| | |
Growthpoint Properties Ltd. | | | 113,829 | | | | 167,077 | |
| | |
H&R REIT | | | 9,468 | | | | 160,495 | |
| | |
Hui Xian REIT | | | 324,032 | | | | 150,608 | |
| | |
Japan Retail Fund Investment Corp. | | | 72 | | | | 167,837 | |
| | |
Klepierre SA | | | 5,832 | | | | 217,251 | |
| | |
Link REIT | | | 38,500 | | | | 419,744 | |
| | |
Redefine Properties Ltd. | | | 294,228 | | | | 147,275 | |
| | |
RioCan REIT | | | 8,244 | | | | 165,777 | |
| | |
Scentre Group | | | 13,968 | | | | 36,857 | |
| | |
Stockland | | | 57,492 | | | | 193,688 | |
| | |
United Urban Investment Corp. | | | 216 | | | | 435,576 | |
| | | | | | | | 2,262,185 | |
|
| Food Products – 3.9% | |
| | |
Nestle SA (Registered) | | | 17,820 | | | | 1,902,004 | |
| | |
Salmar ASA | | | 11,844 | | | | 552,777 | |
| | |
Uni-President Enterprises Corp. | | | 237,000 | | | | 585,483 | |
| | | | | | | | 3,040,264 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Gas Utilities – 0.8% | |
| | |
Enagas SA | | | 25,884 | | | $ | 640,791 | |
|
| Health Care Providers & Services – 0.2% | |
| | |
Netcare Ltd. | | | 168,228 | | | | 191,083 | |
|
| Hotels, Restaurants & Leisure – 1.0% | |
| | |
Crown Resorts Ltd. | | | 21,096 | | | | 181,095 | |
| | |
Sands China Ltd. | | | 129,600 | | | | 640,749 | |
| | | | | | | | 821,844 | |
|
| Household Durables – 2.4% | |
| | |
Barratt Developments plc | | | 24,156 | | | | 197,300 | |
| | |
Persimmon plc | | | 26,064 | | | | 767,960 | |
| | |
Taylor Wimpey plc | | | 289,116 | | | | 619,162 | |
| | |
Woongjin Coway Co. Ltd. | | | 3,780 | | | | 298,254 | |
| | | | | | | | 1,882,676 | |
|
Independent Power and Renewable Electricity
Producers – 0.2% | |
| | |
AES Gener SA | | | 536,148 | | | | 115,041 | |
|
| Insurance – 8.5% | |
| | |
Admiral Group plc | | | 7,776 | | | | 203,457 | |
| | |
Aegon NV | | | 36,528 | | | | 157,957 | |
| | |
Assicurazioni Generali SpA | | | 13,788 | | | | 279,578 | |
| | |
BB Seguridade Participacoes SA | | | 18,000 | | | | 152,317 | |
| | |
Direct Line Insurance Group plc | | | 162,000 | | | | 570,398 | |
| | |
Japan Post Holdings Co. Ltd. | | | 21,600 | | | | 199,007 | |
| | |
Legal & General Group plc | | | 68,760 | | | | 234,628 | |
| | |
MS&AD Insurance Group Holdings, Inc. | | | 18,000 | | | | 584,265 | |
| | |
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Registered) | | | 2,772 | | | | 770,053 | |
| | |
Orange Life Insurance Ltd.(a) | | | 19,584 | | | | 471,315 | |
| | |
Poste Italiane SpA(a) | | | 55,260 | | | | 670,761 | |
| | |
Power Financial Corp. | | | 8,388 | | | | 196,561 | |
| | |
Powszechny Zaklad Ubezpieczen SA | | | 56,916 | | | | 551,257 | |
| | |
Sampo OYJ, Class A | | | 15,300 | | | | 627,131 | |
| | |
Tokio Marine Holdings, Inc. | | | 7,200 | | | | 390,820 | |
| | |
Zurich Insurance Group AG | | | 1,584 | | | | 618,832 | |
| | | | | | | | 6,678,337 | |
See Accompanying Notes to the Financial Statements.
| | |
| 320 | | FLEXSHARES ANNUAL REPORT |
FlexShares® International Quality Dividend Defensive Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Interactive Media & Services – 0.7% | |
| | |
Tencent Holdings Ltd. | | | 12,600 | | | $ | 515,723 | |
|
| IT Services – 0.7% | |
| | |
Otsuka Corp. | | | 14,400 | | | | 584,765 | |
|
| Machinery – 2.5% | |
| | |
Alstom SA | | | 13,428 | | | | 580,512 | |
| | |
FANUC Corp. | | | 1,000 | | | | 199,806 | |
| | |
Kone OYJ, Class B | | | 11,088 | | | | 705,603 | |
| | |
Sinotruk Hong Kong Ltd.(b) | | | 162,000 | | | | 245,552 | |
| | |
Zoomlion Heavy Industry Science and Technology Co. Ltd., Class H | | | 331,200 | | | | 243,824 | |
| | | | | | | | 1,975,297 | |
|
| Media – 1.0% | |
| | |
Eutelsat Communications SA | | | 32,904 | | | | 624,059 | |
| | |
ProSiebenSat.1 Media SE | | | 13,068 | | | | 193,030 | |
| | | | | | | | 817,089 | |
|
| Metals & Mining – 5.5% | |
| | |
Alrosa PJSC | | | 89,856 | | | | 104,496 | |
| | |
Alumina Ltd.(b) | | | 345,060 | | | | 539,645 | |
| | |
Eregli Demir ve Celik Fabrikalari TAS | | | 515,700 | | | | 590,398 | |
| | |
Evraz plc | | | 93,780 | | | | 445,602 | |
| | |
Kumba Iron Ore Ltd. | | | 16,200 | | | | 395,743 | |
| | |
Maanshan Iron & Steel Co. Ltd., Class H(b) | | | 1,152,000 | | | | 436,536 | |
| | |
Magnitogorsk Iron & Steel Works PJSC | | | 958,284 | | | | 546,362 | |
| | |
Novolipetsk Steel PJSC | | | 263,088 | | | | 513,437 | |
| | |
Rio Tinto plc | | | 9,648 | | | | 501,129 | |
| | |
Severstal PJSC | | | 15,422 | | | | 212,346 | |
| | |
Severstal PJSC, GDR(a) | | | 238 | | | | 3,251 | |
| | | | | | | | 4,288,945 | |
|
| Multiline Retail – 0.4% | |
| | |
Wesfarmers Ltd. | | | 10,872 | | | | 297,813 | |
|
| Multi-Utilities – 0.2% | |
| | |
Engie SA | | | 8,856 | | | | 148,154 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Oil, Gas & Consumable Fuels – 8.3% | |
| | |
Aker BP ASA(b) | | | 1,188 | | | $ | 32,853 | |
| | |
BP plc | | | 184,860 | | | | 1,170,449 | |
| | |
Bukit Asam Tbk. PT | | | 3,193,200 | | | | 511,840 | |
| | |
Canadian Natural Resources Ltd. | | | 7,092 | | | | 179,195 | |
| | |
China Petroleum & Chemical Corp., Class H | | | 288,000 | | | | 165,355 | |
| | |
China Shenhua Energy Co. Ltd., Class H | | | 169,000 | | | | 343,705 | |
| | |
Coal India Ltd. | | | 157,176 | | | | 459,925 | |
| | |
Eni SpA | | | 23,292 | | | | 352,626 | |
| | |
Equinor ASA | | | 14,220 | | | | 263,454 | |
| | |
Exxaro Resources Ltd. | | | 17,316 | | | | 141,749 | |
| | |
Inter Pipeline Ltd. | | | 9,792 | | | | 164,721 | |
| | |
Neste OYJ | | | 18,072 | | | | 652,443 | |
| | |
Royal Dutch Shell plc, Class A | | | 20,412 | | | | 589,805 | |
| | |
Royal Dutch Shell plc, Class B | | | 2,412 | | | | 69,226 | |
| | |
TOTAL SA | | | 21,096 | | | | 1,109,358 | |
| | |
Tupras Turkiye Petrol Rafinerileri A/S | | | 7,272 | | | | 158,487 | |
| | |
Yanzhou Coal Mining Co. Ltd., Class H | | | 144,000 | | | | 146,431 | |
| | | | | | | | 6,511,622 | |
|
| Personal Products – 0.2% | |
| | |
L’Oreal SA | | | 648 | | | | 189,266 | |
|
| Pharmaceuticals – 7.0% | |
| | |
Astellas Pharma, Inc. | | | 46,800 | | | | 804,568 | |
| | |
AstraZeneca plc | | | 828 | | | | 80,368 | |
| | |
GlaxoSmithKline plc | | | 92,880 | | | | 2,125,622 | |
| | |
H Lundbeck A/S | | | 4,716 | | | | 160,943 | |
| | |
Novartis AG (Registered) | | | 7,956 | | | | 694,129 | |
| | |
Orion OYJ, Class B | | | 12,816 | | | | 568,209 | |
| | |
Roche Holding AG | | | 3,600 | | | | 1,082,828 | |
| | | | | | | | 5,516,667 | |
|
| Professional Services – 0.9% | |
| | |
Recruit Holdings Co. Ltd. | | | 22,000 | | | | 734,860 | |
|
| Real Estate Management & Development – 2.0% | |
| | |
Agile Group Holdings Ltd. | | | 144,000 | | | | 194,751 | |
| | |
Daito Trust Construction Co. Ltd. | | | 4,400 | | | | 584,876 | |
| | |
Land & Houses PCL, NVDR | | | 1,584,000 | | | | 508,852 | |
| | |
Shui On Land Ltd. | | | 702,000 | | | | 141,516 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 321 | |
FlexShares® International Quality Dividend Defensive Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Real Estate Management & Development – (continued) | |
| | |
Yuzhou Properties Co. Ltd. | | | 344,174 | | | $ | 145,790 | |
| | | | | | | | 1,575,785 | |
|
| Road & Rail – 0.8% | |
| | |
Aurizon Holdings Ltd. | | | 145,188 | | | | 590,161 | |
|
| Semiconductors & Semiconductor Equipment – 1.6% | |
| | |
Nanya Technology Corp. | | | 72,000 | | | | 165,569 | |
| | |
Novatek Microelectronics Corp. | | | 108,000 | | | | 695,389 | |
| | |
Taiwan Semiconductor Manufacturing Co. Ltd. | | | 44,000 | | | | 431,465 | |
| | | | | | | | 1,292,423 | |
|
| Software – 0.7% | |
| | |
Micro Focus International plc | | | 9,036 | | | | 123,941 | |
| | |
SAP SE | | | 648 | | | | 85,885 | |
| | |
Trend Micro, Inc. | | | 7,200 | | | | 366,311 | |
| | | | | | | | 576,137 | |
|
| Specialty Retail – 2.3% | |
| | |
Hennes & Mauritz AB, Class B | | | 33,084 | | | | 692,805 | |
| | |
Petrobras Distribuidora SA | | | 72,000 | | | | 507,214 | |
| | |
Truworths International Ltd. | | | 161,640 | | | | 574,837 | |
| | | | | | | | 1,774,856 | |
|
| Technology Hardware, Storage & Peripherals – 2.4% | |
| | |
Asustek Computer, Inc. | | | 23,000 | | | | 156,026 | |
| | |
Canon, Inc. | | | 25,200 | | | | 690,462 | |
| | |
Catcher Technology Co. Ltd. | | | 18,000 | | | | 152,560 | |
| | |
Compal Electronics, Inc. | | | 252,000 | | | | 150,668 | |
| | |
Inventec Corp. | | | 216,000 | | | | 156,817 | |
| | |
Konica Minolta, Inc. | | | 10,800 | | | | 79,822 | |
| | |
Lite-On Technology Corp. | | | 108,000 | | | | 178,105 | |
| | |
Samsung Electronics Co. Ltd. | | | 8,136 | | | | 352,447 | |
| | | | | | | | 1,916,907 | |
|
| Textiles, Apparel & Luxury Goods – 1.5% | |
| | |
HUGO BOSS AG | | | 10,368 | | | | 436,309 | |
| | |
LVMH Moet Hennessy Louis Vuitton SE | | | 144 | | | | 61,450 | |
| | |
Pandora A/S | | | 14,580 | | | | 717,285 | |
| | | | | | | | 1,215,044 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Thrifts & Mortgage Finance – 0.1% | |
| | |
Indiabulls Housing Finance Ltd. | | | 20,124 | | | $ | 58,631 | |
|
| Tobacco – 2.6% | |
| | |
British American Tobacco Malaysia Bhd. | | | 39,600 | | | | 178,359 | |
| | |
British American Tobacco plc | | | 20,268 | | | | 708,648 | |
| | |
Imperial Brands plc | | | 23,760 | | | | 520,336 | |
| | |
Japan Tobacco, Inc. | | | 28,800 | | | | 654,297 | |
| | | | | | | | 2,061,640 | |
|
| Trading Companies & Distributors – 1.5% | |
| | |
ITOCHU Corp.(b) | | | 32,400 | | | | 680,638 | |
| | |
Marubeni Corp. | | | 7,200 | | | | 51,004 | |
| | |
Sumitomo Corp. | | | 25,400 | | | | 414,229 | |
| | | | | | | | 1,145,871 | |
|
| Transportation Infrastructure – 2.2% | |
| | |
ALEATICA SAB de CV(b) | | | 458,180 | | | | 477,968 | |
| | |
Sydney Airport | | | 103,068 | | | | 623,456 | |
| | |
TAV Havalimanlari Holding A/S | | | 139,572 | | | | 637,200 | |
| | | | | | | | 1,738,624 | |
|
| Wireless Telecommunication Services – 2.8% | |
| | |
China Mobile Ltd. | | | 11,500 | | | | 93,612 | |
| | |
KDDI Corp. | | | 32,400 | | | | 898,826 | |
| | |
Mobile TeleSystems PJSC | | | 40,320 | | | | 179,350 | |
| | |
NTT DOCOMO, Inc. | | | 26,800 | | | | 737,524 | |
| | |
PLDT, Inc. | | | 3,240 | | | | 70,234 | |
| | |
Vodafone Group plc | | | 106,740 | | | | 217,403 | |
| | | | | | | | 2,196,949 | |
Total Common Stocks
(Cost $75,609,651) | | | | 77,814,489 | |
| | | | | | | | | |
Total Investments – 98.9%
(Cost $75,609,651) | | | | 77,814,489 | |
| |
Other Assets Less Liabilities – 1.1% | | | | 904,366 | |
| NET ASSETS – 100.0% | | | $ | 78,718,855 | |
| (a) | Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States and as such may have restrictions on resale. |
| (b) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $3,787,100, collateralized by $251,825 in U.S. Government |
See Accompanying Notes to the Financial Statements.
| | |
| 322 | | FLEXSHARES ANNUAL REPORT |
FlexShares® International Quality Dividend Defensive Index Fund (cont.)
| | Treasury Securities, interest rates ranging from 0.00% – 4.38%, and maturity dates ranging from November 14, 2019 – February 15, 2049 and $3,802,608 in Foreign Government Fixed Income Securities, interest rates ranging from 0.00% – 5.75%, and maturity dates ranging from November 25, 2019 – October 22, 2071; a total value of $4,054,433. |
Percentages shown are based on Net Assets.
Abbreviations
CVA – Dutch Certification
GDR – Global Depositary Receipt
NVDR –Non-Voting Depositary Receipt
OYJ – Public Limited Company
PJSC – Public Joint Stock Company
Preference – A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 6,929,127 | |
Aggregate gross unrealized depreciation | | | (4,946,367 | ) |
Net unrealized appreciation | | $ | 1,982,760 | |
Federal income tax cost | | $ | 75,856,166 | |
Futures Contracts
FlexShares® International Quality Dividend Defensive Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | | | | | |
MSCI EAFEE-Mini Index | | | 8 | | | | 12/20/2019 | | | | USD | | | $ | 782,880 | | | $ | 21,779 | |
MSCI Emerging MarketsE-Mini Index | | | 3 | | | | 12/20/2019 | | | | USD | | | | 156,210 | | | | 3,594 | |
| | | | | | | | | | | | | | | | | | | $ | 25,373 | |
* This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts.
Forward Foreign Currency Contracts
FlexShares® International Quality Dividend Defensive Index Fund had the following outstanding contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | | | |
| Contracts to Receive | | | | | Counterparty | | In Exchange For | | | Maturity Date | | | Unrealized
Depreciation | |
NOK | | | 59,477 | | | | | Toronto-Dominion Bank (The) | | USD | | | 6,638 | | | | 12/18/2019 | | | $ | (158 | ) |
USD | | | 72,527 | | | | | Morgan Stanley | | AUD | | | 105,364 | | | | 12/18/2019 | | | | (151 | ) |
USD | | | 24,218 | | | | | Goldman Sachs & Co. | | BRL* | | | 100,000 | | | | 12/18/2019 | | | | (627 | ) |
Net unrealized depreciation | | | $ | (936 | ) |
| * | Non-deliverable forward. See Note 2 in the Notes to Financial Statements. |
Abbreviations:
AUD – Australian Dollar
BRL – Brazilian Real
NOK – Norwegian Krone
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 323 | |
FlexShares® International Quality Dividend Defensive Index Fund (cont.)
FlexShares® International Quality Dividend Defensive Index Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Australia | | | 7.5 | % |
Belgium | | | 1.1 | |
Brazil | | | 0.8 | |
Canada | | | 4.8 | |
Chile | | | 0.1 | |
China | | | 4.6 | |
Czech Republic | | | 0.7 | |
Denmark | | | 1.9 | |
Finland | | | 3.9 | |
France | | | 4.8 | |
Germany | | | 2.9 | |
Hong Kong | | | 1.3 | |
India | | | 1.4 | |
Indonesia | | | 0.7 | |
Israel | | | 0.0 | † |
Italy | | | 3.2 | |
Japan | | | 14.1 | |
Malaysia | | | 0.2 | |
Mexico | | | 1.4 | |
Netherlands | | | 0.5 | |
New Zealand | | | 0.8 | |
Norway | | | 2.1 | |
Philippines | | | 0.1 | |
Poland | | | 0.9 | |
Russia | | | 4.0 | |
Singapore | | | 0.4 | |
South Africa | | | 2.1 | |
South Korea | | | 1.4 | |
Spain | | | 1.6 | |
Sweden | | | 3.0 | |
Switzerland | | | 5.5 | |
Taiwan | | | 4.8 | |
Thailand | | | 0.6 | |
Turkey | | | 2.7 | |
United Kingdom | | | 13.0 | |
Other1 | | | 1.1 | |
| | | | 100.0 | % |
| † | Amount represents less than 0.05%. |
| 1 | Includes any non-equity securities and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | |
| 324 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® International Quality Dividend Dynamic Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – 98.8% | |
|
| Airlines – 0.4% | |
| | |
Aeroflot PJSC | | | 115,805 | | | $ | 193,215 | |
|
| Auto Components – 3.2% | |
| | |
Faurecia SE | | | 2,299 | | | | 107,161 | |
| | |
Fuyao Glass Industry Group Co. Ltd., Class H(a) | | | 121,600 | | | | 344,427 | |
| | |
Magna International, Inc. | | | 7,410 | | | | 399,267 | |
| | |
Nokian Renkaat OYJ | | | 11,571 | | | | 330,475 | |
| | |
Xinyi Glass Holdings Ltd. | | | 304,000 | | | | 342,488 | |
| | | | | | | | 1,523,818 | |
|
| Automobiles – 1.8% | |
| | |
Fiat Chrysler Automobiles NV | | | 28,424 | | | | 441,674 | |
| | |
Tofas Turk Otomobil Fabrikasi A/S | | | 100,301 | | | | 392,948 | |
| | | | | | | | 834,622 | |
|
| Banks – 10.8% | |
| | |
Agricultural Bank of China Ltd., Class H | | | 266,000 | | | | 109,622 | |
| | |
Australia & New Zealand Banking Group Ltd. | | | 15,466 | | | | 284,923 | |
| | |
Bank of China Ltd., Class H | | | 437,000 | | | | 178,977 | |
| | |
Bank Polska Kasa Opieki SA | | | 3,382 | | | | 95,565 | |
| | |
China Construction Bank Corp., Class H | | | 532,000 | | | | 428,304 | |
| | |
China Merchants Bank Co. Ltd., Class H | | | 76,000 | | | | 363,627 | |
| | |
Danske Bank A/S | | | 17,062 | | | | 243,561 | |
| | |
Industrial & Commercial Bank of China Ltd., Class H | | | 57,000 | | | | 41,017 | |
| | |
ING Groep NV | | | 17,024 | | | | 192,359 | |
| | |
KBC Group NV | | | 5,605 | | | | 393,202 | |
| | |
National Australia Bank Ltd. | | | 15,295 | | | | 301,478 | |
| | |
Nordea Bank Abp | | | 19,266 | | | | 141,241 | |
| | |
Royal Bank of Canada | | | 13,490 | | | | 1,090,408 | |
| | |
Skandinaviska Enskilda Banken AB, Class A | | | 40,527 | | | | 389,189 | |
| | |
Standard Bank Group Ltd. | | | 27,607 | | | | 317,920 | |
| | |
Swedbank AB, Class A | | | 27,303 | | | | 382,723 | |
| | |
Toronto-Dominion Bank (The) | | | 266 | | | | 15,221 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Banks – (continued) | |
| | |
VTB Bank PJSC | | | 250,896,805 | | | $ | 168,736 | |
| | | | | | | | 5,138,073 | |
|
| Beverages – 0.1% | |
| | |
Ambev SA* | | | 11,400 | | | | 49,355 | |
|
| Building Products – 0.1% | |
| | |
Daikin Industries Ltd. | | | 400 | | | | 56,353 | |
|
| Capital Markets – 2.1% | |
| | |
CI Financial Corp. | | | 3,895 | | | | 56,809 | |
| | |
Hong Kong Exchanges & Clearing Ltd. | | | 12,226 | | | | 382,174 | |
| | |
Macquarie Group Ltd. | | | 4,560 | | | | 420,725 | |
| | |
Natixis SA | | | 15,466 | | | | 70,934 | |
| | |
SBI Holdings, Inc. | | | 3,800 | | | | 83,308 | |
| | | | | | | | 1,013,950 | |
|
| Chemicals – 2.0% | |
| | |
Covestro AG(a) | | | 7,448 | | | | 357,718 | |
| | |
Nutrien Ltd. | | | 2,945 | | | | 141,184 | |
| | |
Showa Denko KK | | | 12,000 | | | | 341,335 | |
| | |
Sinopec Shanghai Petrochemical Co. Ltd., Class H | | | 380,000 | | | | 105,694 | |
| | | | | | | | 945,931 | |
|
| Construction & Engineering – 1.0% | |
| | |
ACS Actividades de Construccion y Servicios SA | | | 2,717 | | | | 110,306 | |
| | |
HOCHTIEF AG | | | 3,078 | | | | 383,918 | |
| | | | | | | | 494,224 | |
|
| Construction Materials – 0.6% | |
| | |
China Resources Cement Holdings Ltd. | | | 266,000 | | | | 291,871 | |
|
| Diversified Financial Services – 2.0% | |
| | |
EXOR NV | | | 5,206 | | | | 399,131 | |
| | |
Mitsubishi UFJ Lease & Finance Co. Ltd. | | | 60,800 | | | | 376,256 | |
| | |
Wendel SA | | | 1,216 | | | | 172,292 | |
| | | | | | | | 947,679 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 325 | |
FlexShares® International Quality Dividend Dynamic Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Diversified Telecommunication Services – 2.6% | |
| | |
O2 Czech Republic A/S | | | 20,463 | | | $ | 193,322 | |
| | |
Telefonica Deutschland Holding AG | | | 29,811 | | | | 94,621 | |
| | |
Telefonica SA | | | 52,877 | | | | 405,572 | |
| | |
Telenor ASA | | | 17,385 | | | | 325,973 | |
| | |
Telia Co. AB | | | 26,220 | | | | 115,529 | |
| | |
Telstra Corp. Ltd. | | | 35,435 | | | | 85,201 | |
| | | | | | | | 1,220,218 | |
|
| Electric Utilities – 2.2% | |
| | |
Endesa SA | | | 13,205 | | | | 359,465 | |
| | |
Enel SpA | | | 40,831 | | | | 316,138 | |
| | |
Federal Grid Co. Unified Energy System PJSC | | | 125,812,224 | | | | 362,290 | |
| | | | | | | | 1,037,893 | |
|
| Electrical Equipment – 2.0% | |
| | |
ABB Ltd. (Registered) | | | 3,990 | | | | 83,662 | |
| | |
Fuji Electric Co. Ltd. | | | 11,400 | | | | 365,922 | |
| | |
Mitsubishi Electric Corp. | | | 11,400 | | | | 164,138 | |
| | |
Signify NV(a) | | | 11,495 | | | | 336,512 | |
| | | | | | | | 950,234 | |
|
| Electronic Equipment, Instruments & Components – 1.3% | |
| | |
Omron Corp. | | | 2,300 | | | | 136,164 | |
| | |
Walsin Technology Corp. | | | 12,000 | | | | 72,338 | |
| | |
Yageo Corp. | | | 38,000 | | | | 391,978 | |
| | | | | | | | 600,480 | |
|
| Energy Equipment & Services – 0.1% | |
| | |
John Wood Group plc | | | 5,358 | | | | 23,455 | |
|
| Entertainment – 0.8% | |
| | |
Nintendo Co. Ltd. | | | 1,100 | | | | 392,970 | |
|
| Food & Staples Retailing – 0.5% | |
| | |
President Chain Store Corp. | | | 23,000 | | | | 229,694 | |
|
| Food Products – 2.0% | |
| | |
Danone SA | | | 551 | | | | 45,711 | |
| | |
Nestle SA (Registered) | | | 5,529 | | | | 590,134 | |
| | |
Salmar ASA | | | 6,859 | | | | 320,119 | |
| | | | | | | | 955,964 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Gas Utilities – 0.6% | |
| | |
Enagas SA | | | 12,198 | | | $ | 301,977 | |
|
| Health Care Equipment & Supplies – 0.9% | |
| | |
Hoya Corp. | | | 4,500 | | | | 399,736 | |
|
| Hotels, Restaurants & Leisure – 1.5% | |
| | |
Sands China Ltd. | | | 76,000 | | | | 375,748 | |
| | |
Wynn Macau Ltd. | | | 159,600 | | | | 347,802 | |
| | | | | | | | 723,550 | |
|
| Household Durables – 0.9% | |
| | |
Persimmon plc | | | 15,086 | | | | 444,500 | |
|
| Insurance – 7.8% | |
| | |
Allianz SE (Registered) | | | 3,971 | | | | 970,224 | |
| | |
Aviva plc | | | 72,694 | | | | 390,562 | |
| | |
BB Seguridade Participacoes SA | | | 17,100 | | | | 144,701 | |
| | |
Direct Line Insurance Group plc | | | 93,632 | | | | 329,676 | |
| | |
Legal & General Group plc | | | 39,539 | | | | 134,918 | |
| | |
Old Mutual Ltd. | | | 181,659 | | | | 236,970 | |
| | |
Ping An Insurance Group Co. of China Ltd., Class H | | | 19,000 | | | | 219,994 | |
| | |
Poste Italiane SpA(a) | | | 14,193 | | | | 172,279 | |
| | |
Powszechny Zaklad Ubezpieczen SA | | | 34,637 | | | | 335,475 | |
| | |
Tokio Marine Holdings, Inc. | | | 7,600 | | | | 412,532 | |
| | |
Zurich Insurance Group AG | | | 893 | | | | 348,874 | |
| | | | | | | | 3,696,205 | |
|
| Interactive Media & Services – 0.4% | |
| | |
Tencent Holdings Ltd. | | | 4,900 | | | | 200,559 | |
|
| IT Services – 0.8% | |
| | |
Nomura Research Institute Ltd. | | | 18,600 | | | | 397,619 | |
|
| Machinery – 4.9% | |
| | |
Alstom SA | | | 5,092 | | | | 220,135 | |
| | |
Atlas Copco AB, Class A(b) | | | 13,547 | | | | 479,628 | |
| | |
Atlas Copco AB, Class B | | | 95 | | | | 2,949 | |
| | |
FANUC Corp. | | | 2,300 | | | | 459,553 | |
| | |
Hitachi Construction Machinery Co. Ltd. | | | 3,800 | | | | 99,266 | |
| | |
NSK Ltd. | | | 41,800 | | | | 392,848 | |
| | |
Sinotruk Hong Kong Ltd. | | | 180,500 | | | | 273,593 | |
| | |
SKF AB, Class B | | | 1,102 | | | | 19,966 | |
See Accompanying Notes to the Financial Statements.
| | |
| 326 | | FLEXSHARES ANNUAL REPORT |
FlexShares® International Quality Dividend Dynamic Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Machinery – (continued) | |
| | |
SMC Corp. | | | 900 | | | $ | 392,868 | |
| | | | | | | | 2,340,806 | |
|
| Media – 1.8% | |
| | |
Eutelsat Communications SA | | | 18,943 | | | | 359,274 | |
| | |
ITV plc | | | 241,547 | | | | 418,051 | |
| | |
ProSiebenSat.1 Media SE | | | 5,833 | | | | 86,161 | |
| | | | | | | | 863,486 | |
|
| Metals & Mining – 5.3% | |
| | |
Alumina Ltd. | | | 206,530 | | | | 322,996 | |
| | |
BHP Group plc | | | 6,783 | | | | 143,490 | |
| | |
Cia Siderurgica Nacional SA | | | 87,400 | | | | 256,905 | |
| | |
Eregli Demir ve Celik Fabrikalari TAS | | | 299,364 | | | | 342,726 | |
| | |
Evraz plc | | | 54,967 | | | | 261,180 | |
| | |
Kumba Iron Ore Ltd. | | | 8,797 | | | | 214,898 | |
| | |
Novolipetsk Steel PJSC | | | 121,657 | | | | 237,423 | |
| | |
Rio Tinto plc | | | 7,828 | | | | 406,595 | |
| | |
Severstal PJSC | | | 22,819 | | | | 314,196 | |
| | | | | | | | 2,500,409 | |
|
| Multiline Retail – 0.4% | |
| | |
Wesfarmers Ltd. | | | 6,213 | | | | 170,191 | |
|
| Multi-Utilities – 0.4% | |
| | |
Engie SA | | | 9,994 | | | | 167,191 | |
|
| Oil, Gas & Consumable Fuels – 8.3% | |
| | |
Aker BP ASA(b) | | | 11,267 | | | | 311,581 | |
| | |
BP plc | | | 109,497 | | | | 693,285 | |
| | |
Bukit Asam Tbk. PT | | | 1,875,300 | | | | 300,593 | |
| | |
Canadian Natural Resources Ltd. | | | 9,671 | | | | 244,360 | |
| | |
China Petroleum & Chemical Corp., Class H | | | 190,000 | | | | 109,088 | |
| | |
China Shenhua Energy Co. Ltd., Class H | | | 76,000 | | | | 154,566 | |
| | |
CNOOC Ltd. | | | 190,000 | | | | 285,084 | |
| | |
Ecopetrol SA | | | 411,901 | | | | 370,640 | |
| | |
Eni SpA | | | 13,927 | | | | 210,846 | |
| | |
Equinor ASA | | | 20,900 | | | | 387,214 | |
| | |
OMV AG | | | 6,726 | | | | 392,602 | |
| | |
Suncor Energy, Inc. | | | 8,322 | | | | 247,947 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Tupras Turkiye Petrol Rafinerileri A/S | | | 4,066 | | | $ | 88,615 | |
| | |
Yanzhou Coal Mining Co. Ltd., Class H | | | 114,000 | | | | 115,924 | |
| | | | | | | | 3,912,345 | |
|
| Paper & Forest Products – 0.4% | |
| | |
UPM-Kymmene OYJ | | | 5,833 | | | | 189,631 | |
|
| Personal Products – 2.5% | |
| | |
Kose Corp. | | | 1,900 | | | | 339,207 | |
| | |
L’Oreal SA | | | 2,774 | | | | 810,222 | |
| | |
Pola Orbis Holdings, Inc. | | | 1,900 | | | | 43,271 | |
| | | | | | | | 1,192,700 | |
|
| Pharmaceuticals – 6.3% | |
| | |
Astellas Pharma, Inc. | | | 22,800 | | | | 391,969 | |
| | |
GlaxoSmithKline plc | | | 54,587 | | | | 1,249,260 | |
| | |
Livzon Pharmaceutical Group, Inc., Class H | | | 34,200 | | | | 100,143 | |
| | |
Novartis AG (Registered) | | | 4,028 | | | | 351,427 | |
| | |
Orion OYJ, Class B | | | 9,006 | | | | 399,289 | |
| | |
Roche Holding AG | | | 1,178 | | | | 354,325 | |
| | |
Roche Holding AG – BR | | | 494 | | | | 147,086 | |
| | | | | | | | 2,993,499 | |
|
| Professional Services – 0.9% | |
| | |
Recruit Holdings Co. Ltd. | | | 13,300 | | | | 444,256 | |
|
| Real Estate Management & Development – 3.9% | |
| | |
Agile Group Holdings Ltd. | | | 76,000 | | | | 102,785 | |
| | |
China Resources Land Ltd. | | | 76,000 | | | | 324,355 | |
| | |
Country Garden Holdings Co. Ltd. | | | 266,000 | | | | 370,609 | |
| | |
Daiwa House Industry Co. Ltd. | | | 1,900 | | | | 65,644 | |
| | |
Future Land Development Holdings Ltd.(b) | | | 76,000 | | | | 80,386 | |
| | |
Logan Property Holdings Co. Ltd. | | | 228,000 | | | | 348,500 | |
| | |
Shimao Property Holdings Ltd. | | | 123,500 | | | | 415,202 | |
| | |
Sino Land Co. Ltd. | | | 38,000 | | | | 56,920 | |
| | |
Yuzhou Properties Co. Ltd. | | | 200,667 | | | | 85,001 | |
| | | | | | | | 1,849,402 | |
|
| Semiconductors & Semiconductor Equipment – 5.9% | |
| | |
ASML Holding NV | | | 4,028 | | | | 1,056,052 | |
| | |
Globalwafers Co. Ltd. | | | 38,000 | | | | 455,643 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 327 | |
FlexShares® International Quality Dividend Dynamic Index Fund (cont.)
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| COMMON STOCKS – (continued) | |
|
| Semiconductors & Semiconductor Equipment – (continued) | |
| | |
Nanya Technology Corp. | | | 38,000 | | | $ | 87,384 | |
| | |
Novatek Microelectronics Corp. | | | 57,000 | | | | 367,011 | |
| | |
SUMCO Corp. | | | 7,600 | | | | 128,020 | |
| | |
Taiwan Semiconductor Manufacturing Co. Ltd. | | | 13,000 | | | | 127,478 | |
| | |
Tokyo Electron Ltd. | | | 900 | | | | 183,780 | |
| | |
Vanguard International Semiconductor Corp. | | | 171,000 | | | | 366,262 | |
| | | | | | | | 2,771,630 | |
|
| Software – 0.7% | |
| | |
Trend Micro, Inc. | | | 6,900 | | | | 351,048 | |
|
| Specialty Retail – 0.9% | |
| | |
Hennes & Mauritz AB, Class B | | | 19,608 | | | | 410,607 | |
|
| Technology Hardware, Storage & Peripherals – 1.9% | |
| | |
Brother Industries Ltd. | | | 19,000 | | | | 361,176 | |
| | |
Catcher Technology Co. Ltd. | | | 11,000 | | | | 93,231 | |
| | |
Lite-On Technology Corp. | | | 57,000 | | | | 94,000 | |
| | |
Logitech International SA (Registered) | | | 285 | | | | 11,657 | |
| | |
Samsung Electronics Co. Ltd. | | | 4,370 | | | | 189,306 | |
| | |
Samsung Electronics Co. Ltd. (Preference) | | | 4,066 | | | | 143,461 | |
| | | | | | | | 892,831 | |
|
| Textiles, Apparel & Luxury Goods – 1.0% | |
| | |
HUGO BOSS AG | | | 5,187 | | | | 218,281 | |
| | |
Kering SA | | | 418 | | | | 237,928 | |
| | | | | | | | 456,209 | |
|
| Tobacco – 2.3% | |
| | |
British American Tobacco plc | | | 855 | | | | 29,894 | |
| | |
Imperial Brands plc | | | 14,858 | | | | 325,385 | |
| | |
Japan Tobacco, Inc. | | | 17,100 | | | | 388,489 | |
| | |
Swedish Match AB | | | 7,657 | | | | 360,188 | |
| | | | | | | | 1,103,956 | |
|
| Trading Companies & Distributors – 1.7% | |
| | |
Ashtead Group plc | | | 13,547 | | | | 411,600 | |
| | |
ITOCHU Corp. | | | 7,600 | | | | 159,656 | |
| | |
Marubeni Corp. | | | 11,400 | | | | 80,756 | |
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| Trading Companies & Distributors – (continued) | |
| | |
Toyota Tsusho Corp. | | | 3,800 | | | $ | 132,519 | |
| | | | | | | | 784,531 | |
|
| Transportation Infrastructure – 0.8% | |
| | |
TAV Havalimanlari Holding A/S | | | 80,731 | | | | 368,568 | |
Total Common Stocks
(Cost $44,394,073) | | | | 46,827,441 | |
| | | | | | | | | |
Total Investments – 98.8%
(Cost $44,394,073) | | | | 46,827,441 | |
| |
Other Assets Less Liabilities – 1.2% | | | | 563,582 | |
| NET ASSETS – 100.0% | | | $ | 47,391,023 | |
| * | Non-income producing security. |
| (a) | Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States and as such may have restrictions on resale. |
| (b) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $846,352, collateralized by $340,859 in U.S. Government Treasury Securities, interest rates ranging from 1.50% – 2.88%, and maturity dates ranging from November 15, 2023 – February 15, 2029 and $574,270 in Foreign Government Fixed Income Securities, interest rates ranging from 0.00% – 5.75%, and maturity dates ranging from April 15, 2020 – July 22, 2068; a total value of $915,129. |
Percentages shown are based on Net Assets.
Abbreviations
OYJ – Public Limited Company
PJSC – Public Joint Stock Company
Preference – A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | |
Aggregate gross unrealized appreciation | | $ | 4,704,860 | |
Aggregate gross unrealized depreciation | | | (2,401,009 | ) |
Net unrealized appreciation | | $ | 2,303,851 | |
Federal income tax cost | | $ | 44,536,970 | |
See Accompanying Notes to the Financial Statements.
| | |
| 328 | | FLEXSHARES ANNUAL REPORT |
FlexShares® International Quality Dividend Dynamic Index Fund (cont.)
Futures Contracts
FlexShares® International Quality Dividend Dynamic Index Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | | | | | |
MSCI EAFEE-Mini Index | | | 4 | | | | 12/20/2019 | | | | USD | | | $ | 391,440 | | | $ | 11,151 | |
MSCI Emerging MarketsE-Mini Index | | | 3 | | | | 12/20/2019 | | | | USD | | | | 156,210 | | | | 2,229 | |
| | | | | | | | | | | | | | | | | | | $ | 13,380 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Abbreviations:
USD – US Dollar
FlexShares® International Quality Dividend Dynamic Index Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Australia | | | 3.4 | % |
Austria | | | 0.8 | |
Belgium | | | 0.8 | |
Brazil | | | 1.0 | |
Canada | | | 4.6 | |
China | | | 10.7 | |
Colombia | | | 0.8 | |
Czech Republic | | | 0.4 | |
Denmark | | | 0.5 | |
Finland | | | 1.9 | |
France | | | 4.6 | |
Germany | | | 4.5 | |
Hong Kong | | | 3.2 | |
Indonesia | | | 0.6 | |
Italy | | | 3.3 | |
Japan | | | 15.9 | |
Netherlands | | | 3.3 | |
Norway | | | 2.8 | |
Poland | | | 0.9 | |
Russia | | | 2.7 | |
South Africa | | | 1.6 | |
South Korea | | | 0.7 | |
Spain | | | 2.5 | |
Sweden | | | 4.9 | |
Switzerland | | | 4.0 | |
Taiwan | | | 4.8 | |
Turkey | | | 2.5 | |
United Kingdom | | | 11.1 | |
Other1 | | | 1.2 | |
| | | | 100.0 | % |
| 1 | Includes anynon-equity securities and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 329 | |
Schedule of Investments
FlexShares® iBoxx3-Year Target Duration TIPS Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| U.S. TREASURY OBLIGATIONS – 99.9% | |
| | |
U.S. Treasury Inflation Linked Bonds | | | | | | | | |
2.38%, 1/15/2025 | | $ | 38,252,872 | | | $ | 42,576,817 | |
2.00%, 1/15/2026 | | | 26,007,716 | | | | 28,893,099 | |
2.38%, 1/15/2027 | | | 21,029,466 | | | | 24,303,444 | |
| | |
U.S. Treasury Inflation Linked Notes | | | | | | | | |
1.13%, 1/15/2021 | | | 43,232,491 | | | | 43,526,786 | |
0.13%, 4/15/2021 | | | 48,857,104 | | | | 48,476,896 | |
0.63%, 7/15/2021(a) | | | 40,945,370 | | | | 41,232,069 | |
0.13%, 1/15/2022 | | | 47,013,157 | | | | 46,705,558 | |
0.13%, 4/15/2022(a) | | | 47,087,693 | | | | 46,739,876 | |
0.13%, 7/15/2022 | | | 45,975,937 | | | | 45,922,567 | |
0.13%, 1/15/2023 | | | 109,504,980 | | | | 108,930,835 | |
0.63%, 4/15/2023 | | | 116,761,920 | | | | 117,995,392 | |
0.38%, 7/15/2023 | | | 108,628,925 | | | | 109,609,933 | |
0.63%, 1/15/2024(a) | | | 108,305,675 | | | | 110,177,991 | |
0.50%, 4/15/2024 | | | 78,765,668 | | | | 79,824,626 | |
0.13%, 7/15/2024 | | | 44,510,786 | | | | 44,582,416 | |
0.13%, 10/15/2024 | | | 18,969,431 | | | | 19,029,426 | |
0.25%, 1/15/2025 | | | 44,632,844 | | | | 44,825,192 | |
0.38%, 7/15/2025 | | | 44,605,500 | | | | 45,322,115 | |
0.63%, 1/15/2026 | | | 46,013,120 | | | | 47,276,579 | |
0.13%, 7/15/2026 | | | 39,644,653 | | | | 39,666,971 | |
0.38%, 1/15/2027 | | | 41,102,883 | | | | 41,666,417 | |
Total U.S. Treasury Obligations
(Cost $1,165,440,138) | | | | 1,177,285,005 | |
| | | | | | | | | |
Total Investments – 99.9%
(Cost $1,165,440,138) | | | | 1,177,285,005 | |
| |
Other Assets Less Liabilities – 0.1% | | | | 1,437,209 | |
| NET ASSETS – 100.0% | | | $ | 1,178,722,214 | |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $67,113,452, collateralized in the form of U.S. Government Treasury Securities, interest rates ranging from 0.00% – 3.88%, and maturity dates ranging from November 12, 2019 – August 15, 2049; a total value of $68,289,010. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 12,100,569 | |
Aggregate gross unrealized depreciation | | | (877,652 | ) |
Net unrealized appreciation | | $ | 11,222,917 | |
Federal income tax cost | | $ | 1,166,062,088 | |
See Accompanying Notes to the Financial Statements.
| | |
| 330 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® iBoxx5-Year Target Duration TIPS Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| U.S. TREASURY OBLIGATIONS – 99.8% | |
| | |
U.S. Treasury Inflation Linked Bonds | | | | | | | | |
2.38%, 1/15/2025(a) | | $ | 23,267,492 | | | $ | 25,897,551 | |
2.00%, 1/15/2026 | | | 15,807,572 | | | | 17,561,317 | |
2.38%, 1/15/2027 | | | 19,318,357 | | | | 22,325,941 | |
1.75%, 1/15/2028(a) | | | 11,676,942 | | | | 13,151,611 | |
3.63%, 4/15/2028(a) | | | 24,531,202 | | | | 31,517,309 | |
2.50%, 1/15/2029 | | | 10,312,505 | | | | 12,483,392 | |
3.88%, 4/15/2029 | | | 18,805,712 | | | | 25,249,672 | |
3.38%, 4/15/2032 | | | 4,408,470 | | | | 6,095,088 | |
| | |
U.S. Treasury Inflation Linked Notes | | | | | | | | |
0.38%, 7/15/2023 | | | 27,628,249 | | | | 27,877,754 | |
0.63%, 1/15/2024 | | | 27,511,841 | | | | 27,987,447 | |
0.50%, 4/15/2024(a) | | | 20,034,739 | | | | 20,304,094 | |
0.13%, 7/15/2024 | | | 27,050,067 | | | | 27,093,599 | |
0.13%, 10/15/2024 | | | 11,529,654 | | | | 11,566,119 | |
0.25%, 1/15/2025 | | | 27,092,748 | | | | 27,209,506 | |
0.38%, 7/15/2025 | | | 27,067,306 | | | | 27,502,158 | |
0.63%, 1/15/2026 | | | 42,163,847 | | | | 43,321,610 | |
0.13%, 7/15/2026(a) | | | 36,289,200 | | | | 36,309,629 | |
0.38%, 1/15/2027 | | | 37,624,538 | | | | 38,140,384 | |
0.38%, 7/15/2027 | | | 23,629,689 | | | | 24,068,156 | |
0.50%, 1/15/2028 | | | 24,645,170 | | | | 25,293,761 | |
0.75%, 7/15/2028 | | | 22,899,702 | | | | 24,115,818 | |
0.88%, 1/15/2029 | | | 22,449,846 | | | | 23,888,985 | |
0.25%, 7/15/2029(a) | | | 17,025,755 | | | | 17,218,972 | |
Total U.S. Treasury Obligations
(Cost $544,264,351) | | | | 556,179,873 | |
| | | | | | | | | |
Total Investments – 99.8%
(Cost $544,264,351) | | | | 556,179,873 | |
| |
Other Assets Less Liabilities – 0.2% | | | | 1,004,855 | |
| NET ASSETS – 100.0% | | | $ | 557,184,728 | |
| (a) | The security or a portion of this security is on loan at October 31, 2019. The total value of securities on loan at October 31, 2019 was $70,072,472, collateralized by $37,602,024 in U.S. Government Treasury Securities, interest rates ranging from 0.13% – 3.88%, and maturity dates ranging from May 15, 2020 – November 15, 2044 and $38,630,084 in Foreign Government Fixed Income Securities, interest rates ranging from 0.00% – 6.25%, and maturity dates ranging from November 7, 2019 – June 22, 2066; a total value of $76,232,108. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 11,517,342 | |
Aggregate gross unrealized depreciation | | | (24,510 | ) |
Net unrealized appreciation | | $ | 11,492,832 | |
Federal income tax cost | | $ | 544,687,041 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 331 | |
Schedule of Investments
FlexShares® Disciplined Duration MBS Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| MORTGAGE-BACKED SECURITIES – 99.3% | |
|
FHLMC | |
4.00%, 7/1/2024 | | $ | 169,526 | | | $ | 176,825 | |
4.00%, 9/1/2024 | | | 119,648 | | | | 124,794 | |
4.00%, 4/1/2025 | | | 21,371 | | | | 22,283 | |
4.00%, 6/1/2025 | | | 71,303 | | | | 74,387 | |
3.50%, 10/1/2025 | | | 109,076 | | | | 113,038 | |
4.00%, 10/1/2025 | | | 54,987 | | | | 57,369 | |
3.50%, 11/1/2025 | | | 120,613 | | | | 124,984 | |
3.50%, 2/1/2026 | | | 70,205 | | | | 72,757 | |
4.00%, 3/1/2026 | | | 128,740 | | | | 134,357 | |
4.00%, 4/1/2026 | | | 92,840 | | | | 97,099 | |
3.50%, 6/1/2026 | | | 107,215 | | | | 111,742 | |
3.00%, 9/1/2026 | | | 222,785 | | | | 229,346 | |
3.50%, 9/1/2026 | | | 200,811 | | | | 208,111 | |
3.50%, 10/1/2026 | | | 91,469 | | | | 94,794 | |
3.00%, 12/1/2026 | | | 118,907 | | | | 122,606 | |
2.50%, 4/1/2027 | | | 180,669 | | | | 183,163 | |
4.00%, 5/1/2027 | | | 66,272 | | | | 69,125 | |
3.50%, 8/1/2027 | | | 75,333 | | | | 78,251 | |
2.50%, 11/1/2027 | | | 186,577 | | | | 189,659 | |
2.50%, 2/1/2028 | | | 42,017 | | | | 42,816 | |
2.50%, 4/1/2028 | | | 23,848 | | | | 24,157 | |
2.50%, 11/1/2028 | | | 17,088 | | | | 17,325 | |
3.00%, 11/1/2028 | | | 101,572 | | | | 104,570 | |
3.00%, 1/1/2029 | | | 165,397 | | | | 170,280 | |
2.00%, 10/1/2031 | | | 68,846 | | | | 68,326 | |
2.00%, 11/1/2031 | | | 78,128 | | | | 77,538 | |
5.50%, 10/1/2032 | | | 96,628 | | | | 106,695 | |
3.00%, 4/1/2033 | | | 90,497 | | | | 93,463 | |
6.00%, 4/1/2034 | | | 55,178 | | | | 63,383 | |
5.00%, 5/1/2034 | | | 98,744 | | | | 109,104 | |
3.00%, 5/1/2035 | | | 47,763 | | | | 49,032 | |
5.50%, 5/1/2035 | | | 124,367 | | | | 140,254 | |
6.00%, 5/1/2035 | | | 115,216 | | | | 132,671 | |
5.50%, 6/1/2035 | | | 51,581 | | | | 57,621 | |
5.00%, 7/1/2035 | | | 59,687 | | | | 65,996 | |
5.50%, 10/1/2035 | | | 32,178 | | | | 36,285 | |
3.00%, 11/1/2035 | | | 58,914 | | | | 60,632 | |
6.00%, 12/1/2035 | | | 112,634 | | | | 129,727 | |
5.50%, 12/1/2036 | | | 155,788 | | | | 175,020 | |
5.50%, 2/1/2037 | | | 42,557 | | | | 47,928 | |
6.00%, 4/1/2037 | | | 57,698 | | | | 66,474 | |
6.00%, 5/1/2037 | | | 105,186 | | | | 121,026 | |
5.50%, 7/1/2037 | | | 100,995 | | | | 113,877 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
5.50%, 9/1/2037 | | $ | 47,680 | | | $ | 53,679 | |
5.50%, 1/1/2038 | | | 23,606 | | | | 26,574 | |
5.00%, 7/1/2038 | | | 64,823 | | | | 71,607 | |
5.50%, 7/1/2038 | | | 5,008 | | | | 5,630 | |
5.50%, 8/1/2038 | | | 16,481 | | | | 18,519 | |
5.00%, 10/1/2038 | | | 47,143 | | | | 52,094 | |
5.50%, 12/1/2038 | | | 17,087 | | | | 19,211 | |
5.00%, 2/1/2039 | | | 254,878 | | | | 281,685 | |
5.00%, 5/1/2039 | | | 112,004 | | | | 123,680 | |
5.00%, 8/1/2039 | | | 9,025 | | | | 9,983 | |
5.00%, 9/1/2039 | | | 10,544 | | | | 11,650 | |
4.50%, 10/1/2039 | | | 20,823 | | | | 22,593 | |
5.50%, 1/1/2040 | | | 87,677 | | | | 98,657 | |
4.00%, 2/1/2040 | | | 13,837 | | | | 14,823 | |
4.50%, 4/1/2040 | | | 76,551 | | | | 83,593 | |
6.00%, 4/1/2040 | | | 82,781 | | | | 95,213 | |
6.00%, 5/1/2040 | | | 186,685 | | | | 214,738 | |
5.50%, 6/1/2040 | | | 54,836 | | | | 61,308 | |
6.00%, 7/1/2040 | | | 296,373 | | | | 341,231 | |
3.50%, 12/1/2040 | | | 142,420 | | | | 149,589 | |
4.00%, 1/1/2041 | | | 27,327 | | | | 29,270 | |
4.50%, 3/1/2041 | | | 142,142 | | | | 154,242 | |
4.00%, 4/1/2041 | | | 38,052 | | | | 41,000 | |
5.50%, 4/1/2041 | | | 24,238 | | | | 26,924 | |
5.50%, 6/1/2041 | | | 279,035 | | | | 313,355 | |
4.50%, 8/1/2041 | | | 37,535 | | | | 40,730 | |
3.50%, 11/1/2041 | | | 198,660 | | | | 208,612 | |
4.00%, 1/1/2042 | | | 115,362 | | | | 124,776 | |
5.00%, 2/1/2042 | | | 77,716 | | | | 85,912 | |
3.00%, 3/1/2042 | | | 261,317 | | | | 269,779 | |
3.00%, 3/1/2043 | | | 33,529 | | | | 34,617 | |
3.00%, 4/1/2043 | | | 365,998 | | | | 377,412 | |
3.00%, 6/1/2043 | | | 163,765 | | | | 169,065 | |
4.50%, 3/1/2044 | | | 151,003 | | | | 163,317 | |
4.00%, 6/1/2044 | | | 14,871 | | | | 15,737 | |
4.50%, 7/1/2044 | | | 60,466 | | | | 65,526 | |
4.00%, 8/1/2044 | | | 43,360 | | | | 45,886 | |
5.00%, 8/1/2044 | | | 76,588 | | | | 84,516 | |
4.50%, 9/1/2044 | | | 67,898 | | | | 72,997 | |
4.50%, 12/1/2044 | | | 34,545 | | | | 37,135 | |
3.00%, 7/1/2045 | | | 32,323 | | | | 33,270 | |
4.50%, 9/1/2045 | | | 58,797 | | | | 63,145 | |
4.00%, 10/1/2045 | | | 157,094 | | | | 166,250 | |
4.50%, 12/1/2045 | | | 57,063 | | | | 61,343 | |
4.00%, 4/1/2046 | | | 77,748 | | | | 82,115 | |
See Accompanying Notes to the Financial Statements.
| | |
| 332 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Disciplined Duration MBS Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| MORTGAGE-BACKED SECURITIES – (continued) | |
3.50%, 5/1/2046 | | $ | 50,046 | | | $ | 52,171 | |
4.00%, 5/1/2046 | | | 33,522 | | | | 35,388 | |
4.50%, 5/1/2046 | | | 87,126 | | | | 93,142 | |
2.50%, 12/1/2046 | | | 290,908 | | | | 291,340 | |
4.50%, 3/1/2047 | | | 105,356 | | | | 113,067 | |
3.00%, 9/1/2047 | | | 84,087 | | | | 86,537 | |
|
GNMA | |
3.00%, 2/20/2027 | | | 237,516 | | | | 244,340 | |
2.50%, 4/20/2027 | | | 107,546 | | | | 109,705 | |
2.50%, 11/20/2027 | | | 118,089 | | | | 120,461 | |
2.50%, 1/20/2028 | | | 59,571 | | | | 60,769 | |
3.00%, 1/20/2028 | | | 131,218 | | | | 134,997 | |
3.00%, 3/20/2028 | | | 118,056 | | | | 121,464 | |
3.00%, 7/20/2028 | | | 189,829 | | | | 195,313 | |
2.50%, 8/20/2028 | | | 183,914 | | | | 187,627 | |
2.50%, 12/20/2028 | | | 25,726 | | | | 26,244 | |
2.50%, 3/20/2031 | | | 75,805 | | | | 76,965 | |
2.50%, 10/20/2031 | | | 91,202 | | | | 92,602 | |
6.00%, 3/15/2033 | | | 94,348 | | | | 108,208 | |
5.50%, 6/15/2033 | | | 75,962 | | | | 85,074 | |
5.50%, 8/20/2033 | | | 41,219 | | | | 46,460 | |
6.00%, 10/20/2033 | | | 108,020 | | | | 123,932 | |
5.50%, 11/20/2033 | | | 57,477 | | | | 64,790 | |
6.00%, 12/15/2033 | | | 181,407 | | | | 208,021 | |
5.50%, 3/20/2034 | | | 67,155 | | | | 75,621 | |
5.50%, 7/20/2034 | | | 44,379 | | | | 50,018 | |
6.00%, 2/15/2035 | | | 38,414 | | | | 44,050 | |
5.50%, 3/15/2035 | | | 153,701 | | | | 172,424 | |
5.50%, 3/20/2036 | | | 139,630 | | | | 156,025 | |
5.50%, 9/20/2038 | | | 89,041 | | | | 99,356 | |
6.00%, 12/20/2038 | | | 193,962 | | | | 222,692 | |
5.50%, 2/15/2039 | | | 78,866 | | | | 88,593 | |
5.50%, 2/20/2039 | | | 108,424 | | | | 120,985 | |
4.50%, 5/15/2039 | | | 112,097 | | | | 122,438 | |
5.50%, 5/15/2039 | | | 51,371 | | | | 57,655 | |
5.00%, 9/15/2039 | | | 87,776 | | | | 98,426 | |
5.50%, 9/15/2039 | | | 22,526 | | | | 25,289 | |
4.00%, 9/20/2039 | | | 37,190 | | | | 39,627 | |
4.50%, 12/15/2039 | | | 184,983 | | | | 201,472 | |
5.50%, 12/15/2039 | | | 63,102 | | | | 70,877 | |
5.00%, 1/20/2040 | | | 176,527 | | | | 195,590 | |
5.50%, 3/15/2040 | | | 41,667 | | | | 46,775 | |
4.50%, 4/15/2040 | | | 80,048 | | | | 87,211 | |
5.00%, 4/15/2040 | | | 101,279 | | | | 113,596 | |
4.50%, 6/15/2040 | | | 39,895 | | | | 43,435 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
4.50%, 7/15/2040 | | $ | 104,075 | | | $ | 113,332 | |
4.00%, 8/15/2040 | | | 19,379 | | | | 20,712 | |
4.00%, 10/15/2040 | | | 12,736 | | | | 13,612 | |
3.50%, 11/15/2040 | | | 38,764 | | | | 40,917 | |
5.50%, 1/20/2041 | | | 37,314 | | | | 41,779 | |
4.00%, 3/15/2041 | | | 5,206 | | | | 5,567 | |
4.50%, 6/15/2041 | | | 158,478 | | | | 172,104 | |
4.00%, 8/15/2041 | | | 96,999 | | | | 103,636 | |
5.00%, 8/15/2041 | | | 102,730 | | | | 114,391 | |
3.50%, 9/15/2041 | | | 105,863 | | | | 111,741 | |
3.50%, 11/20/2041 | | | 85,937 | | | | 91,119 | |
3.50%, 1/15/2042 | | | 24,987 | | | | 26,371 | |
5.50%, 2/20/2042 | | | 29,799 | | | | 33,005 | |
4.50%, 3/15/2042 | | | 131,444 | | | | 142,859 | |
3.50%, 4/20/2042 | | | 136,249 | | | | 144,800 | |
3.00%, 5/15/2042 | | | 80,393 | | | | 82,969 | |
3.50%, 6/15/2042 | | | 69,211 | | | | 73,028 | |
3.50%, 8/20/2042 | | | 45,143 | | | | 47,977 | |
3.00%, 9/15/2042 | | | 37,224 | | | | 38,475 | |
3.00%, 12/20/2042 | | | 109,363 | | | | 113,348 | |
3.50%, 12/20/2042 | | | 16,743 | | | | 17,705 | |
3.00%, 2/20/2043 | | | 76,460 | | | | 79,123 | |
2.50%, 3/20/2043 | | | 89,034 | | | | 90,511 | |
3.00%, 3/20/2043 | | | 97,776 | | | | 101,182 | |
3.00%, 4/15/2043 | | | 79,373 | | | | 82,039 | |
3.50%, 4/20/2043 | | | 108,094 | | | | 114,316 | |
3.00%, 5/15/2043 | | | 95,202 | | | | 98,725 | |
2.50%, 5/20/2043 | | | 130,369 | | | | 132,530 | |
3.50%, 6/15/2043 | | | 65,642 | | | | 69,265 | |
3.00%, 9/20/2043 | | | 123,179 | | | | 127,825 | |
3.50%, 10/20/2043 | | | 68,963 | | | | 73,045 | |
5.00%, 12/20/2043 | | | 46,350 | | | | 51,260 | |
5.00%, 1/20/2044 | | | 6,366 | | | | 7,015 | |
5.50%, 3/20/2044 | | | 145,984 | | | | 163,111 | |
4.00%, 7/15/2044 | | | 41,221 | | | | 44,427 | |
3.50%, 8/20/2044 | | | 97,317 | | | | 102,385 | |
4.00%, 9/15/2044 | | | 19,146 | | | | 20,221 | |
3.50%, 10/15/2044 | | | 65,080 | | | | 68,040 | |
3.50%, 10/20/2044 | | | 16,315 | | | | 17,150 | |
2.50%, 11/20/2044 | | | 97,153 | | | | 98,763 | |
4.00%, 12/15/2044 | | | 41,114 | | | | 44,304 | |
3.00%, 12/20/2044 | | | 51,323 | | | | 53,226 | |
3.50%, 12/20/2044 | | | 50,234 | | | | 52,770 | |
3.50%, 1/15/2045 | | | 97,583 | | | | 102,806 | |
3.00%, 1/20/2045 | | | 102,497 | | | | 106,096 | |
3.50%, 2/20/2045 | | | 66,918 | | | | 70,259 | |
3.00%, 3/20/2045 | | | 79,149 | | | | 81,916 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 333 | |
FlexShares® Disciplined Duration MBS Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| MORTGAGE-BACKED SECURITIES – (continued) | |
3.50%, 5/15/2045 | | $ | 74,616 | | | $ | 78,237 | |
3.00%, 7/15/2045 | | | 203,710 | | | | 210,158 | |
3.00%, 12/20/2045 | | | 122,849 | | | | 127,161 | |
3.50%, 12/20/2045 | | | 133,924 | | | | 140,872 | |
4.00%, 3/15/2046 | | | 72,415 | | | | 77,637 | |
4.00%, 3/20/2046 | | | 194,775 | | | | 207,021 | |
3.50%, 4/20/2046 | | | 118,512 | | | | 124,408 | |
4.00%, 5/20/2046 | | | 86,459 | | | | 91,267 | |
4.00%, 7/15/2046 | | | 108,050 | | | | 115,423 | |
3.00%, 9/20/2046 | | | 68,100 | | | | 70,488 | |
2.50%, 11/20/2046 | | | 296,846 | | | | 300,822 | |
3.00%, 12/20/2046 | | | 35,465 | | | | 36,699 | |
4.00%, 3/15/2047 | | | 213,142 | | | | 228,145 | |
4.50%, 11/15/2047 | | | 321,814 | | | | 351,752 | |
5.00%, 2/20/2048 | | | 57,339 | | | | 60,953 | |
5.00%, 4/20/2048 | | | 129,996 | | | | 138,161 | |
5.50%, 11/20/2048 | | | 144,738 | | | | 153,917 | |
3.50%, 9/20/2049 | | | 174,633 | | | | 181,564 | |
|
UMBS | |
4.50%, 1/1/2020 | | | 245 | | | | 253 | |
4.50%, 4/1/2020 | | | 1,619 | | | | 1,669 | |
4.50%, 11/1/2020 | | | 3,239 | | | | 3,339 | |
4.00%, 5/1/2024 | | | 90,291 | | | | 94,147 | |
4.00%, 4/1/2025 | | | 203,343 | | | | 212,033 | |
4.00%, 9/1/2025 | | | 81,373 | | | | 84,850 | |
3.00%, 11/1/2025 | | | 155,394 | | | | 159,320 | |
3.50%, 11/1/2025 | | | 166,402 | | | | 172,338 | |
3.00%, 12/1/2025 | | | 121,963 | | | | 125,141 | |
3.50%, 12/1/2025 | | | 115,693 | | | | 119,813 | |
3.50%, 2/1/2026 | | | 205,483 | | | | 212,831 | |
4.00%, 4/1/2026 | | | 70,732 | | | | 73,767 | |
4.00%, 5/1/2026 | | | 145,518 | | | | 152,099 | |
3.00%, 8/1/2026 | | | 225,255 | | | | 231,732 | |
2.50%, 11/1/2026 | | | 51,146 | | | | 51,748 | |
3.00%, 12/1/2026 | | | 36,386 | | | | 37,437 | |
4.00%, 5/1/2027 | | | 203,897 | | | | 212,615 | |
2.50%, 6/1/2027 | | | 18,493 | | | | 18,770 | |
3.50%, 6/1/2027 | | | 29,563 | | | | 30,615 | |
2.50%, 10/1/2027 | | | 189,459 | | | | 191,975 | |
2.50%, 12/1/2027 | | | 102,113 | | | | 103,807 | |
3.50%, 1/1/2028 | | | 234,280 | | | | 244,740 | |
3.00%, 3/1/2028 | | | 36,397 | | | | 37,463 | |
3.00%, 6/1/2028 | | | 175,983 | | | | 181,246 | |
3.00%, 7/1/2028 | | | 34,821 | | | | 35,919 | |
2.50%, 8/1/2028 | | | 25,738 | | | | 26,214 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
2.50%, 9/1/2028 | | $ | 82,061 | | | $ | 83,347 | |
3.00%, 11/1/2028 | | | 32,936 | | | | 33,976 | |
4.00%, 7/1/2029 | | | 139,599 | | | | 145,806 | |
3.50%, 10/1/2030 | | | 117,775 | | | | 120,933 | |
3.50%, 11/1/2030 | | | 26,906 | | | | 27,627 | |
2.00%, 9/1/2031 | | | 67,056 | | | | 66,511 | |
2.00%, 11/1/2031 | | | 141,989 | | | | 140,836 | |
2.00%, 2/1/2032 | | | 112,813 | | | | 111,897 | |
3.00%, 4/1/2032 | | | 139,400 | | | | 143,161 | |
6.00%, 12/1/2032 | | | 22,710 | | | | 26,141 | |
3.00%, 5/1/2033 | | | 244,309 | | | | 252,218 | |
3.00%, 7/1/2033 | | | 30,228 | | | | 31,207 | |
3.00%, 10/1/2033 | | | 48,698 | | | | 50,275 | |
6.00%, 8/1/2034 | | | 83,725 | | | | 96,265 | |
6.50%, 9/1/2034 | | | 180,558 | | | | 208,851 | |
5.00%, 12/1/2034 | | | 39,932 | | | | 44,107 | |
5.00%, 1/1/2035 | | | 50,545 | | | | 55,822 | |
5.00%, 6/1/2035 | | | 83,495 | | | | 92,223 | |
6.00%, 11/1/2035 | | | 36,600 | | | | 42,119 | |
5.00%, 12/1/2035 | | | 106,384 | | | | 117,484 | |
5.00%, 2/1/2036 | | | 103,200 | | | | 113,976 | |
5.50%, 12/1/2036 | | | 106,982 | | | | 120,002 | |
6.50%, 12/1/2036 | | | 100,607 | | | | 112,675 | |
5.50%, 1/1/2037 | | | 30,945 | | | | 34,724 | |
5.50%, 2/1/2037 | | | 10,204 | | | | 11,276 | |
5.50%, 4/1/2037 | | | 108,619 | | | | 121,993 | |
6.00%, 8/1/2037 | | | 14,741 | | | | 16,960 | |
6.00%, 9/1/2037 | | | 42,490 | | | | 48,840 | |
5.00%, 3/1/2038 | | | 110,922 | | | | 122,113 | |
5.50%, 3/1/2038 | | | 26,580 | | | | 29,855 | |
5.00%, 5/1/2038 | | | 88,283 | | | | 97,524 | |
5.50%, 6/1/2038 | | | 69,210 | | | | 77,754 | |
5.50%, 9/1/2038 | | | 33,577 | | | | 37,710 | |
6.00%, 9/1/2038 | | | 56,639 | | | | 65,166 | |
5.50%, 11/1/2038 | | | 121,477 | | | | 136,374 | |
5.00%, 1/1/2039 | | | 11,160 | | | | 12,297 | |
5.50%, 3/1/2039 | | | 106,312 | | | | 119,462 | |
4.50%, 4/1/2039 | | | 102,760 | | | | 111,212 | |
5.50%, 8/1/2039 | | | 91,727 | | | | 103,142 | |
5.50%, 11/1/2039 | | | 71,041 | | | | 79,797 | |
5.50%, 1/1/2040 | | | 32,802 | | | | 36,763 | |
4.50%, 4/1/2040 | | | 18,631 | | | | 20,194 | |
5.50%, 4/1/2040 | | | 40,688 | | | | 45,436 | |
6.00%, 6/1/2040 | | | 221,970 | | | | 255,501 | |
4.00%, 9/1/2040 | | | 40,767 | | | | 43,642 | |
4.00%, 11/1/2040 | | | 34,853 | | | | 37,301 | |
3.50%, 1/1/2041 | | | 37,467 | | | | 39,327 | |
See Accompanying Notes to the Financial Statements.
| | |
| 334 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Disciplined Duration MBS Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| MORTGAGE-BACKED SECURITIES – (continued) | |
3.50%, 2/1/2041 | | $ | 68,639 | | | $ | 72,046 | |
4.00%, 2/1/2041 | | | 48,252 | | | | 51,654 | |
4.50%, 4/1/2041 | | | 33,874 | | | | 36,640 | |
5.50%, 4/1/2041 | | | 12,909 | | | | 14,380 | |
4.50%, 6/1/2041 | | | 31,190 | | | | 33,863 | |
6.00%, 7/1/2041 | | | 230,521 | | | | 264,986 | |
4.50%, 8/1/2041 | | | 42,214 | | | | 45,888 | |
5.00%, 8/1/2041 | | | 87,573 | | | | 96,746 | |
5.50%, 8/1/2041 | | | 71,755 | | | | 79,602 | |
5.50%, 9/1/2041 | | | 152,546 | | | | 171,440 | |
4.00%, 12/1/2041 | | | 46,675 | | | | 49,920 | |
4.00%, 1/1/2042 | | | 76,802 | | | | 82,087 | |
4.50%, 1/1/2042 | | | 44,239 | | | | 47,981 | |
6.00%, 1/1/2042 | | | 136,687 | | | | 158,256 | |
3.00%, 4/1/2042 | | | 132,146 | | | | 136,316 | |
3.50%, 5/1/2042 | | | 73,054 | | | | 76,695 | |
3.50%, 8/1/2042 | | | 135,080 | | | | 141,813 | |
3.00%, 1/1/2043 | | | 350,580 | | | | 361,912 | |
3.50%, 1/1/2043 | | | 92,988 | | | | 97,614 | |
3.00%, 2/1/2043 | | | 52,276 | | | | 53,940 | |
3.00%, 3/1/2043 | | | 245,402 | | | | 252,698 | |
3.50%, 3/1/2043 | | | 171,036 | | | | 181,023 | |
3.00%, 5/1/2043 | | | 12,245 | | | | 12,646 | |
3.50%, 5/1/2043 | | | 223,150 | | | | 234,210 | |
2.50%, 6/1/2043 | | | 793,831 | | | | 794,527 | |
3.00%, 6/1/2043 | | | 50,894 | | | | 52,361 | |
3.00%, 7/1/2043 | | | 171,176 | | | | 176,631 | |
3.50%, 7/1/2043 | | | 45,813 | | | | 48,096 | |
4.00%, 8/1/2043 | | | 25,612 | | | | 27,224 | |
4.00%, 9/1/2043 | | | 152,885 | | | | 163,324 | |
4.50%, 9/1/2043 | | | 26,091 | | | | 28,077 | |
4.00%, 11/1/2043 | | | 41,698 | | | | 44,210 | |
5.00%, 1/1/2044 | | | 239,524 | | | | 263,818 | |
5.00%, 3/1/2044 | | | 43,442 | | | | 48,314 | |
4.50%, 4/1/2044 | | | 56,291 | | | | 62,109 | |
5.00%, 5/1/2044 | | | 31,404 | | | | 34,455 | |
5.50%, 5/1/2044 | | | 210,393 | | | | 236,635 | |
5.00%, 6/1/2044 | | | 31,269 | | | | 34,340 | |
3.00%, 10/1/2044 | | | 308,560 | | | | 318,364 | |
4.50%, 10/1/2044 | | | 29,253 | | | | 31,417 | |
3.00%, 12/1/2044 | | | 66,447 | | | | 68,439 | |
3.00%, 2/1/2045 | | | 53,117 | | | | 54,638 | |
4.00%, 2/1/2045 | | | 77,923 | | | | 82,414 | |
4.50%, 2/1/2045 | | | 147,371 | | | | 159,198 | |
3.00%, 4/1/2045 | | | 49,784 | | | | 51,215 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
4.00%, 4/1/2045 | | $ | 50,239 | | | $ | 53,855 | |
4.00%, 11/1/2045 | | | 119,504 | | | | 128,107 | |
4.00%, 3/1/2046 | | | 55,081 | | | | 58,494 | |
4.50%, 3/1/2046 | | | 142,004 | | | | 152,140 | |
3.50%, 5/1/2046 | | | 51,361 | | | | 53,471 | |
4.00%, 5/1/2046 | | | 54,321 | | | | 57,307 | |
2.50%, 6/1/2046 | | | 152,751 | | | | 152,885 | |
4.50%, 7/1/2046 | | | 67,300 | | | | 71,480 | |
2.50%, 9/1/2046 | | | 362,508 | | | | 362,826 | |
4.50%, 1/1/2047 | | | 104,137 | | | | 110,254 | |
3.50%, 2/1/2047 | | | 207,642 | | | | 215,788 | |
4.00%, 2/1/2047 | | | 127,432 | | | | 133,917 | |
4.50%, 2/1/2047 | | | 93,444 | | | | 101,225 | |
5.50%, 1/1/2049 | | | 159,200 | | | | 171,797 | |
6.00%, 2/1/2049 | | | 187,797 | | | | 216,030 | |
|
UMBS, 30 Year, Single Family | |
TBA 2.50%, 11/25/2049 | | | 400,000 | | | | 397,766 | |
TBA 3.00%, 11/25/2049 | | | 250,000 | | | | 254,053 | |
| | |
TBA 3.50%, 11/25/2049 | | | 100,000 | | | | 102,680 | |
Total Mortgage-Backed Securities
(Cost $34,503,562) | | | | 35,075,032 | |
| | | | | | | | | |
Total Investments – 99.3%
(Cost $34,503,562) | | | | 35,075,032 | |
| |
Other Assets Less Liabilities – 0.7% | | | | 254,589 | |
| NET ASSETS – 100.0% | | | $ | 35,329,621 | |
Percentages shown are based on Net Assets.
Abbreviations
FHLMC – Federal Home Loan Mortgage Corp.
GNMA – Government National Mortgage Association
TBA – To Be Announced; Security is subject to delayed delivery.
UMBS – Uniform Mortgage-Backed Securities
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 617,086 | |
Aggregate gross unrealized depreciation | | | (46,229 | ) |
Net unrealized appreciation | | $ | 570,857 | |
Federal income tax cost | | $ | 34,504,175 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 335 | |
Schedule of Investments
FlexShares® Credit-Scored US Corporate Bond Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – 99.0% | |
|
| Aerospace & Defense – 1.1% | |
| | |
General Dynamics Corp. | | | | | | | | |
3.75%, 5/15/2028 | | $ | 100,000 | | | $ | 111,834 | |
| | |
Lockheed Martin Corp. | | | | | | | | |
3.55%, 1/15/2026 | | | 70,000 | | | | 75,664 | |
| | |
Northrop Grumman Corp. | | | | | | | | |
2.93%, 1/15/2025 | | | 400,000 | | | | 413,860 | |
| | |
Rockwell Collins, Inc. | | | | | | | | |
3.50%, 3/15/2027 | | | 200,000 | | | | 214,121 | |
| | |
United Technologies Corp. | | | | | | | | |
3.10%, 6/1/2022 | | | 250,000 | | | | 257,673 | |
| | | | | | | | 1,073,152 | |
|
| Air Freight & Logistics – 0.5% | |
| | |
FedEx Corp. | | | | | | | | |
3.20%, 2/1/2025 | | | 130,000 | | | | 135,121 | |
| | |
United Parcel Service, Inc. | | | | | | | | |
2.45%, 10/1/2022 | | | 80,000 | | | | 81,388 | |
3.40%, 3/15/2029 | | | 200,000 | | | | 216,067 | |
| | | | | | | | 432,576 | |
|
| Automobiles – 0.1% | |
| | |
General Motors Co. | | | | | | | | |
4.88%, 10/2/2023 | | | 100,000 | | | | 107,479 | |
|
| Banks – 29.2% | |
| | |
Banco Santander SA | | | | | | | | |
3.13%, 2/23/2023 | | | 400,000 | | | | 408,874 | |
| | |
Bank of America Corp. | | | | | | | | |
3.30%, 1/11/2023 | | | 600,000 | | | | 622,454 | |
3.12%, 1/20/2023(a) | | | 250,000 | | | | 255,329 | |
3.00%, 12/20/2023(a) | | | 500,000 | | | | 511,723 | |
4.20%, 8/26/2024 | | | 470,000 | | | | 506,340 | |
4.00%, 1/22/2025 | | | 255,000 | | | | 272,167 | |
3.88%, 8/1/2025 | | | 600,000 | | | | 647,553 | |
3.50%, 4/19/2026 | | | 200,000 | | | | 212,836 | |
3.82%, 1/20/2028(a) | | | 500,000 | | | | 538,485 | |
3.71%, 4/24/2028(a) | | | 5,000 | | | | 5,351 | |
3.42%, 12/20/2028(a) | | | 200,000 | | | | 209,513 | |
3.97%, 3/5/2029(a) | | | 250,000 | | | | 272,385 | |
4.27%, 7/23/2029(a) | | | 550,000 | | | | 611,102 | |
| | |
Bank of Montreal | | | | | | | | |
4.34%, 10/5/2028(a) | | | 300,000 | | | | 317,366 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Banks – (continued) | |
| | |
Bank of Nova Scotia (The) | | | | | | | | |
3.40%, 2/11/2024 | | $ | 250,000 | | | $ | 262,186 | |
4.50%, 12/16/2025 | | | 100,000 | | | | 109,484 | |
| | |
Barclays plc | | | | | | | | |
4.61%, 2/15/2023(a) | | | 250,000 | | | | 261,257 | |
3.65%, 3/16/2025 | | | 200,000 | | | | 207,567 | |
4.38%, 1/12/2026 | | | 200,000 | | | | 215,455 | |
4.84%, 5/9/2028 | | | 100,000 | | | | 106,850 | |
| | |
BB&T Corp. | | | | | | | | |
2.85%, 10/26/2024 | | | 150,000 | | | | 155,027 | |
| | |
Citigroup, Inc. | | | | | | | | |
2.90%, 12/8/2021 | | | 500,000 | | | | 508,620 | |
4.50%, 1/14/2022 | | | 150,000 | | | | 157,776 | |
4.05%, 7/30/2022 | | | 100,000 | | | | 104,972 | |
3.50%, 5/15/2023 | | | 250,000 | | | | 261,440 | |
3.35%, 4/24/2025(a) | | | 500,000 | | | | 520,525 | |
3.30%, 4/27/2025 | | | 200,000 | | | | 209,598 | |
4.40%, 6/10/2025 | | | 325,000 | | | | 352,373 | |
3.40%, 5/1/2026 | | | 200,000 | | | | 210,014 | |
3.20%, 10/21/2026 | | | 250,000 | | | | 259,498 | |
4.45%, 9/29/2027 | | | 200,000 | | | | 220,221 | |
3.89%, 1/10/2028(a) | | | 200,000 | | | | 215,259 | |
3.67%, 7/24/2028(a) | | | 155,000 | | | | 164,130 | |
4.13%, 7/25/2028 | | | 200,000 | | | | 216,719 | |
4.07%, 4/23/2029(a) | | | 150,000 | | | | 164,442 | |
3.98%, 3/20/2030(a) | | | 100,000 | | | | 109,097 | |
| | |
Citizens Financial Group, Inc. | | | | | | | | |
4.30%, 12/3/2025 | | | 60,000 | | | | 64,732 | |
| | |
Credit Suisse Group Funding Guernsey Ltd. | | | | | | | | |
3.80%, 9/15/2022 | | | 250,000 | | | | 260,626 | |
3.75%, 3/26/2025 | | | 400,000 | | | | 422,304 | |
| | |
Discover Bank | | | | | | | | |
3.35%, 2/6/2023 | | | 300,000 | | | | 309,887 | |
| | |
Fifth Third Bank | | | | | | | | |
3.85%, 3/15/2026 | | | 200,000 | | | | 214,188 | |
| | |
HSBC Holdings plc | | | | | | | | |
4.00%, 3/30/2022 | | | 510,000 | | | | 533,926 | |
4.25%, 8/18/2025 | | | 300,000 | | | | 320,832 | |
3.90%, 5/25/2026 | | | 200,000 | | | | 213,859 | |
4.29%, 9/12/2026(a) | | | 250,000 | | | | 270,503 | |
4.04%, 3/13/2028(a) | | | 200,000 | | | | 214,505 | |
See Accompanying Notes to the Financial Statements.
| | |
| 336 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Credit-Scored US Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Banks – (continued) | |
| | |
Huntington Bancshares, Inc. | | | | | | | | |
4.00%, 5/15/2025 | | $ | 200,000 | | | $ | 217,089 | |
| | |
ING Groep NV | | | | | | | | |
4.55%, 10/2/2028 | | | 350,000 | | | | 398,387 | |
| | |
JPMorgan Chase & Co. | | | | | | | | |
3.38%, 5/1/2023 | | | 520,000 | | | | 542,000 | |
3.56%, 4/23/2024(a) | | | 300,000 | | | | 313,474 | |
3.13%, 1/23/2025 | | | 681,000 | | | | 708,287 | |
3.90%, 7/15/2025 | | | 250,000 | | | | 269,710 | |
3.30%, 4/1/2026 | | | 470,000 | | | | 494,328 | |
3.20%, 6/15/2026 | | | 700,000 | | | | 733,068 | |
2.95%, 10/1/2026 | | | 450,000 | | | | 464,840 | |
4.13%, 12/15/2026 | | | 125,000 | | | | 136,599 | |
3.78%, 2/1/2028(a) | | | 300,000 | | | | 322,928 | |
4.20%, 7/23/2029(a) | | | 350,000 | | | | 389,446 | |
4.45%, 12/5/2029(a) | | | 350,000 | | | | 396,919 | |
| | |
Lloyds Banking Group plc | | | | | | | | |
4.38%, 3/22/2028 | | | 200,000 | | | | 221,093 | |
3.57%, 11/7/2028(a) | | | 200,000 | | | | 208,509 | |
| | |
Mitsubishi UFJ Financial Group, Inc. | | | | | | | | |
2.67%, 7/25/2022 | | | 450,000 | | | | 456,230 | |
3.85%, 3/1/2026 | | | 200,000 | | | | 215,421 | |
3.68%, 2/22/2027 | | | 350,000 | | | | 374,830 | |
3.29%, 7/25/2027 | | | 550,000 | | | | 576,765 | |
3.74%, 3/7/2029 | | | 200,000 | | | | 216,848 | |
| | |
Mizuho Financial Group, Inc. | | | | | | | | |
2.95%, 2/28/2022 | | | 400,000 | | | | 406,958 | |
3.55%, 3/5/2023 | | | 250,000 | | | | 260,408 | |
4.02%, 3/5/2028 | | | 300,000 | | | | 331,084 | |
| | |
National Australia Bank Ltd. | | | | | | | | |
2.80%, 1/10/2022 | | | 250,000 | | | | 254,818 | |
| | |
PNC Bank NA | | | | | | | | |
3.50%, 6/8/2023 | | | 250,000 | | | | 262,528 | |
| | |
PNC Financial Services Group, Inc. (The) | | | | | | | | |
3.30%, 3/8/2022 | | | 380,000 | | | | 391,556 | |
3.90%, 4/29/2024 | | | 50,000 | | | | 53,609 | |
3.15%, 5/19/2027 | | | 80,000 | | | | 84,532 | |
3.45%, 4/23/2029 | | | 200,000 | | | | 215,588 | |
| | |
Royal Bank of Canada | | | | | | | | |
2.75%, 2/1/2022 | | | 100,000 | | | | 102,087 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Banks – (continued) | |
| | |
Santander Holdings USA, Inc. | | | | | | | | |
4.50%, 7/17/2025 | | $ | 200,000 | | | $ | 215,682 | |
| | |
Santander UK Group Holdings plc | | | | | | | | |
3.82%, 11/3/2028(a) | | | 200,000 | | | | 211,142 | |
| | |
Sumitomo Mitsui Financial Group, Inc. | | | | | | | | |
2.78%, 7/12/2022 | | | 400,000 | | | | 406,830 | |
3.78%, 3/9/2026 | | | 250,000 | | | | 269,306 | |
2.63%, 7/14/2026 | | | 600,000 | | | | 604,104 | |
3.36%, 7/12/2027 | | | 350,000 | | | | 368,473 | |
| | |
SunTrust Bank | | | | | | | | |
3.30%, 5/15/2026 | | | 200,000 | | | | 209,454 | |
| | |
US Bancorp | | | | | | | | |
3.95%, 11/17/2025 | | | 200,000 | | | | 220,819 | |
| | |
Wells Fargo & Co. | | | | | | | | |
3.50%, 3/8/2022 | | | 400,000 | | | | 413,177 | |
2.63%, 7/22/2022 | | | 300,000 | | | | 304,160 | |
3.07%, 1/24/2023 | | | 250,000 | | | | 255,017 | |
4.48%, 1/16/2024 | | | 225,000 | | | | 242,813 | |
3.55%, 9/29/2025 | | | 450,000 | | | | 477,544 | |
3.58%, 5/22/2028(a) | | | 250,000 | | | | 265,192 | |
| | |
Westpac Banking Corp. | | | | | | | | |
2.75%, 1/11/2023 | | | 200,000 | | | | 204,912 | |
3.40%, 1/25/2028 | | | 400,000 | | | | 431,071 | |
4.32%, 11/23/2031(a) | | | 100,000 | | | | 106,526 | |
| | | | | | | | 28,435,511 | |
|
| Beverages – 1.3% | |
| | |
Anheuser-Busch InBev Finance, Inc. | | | | | | | | |
3.30%, 2/1/2023 | | | 180,000 | | | | 187,379 | |
| | |
Anheuser-Busch InBev Worldwide, Inc. | | | | | | | | |
4.00%, 4/13/2028 | | | 300,000 | | | | 331,427 | |
| | |
Constellation Brands, Inc. | | | | | | | | |
4.25%, 5/1/2023 | | | 150,000 | | | | 160,709 | |
| | |
Diageo Capital plc | | | | | | | | |
2.63%, 4/29/2023 | | | 100,000 | | | | 102,053 | |
| | |
PepsiCo, Inc. | | | | | | | | |
3.10%, 7/17/2022 | | | 200,000 | | | | 206,972 | |
2.38%, 10/6/2026 | | | 300,000 | | | | 305,923 | |
| | | | | | | | 1,294,463 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 337 | |
FlexShares® Credit-Scored US Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Biotechnology – 3.5% | |
| | |
AbbVie, Inc. | | | | | | | | |
2.90%, 11/6/2022 | | $ | 250,000 | | | $ | 254,997 | |
3.20%, 11/6/2022 | | | 240,000 | | | | 246,663 | |
3.20%, 5/14/2026 | | | 100,000 | | | | 102,490 | |
4.25%, 11/14/2028 | | | 400,000 | | | | 435,913 | |
| | |
Amgen, Inc. | | | | | | | | |
3.88%, 11/15/2021 | | | 250,000 | | | | 258,580 | |
2.70%, 5/1/2022 | | | 470,000 | | | | 478,178 | |
3.63%, 5/22/2024 | | | 100,000 | | | | 106,318 | |
| | |
Celgene Corp. | | | | | | | | |
2.25%, 8/15/2021 | | | 150,000 | | | | 150,792 | |
3.25%, 2/20/2023 | | | 200,000 | | | | 206,720 | |
3.63%, 5/15/2024 | | | 300,000 | | | | 317,548 | |
3.90%, 2/20/2028 | | | 200,000 | | | | 219,911 | |
| | |
Gilead Sciences, Inc. | | | | | | | | |
3.70%, 4/1/2024 | | | 350,000 | | | | 372,365 | |
3.50%, 2/1/2025 | | | 225,000 | | | | 239,142 | |
| | | | | | | | 3,389,617 | |
|
| Capital Markets – 11.6% | |
| | |
Bank of New York Mellon Corp. (The) | | | | | | | | |
Series 0012, 3.65%, 2/4/2024 | | | 300,000 | | | | 319,867 | |
3.40%, 1/29/2028 | | | 400,000 | | | | 428,651 | |
| | |
BlackRock, Inc. | | | | | | | | |
3.20%, 3/15/2027 | | | 200,000 | | | | 212,846 | |
| | |
Brookfield Finance, Inc. | | | | | | | | |
4.85%, 3/29/2029 | | | 200,000 | | | | 227,708 | |
| | |
Charles Schwab Corp. (The) | | | | | | | | |
3.20%, 1/25/2028 | | | 100,000 | | | | 105,261 | |
| | |
Deutsche Bank AG | | | | | | | | |
3.70%, 5/30/2024 | | | 295,000 | | | | 298,593 | |
| | |
Goldman Sachs Group, Inc. (The) | | | | | | | | |
5.75%, 1/24/2022 | | | 1,135,000 | | | | 1,223,471 | |
3.00%, 4/26/2022 | | | 400,000 | | | | 405,386 | |
3.63%, 1/22/2023 | | | 500,000 | | | | 522,975 | |
4.00%, 3/3/2024 | | | 210,000 | | | | 224,700 | |
3.50%, 1/23/2025 | | | 255,000 | | | | 266,760 | |
3.27%, 9/29/2025(a) | | | 500,000 | | | | 517,317 | |
3.69%, 6/5/2028(a) | | | 250,000 | | | | 264,238 | |
3.81%, 4/23/2029(a) | | | 500,000 | | | | 531,168 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Capital Markets – (continued) | |
4.22%, 5/1/2029(a) | | $ | 600,000 | | | $ | 656,231 | |
| | |
Morgan Stanley | | | | | | | | |
2.63%, 11/17/2021 | | | 400,000 | | | | 404,672 | |
2.75%, 5/19/2022 | | | 1,850,000 | | | | 1,879,219 | |
3.75%, 2/25/2023 | | | 350,000 | | | | 368,169 | |
4.00%, 7/23/2025 | | | 350,000 | | | | 379,869 | |
3.88%, 1/27/2026 | | | 200,000 | | | | 216,187 | |
4.35%, 9/8/2026 | | | 400,000 | | | | 435,989 | |
3.77%, 1/24/2029(a) | | | 1,000,000 | | | | 1,072,749 | |
| | |
State Street Corp. | | | | | | | | |
3.10%, 5/15/2023 | | | 200,000 | | | | 207,047 | |
3.55%, 8/18/2025 | | | 100,000 | | | | 108,000 | |
| | | | | | | | 11,277,073 | |
|
| Chemicals – 1.1% | |
| | |
Dow Chemical Co. (The) | | | | | | | | |
4.13%, 11/15/2021 | | | 150,000 | | | | 155,491 | |
| | |
DuPont de Nemours, Inc. | | | | | | | | |
4.21%, 11/15/2023 | | | 250,000 | | | | 268,022 | |
| | |
LYB International Finance BV | | | | | | | | |
4.00%, 7/15/2023 | | | 243,000 | | | | 257,986 | |
| | |
LYB International Finance II BV | | | | | | | | |
3.50%, 3/2/2027 | | | 187,000 | | | | 195,016 | |
| | |
Sherwin-Williams Co. (The) | | | | | | | | |
2.75%, 6/1/2022 | | | 113,000 | | | | 115,078 | |
2.95%, 8/15/2029 | | | 100,000 | | | | 101,289 | |
| | | | | | | | 1,092,882 | |
|
| Commercial Services & Supplies – 0.6% | |
| | |
Republic Services, Inc. | | | | | | | | |
3.55%, 6/1/2022 | | | 200,000 | | | | 207,901 | |
3.95%, 5/15/2028 | | | 100,000 | | | | 111,284 | |
| | |
Waste Management, Inc. | | | | | | | | |
3.13%, 3/1/2025 | | | 205,000 | | | | 214,916 | |
| | | | | | | | 534,101 | |
|
| Communications Equipment – 0.5% | |
| | |
Cisco Systems, Inc. | | | | | | | | |
2.95%, 2/28/2026 | | | 100,000 | | | | 105,501 | |
| | |
Motorola Solutions, Inc. | | | | | | | | |
3.75%, 5/15/2022 | | | 57,000 | | | | 59,255 | |
3.50%, 3/1/2023 | | | 300,000 | | | | 310,941 | |
| | | | | | | | 475,697 | |
See Accompanying Notes to the Financial Statements.
| | |
| 338 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Credit-Scored US Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Consumer Finance – 4.7% | |
| | |
AerCap Ireland Capital DAC | | | | | | | | |
3.95%, 2/1/2022 | | $ | 200,000 | | | $ | 206,990 | |
3.88%, 1/23/2028 | | | 200,000 | | | | 207,194 | |
| | |
American Express Co. | | | | | | | | |
2.50%, 8/1/2022 | | | 200,000 | | | | 202,584 | |
3.00%, 10/30/2024 | | | 450,000 | | | | 468,240 | |
3.63%, 12/5/2024 | | | 390,000 | | | | 414,891 | |
| | |
American Honda Finance Corp. | | | | | | | | |
3.63%, 10/10/2023 | | | 250,000 | | | | 266,115 | |
| | |
Capital One Financial Corp. | | | | | | | | |
3.50%, 6/15/2023 | | | 200,000 | | | | 208,539 | |
3.20%, 2/5/2025 | | | 750,000 | | | | 776,869 | |
4.20%, 10/29/2025 | | | 300,000 | | | | 323,671 | |
| | |
Discover Financial Services | | | | | | | | |
4.10%, 2/9/2027 | | | 150,000 | | | | 161,352 | |
| | |
General Motors Financial Co., Inc. | | | | | | | | |
5.10%, 1/17/2024 | | | 500,000 | | | | 538,944 | |
4.35%, 1/17/2027 | | | 400,000 | | | | 413,089 | |
| | |
Synchrony Financial | | | | | | | | |
4.25%, 8/15/2024 | | | 150,000 | | | | 158,964 | |
| | |
Toyota Motor Credit Corp. | | | | | | | | |
2.60%, 1/11/2022 | | | 250,000 | | | | 254,369 | |
| | | | | | | | 4,601,811 | |
|
| Diversified Financial Services – 0.8% | |
| | |
Berkshire Hathaway, Inc. | | | | | | | | |
3.13%, 3/15/2026 | | | 130,000 | | | | 138,357 | |
| | |
Shell International Finance BV | | | | | | | | |
3.25%, 5/11/2025 | | | 200,000 | | | | 212,030 | |
2.88%, 5/10/2026 | | | 175,000 | | | | 183,022 | |
| | |
Synchrony Bank | | | | | | | | |
3.00%, 6/15/2022 | | | 250,000 | | | | 253,609 | |
| | | | | | | | 787,018 | |
|
| Diversified Telecommunication Services – 2.4% | |
| | |
AT&T, Inc. | | | | | | | | |
3.40%, 5/15/2025 | | | 850,000 | | | | 891,321 | |
| | |
Verizon Communications, Inc. | | | | | | | | |
5.15%, 9/15/2023 | | | 550,000 | | | | 614,654 | |
2.63%, 8/15/2026 | | | 80,000 | | | | 81,695 | |
4.13%, 3/16/2027 | | | 400,000 | | | | 446,435 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Diversified Telecommunication Services – (continued) | |
4.33%, 9/21/2028 | | $ | 220,000 | | | $ | 250,730 | |
| | | | | | | | 2,284,835 | |
|
| Electric Utilities – 2.7% | |
| | |
Duke Energy Corp. | | | | | | | | |
3.75%, 4/15/2024 | | | 250,000 | | | | 265,801 | |
| | |
Duke Energy Progress LLC | | | | | | | | |
3.45%, 3/15/2029 | | | 300,000 | | | | 326,424 | |
| | |
Eversource Energy | | | | | | | | |
Series K, 2.75%, 3/15/2022 | | | 150,000 | | | | 152,649 | |
| | |
Exelon Corp. | | | | | | | | |
3.50%, 6/1/2022(b) | | | 400,000 | | | | 411,752 | |
| | |
FirstEnergy Corp. | | | | | | | | |
Series B, 3.90%, 7/15/2027 | | | 200,000 | | | | 215,421 | |
| | |
NextEra Energy Capital Holdings, Inc. | | | | | | | | |
3.50%, 4/1/2029 | | | 300,000 | | | | 319,641 | |
| | |
Southern Co. (The) | | | | | | | | |
2.95%, 7/1/2023 | | | 200,000 | | | | 205,013 | |
3.25%, 7/1/2026 | | | 175,000 | | | | 182,821 | |
| | |
Southwestern Electric Power Co. | | | | | | | | |
Series M, 4.10%, 9/15/2028 | | | 200,000 | | | | 222,686 | |
| | |
Virginia Electric & Power Co. | | | | | | | | |
Series A, 3.15%, 1/15/2026 | | | 50,000 | | | | 52,469 | |
Series A, 3.50%, 3/15/2027 | | | 100,000 | | | | 107,599 | |
| | |
Xcel Energy, Inc. | | | | | | | | |
4.00%, 6/15/2028 | | | 100,000 | | | | 110,408 | |
| | | | | | | | 2,572,684 | |
|
| Energy Equipment & Services – 0.3% | |
| | |
Halliburton Co. | | | | | | | | |
3.50%, 8/1/2023 | | | 200,000 | | | | 208,220 | |
3.80%, 11/15/2025 | | | 75,000 | | | | 79,067 | |
| | | | | | | | 287,287 | |
|
| Equity Real Estate Investment Trusts (REITs) – 3.5% | |
| | |
Alexandria Real Estate Equities, Inc. | | | | | | | | |
3.45%, 4/30/2025 | | | 200,000 | | | | 211,085 | |
| | |
American Tower Corp. | | | | | | | | |
3.50%, 1/31/2023 | | | 250,000 | | | | 260,188 | |
| | |
Boston Properties LP | | | | | | | | |
3.65%, 2/1/2026 | | | 255,000 | | | | 271,877 | |
4.50%, 12/1/2028 | | | 100,000 | | | | 114,471 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 339 | |
FlexShares® Credit-Scored US Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Brixmor Operating Partnership LP | | | | | | | | |
4.13%, 5/15/2029 | | $ | 300,000 | | | $ | 324,436 | |
| | |
Crown Castle International Corp. | | | | | | | | |
5.25%, 1/15/2023 | | | 200,000 | | | | 218,586 | |
| | |
Digital Realty Trust LP | | | | | | | | |
3.95%, 7/1/2022 | | | 74,000 | | | | 77,312 | |
4.45%, 7/15/2028 | | | 100,000 | | | | 110,827 | |
| | |
ERP Operating LP | | | | | | | | |
4.63%, 12/15/2021 | | | 200,000 | | | | 209,997 | |
| | |
GLP Capital LP | | | | | | | | |
5.30%, 1/15/2029 | | | 250,000 | | | | 277,335 | |
| | |
HCP, Inc. | | | | | | | | |
4.25%, 11/15/2023 | | | 165,000 | | | | 177,535 | |
| | |
Omega Healthcare Investors, Inc. | | | | | | | | |
4.38%, 8/1/2023 | | | 250,000 | | | | 265,615 | |
| | |
Realty Income Corp. | | | | | | | | |
3.65%, 1/15/2028 | | | 250,000 | | | | 269,009 | |
| | |
Simon Property Group LP | | | | | | | | |
3.38%, 10/1/2024 | | | 200,000 | | | | 211,356 | |
| | |
Ventas Realty LP | | | | | | | | |
3.50%, 2/1/2025 | | | 50,000 | | | | 52,586 | |
4.00%, 3/1/2028 | | | 150,000 | | | | 163,254 | |
| | |
Welltower, Inc. | | | | | | | | |
3.75%, 3/15/2023 | | | 30,000 | | | | 31,473 | |
4.25%, 4/1/2026 | | | 150,000 | | | | 164,402 | |
| | | | | | | | 3,411,344 | |
|
| Food & Staples Retailing – 0.9% | |
| | |
Costco Wholesale Corp. | | | | | | | | |
3.00%, 5/18/2027 | | | 75,000 | | | | 79,898 | |
| | |
Kroger Co. (The) | | | | | | | | |
3.85%, 8/1/2023 | | | 200,000 | | | | 211,480 | |
| | |
Sysco Corp. | | | | | | | | |
3.75%, 10/1/2025 | | | 200,000 | | | | 216,343 | |
| | |
Walmart, Inc. | | | | | | | | |
3.40%, 6/26/2023 | | | 300,000 | | | | 317,169 | |
| | | | | | | | 824,890 | |
|
| Food Products – 0.6% | |
| | |
General Mills, Inc. | | | | | | | | |
4.00%, 4/17/2025 | | | 250,000 | | | | 271,374 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Food Products – (continued) | |
| | |
Unilever Capital Corp. | | | | | | | | |
2.90%, 5/5/2027 | | $ | 200,000 | | | $ | 209,038 | |
3.50%, 3/22/2028 | | | 100,000 | | | | 109,609 | |
| | | | | | | | 590,021 | |
|
| Health Care Equipment & Supplies – 0.8% | |
| | |
Abbott Laboratories | | | | | | | | |
2.90%, 11/30/2021 | | | 200,000 | | | | 204,101 | |
| | |
Becton Dickinson and Co. | | | | | | | | |
3.73%, 12/15/2024 | | | 100,000 | | | | 106,917 | |
| | |
Boston Scientific Corp. | | | | | | | | |
4.00%, 3/1/2028 | | | 300,000 | | | | 334,688 | |
| | |
Medtronic, Inc. | | | | | | | | |
3.50%, 3/15/2025 | | | 156,000 | | | | 167,791 | |
| | | | | | | | 813,497 | |
|
| Health Care Providers & Services – 1.5% | |
| | |
Anthem, Inc. | | | | | | | | |
3.13%, 5/15/2022 | | | 300,000 | | | | 307,886 | |
3.30%, 1/15/2023 | | | 100,000 | | | | 103,873 | |
| | |
Cardinal Health, Inc. | | | | | | | | |
2.62%, 6/15/2022 | | | 300,000 | | | | 303,580 | |
| | |
CVS Health Corp. | | | | | | | | |
3.50%, 7/20/2022 | | | 200,000 | | | | 206,954 | |
| | |
Laboratory Corp. of America Holdings | | | | | | | | |
3.20%, 2/1/2022 | | | 100,000 | | | | 102,243 | |
| | |
UnitedHealth Group, Inc. | | | | | | | | |
3.75%, 7/15/2025 | | | 75,000 | | | | 81,386 | |
3.85%, 6/15/2028 | | | 250,000 | | | | 275,792 | |
3.88%, 12/15/2028 | | | 55,000 | | | | 61,015 | |
| | | | | | | | 1,442,729 | |
|
| Hotels, Restaurants & Leisure – 1.3% | |
| | |
Marriott International, Inc. | | | | | | | | |
2.30%, 1/15/2022 | | | 80,000 | | | | 80,421 | |
| | |
McDonald’s Corp. | | | | | | | | |
2.63%, 1/15/2022 | | | 150,000 | | | | 152,584 | |
3.38%, 5/26/2025 | | | 125,000 | | | | 132,721 | |
3.80%, 4/1/2028 | | | 150,000 | | | | 165,890 | |
| | |
Sands China Ltd. | | | | | | | | |
5.13%, 8/8/2025 | | | 400,000 | | | | 442,060 | |
See Accompanying Notes to the Financial Statements.
| | |
| 340 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Credit-Scored US Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Hotels, Restaurants & Leisure – (continued) | |
| | |
Starbucks Corp. | | | | | | | | |
3.10%, 3/1/2023 | | $ | 100,000 | | | $ | 103,565 | |
3.50%, 3/1/2028 | | | 200,000 | | | | 216,539 | |
| | | | | | | | 1,293,780 | |
|
| Household Products – 0.2% | |
| | |
Procter & Gamble Co. (The) | | | | | | | | |
3.10%, 8/15/2023 | | | 150,000 | | | | 157,149 | |
|
| Industrial Conglomerates – 0.6% | |
| | |
3M Co. | | | | | | | | |
2.25%, 9/19/2026 | | | 100,000 | | | | 100,636 | |
3.38%, 3/1/2029 | | | 100,000 | | | | 108,005 | |
| | |
Honeywell International, Inc. | | | | | | | | |
1.85%, 11/1/2021 | | | 80,000 | | | | 80,181 | |
2.70%, 8/15/2029 | | | 100,000 | | | | 103,435 | |
| | |
Roper Technologies, Inc. | | | | | | | | |
3.80%, 12/15/2026 | | | 200,000 | | | | 215,210 | |
| | | | | | | | 607,467 | |
|
| Insurance – 1.3% | |
| | |
American International Group, Inc. | | | | | | | | |
3.90%, 4/1/2026 | | | 100,000 | | | | 107,659 | |
4.25%, 3/15/2029 | | | 150,000 | | | | 166,676 | |
| | |
Chubb INA Holdings, Inc. | | | | | | | | |
3.15%, 3/15/2025 | | | 270,000 | | | | 285,896 | |
| | |
Marsh & McLennan Cos., Inc. | | | | | | | | |
3.50%, 3/10/2025 | | | 75,000 | | | | 79,365 | |
4.38%, 3/15/2029 | | | 200,000 | | | | 228,381 | |
| | |
MetLife, Inc. | | | | | | | | |
3.05%, 12/15/2022(b) | | | 250,000 | | | | 258,416 | |
| | |
Prudential Financial, Inc. | | | | | | | | |
5.20%, 3/15/2044(a) | | | 10,000 | | | | 10,667 | |
5.70%, 9/15/2048(a) | | | 150,000 | | | | 170,463 | |
| | | | | | | | 1,307,523 | |
|
| Internet & Direct Marketing Retail – 1.2% | |
| | |
Alibaba Group Holding Ltd. | | | | | | | | |
3.13%, 11/28/2021 | | | 200,000 | | | | 203,646 | |
3.60%, 11/28/2024 | | | 300,000 | | | | 315,311 | |
| | |
Amazon.com, Inc. | | | | | | | | |
3.15%, 8/22/2027 | | | 300,000 | | | | 320,345 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Internet & Direct Marketing Retail – (continued) | |
| | |
eBay, Inc. | | | | | | | | |
2.60%, 7/15/2022 | | $ | 200,000 | | | $ | 202,168 | |
3.45%, 8/1/2024 | | | 120,000 | | | | 125,551 | |
| | | | | | | | 1,167,021 | |
|
| IT Services – 2.8% | |
| | |
Fidelity National Information Services, Inc. | | | | | | | | |
3.50%, 4/15/2023 | | | 250,000 | | | | 261,182 | |
3.00%, 8/15/2026 | | | 100,000 | | | | 103,451 | |
| | |
Fiserv, Inc. | | | | | | | | |
3.80%, 10/1/2023 | | | 250,000 | | | | 265,130 | |
3.20%, 7/1/2026 | | | 500,000 | | | | 523,176 | |
| | |
International Business Machines Corp. | | | | | | | | |
3.00%, 5/15/2024 | | | 900,000 | | | | 935,286 | |
3.45%, 2/19/2026 | | | 350,000 | | | | 374,425 | |
| | |
Visa, Inc. | | | | | | | | |
3.15%, 12/14/2025 | | | 200,000 | | | | 213,965 | |
| | | | | | | | 2,676,615 | |
|
| Media – 1.6% | |
| | |
CBS Corp. | | | | | | | | |
3.70%, 8/15/2024 | | | 300,000 | | | | 315,691 | |
2.90%, 1/15/2027 | | | 100,000 | | | | 99,942 | |
| | |
Comcast Corp. | | | | | | | | |
3.95%, 10/15/2025 | | | 647,000 | | | | 709,782 | |
4.15%, 10/15/2028 | | | 300,000 | | | | 339,150 | |
| | |
Omnicom Group, Inc. | | | | | | | | |
3.60%, 4/15/2026 | | | 100,000 | | | | 105,667 | |
| | | | | | | | 1,570,232 | |
|
| Multiline Retail – 0.3% | |
| | |
Dollar Tree, Inc. | | | | | | | | |
3.70%, 5/15/2023 | | | 300,000 | | | | 314,151 | |
|
| Multi-Utilities – 0.4% | |
| | |
Berkshire Hathaway Energy Co. | | | | | | | | |
3.25%, 4/15/2028 | | | 100,000 | | | | 106,130 | |
| | |
DTE Energy Co. | | | | | | | | |
3.80%, 3/15/2027 | | | 100,000 | | | | 107,857 | |
| | |
Public Service Enterprise Group, Inc. | | | | | | | | |
2.65%, 11/15/2022 | | | 200,000 | | | | 203,488 | |
| | | | | | | | 417,475 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 341 | |
FlexShares® Credit-Scored US Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Oil, Gas & Consumable Fuels – 9.6% | |
| | |
BP Capital Markets America, Inc. | | | | | | | | |
3.25%, 5/6/2022 | | $ | 339,000 | | | $ | 350,221 | |
3.22%, 4/14/2024 | | | 300,000 | | | | 313,487 | |
3.12%, 5/4/2026 | | | 300,000 | | | | 314,626 | |
3.02%, 1/16/2027 | | | 150,000 | | | | 155,829 | |
| | |
BP Capital Markets plc | | | | | | | | |
3.28%, 9/19/2027 | | | 350,000 | | | | 369,686 | |
| | |
Canadian Natural Resources Ltd. | | | | | | | | |
3.85%, 6/1/2027 | | | 300,000 | | | | 317,717 | |
| | |
Chevron Corp. | | | | | | | | |
2.95%, 5/16/2026 | | | 100,000 | | | | 105,253 | |
| | |
ConocoPhillips Co. | | | | | | | | |
4.95%, 3/15/2026 | | | 300,000 | | | | 345,388 | |
| | |
Continental Resources, Inc. | | | | | | | | |
4.50%, 4/15/2023 | | | 400,000 | | | | 416,971 | |
| | |
Enbridge, Inc. | | | | | | | | |
3.70%, 7/15/2027 | | | 200,000 | | | | 212,354 | |
| | |
Energy Transfer Operating LP | | | | | | | | |
5.88%, 1/15/2024 | | | 500,000 | | | | 555,545 | |
| | |
Enterprise Products Operating LLC | | | | | | | | |
3.35%, 3/15/2023 | | | 430,000 | | | | 445,621 | |
3.75%, 2/15/2025 | | | 200,000 | | | | 213,383 | |
4.15%, 10/16/2028 | | | 250,000 | | | | 276,371 | |
| | |
Exxon Mobil Corp. | | | | | | | | |
2.73%, 3/1/2023 | | | 160,000 | | | | 164,668 | |
3.04%, 3/1/2026 | | | 200,000 | | | | 211,437 | |
| | |
Kinder Morgan Energy Partners LP | | | | | | | | |
4.25%, 9/1/2024 | | | 400,000 | | | | 429,043 | |
| | |
Kinder Morgan, Inc. | | | | | | | | |
4.30%, 6/1/2025 | | | 100,000 | | | | 108,241 | |
| | |
MPLX LP | | | | | | | | |
3.38%, 3/15/2023 | | | 200,000 | | | | 205,548 | |
4.00%, 2/15/2025 | | | 100,000 | | | | 104,881 | |
| | |
Occidental Petroleum Corp. | | | | | | | | |
2.70%, 2/15/2023 | | | 80,000 | | | | 80,651 | |
3.40%, 4/15/2026 | | | 200,000 | | | | 203,731 | |
3.20%, 8/15/2026 | | | 500,000 | | | | 506,593 | |
| | |
ONEOK Partners LP | | | | | | | | |
4.90%, 3/15/2025 | | | 150,000 | | | | 165,054 | |
| | |
Plains All American Pipeline LP | | | | | | | | |
3.65%, 6/1/2022 | | | 250,000 | | | | 256,695 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
4.65%, 10/15/2025 | | $ | 50,000 | | | $ | 53,468 | |
| | |
Sabine Pass Liquefaction LLC | | | | | | | | |
5.63%, 3/1/2025 | | | 500,000 | | | | 561,379 | |
| | |
Spectra Energy Partners LP | | | | | | | | |
4.75%, 3/15/2024 | | | 400,000 | | | | 436,461 | |
| | |
Total Capital International SA | | | | | | | | |
3.75%, 4/10/2024 | | | 180,000 | | | | 193,635 | |
3.46%, 2/19/2029 | | | 200,000 | | | | 217,911 | |
| | |
TransCanada PipeLines Ltd. | | | | | | | | |
2.50%, 8/1/2022 | | | 800,000 | | | | 810,958 | |
| | |
Valero Energy Corp. | | | | | | | | |
3.65%, 3/15/2025 | | | 200,000 | | | | 211,322 | |
| | | | | | | | 9,314,128 | |
|
| Pharmaceuticals – 2.7% | |
| | |
Allergan Funding SCS | | | | | | | | |
3.80%, 3/15/2025 | | | 500,000 | | | | 526,305 | |
| | |
AstraZeneca plc | | | | | | | | |
3.38%, 11/16/2025 | | | 300,000 | | | | 317,545 | |
| | |
GlaxoSmithKline Capital, Inc. | | | | | | | | |
3.38%, 5/15/2023 | | | 200,000 | | | | 209,828 | |
3.88%, 5/15/2028 | | | 200,000 | | | | 223,639 | |
| | |
Johnson & Johnson | | | | | | | | |
2.45%, 3/1/2026 | | | 200,000 | | | | 205,322 | |
| | |
Merck & Co., Inc. | | | | | | | | |
2.75%, 2/10/2025 | | | 365,000 | | | | 379,186 | |
| | |
Novartis Capital Corp. | | | | | | | | |
3.40%, 5/6/2024 | | | 200,000 | | | | 212,926 | |
| | |
Pfizer, Inc. | | | | | | | | |
3.45%, 3/15/2029 | | | 300,000 | | | | 327,595 | |
| | |
Zoetis, Inc. | | | | | | | | |
3.25%, 2/1/2023 | | | 150,000 | | | | 155,018 | |
3.00%, 9/12/2027 | | | 100,000 | | | | 103,211 | |
| | | | | | | | 2,660,575 | |
|
| Road & Rail – 0.7% | |
| | |
CSX Corp. | | | | | | | | |
3.25%, 6/1/2027 | | | 100,000 | | | | 105,530 | |
4.25%, 3/15/2029 | | | 200,000 | | | | 226,609 | |
| | |
Union Pacific Corp. | | | | | | | | |
4.16%, 7/15/2022 | | | 100,000 | | | | 105,565 | |
3.95%, 9/10/2028 | | | 250,000 | | | | 278,423 | |
| | | | | | | | 716,127 | |
See Accompanying Notes to the Financial Statements.
| | |
| 342 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Credit-Scored US Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Semiconductors & Semiconductor Equipment – 1.2% | |
| | |
Analog Devices, Inc. | | | | | | | | |
3.50%, 12/5/2026 | | $ | 200,000 | | | $ | 210,716 | |
| | |
Intel Corp. | | | | | | | | |
2.70%, 12/15/2022 | | | 200,000 | | | | 205,628 | |
2.60%, 5/19/2026 | | | 150,000 | | | | 154,702 | |
| | |
QUALCOMM, Inc. | | | | | | | | |
3.00%, 5/20/2022 | | | 400,000 | | | | 410,734 | |
3.25%, 5/20/2027 | | | 200,000 | | | | 210,594 | |
| | | | | | | | 1,192,374 | |
|
| Software – 1.9% | |
| | |
Microsoft Corp. | | | | | | | | |
2.38%, 2/12/2022 | | | 400,000 | | | | 405,958 | |
2.88%, 2/6/2024 | | | 200,000 | | | | 208,644 | |
2.70%, 2/12/2025 | | | 140,000 | | | | 145,872 | |
3.13%, 11/3/2025 | | | 150,000 | | | | 159,888 | |
2.40%, 8/8/2026 | | | 100,000 | | | | 102,651 | |
| | |
Oracle Corp. | | | | | | | | |
2.95%, 5/15/2025 | | | 400,000 | | | | 416,388 | |
2.65%, 7/15/2026 | | | 200,000 | | | | 205,042 | |
3.25%, 11/15/2027 | | | 200,000 | | | | 212,844 | |
| | | | | | | | 1,857,287 | |
|
| Specialty Retail – 1.2% | |
| | |
Home Depot, Inc. (The) | | | | | | | | |
2.63%, 6/1/2022 | | | 200,000 | | | | 204,466 | |
3.00%, 4/1/2026 | | | 330,000 | | | | 347,990 | |
| | |
Lowe’s Cos., Inc. | | | | | | | | |
3.38%, 9/15/2025 | | | 100,000 | | | | 106,032 | |
3.10%, 5/3/2027 | | | 300,000 | | | | 313,177 | |
| | |
O’Reilly Automotive, Inc. | | | | | | | | |
3.55%, 3/15/2026 | | | 200,000 | | | | 211,936 | |
| | | | | | | | 1,183,601 | |
|
| Technology Hardware, Storage & Peripherals – 1.8% | |
| | |
Apple, Inc. | | | | | | | | |
3.00%, 2/9/2024 | | | 225,000 | | | | 235,365 | |
3.45%, 5/6/2024 | | | 450,000 | | | | 480,383 | |
3.20%, 5/11/2027 | | | 450,000 | | | | 479,538 | |
2.90%, 9/12/2027 | | | 500,000 | | | | 523,746 | |
| | | | | | | | 1,719,032 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Tobacco – 2.1% | |
| | |
Altria Group, Inc. | | | | | | | | |
3.49%, 2/14/2022 | | $ | 200,000 | | | $ | 205,681 | |
2.85%, 8/9/2022 | | | 160,000 | | | | 162,446 | |
4.00%, 1/31/2024 | | | 100,000 | | | | 105,818 | |
2.63%, 9/16/2026 | | | 160,000 | | | | 156,892 | |
4.80%, 2/14/2029 | | | 100,000 | | | | 109,872 | |
| | |
BAT Capital Corp. | | | | | | | | |
3.56%, 8/15/2027 | | | 400,000 | | | | 402,593 | |
| | |
Philip Morris International, Inc. | | | | | | | | |
2.75%, 2/25/2026 | | | 400,000 | | | | 408,440 | |
| | |
Reynolds American, Inc. | | | | | | | | |
4.00%, 6/12/2022 | | | 450,000 | | | | 469,301 | |
| | | | | | | | 2,021,043 | |
|
| Trading Companies & Distributors – 0.4% | |
| | |
Air Lease Corp. | | | | | | | | |
3.00%, 9/15/2023 | | | 405,000 | | | | 412,255 | |
Total Corporate Bonds
(Cost $91,943,843) | | | | 96,316,502 | |
| | | | | | |
Total Investments – 99.0%
(Cost $91,943,843) | | | | 96,316,502 | |
| |
Other Assets Less Liabilities – 1.0% | | | | 958,566 | |
| NET ASSETS – 100.0% | | | $ | 97,275,068 | |
| (a) | Security issued at a fixed coupon rate, which converts to a variable rate at a future date. Rate shown is the rate in effect as of period end. |
| (b) | Step bond. Interest rate is a fixed rate for an initial period that either resets at a specific date or may reset in the future at a contingent upon predetermined trigger. The interest rate shown was the current rate as of October 31, 2019. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 4,356,197 | |
Aggregate gross unrealized depreciation | | | (11,099 | ) |
Net unrealized appreciation | | $ | 4,345,098 | |
Federal income tax cost | | $ | 91,971,404 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 343 | |
Schedule of Investments
FlexShares® Credit-Scored US Long Corporate Bond Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – 98.2% | |
|
| Aerospace & Defense – 2.7% | |
| | |
L3Harris Technologies, Inc. | | | | | | | | |
5.05%, 4/27/2045 | | $ | 20,000 | | | $ | 25,078 | |
| | |
Lockheed Martin Corp. | | | | | | | | |
4.70%, 5/15/2046 | | | 85,000 | | | | 107,140 | |
| | |
Northrop Grumman Corp. | | | | | | | | |
4.75%, 6/1/2043 | | | 85,000 | | | | 104,237 | |
| | |
Raytheon Co. | | | | | | | | |
4.88%, 10/15/2040 | | | 15,000 | | | | 18,808 | |
| | |
United Technologies Corp. | | | | | | | | |
4.50%, 6/1/2042 | | | 175,000 | | | | 210,370 | |
| | | | | | | | 465,633 | |
|
| Air Freight & Logistics – 0.9% | |
| | |
FedEx Corp. | | | | | | | | |
4.75%, 11/15/2045 | | | 105,000 | | | | 113,385 | |
| | |
United Parcel Service, Inc. | | | | | | | | |
3.75%, 11/15/2047 | | | 40,000 | | | | 43,212 | |
| | | | | | | | 156,597 | |
|
| Automobiles – 0.2% | |
| | |
Daimler Finance North America LLC | | | | | | | | |
8.50%, 1/18/2031 | | | 20,000 | | | | 30,204 | |
|
| Banks – 6.9% | |
| | |
Bank of America Corp. | | | | | | | | |
4.24%, 4/24/2038(a) | | | 130,000 | | | | 147,859 | |
5.00%, 1/21/2044 | | | 40,000 | | | | 51,060 | |
| | |
Citigroup, Inc. | | | | | | | | |
8.13%, 7/15/2039 | | | 22,000 | | | | 36,237 | |
5.88%, 1/30/2042 | | | 35,000 | | | | 48,350 | |
4.75%, 5/18/2046 | | | 35,000 | | | | 41,200 | |
4.28%, 4/24/2048(a) | | | 60,000 | | | | 71,019 | |
4.65%, 7/23/2048 | | | 45,000 | | | | 55,585 | |
| | |
Fifth Third Bancorp | | | | | | | | |
8.25%, 3/1/2038 | | | 25,000 | | | | 38,433 | |
| | |
HSBC Holdings plc | | | | | | | | |
6.10%, 1/14/2042 | | | 105,000 | | | | 149,893 | |
| | |
JPMorgan Chase & Co. | | | | | | | | |
4.26%, 2/22/2048(a) | | | 215,000 | | | | 251,276 | |
3.90%, 1/23/2049(a) | | | 105,000 | | | | 116,711 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Banks – (continued) | |
| | |
Wells Fargo & Co. | | | | | | | | |
5.38%, 11/2/2043 | | $ | 150,000 | | | $ | 190,254 | |
| | | | | | | | 1,197,877 | |
|
| Beverages – 2.0% | |
| | |
Anheuser-Busch Cos. LLC | | | | | | | | |
4.70%, 2/1/2036 | | | 130,000 | | | | 151,179 | |
| | |
Diageo Capital plc | | | | | | | | |
5.88%, 9/30/2036 | | | 45,000 | | | | 62,292 | |
| | |
PepsiCo, Inc. | | | | | | | | |
3.45%, 10/6/2046 | | | 115,000 | | | | 125,277 | |
| | | | | | | | 338,748 | |
|
| Biotechnology – 5.8% | |
| | |
AbbVie, Inc. | | | | | | | | |
4.40%, 11/6/2042 | | | 145,000 | | | | 150,547 | |
4.70%, 5/14/2045 | | | 130,000 | | | | 139,291 | |
| | |
Amgen, Inc. | | | | | | | | |
6.38%, 6/1/2037 | | | 15,000 | | | | 20,398 | |
5.15%, 11/15/2041 | | | 55,000 | | | | 66,950 | |
4.40%, 5/1/2045 | | | 130,000 | | | | 146,480 | |
| | |
Celgene Corp. | | | | | | | | |
5.00%, 8/15/2045 | | | 200,000 | | | | 255,030 | |
| | |
Gilead Sciences, Inc. | | | | | | | | |
4.75%, 3/1/2046 | | | 105,000 | | | | 125,872 | |
4.15%, 3/1/2047 | | | 95,000 | | | | 105,739 | |
| | | | | | | | 1,010,307 | |
|
| Capital Markets – 5.7% | |
| | |
Goldman Sachs Group, Inc. (The) | | | | | | | | |
6.75%, 10/1/2037 | | | 165,000 | | | | 224,796 | |
4.02%, 10/31/2038(a) | | | 130,000 | | | | 140,620 | |
5.15%, 5/22/2045 | | | 170,000 | | | | 207,188 | |
4.75%, 10/21/2045 | | | 35,000 | | | | 42,721 | |
| | |
Morgan Stanley | | | | | | | | |
6.38%, 7/24/2042 | | | 75,000 | | | | 110,161 | |
4.30%, 1/27/2045 | | | 185,000 | | | | 215,448 | |
| | |
Raymond James Financial, Inc. | | | | | | | | |
4.95%, 7/15/2046 | | | 45,000 | | | | 54,598 | |
| | | | | | | | 995,532 | |
See Accompanying Notes to the Financial Statements.
| | |
| 344 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Credit-Scored US Long Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Chemicals – 1.2% | |
| | |
Eastman Chemical Co. | | | | | | | | |
4.80%, 9/1/2042 | | $ | 45,000 | | | $ | 49,183 | |
| | |
LYB International Finance BV | | | | | | | | |
4.88%, 3/15/2044 | | | 85,000 | | | | 94,056 | |
| | |
Praxair, Inc. | | | | | | | | |
3.55%, 11/7/2042 | | | 10,000 | | | | 10,655 | |
| | |
Sherwin-Williams Co. (The) | | | | | | | | |
4.50%, 6/1/2047 | | | 45,000 | | | | 50,558 | |
| | | | | | | | 204,452 | |
|
| Communications Equipment – 0.7% | |
| | |
Cisco Systems, Inc. | | | | | | | | |
5.90%, 2/15/2039 | | | 85,000 | | | | 120,517 | |
|
| Containers & Packaging – 0.2% | |
| | |
Sonoco Products Co. | | | | | | | | |
5.75%, 11/1/2040 | | | 20,000 | | | | 24,742 | |
|
| Diversified Financial Services – 0.7% | |
| | |
Shell International Finance BV | | | | | | | | |
4.38%, 5/11/2045 | | | 105,000 | | | | 127,572 | |
|
| Diversified Telecommunication Services – 8.5% | |
| | |
AT&T, Inc. | | | | | | | | |
4.50%, 5/15/2035 | | | 45,000 | | | | 49,719 | |
4.30%, 12/15/2042 | | | 170,000 | | | | 180,311 | |
| | |
Bell Canada, Inc. | | | | | | | | |
4.46%, 4/1/2048 | | | 45,000 | | | | 52,204 | |
| | |
British Telecommunications plc | | | | | | | | |
9.63%, 12/15/2030(b) | | | 80,000 | | | | 122,832 | |
| | |
Deutsche Telekom International Finance BV | | | | | | | | |
8.75%, 6/15/2030(b) | | | 110,000 | | | | 162,692 | |
| | |
Orange SA | | | | | | | | |
9.00%, 3/1/2031(b) | | | 75,000 | | | | 117,130 | |
| | |
Verizon Communications, Inc. | | | | | | | | |
4.27%, 1/15/2036 | | | 150,000 | | | | 170,004 | |
5.25%, 3/16/2037 | | | 110,000 | | | | 138,746 | |
4.75%, 11/1/2041 | | | 195,000 | | | | 235,157 | |
4.67%, 3/15/2055 | | | 195,000 | | | | 239,919 | |
| | | | | | | | 1,468,714 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Electric Utilities – 3.2% | |
| | |
Alabama Power Co. | | | | | | | | |
Series B, 3.70%, 12/1/2047 | | $ | 65,000 | | | $ | 69,949 | |
| | |
Appalachian Power Co. | | | | | | | | |
7.00%, 4/1/2038 | | | 30,000 | | | | 43,174 | |
| | |
Duke Energy Corp. | | | | | | | | |
3.75%, 9/1/2046 | | | 150,000 | | | | 155,525 | |
| | |
Duke Energy Florida LLC | | | | | | | | |
6.40%, 6/15/2038 | | | 45,000 | | | | 65,912 | |
| | |
Exelon Corp. | | | | | | | | |
4.45%, 4/15/2046 | | | 45,000 | | | | 51,133 | |
| | |
FirstEnergy Corp. | | | | | | | | |
Series C, 7.38%, 11/15/2031 | | | 50,000 | | | | 71,105 | |
| | |
Florida Power & Light Co. | | | | | | | | |
4.13%, 2/1/2042 | | | 75,000 | | | | 87,767 | |
| | |
Public Service Electric & Gas Co. | | | | | | | | |
3.80%, 3/1/2046 | | | 15,000 | | | | 16,998 | |
| | | | | | | | 561,563 | |
|
| Electrical Equipment – 0.1% | |
| | |
Eaton Corp. | | | | | | | | |
4.15%, 11/2/2042 | | | 15,000 | | | | 16,833 | |
|
| Electronic Equipment, Instruments & Components – 0.3% | |
| | |
Corning, Inc. | | | | | | | | |
4.75%, 3/15/2042 | | | 45,000 | | | | 51,680 | |
|
| Energy Equipment & Services – 0.9% | |
| | |
Halliburton Co. | | | | | | | | |
4.85%, 11/15/2035 | | | 135,000 | | | | 150,193 | |
|
| Entertainment – 1.5% | |
| | |
NBCUniversal Media LLC | | | | | | | | |
5.95%, 4/1/2041 | | | 100,000 | | | | 138,059 | |
| | |
Viacom, Inc. | | | | | | | | |
5.85%, 9/1/2043 | | | 100,000 | | | | 122,604 | |
| | | | | | | | 260,663 | |
|
| Equity Real Estate Investment Trusts (REITs) – 0.9% | |
| | |
ERP Operating LP | | | | | | | | |
4.50%, 7/1/2044 | | | 20,000 | | | | 24,027 | |
| | |
Federal Realty Investment Trust | | | | | | | | |
4.50%, 12/1/2044 | | | 25,000 | | | | 29,808 | |
| | |
Simon Property Group LP | | | | | | | | |
4.75%, 3/15/2042 | | | 30,000 | | | | 36,711 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 345 | |
FlexShares® Credit-Scored US Long Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Equity Real Estate Investment Trusts (REITs) – (continued) | |
| | |
Welltower, Inc. | | | | | | | | |
4.95%, 9/1/2048 | | $ | 15,000 | | | $ | 18,359 | |
| | |
Weyerhaeuser Co. | | | | | | | | |
7.38%, 3/15/2032 | | | 35,000 | | | | 48,956 | |
| | | | | | | | 157,861 | |
|
| Food & Staples Retailing – 1.8% | |
| | |
Kroger Co. (The) | | | | | | | | |
4.45%, 2/1/2047 | | | 45,000 | | | | 46,635 | |
| | |
Sysco Corp. | | | | | | | | |
4.85%, 10/1/2045 | | | 35,000 | | | | 42,931 | |
| | |
Walgreen Co. | | | | | | | | |
4.40%, 9/15/2042 | | | 90,000 | | | | 92,268 | |
| | |
Walmart, Inc. | | | | | | | | |
4.05%, 6/29/2048 | | | 105,000 | | | | 125,535 | |
| | | | | | | | 307,369 | |
|
| Food Products – 1.1% | |
| | |
Kellogg Co. | | | | | | | | |
Series B, 7.45%, 4/1/2031 | | | 45,000 | | | | 62,704 | |
| | |
Tyson Foods, Inc. | | | | | | | | |
4.88%, 8/15/2034 | | | 85,000 | | | | 101,965 | |
| | |
Unilever Capital Corp. | | | | | | | | |
5.90%, 11/15/2032 | | | 20,000 | | | | 27,236 | |
| | | | | | | | 191,905 | |
|
| Gas Utilities – 0.2% | |
| | |
Atmos Energy Corp. | | | | | | | | |
4.13%, 10/15/2044 | | | 15,000 | | | | 17,462 | |
| | |
Southern California Gas Co. | | | | | | | | |
Series VV, 4.30%, 1/15/2049 | | | 20,000 | | | | 23,603 | |
| | | | | | | | 41,065 | |
|
| Health Care Equipment & Supplies – 1.2% | |
| | |
Abbott Laboratories | | | | | | | | |
4.90%, 11/30/2046 | | | 85,000 | | | | 108,776 | |
| | |
Koninklijke Philips NV | | | | | | | | |
5.00%, 3/15/2042 | | | 35,000 | | | | 42,294 | |
| | |
Medtronic, Inc. | | | | | | | | |
4.38%, 3/15/2035 | | | 28,000 | | | | 33,463 | |
| | |
Stryker Corp. | | | | | | | | |
4.63%, 3/15/2046 | | | 25,000 | | | | 30,609 | |
| | | | | | | | 215,142 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Health Care Providers & Services – 2.3% | |
| | |
Anthem, Inc. | | | | | | | | |
4.63%, 5/15/2042 | | $ | 100,000 | | | $ | 110,499 | |
| | |
Humana, Inc. | | | | | | | | |
4.95%, 10/1/2044 | | | 15,000 | | | | 17,177 | |
| | |
UnitedHealth Group, Inc. | | | | | | | | |
4.75%, 7/15/2045 | | | 100,000 | | | | 122,327 | |
4.45%, 12/15/2048 | | | 130,000 | | | | 153,649 | |
| | | | | | | | 403,652 | |
|
| Hotels, Restaurants & Leisure – 1.9% | |
| | |
McDonald’s Corp. | | | | | | | | |
6.30%, 3/1/2038 | | | 75,000 | | | | 102,738 | |
4.88%, 12/9/2045 | | | 130,000 | | | | 157,612 | |
| | |
Starbucks Corp. | | | | | | | | |
3.75%, 12/1/2047 | | | 65,000 | | | | 67,935 | |
| | | | | | | | 328,285 | |
|
| Industrial Conglomerates – 0.2% | |
| | |
Ingersoll-Rand Global Holding Co. Ltd. | | | | | | | | |
5.75%, 6/15/2043 | | | 20,000 | | | | 25,679 | |
|
| Insurance – 4.2% | |
| | |
Aflac, Inc. | | | | | | | | |
4.75%, 1/15/2049 | | | 45,000 | | | | 56,025 | |
| | |
Allstate Corp. (The) | | | | | | | | |
6.50%, 5/15/2057(a) | | | 15,000 | | | | 18,546 | |
| | |
American International Group, Inc. | | | | | | | | |
3.88%, 1/15/2035 | | | 110,000 | | | | 116,015 | |
| | |
Aon plc | | | | | | | | |
4.60%, 6/14/2044 | | | 55,000 | | | | 63,953 | |
| | |
Berkshire Hathaway Finance Corp. | | | | | | | | |
5.75%, 1/15/2040 | | | 65,000 | | | | 91,936 | |
| | |
Chubb Corp. (The) | | | | | | | | |
6.00%, 5/11/2037 | | | 30,000 | | | | 41,128 | |
| | |
Manulife Financial Corp. | | | | | | | | |
5.38%, 3/4/2046 | | | 30,000 | | | | 39,922 | |
| | |
Marsh & McLennan Cos., Inc. | | | | | | | | |
4.35%, 1/30/2047 | | | 20,000 | | | | 23,193 | |
4.90%, 3/15/2049 | | | 65,000 | | | | 81,826 | |
| | |
MetLife, Inc. | | | | | | | | |
6.40%, 12/15/2036 | | | 60,000 | | | | 72,972 | |
| | |
Principal Financial Group, Inc. | | | | | | | | |
6.05%, 10/15/2036 | | | 25,000 | | | | 32,871 | |
See Accompanying Notes to the Financial Statements.
| | |
| 346 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Credit-Scored US Long Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Insurance – (continued) | |
| | |
Prudential Financial, Inc. | | | | | | | | |
3.94%, 12/7/2049 | | $ | 45,000 | | | $ | 49,270 | |
| | |
Travelers Cos., Inc. (The) | | | | | | | | |
4.10%, 3/4/2049 | | | 40,000 | | | | 47,255 | |
| | | | | | | | 734,912 | |
|
| Internet & Direct Marketing Retail – 1.7% | |
| | |
Alibaba Group Holding Ltd. | | | | | | | | |
4.00%, 12/6/2037 | | | 170,000 | | | | 183,775 | |
| | |
Amazon.com, Inc. | | | | | | | | |
4.25%, 8/22/2057 | | | 65,000 | | | | 79,714 | |
| | |
eBay, Inc. | | | | | | | | |
4.00%, 7/15/2042 | | | 35,000 | | | | 33,579 | |
| | | | | | | | 297,068 | |
|
| IT Services – 1.4% | |
| | |
Fidelity National Information Services, Inc. | | | | | | | | |
4.75%, 5/15/2048 | | | 45,000 | | | | 53,956 | |
| | |
International Business Machines Corp. | | | | | | | | |
4.25%, 5/15/2049 | | | 85,000 | | | | 97,004 | |
| | |
Visa, Inc. | | | | | | | | |
4.30%, 12/14/2045 | | | 70,000 | | | | 86,899 | |
| | | | | | | | 237,859 | |
|
| Life Sciences Tools & Services – 0.3% | |
| | |
Thermo Fisher Scientific, Inc. | | | | | | | | |
4.10%, 8/15/2047 | | | 40,000 | | | | 45,924 | |
|
| Machinery – 0.3% | |
| | |
Fortive Corp. | | | | | | | | |
4.30%, 6/15/2046 | | | 25,000 | | | | 26,358 | |
| | |
Illinois Tool Works, Inc. | | | | | | | | |
3.90%, 9/1/2042 | | | 25,000 | | | | 29,232 | |
| | | | | | | | 55,590 | |
|
| Media – 2.9% | |
| | |
CBS Corp. | | | | | | | | |
4.60%, 1/15/2045 | | | 85,000 | | | | 92,917 | |
| | |
Comcast Corp. | | | | | | | | |
3.40%, 7/15/2046 | | | 140,000 | | | | 142,441 | |
4.70%, 10/15/2048 | | | 105,000 | | | | 129,488 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Media – (continued) | |
4.00%, 11/1/2049 | | $ | 130,000 | | | $ | 144,415 | |
| | | | | | | | 509,261 | |
|
| Metals & Mining – 1.6% | |
| | |
BHP Billiton Finance USA Ltd. | | | | | | | | |
5.00%, 9/30/2043 | | | 45,000 | | | | 58,860 | |
| | |
Newmont Goldcorp Corp. | | | | | | | | |
5.88%, 4/1/2035 | | | 50,000 | | | | 64,286 | |
| | |
Nucor Corp. | | | | | | | | |
4.40%, 5/1/2048 | | | 65,000 | | | | 75,110 | |
| | |
Rio Tinto Finance USA Ltd. | | | | | | | | |
5.20%, 11/2/2040 | | | 65,000 | | | | 84,609 | |
| | | | | | | | 282,865 | |
|
| Multi-Utilities – 2.0% | |
| | |
Berkshire Hathaway Energy Co. | | | | | | | | |
5.15%, 11/15/2043 | | | 110,000 | | | | 140,183 | |
| | |
Consolidated Edison Co. of New York, Inc. | | | | | | | | |
4.50%, 5/15/2058 | | | 130,000 | | | | 155,394 | |
| | |
Southern Co. Gas Capital Corp. | | | | | | | | |
3.95%, 10/1/2046 | | | 45,000 | | | | 47,560 | |
| | | | | | | | 343,137 | |
|
| Oil, Gas & Consumable Fuels – 10.8% | |
| | |
Canadian Natural Resources Ltd. | | | | | | | | |
6.25%, 3/15/2038 | | | 45,000 | | | | 56,976 | |
| | |
ConocoPhillips | | | | | | | | |
5.90%, 10/15/2032 | | | 170,000 | | | | 224,636 | |
| | |
Devon Energy Corp. | | | | | | | | |
5.60%, 7/15/2041 | | | 60,000 | | | | 71,544 | |
| | |
Enbridge Energy Partners LP | | | | | | | | |
5.50%, 9/15/2040 | | | 100,000 | | | | 119,281 | |
| | |
Enterprise Products Operating LLC | | | | | | | | |
5.95%, 2/1/2041 | | | 105,000 | | | | 133,496 | |
4.85%, 3/15/2044 | | | 130,000 | | | | 148,658 | |
4.25%, 2/15/2048 | | | 85,000 | | | | 91,355 | |
| | |
Exxon Mobil Corp. | | | | | | | | |
4.11%, 3/1/2046 | | | 35,000 | | | | 41,790 | |
| | |
Magellan Midstream Partners LP | | | | | | | | |
5.15%, 10/15/2043 | | | 15,000 | | | | 17,601 | |
4.20%, 10/3/2047 | | | 70,000 | | | | 73,307 | |
| | |
Occidental Petroleum Corp. | | | | | | | | |
4.50%, 7/15/2044 | | | 125,000 | | | | 126,743 | |
4.63%, 6/15/2045 | | | 85,000 | | | | 87,079 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 347 | |
FlexShares® Credit-Scored US Long Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
ONEOK Partners LP | | | | | | | | |
6.13%, 2/1/2041 | | $ | 50,000 | | | $ | 59,470 | |
| | |
Phillips 66 | | | | | | | | |
5.88%, 5/1/2042 | | | 90,000 | | | | 120,231 | |
| | |
Phillips 66 Partners LP | | | | | | | | |
4.90%, 10/1/2046 | | | 25,000 | | | | 27,769 | |
| | |
Plains All American Pipeline LP | | | | | | | | |
5.15%, 6/1/2042 | | | 85,000 | | | | 83,312 | |
| | |
Suncor Energy, Inc. | | | | | | | | |
4.00%, 11/15/2047 | | | 115,000 | | | | 123,323 | |
| | |
TransCanada PipeLines Ltd. | | | | | | | | |
4.63%, 3/1/2034 | | | 40,000 | | | | 45,729 | |
7.63%, 1/15/2039 | | | 150,000 | | | | 222,065 | |
| | | | | | | | 1,874,365 | |
|
| Pharmaceuticals – 4.2% | |
| | |
AstraZeneca plc | | | | | | | | |
4.38%, 11/16/2045 | | | 115,000 | | | | 136,196 | |
| | |
Eli Lilly & Co. | | | | | | | | |
3.70%, 3/1/2045 | | | 25,000 | | | | 27,839 | |
4.15%, 3/15/2059 | | | 45,000 | | | | 53,928 | |
| | |
GlaxoSmithKline Capital, Inc. | | | | | | | | |
5.38%, 4/15/2034 | | | 30,000 | | | | 39,268 | |
6.38%, 5/15/2038 | | | 45,000 | | | | 65,944 | |
| | |
Johnson & Johnson | | | | | | | | |
3.70%, 3/1/2046 | | | 105,000 | | | | 119,230 | |
| | |
Merck & Co., Inc. | | | | | | | | |
3.70%, 2/10/2045 | | | 45,000 | | | | 50,588 | |
| | |
Novartis Capital Corp. | | | | | | | | |
4.40%, 5/6/2044 | | | 20,000 | | | | 24,783 | |
| | |
Wyeth LLC | | | | | | | | |
6.50%, 2/1/2034 | | | 120,000 | | | | 170,960 | |
| | |
Zoetis, Inc. | | | | | | | | |
4.70%, 2/1/2043 | | | 35,000 | | | | 42,510 | |
| | | | | | | | 731,246 | |
|
| Road & Rail – 4.0% | |
| | |
Burlington Northern Santa Fe LLC | | | | | | | | |
5.15%, 9/1/2043 | | | 85,000 | | | | 109,116 | |
3.55%, 2/15/2050 | | | 100,000 | | | | 106,384 | |
| | |
Canadian National Railway Co. | | | | | | | | |
3.20%, 8/2/2046 | | | 45,000 | | | | 47,186 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Road & Rail – (continued) | |
| | |
CSX Corp. | | | | | | | | |
6.15%, 5/1/2037 | | $ | 75,000 | | | $ | 99,284 | |
4.10%, 3/15/2044 | | | 100,000 | | | | 109,897 | |
| | |
Norfolk Southern Corp. | | | | | | | | |
4.84%, 10/1/2041 | | | 100,000 | | | | 120,083 | |
| | |
Union Pacific Corp. | | | | | | | | |
4.10%, 9/15/2067 | | | 100,000 | | | | 103,953 | |
| | | | | | | | 695,903 | |
|
| Semiconductors & Semiconductor Equipment – 1.2% | |
| | |
Applied Materials, Inc. | | | | | | | | |
4.35%, 4/1/2047 | | | 50,000 | | | | 60,965 | |
| | |
Intel Corp. | | | | | | | | |
3.73%, 12/8/2047 | | | 85,000 | | | | 95,894 | |
| | |
QUALCOMM, Inc. | | | | | | | | |
4.80%, 5/20/2045 | | | 40,000 | | | | 47,659 | |
| | | | | | | | 204,518 | |
|
| Software – 3.5% | |
| | |
Microsoft Corp. | | | | | | | | |
3.50%, 2/12/2035 | | | 160,000 | | | | 175,700 | |
3.95%, 8/8/2056 | | | 175,000 | | | | 207,468 | |
| | |
Oracle Corp. | | | | | | | | |
6.13%, 7/8/2039 | | | 105,000 | | | | 148,093 | |
4.38%, 5/15/2055 | | | 65,000 | | | | 77,564 | |
| | | | | | | | 608,825 | |
|
| Specialty Retail – 1.6% | |
| | |
Home Depot, Inc. (The) | | | | | | | | |
5.88%, 12/16/2036 | | | 125,000 | | | | 173,998 | |
| | |
Lowe’s Cos., Inc. | | | | | | | | |
4.38%, 9/15/2045 | | | 100,000 | | | | 109,798 | |
| | | | | | | | 283,796 | |
|
| Technology Hardware, Storage & Peripherals – 1.6% | |
| | |
Apple, Inc. | | | | | | | | |
4.65%, 2/23/2046 | | | 190,000 | | | | 238,445 | |
| | |
HP, Inc. | | | | | | | | |
6.00%, 9/15/2041 | | | 35,000 | | | | 40,412 | |
| | | | | | | | 278,857 | |
|
| Textiles, Apparel & Luxury Goods – 0.3% | |
| | |
NIKE, Inc. | | | | | | | | |
3.63%, 5/1/2043 | | | 45,000 | | | | 49,261 | |
See Accompanying Notes to the Financial Statements.
| | |
| 348 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Credit-Scored US Long Corporate Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Tobacco – 2.9% | |
| | |
Altria Group, Inc. | | | | | | | | |
4.25%, 8/9/2042 | | $ | 90,000 | | | $ | 87,904 | |
5.38%, 1/31/2044 | | | 125,000 | | | | 139,968 | |
| | |
BAT Capital Corp. | | | | | | | | |
4.54%, 8/15/2047 | | | 200,000 | | | | 193,769 | |
| | |
Philip Morris International, Inc. | | | | | | | | |
4.13%, 3/4/2043 | | | 80,000 | | | | 85,859 | |
| | | | | | | | 507,500 | |
|
| Water Utilities – 0.5% | |
| | |
American Water Capital Corp. | | | | | | | | |
4.20%, 9/1/2048 | | | 70,000 | | | | 81,216 | |
|
| Wireless Telecommunication Services – 2.1% | |
| | |
America Movil SAB de CV | | | | | | | | |
6.13%, 3/30/2040 | | | 130,000 | | | | 176,678 | |
| | |
Rogers Communications, Inc. | | | | | | | | |
5.00%, 3/15/2044 | | | 75,000 | | | | 92,401 | |
| | |
Telefonica Europe BV | | | | | | | | |
8.25%, 9/15/2030 | | | 45,000 | | | | 65,138 | |
| | |
Vodafone Group plc | | | | | | | | |
7.88%, 2/15/2030 | | | 25,000 | | | | 34,798 | |
| | | | | | | | 369,015 | |
Total Corporate Bonds
(Cost $15,343,153) | | | | 17,043,903 | |
| | |
| | | | | | | | |
|
| ASSET-BACKED SECURITIES – 0.1% | |
| | |
Latam Airlines Pass-Through Trust A | | | | | | | | |
Series2015-1, Class A, 4.20%, 11/15/2027 (Cost $18,968) | | | 19,517 | | | | 20,273 | |
Total Investments – 98.3%
(Cost $15,362,121) | | | | 17,064,176 | |
| |
Other Assets Less Liabilities – 1.7% | | | | 287,945 | |
| NET ASSETS – 100.0% | | | $ | 17,352,121 | |
| (a) | Security issued at a fixed coupon rate, which converts to a variable rate at a future date. Rate shown is the rate in effect as of period end. |
| (b) | Step bond. Interest rate is a fixed rate for an initial period that either resets at a specific date or may reset in the future at a contingent upon predetermined trigger. The interest rate shown was the current rate as of October 31, 2019. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | |
Aggregate gross unrealized appreciation | | $ | 1,706,638 | |
Aggregate gross unrealized depreciation | | | (8,251 | ) |
Net unrealized appreciation | | $ | 1,698,387 | |
Federal income tax cost | | $ | 15,365,789 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 349 | |
Schedule of Investments
FlexShares® High Yield Value-Scored Bond Index Fund
October 31, 2019
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – 97.6% | |
|
| Aerospace & Defense – 1.8% | |
| | |
Arconic, Inc. | | | | | | | | |
6.75%, 1/15/2028 | | $ | 150,000 | | | $ | 172,635 | |
| | |
BBA US Holdings, Inc. | | | | | | | | |
5.38%, 5/1/2026(a) | | | 200,000 | | | | 209,500 | |
| | |
F-Brasile SpA | | | | | | | | |
Series NR,
7.38%, 8/15/2026(a) | | | 200,000 | | | | 210,000 | |
| | |
TransDigm UK Holdings plc | | | | | | | | |
6.88%, 5/15/2026 | | | 305,000 | | | | 325,588 | |
| | |
TransDigm, Inc. | | | | | | | | |
6.00%, 7/15/2022 | | | 350,000 | | | | 356,387 | |
6.38%, 6/15/2026 | | | 490,000 | | | | 514,500 | |
| | | | | | | | 1,788,610 | |
|
| Air Freight & Logistics – 0.3% | |
| | |
XPO Logistics, Inc. | | | | | | | | |
6.13%, 9/1/2023(a) | | | 250,000 | | | | 258,750 | |
|
| Airlines – 0.1% | |
| | |
American Airlines Group, Inc. | | | | | | | | |
5.00%, 6/1/2022(a) | | | 50,000 | | | | 52,188 | |
|
| Auto Components – 1.9% | |
| | |
Allison Transmission, Inc. | | | | | | | | |
5.00%, 10/1/2024(a) | | | 50,000 | | | | 51,313 | |
4.75%, 10/1/2027(a) | | | 100,000 | | | | 103,000 | |
| | |
Dana Financing Luxembourg Sarl | | | | | | | | |
6.50%, 6/1/2026(a) | | | 80,000 | | | | 84,400 | |
| | |
Goodyear Tire & Rubber Co. (The) | | | | | | | | |
5.00%, 5/31/2026 | | | 250,000 | | | | 259,375 | |
| | |
Icahn Enterprises LP | | | | | | | | |
4.75%, 9/15/2024(a) | | | 300,000 | | | | 303,375 | |
| | |
JB Poindexter & Co., Inc. | | | | | | | | |
7.13%, 4/15/2026(a) | | | 30,000 | | | | 31,425 | |
| | |
Panther BF Aggregator 2 LP | | | | | | | | |
6.25%, 5/15/2026(a) | | | 200,000 | | | | 211,940 | |
8.50%, 5/15/2027(a) | | | 900,000 | | | | 909,000 | |
| | | | | | | | 1,953,828 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Automobiles – 0.4% | |
| | |
Fiat Chrysler Automobiles NV | | | | | | | | |
5.25%, 4/15/2023 | | $ | 200,000 | | | $ | 214,250 | |
| | |
Mclaren Finance plc | | | | | | | | |
5.75%, 8/1/2022(a) | | | 200,000 | | | | 192,100 | |
| | | | | | | | 406,350 | |
|
| Banks – 0.8% | |
| | |
CIT Group, Inc. | | | | | | | | |
5.00%, 8/15/2022 | | | 100,000 | | | | 106,557 | |
| | |
Royal Bank of Scotland Group plc | | | | | | | | |
7.65%, 9/30/2031(b) (c) | | | 50,000 | | | | 71,265 | |
| | |
Societe Generale SA | | | | | | | | |
8.00%, 9/29/2025(a) (b) (c) | | | 345,000 | | | | 394,457 | |
| | |
UniCredit SpA | | | | | | | | |
5.86%, 6/19/2032(a) (c) | | | 200,000 | | | | 208,630 | |
| | | | | | | | 780,909 | |
|
| Beverages – 0.1% | |
| | |
Cott Holdings, Inc. | | | | | | | | |
5.50%, 4/1/2025(a) | | | 100,000 | | | | 104,625 | |
|
| Building Products – 0.7% | |
| | |
Builders FirstSource, Inc. | | | | | | | | |
6.75%, 6/1/2027(a) | | | 100,000 | | | | 109,000 | |
| | |
Cornerstone Building Brands, Inc. | | | | | | | | |
8.00%, 4/15/2026(a) | | | 210,000 | | | | 207,297 | |
| | |
Masonite International Corp. | | | | | | | | |
5.75%, 9/15/2026(a) | | | 100,000 | | | | 106,500 | |
| | |
PGT Escrow Issuer, Inc. | | | | | | | | |
6.75%, 8/1/2026(a) | | | 30,000 | | | | 32,400 | |
| | |
Standard Industries, Inc. | | | | | | | | |
5.38%, 11/15/2024(a) | | | 75,000 | | | | 77,347 | |
4.75%, 1/15/2028(a) | | | 130,000 | | | | 135,363 | |
| | | | | | | | 667,907 | |
|
| Capital Markets – 2.3% | |
| | |
AG Merger Sub II, Inc. | | | | | | | | |
10.75%, 8/1/2027(a) | | | 100,000 | | | | 99,500 | |
See Accompanying Notes to the Financial Statements.
| | |
| 350 | | FLEXSHARES ANNUAL REPORT |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Capital Markets – (continued) | |
| | |
Compass Group Diversified Holdings LLC | | | | | | | | |
8.00%, 5/1/2026(a) | | $ | 100,000 | | | $ | 108,000 | |
| | |
Credit Suisse Group AG | | | | | | | | |
7.50%, 7/17/2023(a) (b) (c) | | | 570,000 | | | | 615,096 | |
| | |
Deutsche Bank AG | | | | | | | | |
4.30%, 5/24/2028(c) | | | 300,000 | | | | 284,341 | |
| | |
Donnelley Financial Solutions, Inc. | | | | | | | | |
8.25%, 10/15/2024 | | | 30,000 | | | | 31,275 | |
| | |
LPL Holdings, Inc. | | | | | | | | |
5.75%, 9/15/2025(a) | | | 130,000 | | | | 135,200 | |
| | |
MSCI, Inc. | | | | | | | | |
4.75%, 8/1/2026(a) | | | 400,000 | | | | 419,980 | |
| | |
UBS Group AG | | | | | | | | |
7.00%, 1/31/2024(a) (b) (c) | | | 550,000 | | | | 590,562 | |
| | | | | | | | 2,283,954 | |
|
| Chemicals – 2.9% | |
| | |
Atotech Alpha 3 BV | | | | | | | | |
6.25%, 2/1/2025(a) | | | 200,000 | | | | 202,000 | |
| | |
CF Industries, Inc. | | | | | | | | |
5.15%, 3/15/2034 | | | 130,000 | | | | 138,450 | |
4.95%, 6/1/2043 | | | 50,000 | | | | 50,250 | |
| | |
Chemours Co. (The) | | | | | | | | |
6.63%, 5/15/2023 | | | 100,000 | | | | 99,843 | |
7.00%, 5/15/2025 | | | 400,000 | | | | 387,000 | |
| | |
Cornerstone Chemical Co. | | | | | | | | |
6.75%, 8/15/2024(a) | | | 150,000 | | | | 138,750 | |
| | |
FXI Holdings, Inc. | | | | | | | | |
7.88%, 11/1/2024(a) | | | 210,000 | | | | 187,110 | |
| | |
Gates Global LLC | | | | | | | | |
6.00%, 7/15/2022(a) | | | 100,000 | | | | 99,900 | |
| | |
GCP Applied Technologies, Inc. | | | | | | | | |
5.50%, 4/15/2026(a) | | | 100,000 | | | | 103,000 | |
| | |
Kraton Polymers LLC | | | | | | | | |
7.00%, 4/15/2025(a) | | | 200,000 | | | | 204,500 | |
| | |
Neon Holdings, Inc. | | | | | | | | |
10.13%, 4/1/2026(a) | | | 100,000 | | | | 99,125 | |
| | |
OCI NV | | | | | | | | |
6.63%, 4/15/2023(a) | | | 200,000 | | | | 209,450 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Chemicals – (continued) | |
| | |
Olin Corp. | | | | | | | | |
5.63%, 8/1/2029 | | $ | 100,000 | | | $ | 104,077 | |
| | |
Rain CII Carbon LLC | | | | | | | | |
7.25%, 4/1/2025(a) | | | 150,000 | | | | 146,625 | |
| | |
SPCM SA | | | | | | | | |
4.88%, 9/15/2025(a) | | | 110,000 | | | | 114,125 | |
| | |
Starfruit Finco BV | | | | | | | | |
8.00%, 10/1/2026(a) | | | 450,000 | | | | 450,000 | |
| | |
TPC Group, Inc. | | | | | | | | |
10.50%, 8/1/2024(a) | | | 150,000 | | | | 159,750 | |
| | |
WR Grace & Co. | | | | | | | | |
5.13%, 10/1/2021(a) | | | 50,000 | | | | 52,125 | |
| | | | | | | | 2,946,080 | |
|
| Commercial Services & Supplies – 3.9% | |
| | |
ADT Security Corp. (The) | | | | | | | | |
3.50%, 7/15/2022 | | | 250,000 | | | | 251,517 | |
| | |
Aptim Corp. | | | | | | | | |
7.75%, 6/15/2025(a) | | | 200,000 | | | | 139,000 | |
| | |
Aramark Services, Inc. | | | | | | | | |
5.00%, 4/1/2025(a) | | | 100,000 | | | | 104,375 | |
| | |
Cimpress NV | | | | | | | | |
7.00%, 6/15/2026(a) | | | 150,000 | | | | 159,000 | |
| | |
Covanta Holding Corp. | | | | | | | | |
5.88%, 7/1/2025 | | | 110,000 | | | | 114,538 | |
6.00%, 1/1/2027 | | | 100,000 | | | | 105,000 | |
| | |
Garda World Security Corp. | | | | | | | | |
8.75%, 5/15/2025(a) | | | 260,000 | | | | 261,300 | |
| | |
GFL Environmental, Inc. | | | | | | | | |
5.38%, 3/1/2023(a) | | | 110,000 | | | | 113,713 | |
8.50%, 5/1/2027(a) | | | 50,000 | | | | 55,125 | |
| | |
Harland Clarke Holdings Corp. | | | | | | | | |
9.25%, 3/1/2021(a) | | | 530,000 | | | | 494,887 | |
| | |
IAA, Inc. | | | | | | | | |
5.50%, 6/15/2027(a) | | | 100,000 | | | | 107,390 | |
| | |
KAR Auction Services, Inc. | | | | | | | | |
5.13%, 6/1/2025(a) | | | 180,000 | | | | 188,775 | |
| | |
Nielsen Co. Luxembourg SARL (The) | | | | | | | | |
5.00%, 2/1/2025(a) | | | 350,000 | | | | 350,000 | |
| | |
Nielsen Finance LLC | | | | | | | | |
5.00%, 4/15/2022(a) | | | 290,000 | | | | 292,906 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 351 | |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Commercial Services & Supplies – (continued) | |
| | |
Pitney Bowes, Inc. | | | | | | | | |
4.63%, 3/15/2024 | | $ | 150,000 | | | $ | 141,735 | |
| | |
Prime Security Services Borrower LLC | | | | | | | | |
9.25%, 5/15/2023(a) | | | 100,000 | | | | 105,387 | |
5.25%, 4/15/2024(a) | | | 300,000 | | | | 307,875 | |
| | |
Ritchie Bros Auctioneers, Inc. | | | | | | | | |
5.38%, 1/15/2025(a) | | | 100,000 | | | | 104,750 | |
| | |
Stericycle, Inc. | | | | | | | | |
5.38%, 7/15/2024(a) | | | 100,000 | | | | 104,500 | |
| | |
Tms International Holding Corp. | | | | | | | | |
7.25%, 8/15/2025(a) | | | 100,000 | | | | 83,000 | |
| | |
West Corp. | | | | | | | | |
8.50%, 10/15/2025(a) | | | 460,000 | | | | 349,600 | |
| | | | | | | | 3,934,373 | |
|
| Communications Equipment – 1.3% | |
| | |
CommScope Technologies LLC | | | | | | | | |
6.00%, 6/15/2025(a) | | | 450,000 | | | | 402,052 | |
| | |
CommScope, Inc. | | | | | | | | |
5.50%, 6/15/2024(a) | | | 510,000 | | | | 485,137 | |
8.25%, 3/1/2027(a) | | | 200,000 | | | | 190,196 | |
| | |
Riverbed Technology, Inc. | | | | | | | | |
8.88%, 3/1/2023(a) | | | 80,000 | | | | 37,200 | |
| | |
Telefonaktiebolaget LM Ericsson | | | | | | | | |
4.13%, 5/15/2022 | | | 50,000 | | | | 51,943 | |
| | |
ViaSat, Inc. | | | | | | | | |
5.63%, 4/15/2027(a) | | | 100,000 | | | | 105,595 | |
| | | | | | | | 1,272,123 | |
|
| Construction & Engineering – 0.6% | |
| | |
AECOM | | | | | | | | |
5.13%, 3/15/2027 | | | 100,000 | | | | 105,970 | |
| | |
Brand Industrial Services, Inc. | | | | | | | | |
8.50%, 7/15/2025(a) | | | 340,000 | | | | 331,500 | |
| | |
New Enterprise Stone & Lime Co., Inc. | | | | | | | | |
10.13%, 4/1/2022(a) | | | 142,000 | | | | 147,680 | |
| | | | | | | | 585,150 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Consumer Finance – 1.1% | |
| | |
Ally Financial, Inc. | | | | | | | | |
8.00%, 11/1/2031 | | $ | 115,000 | | | $ | 160,569 | |
| | |
Credit Acceptance Corp. | | | | | | | | |
6.63%, 3/15/2026(a) | | | 100,000 | | | | 106,500 | |
| | |
Enova International, Inc. | | | | | | | | |
8.50%, 9/1/2024(a) | | | 100,000 | | | | 93,250 | |
| | |
Navient Corp. | | | | | | | | |
5.50%, 1/25/2023 | | | 165,000 | | | | 172,012 | |
7.25%, 9/25/2023 | | | 200,000 | | | | 219,246 | |
| | |
Springleaf Finance Corp. | | | | | | | | |
8.25%, 10/1/2023 | | | 100,000 | | | | 117,000 | |
| | |
TMX Finance LLC | | | | | | | | |
11.13%, 4/1/2023(a) | | | 130,000 | | | | 117,488 | |
| | |
Voyager Aviation Holdings LLC | | | | | | | | |
8.50%, 8/15/2021(a) | | | 80,000 | | | | 83,119 | |
| | | | | | | | 1,069,184 | |
|
| Containers & Packaging – 2.3% | |
| | |
Ball Corp. | | | | | | | | |
5.00%, 3/15/2022 | | | 200,000 | | | | 212,000 | |
| | |
Crown Cork & Seal Co., Inc. | | | | | | | | |
7.38%, 12/15/2026 | | | 120,000 | | | | 144,600 | |
| | |
Flex Acquisition Co., Inc. | | | | | | | | |
6.88%, 1/15/2025(a) | | | 80,000 | | | | 75,400 | |
7.88%, 7/15/2026(a) | | | 250,000 | | | | 235,625 | |
| | |
Intertape Polymer Group, Inc. | | | | | | | | |
7.00%, 10/15/2026(a) | | | 50,000 | | | | 52,430 | |
| | |
LABL Escrow Issuer LLC | | | | | | | | |
10.50%, 7/15/2027(a) | | | 400,000 | | | | 402,000 | |
| | |
Mauser Packaging Solutions Holding Co. | | | | | | | | |
7.25%, 4/15/2025(a) | | | 450,000 | | | | 432,000 | |
| | |
Owens-Brockway Glass Container, Inc. | | | | | | | | |
5.88%, 8/15/2023(a) | | | 200,000 | | | | 212,000 | |
| | |
Plastipak Holdings, Inc. | | | | | | | | |
6.25%, 10/15/2025(a) | | | 135,000 | | | | 112,050 | |
| | |
Sealed Air Corp. | | | | | | | | |
5.25%, 4/1/2023(a) | | | 50,000 | | | | 53,625 | |
| | |
Trident TPI Holdings, Inc. | | | | | | | | |
9.25%, 8/1/2024(a) | | | 200,000 | | | | 194,500 | |
| | |
Trivium Packaging Finance BV | | | | | | | | |
8.50%, 8/15/2027(a) (d) | | | 200,000 | | | | 213,750 | |
| | | | | | | | 2,339,980 | |
See Accompanying Notes to the Financial Statements.
| | |
| 352 | | FLEXSHARES ANNUAL REPORT |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Distributors – 0.4% | |
| | |
American Builders & Contractors Supply Co., Inc. | | | | | | | | |
5.88%, 5/15/2026(a) | | $ | 50,000 | | | $ | 52,703 | |
| | |
Core & Main LP | | | | | | | | |
6.13%, 8/15/2025(a) | | | 80,000 | | | | 81,700 | |
| | |
Performance Food Group, Inc. | | | | | | | | |
5.50%, 6/1/2024(a) | | | 50,000 | | | | 51,312 | |
5.50%, 10/15/2027(a) | | | 250,000 | | | | 265,625 | |
| | | | | | | | 451,340 | |
|
| Diversified Consumer Services – 0.7% | |
| | |
Carriage Services, Inc. | | | | | | | | |
6.63%, 6/1/2026(a) | | | 100,000 | | | | 104,500 | |
| | |
Graham Holdings Co. | | | | | | | | |
5.75%, 6/1/2026(a) | | | 100,000 | | | | 107,000 | |
| | |
Laureate Education, Inc. | | | | | | | | |
8.25%, 5/1/2025(a) | | | 110,000 | | | | 119,900 | |
| | |
Midas Intermediate Holdco II LLC | | | | | | | | |
7.88%, 10/1/2022(a) | | | 30,000 | | | | 26,700 | |
| | |
Service Corp. International | | | | | | | | |
5.13%, 6/1/2029 | | | 200,000 | | | | 214,000 | |
| | |
WW International, Inc. | | | | | | | | |
8.63%, 12/1/2025(a) | | | 150,000 | | | | 155,250 | |
| | | | | | | | 727,350 | |
|
| Diversified Financial Services – 1.8% | |
| | |
ACE Cash Express, Inc. | | | | | | | | |
12.00%, 12/15/2022(a) | | | 20,000 | | | | 18,600 | |
| | |
Allied Universal Holdco LLC | | | | | | | | |
9.75%, 7/15/2027(a) | | | 550,000 | | | | 576,125 | |
| | |
CNG Holdings, Inc. | | | | | | | | |
12.50%, 6/15/2024(a) | | | 150,000 | | | | 141,750 | |
| | |
Jefferies Finance LLC | | | | | | | | |
7.25%, 8/15/2024(a) | | | 110,000 | | | | 111,375 | |
| | |
MPH Acquisition Holdings LLC | | | | | | | | |
7.13%, 6/1/2024(a) | | | 340,000 | | | | 316,217 | |
| | |
Refinitiv US Holdings, Inc. | | | | | | | | |
8.25%, 11/15/2026(a) | | | 400,000 | | | | 450,000 | |
| | |
Verscend Escrow Corp. | | | | | | | | |
9.75%, 8/15/2026(a) | | | 180,000 | | | | 192,150 | |
| | | | | | | | 1,806,217 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Diversified Telecommunication Services – 5.1% | |
| | |
Altice France SA | | | | | | | | |
5.50%, 1/15/2028(a) | | $ | 200,000 | | | $ | 204,250 | |
| | |
CCO Holdings LLC | | | | | | | | |
5.75%, 2/15/2026(a) | | | 255,000 | | | | 269,917 | |
5.13%, 5/1/2027(a) | | | 610,000 | | | | 644,313 | |
5.00%, 2/1/2028(a) | | | 760,000 | | | | 796,784 | |
5.38%, 6/1/2029(a) | | | 450,000 | | | | 481,500 | |
| | |
CenturyLink, Inc. | | | | | | | | |
Series Y, 7.50%, 4/1/2024 | | | 450,000 | | | | 511,875 | |
| | |
Koninklijke KPN NV | | | | | | | | |
7.00%, 3/28/2073(a) (c) | | | 100,000 | | | | 109,777 | |
| | |
Level 3 Financing, Inc. | | | | | | | | |
4.63%, 9/15/2027(a) | | | 100,000 | | | | 102,000 | |
| | |
Sprint Capital Corp. | | | | | | | | |
6.88%, 11/15/2028 | | | 770,000 | | | | 840,979 | |
8.75%, 3/15/2032 | | | 350,000 | | | | 427,658 | |
| | |
Telecom Italia Capital SA | | | | | | | | |
6.38%, 11/15/2033 | | | 405,000 | | | | 448,420 | |
| | |
Virgin Media Finance plc | | | | | | | | |
5.75%, 1/15/2025(a) | | | 300,000 | | | | 310,125 | |
| | | | | | | | 5,147,598 | |
|
| Electric Utilities – 0.4% | |
| | |
Drax Finco plc | | | | | | | | |
6.63%, 11/1/2025(a) | | | 200,000 | | | | 212,750 | |
| | |
Emera, Inc. | | | | | | | | |
Series16-A,
6.75%, 6/15/2076(c) | | | 50,000 | | | | 56,299 | |
| | |
Vistra Operations Co. LLC | | | | | | | | |
5.50%, 9/1/2026(a) | | | 100,000 | | | | 105,922 | |
| | | | | | | | 374,971 | |
|
| Electrical Equipment – 0.4% | |
| | |
Sensata Technologies BV | | | | | | | | |
4.88%, 10/15/2023(a) | | | 100,000 | | | | 106,002 | |
| | |
Vertiv Group Corp. | | | | | | | | |
9.25%, 10/15/2024(a) | | | 300,000 | | | | 284,250 | |
| | | | | | | | 390,252 | |
|
| Electronic Equipment, Instruments & Components – 0.8% | |
| | |
APX Group, Inc. | | | | | | | | |
7.88%, 12/1/2022 | | | 140,000 | | | | 140,525 | |
7.63%, 9/1/2023 | | | 150,000 | | | | 132,750 | |
8.50%, 11/1/2024(a) | | | 225,000 | | | | 224,437 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 353 | |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
Electronic Equipment, Instruments & Components –
(continued) | |
| | |
CDW LLC | | | | | | | | |
5.00%, 9/1/2025 | | $ | 150,000 | | | $ | 157,219 | |
| | |
MTS Systems Corp. | | | | | | | | |
5.75%, 8/15/2027(a) | | | 100,000 | | | | 105,000 | |
| | | | | | | | 759,931 | |
|
| Energy Equipment & Services – 1.8% | |
| | |
CSI Compressco LP | | | | | | | | |
7.50%, 4/1/2025(a) | | | 100,000 | | | | 97,500 | |
| | |
Diamond Offshore Drilling, Inc. | | | | | | | | |
7.88%, 8/15/2025 | | | 210,000 | | | | 168,525 | |
| | |
Exterran Energy Solutions LP | | | | | | | | |
8.13%, 5/1/2025 | | | 50,000 | | | | 49,750 | |
| | |
KCA Deutag UK Finance plc | | | | | | | | |
9.63%, 4/1/2023(a) | | | 410,000 | | | | 260,862 | |
| | |
KLX Energy Services Holdings, Inc. | | | | | | | | |
11.50%, 11/1/2025(a) | | | 50,000 | | | | 44,000 | |
| | |
Nabors Industries, Inc. | | | | | | | | |
5.50%, 1/15/2023 | | | 300,000 | | | | 255,000 | |
| | |
Nine Energy Service, Inc. | | | | | | | | |
8.75%, 11/1/2023(a) | | | 100,000 | | | | 76,000 | |
| | |
Noble Holding International Ltd. | | | | | | | | |
7.88%, 2/1/2026(a) | | | 110,000 | | | | 73,150 | |
| | |
Precision Drilling Corp. | | | | | | | | |
7.75%, 12/15/2023 | | | 100,000 | | | | 95,000 | |
| | |
Transocean, Inc. | | | | | | | | |
7.50%, 1/15/2026(a) | | | 350,000 | | | | 313,250 | |
| | |
USA Compression Partners LP | | | | | | | | |
6.88%, 4/1/2026 | | | 330,000 | | | | 334,950 | |
| | | | | | | | 1,767,987 | |
|
| Entertainment – 1.0% | |
| | |
Live Nation Entertainment, Inc. | | | | | | | | |
5.63%, 3/15/2026(a) | | | 300,000 | | | | 320,250 | |
| | |
Netflix, Inc. | | | | | | | | |
5.88%, 11/15/2028 | | | 490,000 | | | | 540,838 | |
| | |
Viacom, Inc. | | | | | | | | |
5.87%, 2/28/2057(c) | | | 100,000 | | | | 104,062 | |
| | | | | | | | 965,150 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Equity Real Estate Investment Trusts (REITs) – 3.3% | |
| | |
Brookfield Property REIT, Inc. | | | | | | | | |
5.75%, 5/15/2026(a) | | $ | 250,000 | | | $ | 261,875 | |
| | |
CoreCivic, Inc. | | | | | | | | |
4.63%, 5/1/2023 | | | 100,000 | | | | 94,125 | |
| | |
Equinix, Inc. | | | | | | | | |
5.38%, 1/1/2022 | | | 300,000 | | | | 306,285 | |
5.38%, 5/15/2027 | | | 200,000 | | | | 217,500 | |
| | |
ESH Hospitality, Inc. | | | | | | | | |
5.25%, 5/1/2025(a) | | | 260,000 | | | | 268,775 | |
| | |
GEO Group, Inc. (The) | | | | | | | | |
5.88%, 10/15/2024 | | | 317,000 | | | | 266,280 | |
| | |
HAT Holdings I LLC | | | | | | | | |
5.25%, 7/15/2024(a) | | | 100,000 | | | | 105,375 | |
| | |
Iron Mountain, Inc. | | | | | | | | |
6.00%, 8/15/2023 | | | 200,000 | | | | 204,750 | |
5.75%, 8/15/2024 | | | 110,000 | | | | 111,237 | |
4.88%, 9/15/2029(a) | | | 100,000 | | | | 102,625 | |
| | |
iStar, Inc. | | | | | | | | |
4.75%, 10/1/2024 | | | 50,000 | | | | 51,688 | |
| | |
Mack-Cali Realty LP | | | | | | | | |
3.15%, 5/15/2023 | | | 100,000 | | | | 95,688 | |
| | |
MPT Operating Partnership LP | | | | | | | | |
5.25%, 8/1/2026 | | | 100,000 | | | | 105,500 | |
5.00%, 10/15/2027 | | | 50,000 | | | | 52,750 | |
| | |
SBA Communications Corp. | | | | | | | | |
4.00%, 10/1/2022 | | | 310,000 | | | | 317,797 | |
| | |
Uniti Group LP | | | | | | | | |
6.00%, 4/15/2023(a) | | | 100,000 | | | | 95,500 | |
8.25%, 10/15/2023 | | | 595,000 | | | | 511,700 | |
| | |
Washington Prime Group LP | | | | | | | | |
6.45%, 8/15/2024(d) | | | 200,000 | | | | 193,000 | |
| | | | | | | | 3,362,450 | |
|
| Food & Staples Retailing – 0.3% | |
| | |
Fresh Market, Inc. (The) | | | | | | | | |
9.75%, 5/1/2023(a) | | | 180,000 | | | | 106,200 | |
| | |
Ingles Markets, Inc. | | | | | | | | |
5.75%, 6/15/2023 | | | 100,000 | | | | 102,250 | |
| | |
US Foods, Inc. | | | | | | | | |
5.88%, 6/15/2024(a) | | | 100,000 | | | | 103,375 | |
| | | | | | | | 311,825 | |
See Accompanying Notes to the Financial Statements.
| | |
| 354 | | FLEXSHARES ANNUAL REPORT |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Food Products – 2.0% | |
| | |
B&G Foods, Inc. | | | | | | | | |
5.25%, 4/1/2025 | | $ | 200,000 | | | $ | 205,000 | |
| | |
Chobani LLC | | | | | | | | |
7.50%, 4/15/2025(a) | | | 80,000 | | | | 77,200 | |
| | |
Cooke Omega Investments, Inc. | | | | | | | | |
8.50%, 12/15/2022(a) | | | 100,000 | | | | 97,750 | |
| | |
Dole Food Co., Inc. | | | | | | | | |
7.25%, 6/15/2025(a) | | | 30,000 | | | | 28,725 | |
| | |
Lamb Weston Holdings, Inc. | | | | | | | | |
4.88%, 11/1/2026(a) | | | 200,000 | | | | 211,250 | |
| | |
Post Holdings, Inc. | | | | | | | | |
5.50%, 3/1/2025(a) | | | 430,000 | | | | 452,081 | |
5.50%, 12/15/2029(a) | | | 400,000 | | | | 422,680 | |
| | |
Sigma Holdco BV | | | | | | | | |
7.88%, 5/15/2026(a) | | | 310,000 | | | | 300,700 | |
| | |
Simmons Foods, Inc. | | | | | | | | |
5.75%, 11/1/2024(a) | | | 110,000 | | | | 108,075 | |
| | |
TreeHouse Foods, Inc. | | | | | | | | |
6.00%, 2/15/2024(a) | | | 100,000 | | | | 104,000 | |
| | | | | | | | 2,007,461 | |
|
| Gas Utilities – 0.1% | |
| | |
Suburban Propane Partners LP | | | | | | | | |
5.50%, 6/1/2024 | | | 110,000 | | | | 112,992 | |
| | |
Superior Plus LP | | | | | | | | |
7.00%, 7/15/2026(a) | | | 30,000 | | | | 32,400 | |
| | | | | | | | 145,392 | |
|
| Health Care Equipment & Supplies – 0.6% | |
| | |
Hologic, Inc. | | | | | | | | |
4.63%, 2/1/2028(a) | | | 100,000 | | | | 105,125 | |
| | |
Immucor, Inc. | | | | | | | | |
11.13%, 2/15/2022(a) | | | 30,000 | | | | 30,165 | |
| | |
Ortho-Clinical Diagnostics, Inc. | | | | | | | | |
6.63%, 5/15/2022(a) | | | 375,000 | | | | 362,812 | |
| | |
Sotera Health Holdings LLC | | | | | | | | |
6.50%, 5/15/2023(a) | | | 100,000 | | | | 102,125 | |
| | |
Teleflex, Inc. | | | | | | | | |
4.88%, 6/1/2026 | | | 50,000 | | | | 52,672 | |
| | | | | | | | 652,899 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Health Care Providers & Services – 5.2% | |
| | |
AHP Health Partners, Inc. | | | | | | | | |
9.75%, 7/15/2026(a) | | $ | 130,000 | | | $ | 140,725 | |
| | |
ASP AMC Merger Sub, Inc. | | | | | | | | |
8.00%, 5/15/2025(a) | | | 175,000 | | | | 109,375 | |
| | |
BCPE Cycle Merger Sub II, Inc. | | | | | | | | |
10.63%, 7/15/2027(a) | | | 200,000 | | | | 187,500 | |
| | |
Centene Corp. | | | | | | | | |
5.38%, 6/1/2026(a) | | | 350,000 | | | | 371,350 | |
| | |
DaVita, Inc. | | | | | | | | |
5.13%, 7/15/2024 | | | 150,000 | | | | 153,490 | |
5.00%, 5/1/2025 | | | 250,000 | | | | 253,488 | |
| | |
Encompass Health Corp. | | | | | | | | |
5.13%, 3/15/2023 | | | 250,000 | | | | 255,625 | |
| | |
Envision Healthcare Corp. | | | | | | | | |
8.75%, 10/15/2026(a) | | | 400,000 | | | | 232,000 | |
| | |
Hadrian Merger Sub, Inc. | | | | | | | | |
8.50%, 5/1/2026(a) | | | 100,000 | | | | 98,625 | |
| | |
HCA, Inc. | | | | | | | | |
5.88%, 5/1/2023 | | | 100,000 | | | | 109,970 | |
7.69%, 6/15/2025 | | | 150,000 | | | | 181,500 | |
| | |
MEDNAX, Inc. | | | | | | | | |
6.25%, 1/15/2027(a) | | | 150,000 | | | | 148,875 | |
| | |
Molina Healthcare, Inc. | | | | | | | | |
5.38%, 11/15/2022(d) | | | 150,000 | | | | 158,813 | |
| | |
NVA Holdings, Inc. | | | | | | | | |
6.88%, 4/1/2026(a) | | | 50,000 | | | | 53,875 | |
| | |
One Call Corp. | | | | | | | | |
10.00%, 10/1/2024(a) | | | 110,000 | | | | 99,550 | |
| | |
RegionalCare Hospital Partners Holdings, Inc. | | | | | | | | |
9.75%, 12/1/2026(a) | | | 425,000 | | | | 467,500 | |
| | |
Select Medical Corp. | | | | | | | | |
6.25%, 8/15/2026(a) | | | 100,000 | | | | 106,750 | |
| | |
Surgery Center Holdings, Inc. | | | | | | | | |
10.00%, 4/15/2027(a) | | | 300,000 | | | | 304,500 | |
| | |
Team Health Holdings, Inc. | | | | | | | | |
6.38%, 2/1/2025(a) | | | 240,000 | | | | 156,000 | |
| | |
Tenet Healthcare Corp. | | | | | | | | |
8.13%, 4/1/2022 | | | 350,000 | | | | 379,767 | |
6.75%, 6/15/2023 | | | 450,000 | | | | 477,990 | |
5.13%, 5/1/2025 | | | 200,000 | | | | 205,250 | |
6.25%, 2/1/2027(a) | | | 200,000 | | | | 212,168 | |
| | |
WellCare Health Plans, Inc. | | | | | | | | |
5.25%, 4/1/2025 | | | 200,000 | | | | 210,062 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 355 | |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Health Care Providers & Services – (continued) | |
| | |
West Street Merger Sub, Inc. | | | | | | | | |
6.38%, 9/1/2025(a) | | $ | 110,000 | | | $ | 105,325 | |
| | | | | | | | 5,180,073 | |
|
| Health Care Technology – 0.5% | |
| | |
IQVIA, Inc. | | | | | | | | |
5.00%, 10/15/2026(a) | | | 500,000 | | | | 529,375 | |
|
| Hotels, Restaurants & Leisure – 4.2% | |
| | |
1011778 BC ULC | | | | | | | | |
5.00%, 10/15/2025(a) | | | 410,000 | | | | 421,275 | |
| | |
24 Hour Fitness Worldwide, Inc. | | | | | | | | |
8.00%, 6/1/2022(a) | | | 130,000 | | | | 94,575 | |
| | |
Arrow Bidco LLC | | | | | | | | |
9.50%, 3/15/2024(a) | | | 100,000 | | | | 97,208 | |
| | |
Boyd Gaming Corp. | | | | | | | | |
6.38%, 4/1/2026 | | | 150,000 | | | | 159,937 | |
| | |
Boyne USA, Inc. | | | | | | | | |
7.25%, 5/1/2025(a) | | | 100,000 | | | | 109,750 | |
| | |
Carlson Travel, Inc. | | | | | | | | |
6.75%, 12/15/2023(a) | | | 100,000 | | | | 102,781 | |
| | |
Cedar Fair LP | | | | | | | | |
5.38%, 4/15/2027 | | | 100,000 | | | | 107,000 | |
| | |
Churchill Downs, Inc. | | | | | | | | |
5.50%, 4/1/2027(a) | | | 100,000 | | | | 106,250 | |
| | |
Cirsa Finance International SARL | | | | | | | | |
7.88%, 12/20/2023(a) | | | 110,000 | | | | 116,685 | |
| | |
Downstream Development Authority of the Quapaw Tribe of Oklahoma | | | | | | | | |
10.50%, 2/15/2023(a) | | | 30,000 | | | | 31,725 | |
| | |
Enterprise Development Authority (The) | | | | | | | | |
12.00%, 7/15/2024(a) | | | 130,000 | | | | 143,000 | |
| | |
Golden Nugget, Inc. | | | | | | | | |
6.75%, 10/15/2024(a) | | | 340,000 | | | | 351,084 | |
| | |
Hilton Domestic Operating Co., Inc. | | | | | | | | |
4.25%, 9/1/2024 | | | 50,000 | | | | 51,000 | |
5.13%, 5/1/2026 | | | 200,000 | | | | 210,500 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Hotels, Restaurants & Leisure – (continued) | |
| | |
International Game Technology plc | | | | | | | | |
6.25%, 2/15/2022(a) | | $ | 200,000 | | | $ | 211,500 | |
6.25%, 1/15/2027(a) | | | 200,000 | | | | 224,250 | |
| | |
IRB Holding Corp. | | | | | | | | |
6.75%, 2/15/2026(a) | | | 80,000 | | | | 81,600 | |
| | |
KFC Holding Co. | | | | | | | | |
5.00%, 6/1/2024(a) | | | 400,000 | | | | 416,000 | |
4.75%, 6/1/2027(a) | | | 300,000 | | | | 313,785 | |
| | |
Marriott Ownership Resorts, Inc. | | | | | | | | |
6.50%, 9/15/2026 | | | 100,000 | | | | 108,623 | |
| | |
Mohegan Gaming & Entertainment | | | | | | | | |
7.88%, 10/15/2024(a) | | | 135,000 | | | | 129,938 | |
| | |
Six Flags Entertainment Corp. | | | | | | | | |
5.50%, 4/15/2027(a) | | | 100,000 | | | | 105,000 | |
| | |
Twin River Worldwide Holdings, Inc. | | | | | | | | |
6.75%, 6/1/2027(a) | | | 100,000 | | | | 105,530 | |
| | |
Viking Cruises Ltd. | | | | | | | | |
5.88%, 9/15/2027(a) | | | 100,000 | | | | 106,500 | |
| | |
Wyndham Destinations, Inc. | | | | | | | | |
4.25%, 3/1/2022 | | | 100,000 | | | | 102,250 | |
| | |
Wyndham Hotels & Resorts, Inc. | | | | | | | | |
5.38%, 4/15/2026(a) | | | 100,000 | | | | 106,000 | |
| | |
Wynn Las Vegas LLC | | | | | | | | |
5.50%, 3/1/2025(a) | | | 80,000 | | | | 85,200 | |
| | | | | | | | 4,198,946 | |
|
| Household Durables – 1.3% | |
| | |
American Greetings Corp. | | | | | | | | |
8.75%, 4/15/2025(a) | | | 210,000 | | | | 193,200 | |
| | |
Ashton Woods USA LLC | | | | | | | | |
6.75%, 8/1/2025(a) | | | 150,000 | | | | 151,500 | |
| | |
Brookfield Residential Properties, Inc. | | | | | | | | |
6.38%, 5/15/2025(a) | | | 110,000 | | | | 114,400 | |
| | |
Century Communities, Inc. | | | | | | | | |
6.75%, 6/1/2027(a) | | | 100,000 | | | | 107,250 | |
| | |
KB Home | | | | | | | | |
6.88%, 6/15/2027 | | | 100,000 | | | | 114,250 | |
See Accompanying Notes to the Financial Statements.
| | |
| 356 | | FLEXSHARES ANNUAL REPORT |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Household Durables – (continued) | |
| | |
Mattamy Group Corp. | | | | | | | | |
6.50%, 10/1/2025(a) | | $ | 110,000 | | | $ | 116,875 | |
| | |
PulteGroup, Inc. | | | | | | | | |
5.50%, 3/1/2026 | | | 100,000 | | | | 112,400 | |
| | |
Taylor Morrison Communities, Inc. | | | | | | | | |
5.75%, 1/15/2028(a) | | | 100,000 | | | | 111,000 | |
| | |
Tempur Sealy International, Inc. | | | | | | | | |
5.50%, 6/15/2026 | | | 100,000 | | | | 105,000 | |
| | |
TopBuild Corp. | | | | | | | | |
5.63%, 5/1/2026(a) | | | 100,000 | | | | 105,500 | |
| | |
TRI Pointe Group, Inc. | | | | | | | | |
5.88%, 6/15/2024 | | | 110,000 | | | | 118,800 | |
| | | | | | | | 1,350,175 | |
|
| Household Products – 0.8% | |
| | |
Energizer Holdings, Inc. | | | | | | | | |
7.75%, 1/15/2027(a) | | | 150,000 | | | | 166,500 | |
| | |
Kronos Acquisition Holdings, Inc. | | | | | | | | |
9.00%, 8/15/2023(a) | | | 510,000 | | | | 446,250 | |
| | |
Spectrum Brands, Inc. | | | | | | | | |
5.75%, 7/15/2025 | | | 200,000 | | | | 209,500 | |
| | | | | | | | 822,250 | |
|
Independent Power and Renewable Electricity
Producers – 0.6% | |
| | |
NRG Energy, Inc. | | | | | | | | |
7.25%, 5/15/2026 | | | 160,000 | | | | 175,805 | |
| | |
Talen Energy Supply LLC | | | | | | | | |
10.50%, 1/15/2026(a) | | | 440,000 | | | | 379,500 | |
| | |
Vistra Energy Corp. | | | | | | | | |
5.88%, 6/1/2023 | | | 50,000 | | | | 51,250 | |
| | | | | | | | 606,555 | |
|
| Insurance – 2.4% | |
| | |
Acrisure LLC | | | | | | | | |
7.00%, 11/15/2025(a) | | | 750,000 | | | | 690,000 | |
| | |
AmWINS Group, Inc. | | | | | | | | |
7.75%, 7/1/2026(a) | | | 75,000 | | | | 81,000 | |
| | |
Ardonagh Midco 3 plc | | | | | | | | |
8.63%, 7/15/2023(a) | | | 360,000 | | | | 341,100 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Insurance – (continued) | |
| | |
AssuredPartners, Inc. | | | | | | | | |
7.00%, 8/15/2025(a) | | $ | 350,000 | | | $ | 350,437 | |
| | |
Fidelity & Guaranty Life Holdings, Inc. | | | | | | | | |
5.50%, 5/1/2025(a) | | | 30,000 | | | | 32,175 | |
| | |
Genworth Holdings, Inc. | | | | | | | | |
(ICE LIBOR USD
3 Month + 2.00%), 4.16%, 11/15/2036(e) | | | 50,000 | | | | 30,250 | |
| | |
HUB International Ltd. | | | | | | | | |
7.00%, 5/1/2026(a) | | | 480,000 | | | | 495,000 | |
| | |
NFP Corp. | | | | | | | | |
6.88%, 7/15/2025(a) | | | 280,000 | | | | 276,850 | |
| | |
USI, Inc. | | | | | | | | |
6.88%, 5/1/2025(a) | | | 130,000 | | | | 132,600 | |
| | | | | | | | 2,429,412 | |
|
| Interactive Media & Services – 0.4% | |
| | |
Match Group, Inc. | | | | | | | | |
6.38%, 6/1/2024 | | | 100,000 | | | | 105,250 | |
| | |
Rackspace Hosting, Inc. | | | | | | | | |
8.63%, 11/15/2024(a) | | | 350,000 | | | | 322,000 | |
| | | | | | | | 427,250 | |
|
| Internet & Direct Marketing Retail – 0.2% | |
| | |
Go Daddy Operating Co. LLC | | | | | | | | |
5.25%, 12/1/2027(a) | | | 100,000 | | | | 106,375 | |
| | |
QVC, Inc. | | | | | | | | |
5.45%, 8/15/2034 | | | 100,000 | | | | 100,864 | |
| | | | | | | | 207,239 | |
|
| IT Services – 1.5% | |
| | |
Banff Merger Sub, Inc. | | | | | | | | |
9.75%, 9/1/2026(a) | | | 540,000 | | | | 505,575 | |
| | |
EIG Investors Corp. | | | | | | | | |
10.88%, 2/1/2024 | | | 100,000 | | | | 101,000 | |
| | |
VeriSign, Inc. | | | | | | | | |
4.75%, 7/15/2027 | | | 100,000 | | | | 106,000 | |
| | |
Zayo Group LLC | | | | | | | | |
6.38%, 5/15/2025 | | | 750,000 | | | | 773,813 | |
| | | | | | | | 1,486,388 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 357 | |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Life Sciences Tools & Services – 0.1% | |
| | |
Charles River Laboratories International, Inc. | | | | | | | | |
5.50%, 4/1/2026(a) | | $ | 100,000 | | | $ | 106,750 | |
|
| Machinery – 2.5% | |
| | |
Amsted Industries, Inc. | | | | | | | | |
5.38%, 9/15/2024(a) | | | 100,000 | | | | 102,875 | |
| | |
Apex Tool Group LLC | | | | | | | | |
9.00%, 2/15/2023(a) | | | 80,000 | | | | 68,000 | |
| | |
BCD Acquisition, Inc. | | | | | | | | |
9.63%, 9/15/2023(a) | | | 100,000 | | | | 103,127 | |
| | |
Cleaver-Brooks, Inc. | | | | | | | | |
7.88%, 3/1/2023(a) | | | 100,000 | | | | 94,750 | |
| | |
Cloud Crane LLC | | | | | | | | |
10.13%, 8/1/2024(a) | | | 310,000 | | | | 328,213 | |
| | |
Colfax Corp. | | | | | | | | |
6.00%, 2/15/2024(a) | | | 50,000 | | | | 53,187 | |
| | |
EnPro Industries, Inc. | | | | | | | | |
5.75%, 10/15/2026 | | | 100,000 | | | | 106,000 | |
| | |
Granite Holdings US Acquisition Co. | | | | | | | | |
11.00%, 10/1/2027(a) | | | 150,000 | | | | 139,875 | |
| | |
Grinding Media, Inc. | | | | | | | | |
7.38%, 12/15/2023(a) | | | 300,000 | | | | 291,000 | |
| | |
JPW Industries Holding Corp. | | | | | | | | |
9.00%, 10/1/2024(a) | | | 100,000 | | | | 94,000 | |
| | |
Manitowoc Co., Inc. (The) | | | | | | | | |
9.00%, 4/1/2026(a) | | | 100,000 | | | | 96,460 | |
| | |
Mueller Water Products, Inc. | | | | | | | | |
5.50%, 6/15/2026(a) | | | 100,000 | | | | 105,125 | |
| | |
Navistar International Corp. | | | | | | | | |
6.63%, 11/1/2025(a) | | | 200,000 | | | | 205,000 | |
| | |
SPX FLOW, Inc. | | | | | | | | |
5.63%, 8/15/2024(a) | | | 50,000 | | | | 52,312 | |
| | |
Terex Corp. | | | | | | | | |
5.63%, 2/1/2025(a) | | | 200,000 | | | | 200,750 | |
| | |
Titan Acquisition Ltd. | | | | | | | | |
7.75%, 4/15/2026(a) | | | 330,000 | | | | 310,200 | |
| | |
Wabash National Corp. | | | | | | | | |
5.50%, 10/1/2025(a) | | | 100,000 | | | | 98,000 | |
| | |
Werner FinCo LP | | | | | | | | |
8.75%, 7/15/2025(a) | | | 50,000 | | | | 43,688 | |
| | | | | | | | 2,492,562 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Marine – 0.1% | |
| | |
Stena AB | | | | | | | | |
7.00%, 2/1/2024(a) | | $ | 110,000 | | | $ | 111,925 | |
|
| Media – 8.2% | |
| | |
AMC Networks, Inc. | | | | | | | | |
5.00%, 4/1/2024 | | | 250,000 | | | | 255,265 | |
| | |
Cinemark USA, Inc. | | | | | | | | |
4.88%, 6/1/2023 | | | 300,000 | | | | 305,250 | |
| | |
Clear Channel Worldwide Holdings, Inc. | | | | | | | | |
9.25%, 2/15/2024(a) | | | 85,000 | | | | 93,659 | |
| | |
CSC Holdings LLC | | | | | | | | |
6.75%, 11/15/2021 | | | 350,000 | | | | 378,000 | |
7.50%, 4/1/2028(a) | | | 400,000 | | | | 453,000 | |
| | |
Diamond Sports Group LLC | | | | | | | | |
5.38%, 8/15/2026(a) | | | 200,000 | | | | 209,500 | |
| | |
DISH DBS Corp. | | | | | | | | |
6.75%, 6/1/2021 | | | 260,000 | | | | 273,650 | |
5.88%, 7/15/2022 | | | 250,000 | | | | 262,390 | |
5.00%, 3/15/2023 | | | 625,000 | | | | 632,031 | |
7.75%, 7/1/2026 | | | 850,000 | | | | 859,648 | |
| | |
EW Scripps Co. (The) | | | | | | | | |
5.13%, 5/15/2025(a) | | | 100,000 | | | | 101,625 | |
| | |
GCI LLC | | | | | | | | |
6.63%, 6/15/2024(a) | | | 100,000 | | | | 108,625 | |
| | |
Getty Images, Inc. | | | | | | | | |
9.75%, 3/1/2027(a) | | | 50,000 | | | | 50,688 | |
| | |
Gray Television, Inc. | | | | | | | | |
5.88%, 7/15/2026(a) | | | 150,000 | | | | 158,066 | |
| | |
iHeartCommunications, Inc. | | | | | | | | |
6.38%, 5/1/2026 | | | 100,000 | | | | 107,750 | |
8.38%, 5/1/2027 | | | 500,000 | | | | 538,750 | |
| | |
Lamar Media Corp. | | | | | | | | |
5.38%, 1/15/2024 | | | 300,000 | | | | 308,193 | |
| | |
McGraw-Hill Global Education Holdings LLC | | | | | | | | |
7.88%, 5/15/2024(a) | | | 135,000 | | | | 113,400 | |
| | |
Meredith Corp. | | | | | | | | |
6.88%, 2/1/2026 | | | 410,000 | | | | 424,649 | |
| | |
Nexstar Broadcasting, Inc. | | | | | | | | |
5.63%, 8/1/2024(a) | | | 155,000 | | | | 162,111 | |
| | |
Quebecor Media, Inc. | | | | | | | | |
5.75%, 1/15/2023 | | | 400,000 | | | | 434,880 | |
See Accompanying Notes to the Financial Statements.
| | |
| 358 | | FLEXSHARES ANNUAL REPORT |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Media – (continued) | |
| | |
Radiate Holdco LLC | | | | | | | | |
6.63%, 2/15/2025(a) | | $ | 110,000 | | | $ | 111,650 | |
| | |
Sirius XM Radio, Inc. | | | | | | | | |
5.38%, 4/15/2025(a) | | | 475,000 | | | | 495,781 | |
5.00%, 8/1/2027(a) | | | 100,000 | | | | 105,500 | |
| | |
TEGNA, Inc. | | | | | | | | |
5.00%, 9/15/2029(a) | | | 150,000 | | | | 152,250 | |
| | |
Univision Communications, Inc. | | | | | | | | |
5.13%, 5/15/2023(a) | | | 135,000 | | | | 135,675 | |
5.13%, 2/15/2025(a) | | | 340,000 | | | | 333,625 | |
| | |
UPC Holding BV | | | | | | | | |
5.50%, 1/15/2028(a) | | | 110,000 | | | | 112,475 | |
| | |
Videotron Ltd. | | | | | | | | |
5.00%, 7/15/2022 | | | 100,000 | | | | 105,625 | |
| | |
Ziggo BV | | | | | | | | |
5.50%, 1/15/2027(a) | | | 430,000 | | | | 455,800 | |
| | | | | | | | 8,239,511 | |
|
| Metals & Mining – 2.9% | |
| | |
Alcoa Nederland Holding BV | | | | | | | | |
6.75%, 9/30/2024(a) | | | 300,000 | | | | 316,875 | |
| | |
Allegheny Technologies, Inc. | | | | | | | | |
7.88%, 8/15/2023(d) | | | 150,000 | | | | 163,920 | |
| | |
Baffinland Iron Mines Corp. | | | | | | | | |
8.75%, 7/15/2026(a) | | | 150,000 | | | | 150,750 | |
| | |
Big River Steel LLC | | | | | | | | |
7.25%, 9/1/2025(a) | | | 100,000 | | | | 103,000 | |
| | |
Cleveland-Cliffs, Inc. | | | | | | | | |
5.88%, 6/1/2027(a) | | | 100,000 | | | | 95,625 | |
| | |
Commercial Metals Co. | | | | | | | | |
5.75%, 4/15/2026 | | | 30,000 | | | | 31,012 | |
| | |
FMG Resources August 2006 Pty. Ltd. | | | | | | | | |
4.75%, 5/15/2022(a) | | | 130,000 | | | | 134,388 | |
| | |
Freeport-McMoRan, Inc. | | | | | | | | |
3.88%, 3/15/2023 | | | 200,000 | | | | 203,500 | |
5.45%, 3/15/2043 | | | 215,000 | | | | 201,025 | |
| | |
Hudbay Minerals, Inc. | | | | | | | | |
7.25%, 1/15/2023(a) | | | 100,000 | | | | 103,740 | |
| | |
JW Aluminum Continuous Cast Co. | | | | | | | | |
10.25%, 6/1/2026(a) | | | 50,000 | | | | 52,875 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Metals & Mining – (continued) | |
| | |
Mineral Resources Ltd. | | | | | | | | |
8.13%, 5/1/2027(a) | | $ | 200,000 | | | $ | 211,000 | |
| | |
Northwest Acquisitions ULC | | | | | | | | |
7.13%, 11/1/2022(a) | | | 155,000 | | | | 77,887 | |
| | |
Novelis Corp. | | | | | | | | |
6.25%, 8/15/2024(a) | | | 110,000 | | | | 115,500 | |
| | |
Steel Dynamics, Inc. | | | | | | | | |
4.13%, 9/15/2025 | | | 100,000 | | | | 102,760 | |
| | |
United States Steel Corp. | | | | | | | | |
6.88%, 8/15/2025 | | | 775,000 | | | | 702,848 | |
| | |
Warrior Met Coal, Inc. | | | | | | | | |
8.00%, 11/1/2024(a) | | | 110,000 | | | | 112,269 | |
| | | | | | | | 2,878,974 | |
|
| Mortgage Real Estate Investment Trusts (REITs) – 0.1% | |
| | |
Starwood Property Trust, Inc. | | | | | | | | |
5.00%, 12/15/2021 | | | 128,000 | | | | 132,800 | |
|
| Oil, Gas & Consumable Fuels – 9.3% | |
| | |
Alliance Resource Operating Partners LP | | | | | | | | |
7.50%, 5/1/2025(a) | | | 150,000 | | | | 127,500 | |
| | |
Antero Midstream Partners LP | | | | | | | | |
5.38%, 9/15/2024 | | | 400,000 | | | | 333,000 | |
| | |
Antero Resources Corp. | | | | | | | | |
5.63%, 6/1/2023 | | | 650,000 | | | | 459,062 | |
| | |
Ascent Resources Utica Holdings LLC | | | | | | | | |
10.00%, 4/1/2022(a) | | | 150,000 | | | | 142,695 | |
| | |
Berry Petroleum Co. LLC | | | | | | | | |
7.00%, 2/15/2026(a) | | | 30,000 | | | | 28,050 | |
| | |
Blue Racer Midstream LLC | | | | | | | | |
6.13%, 11/15/2022(a) | | | 200,000 | | | | 197,500 | |
| | |
Brazos Valley Longhorn LLC | | | | | | | | |
6.88%, 2/1/2025 | | | 200,000 | | | | 158,000 | |
| | |
Bruin E&P Partners LLC | | | | | | | | |
8.88%, 8/1/2023(a) | | | 200,000 | | | | 133,000 | |
| | |
Callon Petroleum Co. | | | | | | | | |
6.13%, 10/1/2024 | | | 100,000 | | | | 95,500 | |
| | |
Calumet Specialty Products Partners LP | | | | | | | | |
7.63%, 1/15/2022 | | | 30,000 | | | | 29,400 | |
| | |
Carrizo Oil & Gas, Inc. | | | | | | | | |
6.25%, 4/15/2023 | | | 100,000 | | | | 93,500 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 359 | |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Chesapeake Energy Corp. | | | | | | | | |
7.00%, 10/1/2024 | | $ | 100,000 | | | $ | 68,000 | |
8.00%, 1/15/2025 | | | 440,000 | | | | 292,600 | |
8.00%, 3/15/2026(a) | | | 200,000 | | | | 128,000 | |
| | |
Citgo Holding, Inc. | | | | | | | | |
9.25%, 8/1/2024(a) | | | 150,000 | | | | 156,938 | |
| | |
CNX Resources Corp. | | | | | | | | |
5.88%, 4/15/2022 | | | 150,000 | | | | 147,187 | |
| | |
Comstock Resources, Inc. | | | | | | | | |
9.75%, 8/15/2026 | | | 250,000 | | | | 198,750 | |
| | |
CONSOL Energy, Inc. | | | | | | | | |
11.00%, 11/15/2025(a) | | | 50,000 | | | | 42,000 | |
| | |
Covey Park Energy LLC | | | | | | | | |
7.50%, 5/15/2025(a) | | | 180,000 | | | | 134,100 | |
| | |
DCP Midstream LP | | | | | | | | |
Series A,
7.38%, 12/15/2022(b) (c) | | | 250,000 | | | | 241,005 | |
| | |
Delek Logistics Partners LP | | | | | | | | |
6.75%, 5/15/2025 | | | 100,000 | | | | 100,250 | |
| | |
Denbury Resources, Inc. | | | | | | | | |
9.00%, 5/15/2021(a) | | | 150,000 | | | | 132,000 | |
7.75%, 2/15/2024(a) | | | 350,000 | | | | 259,000 | |
| | |
Energy Transfer Operating LP | | | | | | | | |
Series A,
6.25%, 2/15/2023(b) (c) | | | 210,000 | | | | 195,619 | |
| | |
EnLink Midstream Partners LP | | | | | | | | |
5.05%, 4/1/2045 | | | 50,000 | | | | 37,750 | |
| | |
Extraction Oil & Gas, Inc. | | | | | | | | |
7.38%, 5/15/2024(a) | | | 200,000 | | | | 83,000 | |
| | |
Foresight Energy LLC | | | | | | | | |
11.50%, 4/1/2023(a) | | | 30,000 | | | | 2,775 | |
| | |
Genesis Energy LP | | | | | | | | |
6.75%, 8/1/2022 | | | 170,000 | | | | 171,488 | |
6.25%, 5/15/2026 | | | 100,000 | | | | 93,000 | |
| | |
Gran Tierra Energy International Holdings Ltd. | | | | | | | | |
6.25%, 2/15/2025(a) | | | 200,000 | | | | 188,250 | |
| | |
Gulfport Energy Corp. | | | | | | | | |
6.38%, 1/15/2026 | | | 760,000 | | | | 459,800 | |
| | |
Holly Energy Partners LP | | | | | | | | |
6.00%, 8/1/2024(a) | | | 100,000 | | | | 104,625 | |
| | |
Indigo Natural Resources LLC | | | | | | | | |
6.88%, 2/15/2026(a) | | | 110,000 | | | | 100,650 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Ithaca Energy North Sea plc | | | | | | | | |
9.38%, 7/15/2024(a) | | $ | 200,000 | | | $ | 203,500 | |
| | |
Jonah Energy LLC | | | | | | | | |
7.25%, 10/15/2025(a) | | | 110,000 | | | | 31,900 | |
| | |
Laredo Petroleum, Inc. | | | | | | | | |
6.25%, 3/15/2023 | | | 93,000 | | | | 85,328 | |
| | |
Magnolia Oil & Gas Operating LLC | | | | | | | | |
6.00%, 8/1/2026(a) | | | 200,000 | | | | 201,000 | |
| | |
MEG Energy Corp. | | | | | | | | |
7.00%, 3/31/2024(a) | | | 170,000 | | | | 160,225 | |
| | |
Montage Resources Corp. | | | | | | | | |
8.88%, 7/15/2023 | | | 110,000 | | | | 84,975 | |
| | |
Moss Creek Resources Holdings, Inc. | | | | | | | | |
10.50%, 5/15/2027(a) | | | 300,000 | | | | 233,250 | |
| | |
Natural Resource Partners LP | | | | | | | | |
9.13%, 6/30/2025(a) | | | 50,000 | | | | 47,125 | |
| | |
Neptune Energy Bondco plc | | | | | | | | |
6.63%, 5/15/2025(a) | | | 200,000 | | | | 200,000 | |
| | |
NGL Energy Partners LP | | | | | | | | |
7.50%, 11/1/2023 | | | 30,000 | | | | 30,038 | |
6.13%, 3/1/2025 | | | 100,000 | | | | 93,000 | |
| | |
Oasis Petroleum, Inc. | | | | | | | | |
6.88%, 3/15/2022 | | | 250,000 | | | | 220,625 | |
| | |
Par Petroleum LLC | | | | | | | | |
7.75%, 12/15/2025(a) | | | 100,000 | | | | 100,250 | |
| | |
Parkland Fuel Corp. | | | | | | | | |
6.00%, 4/1/2026(a) | | | 100,000 | | | | 106,095 | |
| | |
Parsley Energy LLC | | | | | | | | |
5.38%, 1/15/2025(a) | | | 50,000 | | | | 51,724 | |
| | |
PBF Holding Co. LLC | | | | | | | | |
7.25%, 6/15/2025 | | | 150,000 | | | | 157,312 | |
| | |
PBF Logistics LP | | | | | | | | |
6.88%, 5/15/2023 | | | 100,000 | | | | 103,000 | |
| | |
Peabody Energy Corp. | | | | | | | | |
6.38%, 3/31/2025(a) | | | 425,000 | | | | 351,156 | |
| | |
Plains All American Pipeline LP | | | | | | | | |
Series B,
6.13%, 11/15/2022(b) (c) | | | 100,000 | | | | 93,402 | |
| | |
QEP Resources, Inc. | | | | | | | | |
5.25%, 5/1/2023 | | | 100,000 | | | | 95,500 | |
| | |
Range Resources Corp. | | | | | | | | |
5.00%, 3/15/2023 | | | 150,000 | | | | 130,500 | |
See Accompanying Notes to the Financial Statements.
| | |
| 360 | | FLEXSHARES ANNUAL REPORT |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Oil, Gas & Consumable Fuels – (continued) | |
| | |
Rockpoint Gas Storage Canada Ltd. | | | | | | | | |
7.00%, 3/31/2023(a) | | $ | 100,000 | | | $ | 100,250 | |
| | |
Ruby Pipeline LLC | | | | | | | | |
6.50%, 4/1/2022(a) (d) | | | 73,485 | | | | 76,070 | |
| | |
SM Energy Co. | | | | | | | | |
6.75%, 9/15/2026 | | | 200,000 | | | | 172,500 | |
| | |
Summit Midstream Holdings LLC | | | | | | | | |
5.75%, 4/15/2025 | | | 300,000 | | | | 234,000 | |
| | |
Sunoco LP | | | | | | | | |
4.88%, 1/15/2023 | | | 200,000 | | | | 205,750 | |
| | |
Tallgrass Energy Partners LP | | | | | | | | |
5.50%, 9/15/2024(a) | | | 150,000 | | | | 146,625 | |
| | |
Topaz Solar Farms LLC | | | | | | | | |
5.75%, 9/30/2039(a) | | | 79,950 | | | | 89,594 | |
| | |
Vine Oil & Gas LP | | | | | | | | |
9.75%, 4/15/2023(a) | | | 150,000 | | | | 58,500 | |
| | |
W&T Offshore, Inc. | | | | | | | | |
9.75%, 11/1/2023(a) | | | 100,000 | | | | 94,250 | |
| | |
Whiting Petroleum Corp. | | | | | | | | |
5.75%, 3/15/2021 | | | 200,000 | | | | 189,000 | |
6.63%, 1/15/2026 | | | 50,000 | | | | 31,250 | |
| | | | | | | | 9,311,688 | |
|
| Paper & Forest Products – 0.2% | |
| | |
Mercer International, Inc. | | | | | | | | |
7.38%, 1/15/2025 | | | 100,000 | | | | 104,000 | |
| | |
Schweitzer-Mauduit International, Inc. | | | | | | | | |
6.88%, 10/1/2026(a) | | | 100,000 | | | | 107,000 | |
| | | | | | | | 211,000 | |
|
| Personal Products – 0.4% | |
| | |
Avon Products, Inc. | | | | | | | | |
7.00%, 3/15/2023(d) | | | 110,000 | | | | 116,050 | |
| | |
Edgewell Personal Care Co. | | | | | | | | |
4.70%, 5/19/2021 | | | 100,000 | | | | 102,750 | |
| | |
Prestige Brands, Inc. | | | | | | | | |
5.38%, 12/15/2021(a) | | | 50,000 | | | | 50,225 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Personal Products – (continued) | |
| | |
Revlon Consumer Products Corp. | | | | | | | | |
5.75%, 2/15/2021(d) | | $ | 210,000 | | | $ | 182,700 | |
| | | | | | | | 451,725 | |
|
| Pharmaceuticals – 1.2% | |
| | |
Bausch Health Americas, Inc. | | | | | | | | |
8.50%, 1/31/2027(a) | | | 650,000 | | | | 731,055 | |
| | |
Bausch Health Cos., Inc. | | | | | | | | |
6.13%, 4/15/2025(a) | | | 100,000 | | | | 104,062 | |
| | |
Catalent Pharma Solutions, Inc. | | | | | | | | |
4.88%, 1/15/2026(a) | | | 100,000 | | | | 103,750 | |
| | |
HLF Financing Sarl LLC | | | | | | | | |
7.25%, 8/15/2026(a) | | | 100,000 | | | | 104,750 | |
| | |
Par Pharmaceutical, Inc. | | | | | | | | |
7.50%, 4/1/2027(a) | | | 150,000 | | | | 142,875 | |
| | | | | | | | 1,186,492 | |
|
| Professional Services – 0.2% | |
| | |
Dun & Bradstreet Corp. (The) | | | | | | | | |
10.25%, 2/15/2027(a) | | | 225,000 | | | | 247,505 | |
|
| Real Estate Management & Development – 1.3% | |
| | |
Five Point Operating Co. LP | | | | | | | | |
7.88%, 11/15/2025(a) | | | 210,000 | | | | 199,011 | |
| | |
Forestar Group, Inc. | | | | | | | | |
8.00%, 4/15/2024(a) | | | 50,000 | | | | 54,000 | |
| | |
Greystar Real Estate Partners LLC | | | | | | | | |
5.75%, 12/1/2025(a) | | | 100,000 | | | | 104,500 | |
| | |
Howard Hughes Corp. (The) | | | | | | | | |
5.38%, 3/15/2025(a) | | | 200,000 | | | | 208,750 | |
| | |
Hunt Cos., Inc. | | | | | | | | |
6.25%, 2/15/2026(a) | | | 180,000 | | | | 177,193 | |
| | |
Kennedy-Wilson, Inc. | | | | | | | | |
5.88%, 4/1/2024 | | | 140,000 | | | | 145,600 | |
| | |
Realogy Group LLC | | | | | | | | |
4.88%, 6/1/2023(a) | | | 260,000 | | | | 254,176 | |
| | |
WeWork Cos., Inc. | | | | | | | | |
7.88%, 5/1/2025(a) | | | 200,000 | | | | 170,500 | |
| | | | | | | | 1,313,730 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 361 | |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Road & Rail – 1.3% | |
| | |
Algeco Global Finance plc | | | | | | | | |
8.00%, 2/15/2023(a) | | $ | 110,000 | | | $ | 108,900 | |
| | |
Capitol Investment Merger
Sub 2 LLC | | | | | | | | |
10.00%, 8/1/2024(a) | | | 100,000 | | | | 103,250 | |
| | |
Kenan Advantage Group, Inc. (The) | | | | | | | | |
7.88%, 7/31/2023(a) | | | 100,000 | | | | 90,875 | |
| | |
Uber Technologies, Inc. | | | | | | | | |
8.00%, 11/1/2026(a) | | | 950,000 | | | | 955,045 | |
| | | | | | | | 1,258,070 | |
|
| Semiconductors & Semiconductor Equipment – 0.3% | |
| | |
Entegris, Inc. | | | | | | | | |
4.63%, 2/10/2026(a) | | | 100,000 | | | | 103,453 | |
| | |
Qorvo, Inc. | | | | | | | | |
5.50%, 7/15/2026 | | | 100,000 | | | | 106,998 | |
| | |
Sensata Technologies UK Financing Co. plc | | | | | | | | |
6.25%, 2/15/2026(a) | | | 110,000 | | | | 118,181 | |
| | | | | | | | 328,632 | |
|
| Software – 2.6% | |
| | |
ACI Worldwide, Inc. | | | | | | | | |
5.75%, 8/15/2026(a) | | | 200,000 | | | | 212,750 | |
| | |
Blackboard, Inc. | | | | | | | | |
9.75%, 10/15/2021(a) | | | 50,000 | | | | 50,158 | |
| | |
CDK Global, Inc. | | | | | | | | |
5.88%, 6/15/2026 | | | 150,000 | | | | 161,062 | |
| | |
Change Healthcare Holdings LLC | | | | | | | | |
5.75%, 3/1/2025(a) | | | 130,000 | | | | 133,503 | |
| | |
Genesys Telecommunications Laboratories, Inc. | | | | | | | | |
10.00%, 11/30/2024(a) | | | 100,000 | | | | 108,250 | |
| | |
Granite Merger Sub 2, Inc. | | | | | | | | |
11.00%, 7/15/2027(a) | | | 100,000 | | | | 98,875 | |
| | |
Informatica LLC | | | | | | | | |
7.13%, 7/15/2023(a) | | | 200,000 | | | | 203,750 | |
| | |
j2 Cloud Services LLC | | | | | | | | |
6.00%, 7/15/2025(a) | | | 80,000 | | | | 85,300 | |
| | |
Open Text Corp. | | | | | | | | |
5.88%, 6/1/2026(a) | | | 150,000 | | | | 160,313 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Software – (continued) | |
| | |
Solera LLC | | | | | | | | |
10.50%, 3/1/2024(a) | | $ | 500,000 | | | $ | 525,625 | |
| | |
SS&C Technologies, Inc. | | | | | | | | |
5.50%, 9/30/2027(a) | | | 350,000 | | | | 375,156 | |
| | |
Symantec Corp. | | | | | | | | |
5.00%, 4/15/2025(a) | | | 150,000 | | | | 153,910 | |
| | |
Veritas US, Inc. | | | | | | | | |
10.50%, 2/1/2024(a) | | | 340,000 | | | | 323,000 | |
| | | | | | | | 2,591,652 | |
|
| Specialty Retail – 3.4% | |
| | |
AAG FH LP | | | | | | | | |
9.75%, 7/15/2024(a) | | | 100,000 | | | | 92,750 | |
| | |
Bed Bath & Beyond, Inc. | | | | | | | | |
5.17%, 8/1/2044 | | | 50,000 | | | | 36,393 | |
| | |
eG Global Finance plc | | | | | | | | |
6.75%, 2/7/2025(a) | | | 300,000 | | | | 301,125 | |
| | |
Guitar Center, Inc. | | | | | | | | |
9.50%, 10/15/2021(a) | | | 110,000 | | | | 102,575 | |
| | |
J. Crew Brand LLC | | | | | | | | |
13.00%, 9/15/2021(a) | | | 30,000 | | | | 30,750 | |
| | |
KGA Escrow LLC | | | | | | | | |
7.50%, 8/15/2023(a) | | | 55,000 | | | | 58,781 | |
| | |
L Brands, Inc. | | | | | | | | |
5.25%, 2/1/2028 | | | 150,000 | | | | 139,500 | |
| | |
Murphy Oil USA, Inc. | | | | | | | | |
4.75%, 9/15/2029 | | | 200,000 | | | | 209,250 | |
| | |
Party City Holdings, Inc. | | | | | | | | |
6.13%, 8/15/2023(a) | | | 200,000 | | | | 201,500 | |
| | |
Penske Automotive Group, Inc. | | | | | | | | |
5.50%, 5/15/2026 | | | 110,000 | | | | 115,363 | |
| | |
PetSmart, Inc. | | | | | | | | |
5.88%, 6/1/2025(a) | | | 34,000 | | | | 33,664 | |
8.88%, 6/1/2025(a) | | | 800,000 | | | | 756,000 | |
| | |
Sally Holdings LLC | | | | | | | | |
5.63%, 12/1/2025 | | | 100,000 | | | | 103,500 | |
| | |
SRS Distribution, Inc. | | | | | | | | |
8.25%, 7/1/2026(a) | | | 150,000 | | | | 150,375 | |
| | |
Staples, Inc. | | | | | | | | |
7.50%, 4/15/2026(a) | | | 500,000 | | | | 521,350 | |
10.75%, 4/15/2027(a) | | | 500,000 | | | | 521,250 | |
| | | | | | | | 3,374,126 | |
See Accompanying Notes to the Financial Statements.
| | |
| 362 | | FLEXSHARES ANNUAL REPORT |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Technology Hardware, Storage & Peripherals – 0.4% | |
| | |
NCR Corp. | | | | | | | | |
6.13%, 9/1/2029(a) | | $ | 50,000 | | | $ | 52,562 | |
| | |
Western Digital Corp. | | | | | | | | |
4.75%, 2/15/2026 | | | 30,000 | | | | 30,713 | |
| | |
Xerox Corp. | | | | | | | | |
4.50%, 5/15/2021 | | | 300,000 | | | | 309,188 | |
3.80%, 5/15/2024 | | | 50,000 | | | | 50,500 | |
| | | | | | | | 442,963 | |
|
| Textiles, Apparel & Luxury Goods – 0.3% | |
| | |
Eagle Intermediate Global Holding BV | | | | | | | | |
7.50%, 5/1/2025(a) | | | 250,000 | | | | 219,063 | |
| | |
William Carter Co. (The) | | | | | | | | |
5.63%, 3/15/2027(a) | | | 100,000 | | | | 107,375 | |
| | | | | | | | 326,438 | |
|
| Thrifts & Mortgage Finance – 0.4% | |
| | |
Ladder Capital Finance Holdings LLLP | | | | | | | | |
REIT,
5.25%, 10/1/2025(a) | | | 100,000 | | | | 101,750 | |
| | |
Provident Funding Associates LP | | | | | | | | |
6.38%, 6/15/2025(a) | | | 30,000 | | | | 29,316 | |
| | |
Quicken Loans, Inc. | | | | | | | | |
5.75%, 5/1/2025(a) | | | 310,000 | | | | 320,689 | |
| | | | | | | | 451,755 | |
|
| Tobacco – 0.4% | |
| | |
Vector Group Ltd. | | | | | | | | |
6.13%, 2/1/2025(a) | | | 410,000 | | | | 395,650 | |
|
| Trading Companies & Distributors – 1.0% | |
| | |
Ahern Rentals, Inc. | | | | | | | | |
7.38%, 5/15/2023(a) | | | 180,000 | | | | 146,700 | |
| | |
Fortress Transportation & Infrastructure Investors LLC | | | | | | | | |
6.50%, 10/1/2025(a) | | | 300,000 | | | | 303,750 | |
| | |
H&E Equipment Services, Inc. | | | | | | | | |
5.63%, 9/1/2025 | | | 100,000 | | | | 105,500 | |
| | |
HD Supply, Inc. | | | | | | | | |
5.38%, 10/15/2026(a) | | | 100,000 | | | | 106,250 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Trading Companies & Distributors – (continued) | |
| | |
United Rentals North America, Inc. | | | | | | | | |
6.50%, 12/15/2026 | | $ | 300,000 | | | $ | 325,875 | |
| | | | | | | | 988,075 | |
|
| Wireless Telecommunication Services – 4.7% | |
| | |
C&W Senior Financing DAC | | | | | | | | |
7.50%, 10/15/2026(a) | | | 100,000 | | | | 107,625 | |
6.88%, 9/15/2027(a) | | | 500,000 | | | | 528,125 | |
| | |
Connect Finco SARL | | | | | | | | |
6.75%, 10/1/2026(a) | | | 600,000 | | | | 624,000 | |
| | |
Hughes Satellite Systems Corp. | | | | | | | | |
6.63%, 8/1/2026 | | | 200,000 | | | | 217,000 | |
| | |
Intelsat Connect Finance SA | | | | | | | | |
9.50%, 2/15/2023(a) | | | 870,000 | | | | 811,362 | |
| | |
Sprint Corp. | | | | | | | | |
7.88%, 9/15/2023 | | | 700,000 | | | | 774,375 | |
| | |
T-Mobile USA, Inc. | | | | | | | | |
6.50%, 1/15/2024 | | | 250,000 | | | | 260,313 | |
6.50%, 1/15/2026 | | | 1,170,000 | | | | 1,254,942 | |
| | |
Vodafone Group plc | | | | | | | | |
7.00%, 4/4/2079(c) | | | 100,000 | | | | 115,916 | |
| | | | | | | | 4,693,658 | |
Total Corporate Bonds
(Cost $98,656,586) | | | | 98,088,178 | |
| | | | | | | | | |
Total Investments – 97.6%
(Cost $98,656,586) | | | | 98,088,178 | |
| |
Other Assets Less Liabilities – 2.4% | | | | 2,392,061 | |
| NET ASSETS – 100.0% | | | $ | 100,480,239 | |
| (a) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The value of these securities is determined by valuations supplied by a pricing service or brokers, or, if not available, in accordance with procedures established by the Board of Trustees. |
| (b) | Perpetual security. The rate reflected was the rate in effect on October 31, 2019. The maturity date reflects the next call date. |
| (c) | Security issued at a fixed coupon rate, which converts to a variable rate at a future date. Rate shown is the rate in effect as of period end. |
| (d) | Step bond. Interest rate is a fixed rate for an initial period that either resets at a specific date or may reset in the future at a contingent upon predetermined trigger. The interest rate shown was the current rate as of October 31, 2019. |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 363 | |
FlexShares® High Yield Value-Scored Bond Index Fund (cont.)
| (e) | Variable or floating rate security, linked to the referenced benchmark. The interest rate shown is the rate in effect as of October 31, 2019. |
Percentages shown are based on Net Assets.
Abbreviations
ICE – Intercontinental Exchange
LIBOR – London Interbank Offered Rate
USD – US Dollar
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 1,639,492 | |
Aggregate gross unrealized depreciation | | | (2,241,325 | ) |
Net unrealized depreciation | | $ | (601,833 | ) |
Federal income tax cost | | $ | 98,690,011 | |
See Accompanying Notes to the Financial Statements.
| | |
| 364 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® Ready Access Variable Income Fund
October 31, 2019
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – 81.7% | |
|
| Aerospace & Defense – 3.2% | |
| | |
Boeing Co. (The) | | | | | | | | |
2.30%, 8/1/2021 | | $ | 580,000 | | | $ | 583,607 | |
8.75%, 8/15/2021 | | | 827,000 | | | | 920,809 | |
| | |
General Dynamics Corp. | | | | | | | | |
2.88%, 5/11/2020 | | | 2,500,000 | | | | 2,512,777 | |
| | |
Lockheed Martin Corp. | | | | | | | | |
4.25%, 11/15/2019 | | | 534,000 | | | | 534,373 | |
| | |
Northrop Grumman Corp. | | | | | | | | |
2.08%, 10/15/2020 | | | 1,000,000 | | | | 1,001,495 | |
3.50%, 3/15/2021 | | | 204,000 | | | | 208,210 | |
| | |
Precision Castparts Corp. | | | | | | | | |
2.25%, 6/15/2020 | | | 1,000,000 | | | | 1,002,413 | |
| | |
Spirit AeroSystems, Inc. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.80%), 2.92%, 6/15/2021(a) | | | 711,000 | | | | 709,294 | |
| | |
United Technologies Corp. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.35%), 2.60%, 11/1/2019(a) | | | 466,000 | | | | 466,000 | |
1.95%, 11/1/2021 | | | 828,000 | | | | 829,905 | |
| | | | | | | | 8,768,883 | |
|
| Airlines – 0.5% | |
| | |
Southwest Airlines Co. | | | | | | | | |
2.75%, 11/6/2019 | | | 225,000 | | | | 225,006 | |
2.65%, 11/5/2020 | | | 1,060,000 | | | | 1,067,989 | |
| | | | | | | | 1,292,995 | |
|
| Application Software – 0.5% | |
| | |
Autodesk, Inc. | | | | | | | | |
3.13%, 6/15/2020 | | | 1,500,000 | | | | 1,508,058 | |
|
| Asset Management & Custody Banks – 1.8% | |
| | |
Ameriprise Financial, Inc. | | | | | | | | |
3.00%, 3/22/2022 | | | 900,000 | | | | 920,455 | |
| | |
Bank of New York Mellon (The) | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.28%), 2.41%, 6/4/2021(a) | | | 2,700,000 | | | | 2,703,826 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Asset Management & Custody Banks – (continued) | |
| | |
BlackRock, Inc. | | | | | | | | |
Series 2,
5.00%, 12/10/2019 | | $ | 1,225,000 | | | $ | 1,228,804 | |
| | | | | | | | 4,853,085 | |
|
| Automobile Manufacturers – 3.7% | |
| | |
Daimler Finance North America LLC | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.39%), 2.68%, 5/4/2020(a) (b) | | | 1,500,000 | | | | 1,501,016 | |
(ICE LIBOR USD
3 Month + 0.53%), 2.82%, 5/5/2020(a) (b) | | | 92,000 | | | | 92,105 | |
(ICE LIBOR USD
3 Month + 0.45%), 2.60%, 2/22/2021(a) (b) | | | 1,650,000 | | | | 1,650,772 | |
| | |
Hyundai Capital America | | | | | | | | |
2.85%, 11/1/2022(b) | | | 670,000 | | | | 675,290 | |
| | |
Nissan Motor Acceptance Corp. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.63%), 2.79%, 9/21/2021(a) (b) | | | 762,000 | | | | 762,937 | |
| | |
Toyota Motor Corp. | | | | | | | | |
2.16%, 7/2/2022 | | | 1,400,000 | | | | 1,412,219 | |
| | |
Volkswagen Group of America Finance LLC | | | | | | | | |
2.45%, 11/20/2019(b) | | | 640,000 | | | | 640,134 | |
(ICE LIBOR USD
3 Month + 0.77%),
2.95%, 11/13/2020(a) (b) | | | 3,500,000 | | | | 3,514,956 | |
| | | | | | | | 10,249,429 | |
|
| Automotive Retail – 1.1% | |
| | |
AutoZone, Inc. | | | | | | | | |
4.00%, 11/15/2020 | | | 850,000 | | | | 863,273 | |
3.70%, 4/15/2022 | | | 2,000,000 | | | | 2,074,191 | |
| | | | | | | | 2,937,464 | |
|
| Biotechnology – 1.6% | |
| | |
AbbVie, Inc. | | | | | | | | |
2.50%, 5/14/2020 | | | 770,000 | | | | 772,204 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 365 | |
FlexShares® Ready Access Variable Income Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Biotechnology – (continued) | |
| | |
Gilead Sciences, Inc. | | | | | | | | |
2.35%, 2/1/2020 | | $ | 3,730,000 | | | $ | 3,733,140 | |
| | | | | | | | 4,505,344 | |
|
| Broadcasting – 0.1% | |
| | |
Fox Corp. | | | | | | | | |
3.67%, 1/25/2022(b) | | | 300,000 | | | | 310,660 | |
|
| Consumer Finance – 8.9% | |
| | |
American Express Co. | | | | | | | | |
3.00%, 2/22/2021 | | | 520,000 | | | | 527,537 | |
(ICE LIBOR USD
3 Month + 0.53%), 2.65%, 5/17/2021(a) | | | 62,000 | | | | 62,182 | |
| | |
American Express Credit Corp. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.43%), 2.57%, 3/3/2020(a) | | | 913,000 | | | | 914,137 | |
2.38%, 5/26/2020 | | | 10,000 | | | | 10,025 | |
(ICE LIBOR USD
3 Month + 0.73%), 2.86%, 5/26/2020(a) | | | 975,000 | | | | 978,315 | |
Series F, (ICE LIBOR USD
3 Month + 1.05%), 3.17%, 9/14/2020(a) | | | 1,750,000 | | | | 1,763,448 | |
| | |
American Honda Finance Corp. | | | | | | | | |
2.00%, 11/13/2019 | | | 1,150,000 | | | | 1,150,000 | |
(ICE LIBOR USD
3 Month + 0.26%), 2.38%, 6/16/2020(a) | | | 302,000 | | | | 302,447 | |
3.00%, 6/16/2020 | | | 706,000 | | | | 710,971 | |
(ICE LIBOR USD
3 Month + 0.27%), 2.24%, 7/20/2020(a) | | | 209,000 | | | | 209,319 | |
(ICE LIBOR USD
3 Month + 0.35%), 2.49%, 6/11/2021(a) | | | 1,200,000 | | | | 1,203,145 | |
| | |
Capital One Financial Corp. | | | | | | | | |
2.50%, 5/12/2020 | | | 725,000 | | | | 726,602 | |
(ICE LIBOR USD
3 Month + 0.95%), 3.05%, 3/9/2022(a) | | | 235,000 | | | | 236,967 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Consumer Finance – (continued) | |
| | |
Caterpillar Financial Services Corp. | | | | | | | | |
Series I, (ICE LIBOR USD
3 Month + 0.39%), 2.51%, 5/17/2021(a) | | $ | 1,000,000 | | | $ | 1,002,543 | |
(ICE LIBOR USD
3 Month + 0.28%), 2.38%, 9/7/2021(a) | | | 2,091,000 | | | | 2,092,211 | |
| | |
Ford Motor Credit Co. LLC | | | | | | | | |
2.46%, 3/27/2020 | | | 550,000 | | | | 550,099 | |
2.43%, 6/12/2020 | | | 200,000 | | | | 199,787 | |
| | |
General Motors Financial Co., Inc. | | | | | | | | |
3.15%, 1/15/2020 | | | 1,417,000 | | | | 1,418,956 | |
2.45%, 11/6/2020 | | | 751,000 | | | | 752,313 | |
| | |
John Deere Capital Corp. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.18%), 2.22%, 1/7/2020(a) | | | 532,000 | | | | 532,316 | |
(ICE LIBOR USD
3 Month + 0.30%), 2.43%, 3/13/2020(a) | | | 228,000 | | | | 228,321 | |
(ICE LIBOR USD
3 Month + 0.29%), 2.45%, 6/22/2020(a) | | | 596,000 | | | | 597,142 | |
(ICE LIBOR USD
3 Month + 0.17%), 2.18%, 10/9/2020(a) | | | 690,000 | | | | 690,743 | |
(ICE LIBOR USD
3 Month + 0.26%), 2.39%, 9/10/2021(a) | | | 1,554,000 | | | | 1,555,243 | |
| | |
PACCAR Financial Corp. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.26%), 2.44%, 5/10/2021(a) | | | 1,664,000 | | | | 1,664,703 | |
2.00%, 9/26/2022 | | | 650,000 | | | | 652,686 | |
| | |
Toyota Motor Credit Corp. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.26%), 2.26%, 4/17/2020(a) | | | 776,000 | | | | 776,887 | |
(ICE LIBOR USD
3 Month + 0.15%), 2.16%, 10/9/2020(a) | | | 1,900,000 | | | | 1,902,082 | |
See Accompanying Notes to the Financial Statements.
| | |
| 366 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Ready Access Variable Income Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Consumer Finance – (continued) | |
(ICE LIBOR USD
3 Month + 0.29%), 2.33%, 10/7/2021(a) | | $ | 1,200,000 | | | $ | 1,200,981 | |
| | | | | | | | 24,612,108 | |
|
| Data Processing & Outsourced Services – 1.1% | |
| | |
Fiserv, Inc. | | | | | | | | |
2.70%, 6/1/2020 | | | 2,050,000 | | | | 2,059,449 | |
| | |
PayPal Holdings, Inc. | | | | | | | | |
2.20%, 9/26/2022 | | | 900,000 | | | | 905,282 | |
| | | | | | | | 2,964,731 | |
|
| Diversified Banks – 20.1% | |
| | |
Australia & New Zealand Banking Group Ltd. | | | | | | | | |
2.25%, 11/9/2020 | | | 700,000 | | | | 703,348 | |
| | |
Bank of America Corp. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.38%), 2.31%, 1/23/2022(a) | | | 1,742,000 | | | | 1,742,720 | |
| | |
Bank of Montreal | | | | | | | | |
2.90%, 3/26/2022 | | | 1,500,000 | | | | 1,531,124 | |
| | |
Bank of Nova Scotia (The) | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.29%), 2.32%, 1/8/2021(a) | | | 670,000 | | | | 671,393 | |
(ICE LIBOR USD
3 Month + 0.42%), 2.36%, 1/25/2021(a) | | | 1,000,000 | | | | 1,002,562 | |
| | |
Barclays Bank plc | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.65%), 2.86%, 8/7/2020(a) | | | 144,000 | | | | 144,345 | |
| | |
BNP Paribas SA | | | | | | | | |
2.38%, 5/21/2020 | | | 710,000 | | | | 711,949 | |
5.00%, 1/15/2021 | | | 1,000,000 | | | | 1,037,727 | |
| | |
Citibank NA | | | | | | | | |
(SOFR + 0.60%),
2.42%, 3/13/2021(a) | | | 1,000,000 | | | | 1,002,298 | |
(ICE LIBOR USD
3 Month + 0.57%), 2.50%, 7/23/2021(a) | | | 900,000 | | | | 903,758 | |
3.16%, 2/19/2022(c) | | | 2,000,000 | | | | 2,030,242 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Diversified Banks – (continued) | |
| | |
Citigroup, Inc. | | | | | | | | |
2.65%, 10/26/2020 | | $ | 560,000 | | | $ | 563,990 | |
| | |
Cooperatieve Rabobank UA | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.43%), 2.37%, 4/26/2021(a) | | | 520,000 | | | | 521,727 | |
| | |
DBS Group Holdings Ltd. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.49%), 2.59%, 6/8/2020(a) (b) | | | 100,000 | | | | 100,119 | |
2.85%, 4/16/2022(b) | | | 1,200,000 | | | | 1,219,488 | |
| | |
HSBC Holdings plc | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.60%), 2.72%, 5/18/2021(a) | | | 1,605,000 | | | | 1,607,053 | |
(ICE LIBOR USD
3 Month + 0.65%), 2.78%, 9/11/2021(a) | | | 2,000,000 | | | | 2,004,727 | |
| | |
HSBC USA, Inc. | | | | | | | | |
2.38%, 11/13/2019 | | | 897,000 | | | | 897,086 | |
| | |
JPMorgan Chase & Co. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.68%), 2.82%, 6/1/2021(a) | | | 504,000 | | | | 505,482 | |
| | |
JPMorgan Chase Bank NA | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.29%), 2.54%, 2/1/2021(a) | | | 1,105,000 | | | | 1,105,315 | |
(ICE LIBOR USD
3 Month + 0.37%), 2.49%, 2/19/2021(a) | | | 500,000 | | | | 500,433 | |
| | |
Lloyds Bank plc | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.49%), 2.70%, 5/7/2021(a) | | | 1,038,000 | | | | 1,039,883 | |
| | |
Mitsubishi UFJ Financial Group, Inc. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.65%), 2.59%, 7/26/2021(a) | | | 695,000 | | | | 697,675 | |
3.22%, 3/7/2022 | | | 1,200,000 | | | | 1,230,613 | |
2.62%, 7/18/2022 | | | 1,600,000 | | | | 1,620,241 | |
| | |
National Australia Bank Ltd. | | | | | | | | |
2.25%, 1/10/2020 | | | 1,000,000 | | | | 1,000,702 | |
1.88%, 7/12/2021 | | | 1,000,000 | | | | 1,000,277 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 367 | |
FlexShares® Ready Access Variable Income Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Diversified Banks – (continued) | |
(ICE LIBOR USD
3 Month + 0.71%), 2.95%, 11/4/2021(a) (b) | | $ | 2,000,000 | | | $ | 2,021,297 | |
| | |
Nordea Bank Abp | | | | | | | | |
2.13%, 5/29/2020(b) | | | 1,000,000 | | | | 1,001,193 | |
| | |
Royal Bank of Canada | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.38%), 2.52%, 3/2/2020(a) | | | 2,854,000 | | | | 2,857,098 | |
| | |
Santander UK plc | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.62%), 2.76%, 6/1/2021(a) | | | 672,000 | | | | 674,265 | |
| | |
Skandinaviska Enskilda Banken AB | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.43%), 2.55%, 5/17/2021(a) (b) | | | 1,110,000 | | | | 1,113,563 | |
| | |
Sumitomo Mitsui Banking Corp. | | | | | | | | |
2.45%, 1/16/2020 | | | 1,300,000 | | | | 1,301,547 | |
| | |
Sumitomo Mitsui Financial Group, Inc. | | | | | | | | |
2.06%, 7/14/2021 | | | 941,000 | | | | 941,590 | |
| | |
Svenska Handelsbanken AB | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.47%), 2.60%, 5/24/2021(a) | | | 2,250,000 | | | | 2,259,885 | |
3.35%, 5/24/2021 | | | 1,705,000 | | | | 1,743,090 | |
| | |
Toronto-Dominion Bank (The) | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.26%), 2.40%, 9/17/2020(a) | | | 251,000 | | | | 251,482 | |
(ICE LIBOR USD
3 Month + 0.27%), 2.41%, 3/17/2021(a) | | | 1,000,000 | | | | 1,002,254 | |
(ICE LIBOR USD
3 Month + 0.43%), 2.57%, 6/11/2021(a) | | | 1,000,000 | | | | 1,003,796 | |
2.70%, 7/30/2021(c) | | | 2,300,000 | | | | 2,295,511 | |
| | |
US Bank NA | | | | | | | | |
2.35%, 1/23/2020 | | | 1,375,000 | | | | 1,375,950 | |
2.00%, 1/24/2020 | | | 740,000 | | | | 740,141 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Diversified Banks – (continued) | |
(ICE LIBOR USD
3 Month + 0.31%), 2.60%, 2/4/2021(a) | | $ | 1,500,000 | | | $ | 1,502,086 | |
| | |
Wells Fargo & Co. | | | | | | | | |
Series N,
2.15%, 1/30/2020 | | | 12,000 | | | | 12,008 | |
| | |
Wells Fargo Bank NA | | | | | | | | |
2.40%, 1/15/2020 | | | 650,000 | | | | 650,605 | |
(SOFR + 0.48%),
2.30%, 3/25/2020(a) | | | 500,000 | | | | 501,094 | |
(ICE LIBOR USD
3 Month + 0.38%), 2.53%, 5/21/2021(a) | | | 900,000 | | | | 900,625 | |
(ICE LIBOR USD
3 Month + 0.50%), 2.43%, 7/23/2021(a) | | | 2,400,000 | | | | 2,404,065 | |
| | |
Westpac Banking Corp. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.43%), 2.54%, 3/6/2020(a) | | | 273,000 | | | | 273,414 | |
(ICE LIBOR USD
3 Month + 0.28%), 2.44%, 5/15/2020(a) | | | 194,000 | | | | 194,281 | |
2.30%, 5/26/2020 | | | 1,104,000 | | | | 1,106,444 | |
2.65%, 1/25/2021 | | | 105,000 | | | | 106,024 | |
| | | | | | | | 55,329,585 | |
|
| Diversified Capital Markets – 0.7% | |
| | |
Macquarie Bank Ltd. | | | | | | | | |
2.40%, 1/21/2020(b) | | | 500,000 | | | | 500,431 | |
2.10%, 10/17/2022(b) | | | 700,000 | | | | 698,880 | |
| | |
Macquarie Group Ltd. | | | | | | | | |
6.00%, 1/14/2020(b) | | | 800,000 | | | | 806,243 | |
| | | | | | | | 2,005,554 | |
|
| Diversified Chemicals – 0.0%(d) | |
| | |
Eastman Chemical Co. | | | | | | | | |
2.70%, 1/15/2020 | | | 107,000 | | | | 107,084 | |
|
| Drug Retail – 0.7% | |
| | |
Walgreens Boots Alliance, Inc. | | | | | | | | |
2.70%, 11/18/2019 | | | 1,841,000 | | | | 1,841,409 | |
See Accompanying Notes to the Financial Statements.
| | |
| 368 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Ready Access Variable Income Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Electric Utilities – 1.0% | |
| | |
Florida Power & Light Co. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.40%), 2.64%, 5/6/2022(a) | | $ | 1,000,000 | | | $ | 1,000,060 | |
| | |
NextEra Energy Capital Holdings, Inc. | | | | | | | | |
2.40%, 9/1/2021 | | | 700,000 | | | | 705,657 | |
2.90%, 4/1/2022 | | | 1,000,000 | | | | 1,021,118 | |
| | | | | | | | 2,726,835 | |
|
| Environmental & Facilities Services – 0.7% | |
| | |
Waste Management, Inc. | | | | | | | | |
4.75%, 6/30/2020 | | | 2,000,000 | | | | 2,036,920 | |
|
| Financial Exchanges & Data – 0.8% | |
| | |
Moody’s Corp. | | | | | | | | |
5.50%, 9/1/2020 | | | 2,253,000 | | | | 2,318,428 | |
|
| General Merchandise Stores – 0.0%(d) | |
| | |
Dollar Tree, Inc. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.70%), 2.70%, 4/17/2020(a) | | | 120,000 | | | | 120,019 | |
|
| Health Care Distributors – 0.3% | |
| | |
McKesson Corp. | | | | | | | | |
3.65%, 11/30/2020 | | | 762,000 | | | | 775,259 | |
|
| Health Care Equipment – 0.7% | |
| | |
DH Europe Finance II Sarl | | | | | | | | |
2.05%, 11/15/2022 | | | 2,000,000 | | | | 2,009,147 | |
|
| Health Care Services – 0.3% | |
| | |
CVS Health Corp. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.63%), 2.73%, 3/9/2020(a) | | | 67,000 | | | | 67,108 | |
3.35%, 3/9/2021 | | | 662,000 | | | | 673,882 | |
| | | | | | | | 740,990 | |
|
| Home Improvement Retail – 0.3% | |
| | |
Home Depot, Inc. (The) | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.15%), 2.28%, 6/5/2020(a) | | | 512,000 | | | | 512,404 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Home Improvement Retail – (continued) | |
(ICE LIBOR USD
3 Month + 0.31%), 2.45%, 3/1/2022(a) | | $ | 210,000 | | | $ | 210,618 | |
| | | | | | | | 723,022 | |
|
| Homebuilding – 0.2% | |
| | |
DR Horton, Inc. | | | | | | | | |
2.55%, 12/1/2020 | | | 428,000 | | | | 429,577 | |
|
| Hotels, Resorts & Cruise Lines – 1.0% | |
| | |
Marriott International, Inc. | | | | | | | | |
Series Y, (ICE LIBOR USD
3 Month + 0.60%), 2.74%, 12/1/2020(a) | | | 816,000 | | | | 818,294 | |
Series N, 3.13%, 10/15/2021 | | | 2,000,000 | | | | 2,036,431 | |
| | | | | | | | 2,854,725 | |
|
| Household Products – 0.9% | |
| | |
Church & Dwight Co., Inc. | | | | | | | | |
2.45%, 12/15/2019 | | | 410,000 | | | | 410,015 | |
| | |
Kimberly-Clark Corp. | | | | | | | | |
2.15%, 8/15/2020 | | | 2,000,000 | | | | 2,005,184 | |
| | | | | | | | 2,415,199 | |
|
| Hypermarkets & Super Centers – 0.6% | |
| | |
Walmart, Inc. | | | | | | | | |
3.63%, 7/8/2020 | | | 1,648,000 | | | | 1,667,830 | |
|
| Industrial Conglomerates – 0.9% | |
| | |
General Electric Co. | | | | | | | | |
5.50%, 1/8/2020 | | | 1,000,000 | | | | 1,006,105 | |
2.20%, 1/9/2020 | | | 500,000 | | | | 499,905 | |
5.55%, 5/4/2020 | | | 1,000,000 | | | | 1,016,448 | |
| | | | | | | | 2,522,458 | |
|
| Integrated Oil & Gas – 1.5% | |
| | |
BP Capital Markets plc | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.25%), 2.38%, 11/24/2020(a) | | | 2,100,000 | | | | 2,104,195 | |
| | |
Occidental Petroleum Corp. | | | | | | | | |
2.60%, 8/13/2021 | | | 800,000 | | | | 805,301 | |
| | |
Total Capital International SA | | | | | | | | |
2.22%, 7/12/2021 | | | 1,200,000 | | | | 1,207,546 | |
| | | | | | | | 4,117,042 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 369 | |
FlexShares® Ready Access Variable Income Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Integrated Telecommunication Services – 2.7% | |
| | |
AT&T, Inc. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.65%), 2.65%, 1/15/2020(a) | | $ | 1,078,000 | | | $ | 1,079,491 | |
2.45%, 6/30/2020 | | | 985,000 | | | | 987,791 | |
(ICE LIBOR USD
3 Month + 0.95%), 2.95%, 7/15/2021(a) | | | 2,286,000 | | | | 2,309,968 | |
| | |
Orange SA | | | | | | | | |
1.63%, 11/3/2019 | | | 1,271,000 | | | | 1,271,000 | |
| | |
Verizon Communications, Inc. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.55%), 2.70%, 5/22/2020(a) | | | 1,414,000 | | | | 1,418,044 | |
(ICE LIBOR USD
3 Month + 1.00%), 3.12%, 3/16/2022(a) | | | 320,000 | | | | 325,264 | |
| | | | | | | | 7,391,558 | |
|
| Internet & Direct Marketing Retail – 0.4% | |
| | |
eBay, Inc. | | | | | | | | |
2.88%, 8/1/2021 | | | 1,050,000 | | | | 1,065,412 | |
|
| Investment Banking & Brokerage – 2.5% | |
| | |
Charles Schwab Corp. (The) | | | | | | | | |
4.45%, 7/22/2020 | | | 1,500,000 | | | | 1,527,552 | |
(ICE LIBOR USD
3 Month + 0.32%), 2.47%, 5/21/2021(a) | | | 515,000 | | | | 515,712 | |
3.25%, 5/21/2021 | | | 590,000 | | | | 602,801 | |
| | |
Goldman Sachs Bank USA | | | | | | | | |
3.20%, 6/5/2020 | | | 108,000 | | | | 108,850 | |
| | |
Goldman Sachs Group, Inc. (The) | | | | | | | | |
5.38%, 3/15/2020 | | | 275,000 | | | | 278,405 | |
(ICE LIBOR USD
3 Month + 1.16%), 3.09%, 4/23/2020(a) | | | 1,000,000 | | | | 1,004,051 | |
2.63%, 4/25/2021 | | | 180,000 | | | | 181,718 | |
| | |
Morgan Stanley | | | | | | | | |
5.50%, 1/26/2020 | | | 430,000 | | | | 433,449 | |
(ICE LIBOR USD
3 Month + 0.55%), 2.73%, 2/10/2021(a) | | | 104,000 | | | | 104,100 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Investment Banking & Brokerage – (continued) | |
(ICE LIBOR USD
3 Month + 1.40%), 3.37%, 4/21/2021(a) | | $ | 1,500,000 | | | $ | 1,524,504 | |
5.50%, 7/28/2021 | | | 100,000 | | | | 105,830 | |
2.63%, 11/17/2021 | | | 400,000 | | | | 404,672 | |
| | | | | | | | 6,791,644 | |
|
| Life & Health Insurance – 1.7% | |
| | |
Jackson National Life Global Funding | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.30%),
2.30%, 10/15/2020(a) (b) | | | 1,145,000 | | | | 1,146,875 | |
(ICE LIBOR USD
3 Month + 0.48%), 2.62%, 6/11/2021(a) (b) | | | 500,000 | | | | 502,032 | |
| | |
Prudential Financial, Inc. | | | | | | | | |
4.50%, 11/15/2020 | | | 3,000,000 | | | | 3,077,390 | |
| | | | | | | | 4,726,297 | |
|
| Managed Health Care – 0.5% | |
| | |
Cigna Corp. | | | | | | | | |
3.20%, 9/17/2020 | | | 1,380,000 | | | | 1,394,596 | |
|
| Movies & Entertainment – 0.1% | |
| | |
Walt Disney Co. (The) | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.25%), 2.36%, 9/1/2021(a) | | | 300,000 | | | | 300,915 | |
|
| Multi-line Insurance – 1.7% | |
| | |
Metropolitan Life Global Funding I | | | | | | | | |
(SOFR + 0.57%),
2.39%, 9/7/2020(a) (b) | | | 1,170,000 | | | | 1,172,951 | |
| | |
New York Life Global Funding | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.28%), 2.22%, 1/28/2021(a) (b) | | | 2,000,000 | | | | 2,003,372 | |
(ICE LIBOR USD
3 Month + 0.28%), 2.23%, 1/21/2022(a) (b) | | | 1,600,000 | | | | 1,602,207 | |
| | | | | | | | 4,778,530 | |
See Accompanying Notes to the Financial Statements.
| | |
| 370 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Ready Access Variable Income Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Oil & Gas Equipment & Services – 0.0%(d) | |
| | |
Schlumberger Finance Canada Ltd. | | | | | | | | |
2.20%, 11/20/2020(b) | | $ | 25,000 | | | $ | 25,090 | |
|
| Oil & Gas Storage & Transportation – 0.1% | |
| | |
Enterprise Products Operating LLC | | | | | | | | |
5.25%, 1/31/2020 | | | 341,000 | | | | 343,634 | |
|
| Other Diversified Financial Services – 0.2% | |
| | |
Kreditanstalt fuer Wiederaufbau | | | | | | | | |
2.38%, 3/24/2021 | | | 535,211 | | | | 540,651 | |
| | |
Siemens Financieringsmaatschappij NV | | | | | | | | |
(ICE LIBOR USD 3 Month + 0.34%), 2.46%, 3/16/2020(a) (b) | | | 45,000 | | | | 45,078 | |
| | | | | | | | 585,729 | |
|
| Packaged Foods & Meats – 3.0% | |
| | |
JM Smucker Co. (The) | | | | | | | | |
2.20%, 12/6/2019 | | | 2,337,000 | | | | 2,337,199 | |
| | |
Mondelez International Holdings Netherlands BV | | | | | | | | |
2.13%, 9/19/2022(b) | | | 1,360,000 | | | | 1,362,708 | |
| | |
Tyson Foods, Inc. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.55%), 2.68%, 6/2/2020(a) | | | 1,717,000 | | | | 1,720,238 | |
2.25%, 8/23/2021 | | | 1,710,000 | | | | 1,718,891 | |
| | |
Unilever Capital Corp. | | | | | | | | |
2.10%, 7/30/2020 | | | 1,000,000 | | | | 1,002,168 | |
| | | | | | | | 8,141,204 | |
|
| Paper Products – 0.4% | |
| | |
Georgia-Pacific LLC | | | | | | | | |
5.40%, 11/1/2020(b) | | | 1,000,000 | | | | 1,033,648 | |
|
| Pharmaceuticals – 0.4% | |
| | |
GlaxoSmithKline Capital plc | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.35%), 2.53%, 5/14/2021(a) | | | 1,120,000 | | | | 1,123,158 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Property & Casualty Insurance – 0.4% | |
| | |
Allstate Corp. (The) | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.43%), 2.53%, 3/29/2021(a) | | $ | 990,000 | | | $ | 992,613 | |
|
| Railroads – 0.4% | |
| | |
Canadian National Railway Co. | | | | | | | | |
2.40%, 2/3/2020 | | | 1,000,000 | | | | 1,001,333 | |
|
| Regional Banks – 9.2% | |
| | |
ABN AMRO Bank NV | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.57%), 2.70%, 8/27/2021(a) (b) | | | 1,100,000 | | | | 1,104,771 | |
| | |
Bank of America NA | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.32%), 2.26%, 7/26/2021(a) | | | 4,000,000 | | | | 4,003,728 | |
| | |
Branch Banking & Trust Co. | | | | | | | | |
2.10%, 1/15/2020 | | | 1,000,000 | | | | 1,000,167 | |
| | |
Capital One NA | | | | | | | | |
2.35%, 1/31/2020 | | | 1,600,000 | | | | 1,600,977 | |
2.15%, 9/6/2022 | | | 500,000 | | | | 500,031 | |
| | |
Citizens Bank NA | | | | | | | | |
2.45%, 12/4/2019 | | | 2,921,000 | | | | 2,922,105 | |
(ICE LIBOR USD
3 Month + 0.72%), 2.90%, 2/14/2022(a) | | | 2,000,000 | | | | 2,007,469 | |
| | |
Discover Bank | | | | | | | | |
3.10%, 6/4/2020 | | | 2,250,000 | | | | 2,262,902 | |
| | |
Fifth Third Bancorp | | | | | | | | |
2.88%, 7/27/2020 | | | 1,000,000 | | | | 1,006,208 | |
| | |
Fifth Third Bank | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.25%), 2.19%, 10/30/2020(a) | | | 1,500,000 | | | | 1,501,559 | |
2.25%, 6/14/2021 | | | 460,000 | | | | 462,654 | |
| | |
PNC Bank NA | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.36%), 2.48%, 5/19/2020(a) | | | 900,000 | | | | 901,681 | |
(ICE LIBOR USD
3 Month + 0.35%), 2.48%, 3/12/2021(a) | | | 3,000,000 | | | | 3,004,070 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 371 | |
FlexShares® Ready Access Variable Income Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| CORPORATE BONDS – (continued) | |
|
| Regional Banks – (continued) | |
| | |
SunTrust Bank | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.59%), 2.71%, 5/17/2022(a) | | $ | 3,000,000 | | | $ | 3,012,077 | |
| | | | | | | | 25,290,399 | |
|
| Semiconductors – 1.1% | |
| | |
Intel Corp. | | | | | | | | |
2.45%, 7/29/2020 | | | 3,000,000 | | | | 3,014,588 | |
|
| Specialty Chemicals – 0.8% | |
| | |
DuPont de Nemours, Inc. | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.71%), 2.87%, 11/15/2020(a) | | | 2,072,000 | | | | 2,082,013 | |
| | |
International Flavors & Fragrances, Inc. | | | | | | | | |
3.40%, 9/25/2020 | | | 170,000 | | | | 171,914 | |
| | | | | | | | 2,253,927 | |
|
| Technology Hardware, Storage & Peripherals – 1.0% | |
| | |
Dell International LLC | | | | | | | | |
4.42%, 6/15/2021(b) | | | 1,450,000 | | | | 1,497,858 | |
| | |
Hewlett Packard Enterprise Co. | | | | | | | | |
3.60%, 10/15/2020(e) | | | 1,000,000 | | | | 1,013,565 | |
(ICE LIBOR USD
3 Month + 0.68%), 2.81%, 3/12/2021(a) | | | 370,000 | | | | 371,486 | |
| | | | | | | | 2,882,909 | |
|
| Thrifts & Mortgage Finance – 0.3% | |
| | |
BPCE SA | | | | | | | | |
2.25%, 1/27/2020 | | | 739,000 | | | | 738,995 | |
|
| Trading Companies & Distributors – 0.5% | |
| | |
Aviation Capital Group LLC | | | | | | | | |
(ICE LIBOR USD
3 Month + 0.67%), 2.61%, 7/30/2021(a) (b) | | | 1,150,000 | | | | 1,147,272 | |
| | |
GATX Corp. | | | | | | | | |
2.60%, 3/30/2020 | | | 250,000 | | | | 250,420 | |
| | | | | | | | 1,397,692 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| Trucking – 1.1% | |
| | |
Penske Truck Leasing Co. LP | | | | | | | | |
3.05%, 1/9/2020(b) | | $ | 445,000 | | | $ | 445,378 | |
3.65%, 7/29/2021(b) | | | 1,200,000 | | | | 1,229,543 | |
| | |
Ryder System, Inc. | | | | | | | | |
2.88%, 6/1/2022 | | | 1,200,000 | | | | 1,222,012 | |
| | | | | | | | 2,896,933 | |
Total Corporate Bonds
(Cost $223,914,496) | | | | 224,914,644 | |
| | |
| | | | | | | | |
|
| ASSET-BACKED SECURITIES – 9.4% | |
| | |
BA Credit Card Trust | | | | | | | | |
Series2019-A1, Class A1, 1.74%, 1/15/2025 | | | 880,000 | | | | 879,361 | |
| | |
Barclays Dryrock Issuance Trust | | | | | | | | |
Series2019-1, Class A, 1.96%, 5/15/2025 | | | 700,000 | | | | 702,031 | |
| | |
Capital One Multi-Asset Execution Trust | | | | | | | | |
Series2019-A2, Class A2, 1.72%, 8/15/2024 | | | 900,000 | | | | 898,371 | |
| | |
CarMax Auto Owner Trust | | | | | | | | |
Series2019-1, Class A2A, 3.02%, 7/15/2022 | | | 410,712 | | | | 412,813 | |
| | |
CNH Equipment Trust | | | | | | | | |
Series2018-A, Class A2, 2.78%, 8/16/2021 | | | 322,976 | | | | 323,781 | |
| | |
Dell Equipment Finance Trust | | | | | | | | |
Series2019-1, Class A2, 2.78%, 8/23/2021(b) | | | 920,000 | | | | 926,542 | |
| | |
Discover Card Execution Note Trust | | | | | | | | |
Series2019-A3, Class A, 1.89%, 10/15/2024 | | | 2,800,000 | | | | 2,805,205 | |
| | |
Drive Auto Receivables Trust | | | | | | | | |
Series2019-1, Class A2A, 3.08%, 9/15/2021 | | | 168,715 | | | | 168,810 | |
Series2019-2, Class A2A, 2.93%, 3/15/2022 | | | 563,647 | | | | 564,791 | |
Series2019-4, Class A2A, 2.32%, 6/15/2022 | | | 1,000,000 | | | | 1,001,087 | |
Series2019-3, Class A2A, 2.63%, 9/15/2022 | | | 1,826,903 | | | | 1,830,883 | |
| | |
Enterprise Fleet Financing LLC | | | | | | | | |
Series2019-2, Class A2, 2.29%, 2/20/2025(b) | | | 1,200,000 | | | | 1,208,225 | |
See Accompanying Notes to the Financial Statements.
| | |
| 372 | | FLEXSHARES ANNUAL REPORT |
FlexShares® Ready Access Variable Income Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| ASSET-BACKED SECURITIES – (continued) | |
| | |
Ford Credit Floorplan Master Owner Trust A | | | | | | | | |
Series2019-1, Class A, 2.84%, 3/15/2024 | | $ | 500,000 | | | $ | 509,099 | |
| | |
GM Financial Automobile Leasing Trust | | | | | | | | |
Series2018-3, Class A2A, 2.89%, 9/21/2020 | | | 141,279 | | | | 141,416 | |
Series2019-3, Class A2A, 2.09%, 10/20/2021 | | | 700,000 | | | | 700,775 | |
| | |
GM Financial Consumer Automobile Receivables Trust | | | | | | | | |
Series2019-1, Class A2, 2.99%, 3/16/2022 | | | 1,198,883 | | | | 1,202,572 | |
| | |
Hyundai Auto Receivables Trust | | | | | | | | |
Series2017-A, Class A3, 1.76%, 8/16/2021 | | | 570,010 | | | | 570,278 | |
| | |
Nissan Auto Lease Trust | | | | | | | | |
Series2019-B, Class A2A, 2.27%, 1/15/2021 | | | 2,000,000 | | | | 2,007,442 | |
| | |
Nissan Auto Receivables Owner Trust | | | | | | | | |
Series2019-A, Class A2A, 2.82%, 1/18/2022 | | | 2,315,053 | | | | 2,325,391 | |
| | |
Santander Drive Auto Receivables Trust | | | | | | | | |
Series2019-1, Class A2A, 2.91%, 1/18/2022 | | | 516,330 | | | | 516,938 | |
Series2019-3, Class A2A, 2.28%, 2/15/2022 | | | 1,600,000 | | | | 1,601,695 | |
| | |
Synchrony Card Funding LLC | | | | | | | | |
Series2019-A1, Class A, 2.95%, 3/15/2025 | | | 2,000,000 | | | | 2,045,169 | |
| | |
Volkswagen Auto Loan Enhanced Trust | | | | | | | | |
Series2018-1, Class A2A, 2.81%, 7/20/2021 | | | 446,709 | | | | 447,726 | |
| | |
World Financial Network Credit Card Master Trust | | | | | | | | |
Series2019-B, Class A, 2.49%, 4/15/2026 | | | 1,000,000 | | | | 1,009,946 | |
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| ASSET-BACKED SECURITIES – (continued) | |
Series2019-C, Class A, 2.21%, 7/15/2026 | | $ | 1,000,000 | | | $ | 1,000,391 | |
Total Asset-Backed Securities
(Cost $25,674,848) | | | | 25,800,738 | |
| | |
| | | | | | | | |
|
| U.S. TREASURY OBLIGATIONS – 1.8% | |
| | |
U.S. Treasury Notes | | | | | | | | |
(US Treasury 3 Month Bill Money Market Yield + 0.22%), 1.86%, 7/31/2021(a) | | | 2,500,000 | | | | 2,500,053 | |
(US Treasury 3 Month Bill Money Market Yield + 0.30%), 1.94%, 10/31/2021(a) | | | 2,500,000 | | | | 2,502,106 | |
Total U.S. Treasury Obligations
(Cost $4,998,862) | | | | 5,002,159 | |
| | |
| | | | | | | | |
|
| FOREIGN GOVERNMENT SECURITIES –1.1% | |
| | |
Svensk Exportkredit AB | | | | | | | | |
(ICE LIBOR USD 3 Month + 0.05%), 2.17%, 12/14/2020(a)
(Cost $3,000,000) | | | 3,000,000 | | | | 3,000,514 | |
| | |
| | | | | | | | |
|
| U.S. GOVERNMENT AGENCY SECURITIES – 0.2% | |
| | |
FHLB | | | | | | | | |
(SOFR + 0.03%), 1.85%, 3/6/2020(a)
(Cost $500,000) | | | 500,000 | | | | 499,920 | |
| | |
| | | | | | | | |
|
| COLLATERALIZED MORTGAGE OBLIGATIONS – 0.1% | |
| | |
Holmes Master Issuer plc | | | | | | | | |
Series2018-1A, Class A2, 2.36%, 10/15/2054(b) (f) (Cost $262,857) | | | 262,857 | | | | 262,747 | |
| | |
| | | | | | | | |
|
| SHORT-TERM INVESTMENTS – 5.8% | |
|
| COMMERCIAL PAPER – 0.4% | |
| | |
McCormick & Co., Inc. | | | | | | | | |
2.17%, 2/28/2020(g) (h)
(Cost $992,893) | | | 1,000,000 | | | | 993,150 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 373 | |
FlexShares® Ready Access Variable Income Fund (cont.)
| | | | | | | | |
| Investments | | Principal
Amount | | | Value | |
|
| SHORT-TERM INVESTMENTS – (continued) | |
|
| U.S. GOVERNMENT AGENCY SECURITIES – 0.7% | |
| | |
FHLB Discount Notes | | | | | | | | |
1.50%, 11/1/2019(h)
(Cost $2,000,000) | | $ | 2,000,000 | | | $ | 2,000,000 | |
| | |
| | | | | | | | |
|
| U.S. TREASURY OBLIGATIONS – 4.7% | |
| | |
U.S. Treasury Bills | | | | | | | | |
1.76%, 11/12/2019(h) | | | 1,000,000 | | | | 999,537 | |
1.67%, 12/17/2019(h) | | | 12,000,000 | | | | 11,976,770 | |
Total U.S. Treasury Obligations
(Cost $12,973,972) | | | | 12,976,307 | |
Total Short-Term Investments
(Cost $15,966,865) | | | | 15,969,457 | |
Total Investments – 100.1%
(Cost $274,317,928) | | | | 275,450,179 | |
| |
Liabilities in excess of other assets – (0.1%) | | | | (353,280 | ) |
| NET ASSETS – 100.0% | | | $ | 275,096,899 | |
| (a) | Variable or floating rate security, linked to the referenced benchmark. The interest rate shown is the rate in effect as of October 31, 2019. |
| (b) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The value of these securities is determined by valuations supplied by a pricing service or brokers, or, if not available, in accordance with procedures established by the Board of Trustees. |
| (c) | Security issued at a fixed coupon rate, which converts to a variable rate at a future date. Rate shown is the rate in effect as of period end. |
| (d) | Represents less than 0.05% of net assets. |
| (e) | Step bond. Interest rate is a fixed rate for an initial period that either resets at a specific date or may reset in the future at a contingent upon predetermined trigger. The interest rate shown was the current rate as of October 31, 2019. |
| (f) | Variable or floating rate security, the interest rate of which adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. The interest rate shown was the current rate as of October 31, 2019. |
| (g) | Security exempt from registration under Section 4(2) of the Securities Act of 1933. Such securities may be sold in transactions exempt from registration normally to qualified institutional buyers. |
| (h) | The rate shown was the current yield as of October 31, 2019. |
Percentages shown are based on Net Assets.
Abbreviations
FHLB – Federal Home Loan Bank
ICE – Intercontinental Exchange
LIBOR – London Interbank Offered Rate
SOFR – Secured Overnight Financing Rate
USD – US Dollar
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 1,141,823 | |
Aggregate gross unrealized depreciation | | | (12,528 | ) |
Net unrealized appreciation | | $ | 1,129,295 | |
Federal income tax cost | | $ | 274,320,884 | |
FlexShares® Ready Access Variable Income Fund invested, as a percentage of net assets, in companies domiciled in the following countries as of October 31, 2019:
| | | | |
Australia | | | 3.1 | % |
Canada | | | 4.2 | |
Finland | | | 0.4 | |
France | | | 1.8 | |
Germany | | | 2.9 | |
Japan | | | 2.6 | |
Netherlands | | | 0.6 | |
Singapore | | | 0.5 | |
Sweden | | | 2.9 | |
United Kingdom | | | 3.6 | |
United States | | | 77.5 | |
Other1 | | | (0.1 | ) |
| | | | 100.0 | % |
| 1 | Includes anynon-fixed-income securities and net other assets (liabilities). |
See Accompanying Notes to the Financial Statements.
| | |
| 374 | | FLEXSHARES ANNUAL REPORT |
Schedule of Investments
FlexShares® Core Select Bond Fund
October 31, 2019
| | | | | | | | |
| Investments | | Shares | | | Value | |
|
| EXCHANGE TRADED FUNDS – 98.5% | |
| | |
FlexShares® Credit-Scored US Corporate Bond Index Fund(a) | | | 139,579 | | | $ | 7,339,064 | |
| | |
FlexShares® Credit-Scored US Long Corporate Bond Index Fund(a) | | | 22,893 | | | | 1,318,985 | |
| | |
FlexShares® iBoxx5-Year Target Duration TIPS Index Fund(a) | | | 30,832 | | | | 785,291 | |
| | |
iShares 20+ Year Treasury Bond ETF | | | 14,740 | | | | 2,081,878 | |
| | |
iShares3-7 Year Treasury Bond ETF | | | 13,456 | | | | 1,708,508 | |
| | |
iShares7-10 Year Treasury Bond ETF | | | 11,743 | | | | 1,321,205 | |
| | |
iShares Long-Term Corporate Bond ETF | | | 32,756 | | | | 2,180,239 | |
| | |
iShares MBS ETF | | | 72,578 | | | | 7,866,730 | |
| | |
iShares Short-Term Corporate Bond ETF | | | 24,326 | | | | 1,308,252 | |
Total Exchange Traded Funds
(Cost $24,862,638) | | | | 25,910,152 | |
| | | Principal
Amount | | | | |
|
| SHORT-TERM INVESTMENTS – 0.7% | |
|
| U.S. TREASURY OBLIGATIONS – 0.7% | |
| | |
U.S. Treasury Bills | | | | | | | | |
1.64%, 1/16/2020(b) (c)
(Cost $164,431) | | $ | 165,000 | | | | 164,467 | |
| Total Investments – 99.2% (Cost $25,027,069) | | | | | | | 26,074,619 | |
| | |
Other Assets Less Liabilities – 0.8% | | | | | | | 224,072 | |
| NET ASSETS – 100.0% | | | | | | $ | 26,298,691 | |
| (a) | Investment in affiliated Fund. Northern Trust Investments, Inc. is the Investment Adviser to both the Fund and the affiliated Funds. |
| (b) | All or a portion of the security pledged as collateral for Futures Contracts. |
| (c) | The rate shown was the current yield as of October 31, 2019. |
Percentages shown are based on Net Assets.
As of October 31, 2019, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments (including derivative instruments, if applicable) for federal income tax purposes was as follows:
| | | | |
| | | | |
Aggregate gross unrealized appreciation | | $ | 1,024,563 | |
Aggregate gross unrealized depreciation | | | (3,485 | ) |
Net unrealized appreciation | | $ | 1,021,078 | |
Federal income tax cost | | $ | 25,056,953 | |
See Accompanying Notes to the Financial Statements.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 375 | |
FlexShares® Core Select Bond Fund (cont.)
For the period ended October 31, 2019, the FlexShares® Core Select Bond Fund was invested in securities of affiliated FlexShares® Funds. The Schedules of Investments of the affiliated FlexShares® Funds are located elsewhere in this Report.
Investment in a company which was affiliated for the period ended October 31, 2019, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Security | | Value
October 31,
2018 | | | Purchases
at Cost | | | Sales
Proceeds | | | Shares
October 31,
2019 | | | Value
October 31,
2019 | | | Change in
Unrealized
Appreciation
(Depreciation) | | | Dividend
Income | | | Realized
Gain/(Loss) | |
FlexShares® Credit-Scored US Corporate Bond Index Fund | | $ | 10,633,465 | | | $ | 6,714,638 | | | $ | 10,609,291 | | | | 139,579 | | | $ | 7,339,064 | | | $ | 457,326 | | | $ | 261,476 | | | $ | 142,926 | |
FlexShares® Credit-Scored US Long Corporate Bond Index Fund | | | 5,822,971 | | | | 2,235,995 | | | | 6,930,364 | | | | 22,893 | | | | 1,318,985 | | | | 383,571 | | | | 86,653 | | | | (193,188 | ) |
FlexShares® Disciplined Duration MBS Index Fund | | | 13,730,880 | | | | 2,710,934 | | | | 16,661,670 | | | | — | | | | — | | | | 324,334 | | | | 247,304 | | | | (104,478 | ) |
FlexShares® iBoxx5-Year Target Duration TIPS Index Fund | | | — | | | | 848,283 | | | | 59,412 | | | | 30,832 | | | | 785,291 | | | | (3,389 | ) | | | 1,774 | | | | (191 | ) |
FlexShares® Ready Access Variable Income Fund | | | 1,012,975 | | | | 1,613,083 | | | | 2,626,783 | | | | — | | | | — | | | | (1,414 | ) | | | 17,923 | | | | 2,139 | |
| | | $ | 31,200,291 | | | $ | 14,122,933 | | | $ | 36,887,520 | | | | 193,304 | | | $ | 9,443,340 | | | $ | 1,160,428 | | | $ | 615,130 | | | $ | (152,792 | ) |
Futures Contracts
FlexShares® Core Select Bond Fund had the following open futures contracts as of October 31, 2019:
| | | | | | | | | | | | | | | | | | | | |
| | | Number of
Contracts | | | Expiration
Date | | | Trading
Currency | | | Notional
Amount | | | Value and
Unrealized
Appreciation* | |
Long Contracts | | | | | |
U.S. Treasury 2 Year Note | | | 11 | | | | 12/31/2019 | | | | USD | | | $ | 2,371,617 | | | $ | 3,412 | |
| * | This amount represents the cumulative appreciation/depreciation on futures contracts. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
Abbreviations:
USD – US Dollar
See Accompanying Notes to the Financial Statements.
| | |
| 376 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial StatementsOctober 31, 2019
1. Organization
FlexShares® Trust (the “Trust”), a Maryland statutory trust, was formed on May 13, 2010, originally named NT ETF Trust and renamed FlexShares® Trust as of April 12, 2011. The Trust is registered as anopen-end management investment company under the Investment Company Act of 1940 (the “1940 Act”), as amended. The Trust consists of twenty-nine operational exchange-traded funds as of October 31, 2019 (each a “Fund” and collectively, the “Funds”). The FlexShares® US Quality Low Volatility Index Fund, FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund, FlexShares® Emerging Markets Quality Low Volatility Index Fund, FlexShares® Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, FlexShares® Currency Hedged Morningstar EM Factor Tilt Index Fund, FlexShares® Morningstar Global Upstream Natural Resources Index Fund, FlexShares® STOXX® Global Broad Infrastructure Index Fund, FlexShares® Global Quality Real Estate Index Fund, FlexShares® Real Assets Allocation Index Fund, FlexShares® iBoxx3-Year Target Duration TIPS Index Fund, FlexShares® iBoxx5-Year Target Duration TIPS Index Fund, FlexShares® Credit-Scored US Corporate Bond Index Fund, FlexShares® Credit-Scored US Long Corporate Bond Index Fund, and the FlexShares® Ready Access Variable Income Fund arenon-diversified series of the Trust, pursuant to the 1940 Act. The FlexShares® Morningstar US Market Factor Tilt Index Fund, FlexShares® Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares® US Quality Large Cap Index Fund, FlexShares® STOXX® US ESG Impact Index Fund, FlexShares® STOXX® Global ESG Impact Index Fund, FlexShares® Quality Dividend Index Fund, FlexShares® Quality Dividend Defensive Index Fund, FlexShares® Quality Dividend Dynamic Index Fund, FlexShares® International Quality Dividend Index Fund, FlexShares® International Quality Dividend Defensive Index Fund, FlexShares® International Quality Dividend Dynamic Index Fund, FlexShares® Disciplined Duration MBS Index Fund, FlexShares® High Yield Value-Scored Bond Index Fund and the FlexShares® Core Select Bond Fund are diversified series of the Trust, pursuant to the 1940 Act.
The FlexShares US Quality Low Volatility Index Fund, the FlexShares Developed Marketsex-US Quality Low Volatility
Index Fund, and the FlexShares Emerging Markets Quality Low Volatility Index Fund (together, the “New Funds”) commenced operations on July 15, 2019.
Each Fund, except the FlexShares Ready Access Variable Income Fund and the FlexShares Core Select Bond Fund, seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of a specified benchmark index (each an “Underlying Index”). The FlexShares US Quality Low Volatility Index Fund, FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, FlexShares Emerging Markets Quality Low Volatility Index Fund, FlexShares US Quality Large Cap Index Fund, FlexShares Global Quality Real Estate Index Fund, FlexShares Real Assets Allocation Index Fund, FlexShares Quality Dividend Index Fund, FlexShares Quality Dividend Defensive Index Fund, FlexShares Quality Dividend Dynamic Index Fund, FlexShares International Quality Dividend Index Fund, FlexShares International Quality Dividend Defensive Index Fund, FlexShares International Quality Dividend Dynamic Index Fund, FlexShares Credit-Scored US Corporate Bond Index Fund, FlexShares Credit-Scored US Long Corporate Bond Index Fund and the FlexShares High Yield Value-Scored Bond Index Fund seek to track Underlying Indexes developed by Northern Trust Investments, Inc. (“NTI” or “Investment Adviser”), an indirect subsidiary of Northern Trust Corporation. The FlexShares Morningstar US Market Factor Tilt Index Fund, FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund and FlexShares Morningstar Global Upstream Natural Resources Index Fund seek to track Underlying Indexes sponsored by Morningstar, Inc. The FlexShares STOXX® US ESG Impact Index Fund, FlexShares STOXX® Global ESG Impact Index Fund, and FlexShares STOXX® Global Broad Infrastructure Index Fund seek to track Underlying Indexes sponsored by STOXX. The FlexShares iBoxx3-Year Target Duration TIPS Index Fund and FlexShares iBoxx5-Year Target Duration TIPS Index Fund seek to track Underlying Indexes sponsored by Markit Indexes Limited. The FlexShares Disciplined Duration MBS Index Fund seeks to track an Underlying Index sponsored by ICE Data Indexes, LLC.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 377 | |
Notes to the Financial Statements (cont.)
Each of the FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund and FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund currently seeks its investment objective by investing a substantial amount of its assets in the shares of another FlexShares ETF. Each of these Funds may also invest directly in the securities included in its Underlying Index. The FlexShares Real Assets Allocation Index Fund is a fund of funds that seeks its investment objective by investing primarily in the shares of other FlexShares ETFs that are eligible for inclusion in its Underlying Index, rather than in securities of individual companies. The FlexShares Core Select Bond Fund seeks to achieve its investment objective by investing, under normal circumstances in U.S. dollar-denominated investment-grade fixed-income securities either directly or indirectly through FlexShares ETFs, unaffiliated ETFs and other registered investment companies. The investment performance of each of the FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, FlexShares Real Assets Allocation Index Fund and FlexShares Core Select Bond Fund is directly related to the performance of the underlying fund(s) in which it invests (“Underlying Fund”).
The FlexShares Ready Access Variable Income Fund and the FlexShares Core Select Bond Fund are actively managed and do not seek to replicate the performance of a specified index. The FlexShares Ready Access Variable Income Fund seeks maximum current income consistent with the preservation of capital and liquidity. The FlexShares Core Select Bond Fund seeks total return and preservation of capital. Each Fund, except the FlexShares Ready Access Variable Income Fund and the FlexShares Core Select Bond Fund, is referred to herein as an “Index Fund.” Each Fund is managed by the Investment Adviser.
2. Significant Accounting Policies
The Trust, which is an investment company, follows accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, “Financial Services-Investment Companies.” The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. These policies are in
conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
Investment Valuation
Each Fund’s Net Asset Value (“NAV”) is determined daily as of the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading, based on prices at the time of closing provided that any U.S. fixed-income assets may be valued as of the announced closing time for trading in fixed-income instruments on any day that the Securities Industry and Financial Markets Association announces an early closing time. The NAV of a Fund is calculated by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares outstanding.
The investments of the Funds are valued at fair value pursuant to the pricing policy and procedures approved by the Trust’s Board of Trustees (“Board”). The Funds’ investments are valued using market quotations when available. When market quotations are not readily available, are deemed unreliable, or do not reflect material events occurring between the close of local markets and the time of valuation, the Funds value securities at fair value as determined in good faith in accordance with the Funds’ fair value pricing procedures as approved by the Board. Such circumstances include periods when trading in a security is suspended, the exchange or market on which a security trades closes early, the trading volume in a security is limited, corporate actions and announcements take place, or regulatory news affecting an issuer is released, such as government approvals. Additionally, the Trust, in its discretion, may make adjustments to the prices of securities held by a Fund if an event occurs after the publication of market values normally used by a Fund but before the time as of which the Fund calculates its NAV, depending on the nature and significance of the event, consistent with applicable
| | |
| 378 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
regulatory guidance and the Trust’s fair value procedures. Other events that can trigger fair valuing of foreign securities include, for example, significant fluctuations in general market indicators, government actions, or natural disasters.
The use of fair valuation involves the risk that the values used by the Funds to price their investments may be higher or lower than the values used by other investment companies and investors to price the same investments. Fair value pricing involves subjective judgments and it is possible that a fair value determination for a portfolio security may be materially different than the value that could be realized upon the sale of such security. In addition, fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by an Index Fund’s Underlying Index. This difference may adversely affect an Index Fund’s ability to track its Underlying Index. Portfolio securities of certain Funds are listed on foreign exchanges and their value may change on days when shareholders will not be able to purchase or sell Fund shares.
Security prices are generally provided by independent pricing services. Portfolio securities listed or traded on domestic securities exchanges or the NASDAQ/NMS, including dollar-denominated foreign securities or American Depositary Receipts (“ADRs”), are valued at the closing price, or last sale price, reported on the exchange or system where the security is principally traded. The closing price for securities traded on the NASDAQ/NMS is the Nasdaq Official Closing Price (“NOCP”). If there have been no sales for that day on the exchange or system where the security is principally traded, then the value is determined with reference to the last sale price, or the NOCP, if applicable, on any other exchange or system. If there have been no sales of the security for that day on any exchange or system, the security is valued at fair value pursuant to the Trust’s fair value procedures.
Securities that are traded regularly in theover-the-counter market (other than the NASDAQ/NMS), including securities listed on exchanges but primarily tradedover-the-counter, are valued on the basis of bid quotes or the mean between the bid and asked quotes based upon quotes furnished by one or more broker-dealers or market makers for those securities. Securities that may be tradedover-the-counter include equity securities, fixed-income securities,non-exchange-listed
foreign securities, and certain derivative instruments. Fixed-income securities may be valued using prices provided directly from one or more broker-dealers, market makers, or independent third-party pricing services which may use matrix pricing and valuation models, as well as recent market transactions for the same or similar assets, to derive values when such prices are believed to reflect fair market values of such securities. Such prices may be determined by taking into account securities prices, yields, maturities, call features, ratings, prepayment speeds, credit risks, cash flows, institutional size trading in similar groups of securities and developments related to specific securities. Fixed-income securities maturing within a relatively short period, less than 60 days, are valued at amortized cost when it approximates fair value.
Foreign equity securities are generally priced at the closing price or last sales price reported on the foreign exchange on which they are principally traded. If there have been no sales for that day on the primary exchange, then the value is determined with reference to the last sale price on any other exchange. If there have been no sales of the security for that day on any exchange, the security will be valued at fair value pursuant to the Trust’s fair value procedures. Spot and forward foreign currency exchange contracts generally are valued using an independent pricing service. The value of assets denominated in foreign currencies is converted into U.S. dollars using exchange rates deemed appropriate by NTI as Investment Adviser. Any use of a different rate from the rates used by the index provider may adversely affect the Fund’s ability to track its Underlying Index. The index provider determines the composition and relative weightings of the securities in the Underlying Index and publishes information regarding the market value of the Underlying Index.
Exchange-traded financial futures and options thereon are valued at the settlement price as established by the exchange on which they are traded.Over-the-counter options are valued at broker-provided bid prices, as are swaps. The foregoing prices may be obtained from one or more independent pricing services or, as needed or applicable, independentbroker-dealers. If there was no sale on that day, and for othernon-exchange traded derivatives, the contract is valued at fair value pursuant to the Trust’s fair value procedures.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 379 | |
Notes to the Financial Statements (cont.)
Each Fund relies on various sources to calculate its NAV. The ability of the Funds’ administrator to calculate the NAV per share of the Funds is subject to operational risks associated with processing or human errors, systems or technology failures, and errors caused by third party service providers, data sources, or trading counterparties. Such failures may result in delays in the calculation of the Funds’ NAVs and/or the inability to calculate NAV over extended time periods. The Funds may be unable to recover any losses associated with such failures, and it may be necessary for alternative procedures to be followed to price portfolio securities when determining the Funds’ NAVs.
Various inputs are used in determining the value of each Fund’s investments. These inputs are summarized in three levels listed below:
| | • | | Level 1—Quoted prices in active markets for identical assets on the measurement date. |
| | • | | Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). |
| | • | | Level 3—Significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments). |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, short-term debt securities may be valued at amortized cost, as long as amortized cost approximates the current fair value of a security, but since the valuation is not obtained from a quoted price in an active market, such securities are reflected as Level 2.
The following is a summary of the valuations as of October 31, 2019 for each Fund based upon the three levels defined above. Please refer to the Schedules of Investments to view equity and debt securities segregated by industry type, where applicable.
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares US Quality Low Volatility Index Fund | |
Investments | |
| | | | |
| Common Stocks* | | $ | 6,049,132 | | | $ | — | | | $ | — | | | $ | 6,049,132 | |
| | | | |
| Total Investments | | $ | 6,049,132 | | | $ | — | | | $ | — | | | $ | 6,049,132 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Developed Marketsex-US Quality Low Volatility Index Fund | |
Investments | |
| | | | |
| Common Stocks* | | $ | 5,011,350 | | | $ | — | | | $ | — | | | $ | 5,011,350 | |
| | | | |
| Total Investments | | $ | 5,011,350 | | | $ | — | | | $ | — | | | $ | 5,011,350 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
| | | | |
Futures Contracts | | $ | 2,933 | | | $ | — | | | $ | — | | | $ | 2,933 | |
| | | | |
| Total Other Financial Instruments | | $ | 2,933 | | | $ | — | | | $ | — | | | $ | 2,933 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | |
| 380 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Emerging Markets Quality Low Volatility Index Fund | |
Investments | |
Common Stocks | | | | | | | | | | | | | | | | |
Banks | | $ | 912,714 | | | $ | 14,624 | | | $ | — | | | $ | 927,338 | |
Health Care Providers & Services | | | 131,096 | | | | 21,013 | | | | — | | | | 152,109 | |
Independent Power and Renewable Electricity Producers | | | 65,242 | | | | 1,460 | | | | — | | | | 66,702 | |
Multiline Retail | | | 93,590 | | | | 1,296 | | | | — | | | | 94,886 | |
Other* | | | 3,727,772 | | | | — | | | | — | | | | 3,727,772 | |
| | | | |
| Corporate Bonds* | | | — | | | | 1 | | | | — | | | | 1 | |
| | | | |
| Total Investments | | $ | 4,930,414 | | | $ | 38,394 | | | $ | — | | | $ | 4,968,808 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Morningstar US Market Factor Tilt Index Fund | |
Investments | |
Common Stocks* | | $ | 1,431,891,758 | | | $ | — | | | $ | — | | | $ | 1,431,891,758 | |
Rights | | | — | | | | — | | | | 6,522 | | | | 6,522 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
Bank Notes | | | — | | | | 3,000,000 | | | | — | | | | 3,000,000 | |
Certificates of Deposit | | | — | | | | 20,000,264 | | | | — | | | | 20,000,264 | |
Commercial Paper | | | — | | | | 5,498,887 | | | | — | | | | 5,498,887 | |
| | | | |
Repurchase Agreements | | | — | | | | 78,966,962 | | | | — | | | | 78,966,962 | |
| | | | |
| Total Investments | | $ | 1,431,891,758 | | | $ | 107,466,113 | | | $ | 6,522 | | | $ | 1,539,364,393 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
| | | | |
Futures Contracts | | $ | 212,856 | | | $ | — | | | $ | — | | | $ | 212,856 | |
| | | | |
| Total Other Financial Instruments | | $ | 212,856 | | | $ | — | | | $ | — | | | $ | 212,856 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 381 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | |
Investments | |
Closed End Funds | | $ | 69,876 | | | $ | — | | | $ | — | | | $ | 69,876 | |
Common Stocks | | | | | | | | | | | | | | | | |
Construction & Engineering | | | 23,528,154 | | | | 825 | | | | — | | | | 23,528,979 | |
Diversified Financial Services | | | 11,024,861 | | | | 2,718 | | | | — | | | | 11,027,579 | |
Health Care Providers & Services | | | 5,300,662 | | | | 35,038 | | | | — | | | | 5,335,700 | |
Insurance | | | 46,101,335 | | | | 209,263 | | | | — | | | | 46,310,598 | |
Oil, Gas & Consumable Fuels | | | 52,461,388 | | | | 9,597 | | | | — | | | | 52,470,985 | |
Pharmaceuticals | | | 41,160,063 | | | | 10 | | | | — | | | | 41,160,073 | |
Other* | | | 768,677,618 | | | | — | | | | — | | | | 768,677,618 | |
Rights | | | 6,900 | | | | 24,528 | | | | 21,757 | | | | 53,185 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
| | | | |
Repurchase Agreements | | | — | | | | 12,460,503 | | | | — | | | | 12,460,503 | |
| | | | |
| Total Investments | | $ | 948,330,857 | | | $ | 12,742,482 | | | $ | 21,757 | | | $ | 961,095,096 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 366,866 | | | $ | — | | | $ | — | | | $ | 366,866 | |
Forward Foreign Currency Contracts | | | — | | | | 94,300 | | | | — | | | | 94,300 | |
Liabilities | | | | | | | | | | | | | | | | |
Futures Contracts | | | (38,479 | ) | | | — | | | | — | | | | (38,479 | ) |
| | | | |
Forward Foreign Currency Contracts | | | — | | | | (25,986 | ) | | | — | | | | (25,986 | ) |
| | | | |
| Total Other Financial Instruments | | $ | 328,387 | | | $ | 68,314 | | | $ | — | | | $ | 396,701 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | |
| 382 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 —
Quoted Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | |
Investments | |
Common Stocks | | | | | | | | | | | | | | | | |
Capital Markets | | $ | 8,653,410 | | | $ | 117,892 | | | $ | — | | | $ | 8,771,302 | |
Electronic Equipment, Instruments & Components | | | 14,348,903 | | | | 3,256 | | | | — | | | | 14,352,159 | |
Entertainment | | | 2,324,082 | | | | 21,496 | | | | — | | | | 2,345,578 | |
Equity Real Estate Investment Trusts (REITs) | | | 3,850,464 | | | | 89,074 | | | | — | | | | 3,939,538 | |
Food & Staples Retailing | | | 4,374,509 | | | | 807 | | | | — | | | | 4,375,316 | |
Food Products | | | 7,350,181 | | | | 138,492 | | | | — | | | | 7,488,673 | |
Health Care Equipment & Supplies | | | 394,416 | | | | 2,842 | | | | — | | | | 397,258 | |
Hotels, Restaurants & Leisure | | | 2,152,942 | | | | 24,081 | | | | — | | | | 2,177,023 | |
Independent Power and Renewable Electricity Producers | | | 7,360,075 | | | | 192,087 | | | | — | | | | 7,552,162 | |
Oil, Gas & Consumable Fuels | | | 25,770,213 | | | | 1,872 | | | | — | | | | 25,772,085 | |
Pharmaceuticals | | | 3,812,435 | | | | 272,575 | | | | — | | | | 4,085,010 | |
Real Estate Management & Development | | | 23,424,094 | | | | 26,711 | | | | — | | | | 23,450,805 | |
Textiles, Apparel & Luxury Goods | | | 5,040,941 | | | | 165,740 | | | | 1,894 | | | | 5,208,575 | |
Other* | | | 301,010,264 | | | | — | | | | — | | | | 301,010,264 | |
Corporate Bonds* | | | — | | | | 9,861 | | | | — | | | | 9,861 | |
Rights | | | — | | | | 7,956 | | | | — | | | | 7,956 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
| | | | |
Repurchase Agreements | | | — | | | | 2,144,475 | | | | — | | | | 2,144,475 | |
| | | | |
| Total Investments | | $ | 409,866,929 | | | $ | 3,219,217 | | | $ | 1,894 | | | $ | 413,088,040 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 50,750 | | | $ | — | | | $ | — | | | $ | 50,750 | |
Forward Foreign Currency Contracts | | | — | | | | 4,167 | | | | — | | | | 4,167 | |
Liabilities | | | | | | | | | | | | | | | | |
| | | | |
Forward Foreign Currency Contracts | | | — | | | | (45,867 | ) | | | — | | | | (45,867 | ) |
| | | | |
| Total Other Financial Instruments | | $ | 50,750 | | | $ | (41,700 | ) | | $ | — | | | $ | 9,050 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 383 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | |
Investments | |
| | | | |
| Exchange Traded Funds | | $ | 8,481,240 | | | $ | — | | | $ | — | | | $ | 8,481,240 | |
| | | | |
| Total Investments | | $ | 8,481,240 | | | $ | — | | | $ | — | | | $ | 8,481,240 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
Forward Foreign Currency Contracts | | $ | — | | | $ | 1,369 | | | $ | — | | | $ | 1,369 | |
Liabilities | | | | | | | | | | | | | | | | |
| | | | |
Forward Foreign Currency Contracts | | | — | | | | (16,284 | ) | | | — | | | | (16,284 | ) |
| | | | |
| Total Other Financial Instruments | | $ | — | | | $ | (14,915 | ) | | $ | — | | | $ | (14,915 | ) |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | |
Investments | |
| | | | |
| Exchange Traded Funds | | $ | 5,409,036 | | | $ | — | | | $ | — | | | $ | 5,409,036 | |
| | | | |
| Total Investments | | $ | 5,409,036 | | | $ | — | | | $ | — | | | $ | 5,409,036 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 943 | | | $ | — | | | $ | — | | | $ | 943 | |
Forward Foreign Currency Contracts | | | — | | | | 6,479 | | | | — | | | | 6,479 | |
Liabilities | | | | | | | | | | | | | | | | |
| | | | |
Forward Foreign Currency Contracts | | | — | | | | (27,585 | ) | | | — | | | | (27,585 | ) |
| | | | |
| Total Other Financial Instruments | | $ | 943 | | | $ | (21,106 | ) | | $ | — | | | $ | (20,163 | ) |
| | | | |
| | | | | | | | | | | | | | | | |
| | |
| 384 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares US Quality Large Cap Index Fund | |
Investments | |
Common Stocks* | | $ | 50,915,799 | | | $ | — | | | $ | — | | | $ | 50,915,799 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
| | | | |
Repurchase Agreements | | | — | | | | 989,345 | | | | — | | | | 989,345 | |
| | | | |
| Total Investments | | $ | 50,915,799 | | | $ | 989,345 | | | $ | — | | | $ | 51,905,144 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
| | | | |
Futures Contracts | | $ | 2,780 | | | $ | — | | | $ | — | | | $ | 2,780 | |
| | | | |
| Total Other Financial Instruments | | $ | 2,780 | | | $ | — | | | $ | — | | | $ | 2,780 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares STOXX® US ESG Impact Index Fund | |
Investments | |
Common Stocks* | | $ | 55,361,534 | | | $ | — | | | $ | — | | | $ | 55,361,534 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
| | | | |
Repurchase Agreements | | | — | | | | 151,550 | | | | — | | | | 151,550 | |
| | | | |
| Total Investments | | $ | 55,361,534 | | | $ | 151,550 | | | $ | — | | | $ | 55,513,084 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
| | | | |
Futures Contracts | | $ | 9,738 | | | $ | — | | | $ | — | �� | | $ | 9,738 | |
| | | | |
| Total Other Financial Instruments | | $ | 9,738 | | | $ | — | | | $ | — | | | $ | 9,738 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 385 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares STOXX® Global ESG Impact Index Fund | |
Investments | |
Common Stocks* | | $ | 90,133,698 | | | $ | — | | | $ | — | | | $ | 90,133,698 | |
Rights | | | — | | | | 17 | | | | — | | | | 17 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
| | | | |
Repurchase Agreements | | | — | | | | 436,049 | | | | — | | | | 436,049 | |
| | | | |
| Total Investments | | $ | 90,133,698 | | | $ | 436,066 | | | $ | — | | | $ | 90,569,764 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
| | | | |
Futures Contracts | | $ | 28,232 | | | $ | — | | | $ | — | | | $ | 28,232 | |
| | | | |
| Total Other Financial Instruments | | $ | 28,232 | | | $ | — | | | $ | — | | | $ | 28,232 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | |
Investments | |
Common Stocks* | | $ | 5,495,227,014 | | | $ | — | | | $ | — | | | $ | 5,495,227,014 | |
Rights | | | 253,157 | | | | — | | | | — | | | | 253,157 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
Bank Notes | | | — | | | | 5,000,000 | | | | — | | | | 5,000,000 | |
Certificates of Deposit | | | — | | | | 28,999,939 | | | | — | | | | 28,999,939 | |
Commercial Paper | | | — | | | | 7,997,775 | | | | — | | | | 7,997,775 | |
Funding Agreements | | | — | | | | 3,000,000 | | | | — | | | | 3,000,000 | |
| | | | |
Repurchase Agreements | | | — | | | | 46,270,063 | | | | — | | | | 46,270,063 | |
| | | | |
| Total Investments | | $ | 5,495,480,171 | | | $ | 91,267,777 | | | $ | — | | | $ | 5,586,747,948 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 70,138 | | | $ | — | | | $ | — | | | $ | 70,138 | |
Forward Foreign Currency Contracts | | | — | | | | 339,507 | | | | — | | | | 339,507 | |
Liabilities | | | | | | | | | | | | | | | | |
Futures Contracts | | | (55,490 | ) | | | — | | | | — | | | | (55,490 | ) |
| | | | |
Forward Foreign Currency Contracts | | | — | | | | (344,724 | ) | | | — | | | | (344,724 | ) |
| | | | |
| Total Other Financial Instruments | | $ | 14,648 | | | $ | (5,217 | ) | | $ | — | | | $ | 9,431 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | |
| 386 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares STOXX® Global Broad Infrastructure Index Fund | |
Investments | |
Common Stocks | | | | | | | | | | | | | | | | |
Commercial Services & Supplies | | $ | 48,535,699 | | | $ | 168,892 | | | $ | — | | | $ | 48,704,591 | |
Other* | | | 1,416,571,327 | | | | — | | | | — | | | | 1,416,571,327 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
| | | | |
Repurchase Agreements | | | — | | | | 32,790,554 | | | | — | | | | 32,790,554 | |
| | | | |
| Total Investments | | $ | 1,465,107,026 | | | $ | 32,959,446 | | | $ | — | | | $ | 1,498,066,472 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 286,147 | | | $ | — | | | $ | — | | | $ | 286,147 | |
Forward Foreign Currency Contracts | | | — | | | | 41,458 | | | | — | | | | 41,458 | |
Liabilities | | | | | | | | | | | | | | | | |
Futures Contracts | | | (6,830 | ) | | | — | | | | — | | | | (6,830 | ) |
| | | | |
Forward Foreign Currency Contracts | | | — | | | | (29,935 | ) | | | — | | | | (29,935 | ) |
| | | | |
| Total Other Financial Instruments | | $ | 279,317 | | | $ | 11,523 | | | $ | — | | | $ | 290,840 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Global Quality Real Estate Index Fund | |
Investments | |
Common Stocks* | | $ | 372,383,697 | | | $ | — | | | $ | — | | | $ | 372,383,697 | |
Rights | | | — | | | | 4,457 | | | | — | | | | 4,457 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
| | | | |
Repurchase Agreements | | | — | | | | 14,662,391 | | | | — | | | | 14,662,391 | |
| | | | |
| Total Investments | | $ | 372,383,697 | | | $ | 14,666,848 | | | $ | — | | | $ | 387,050,545 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 55,918 | | | $ | — | | | $ | — | | | $ | 55,918 | |
Forward Foreign Currency Contracts | | | — | | | | 763 | | | | — | | | | 763 | |
Liabilities | | | | | | | | | | | | | | | | |
Futures Contracts | | | (150 | ) | | | — | | | | — | | | | (150 | ) |
| | | | |
Forward Foreign Currency Contracts | | | — | | | | (1,477 | ) | | | — | | | | (1,477 | ) |
| | | | |
| Total Other Financial Instruments | | $ | 55,768 | | | $ | (714 | ) | | $ | — | | | $ | 55,054 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 387 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Real Assets Allocation Index Fund | |
Investments | |
| | | | |
| Exchange Traded Funds | | $ | 11,358,029 | | | $ | — | | | $ | — | | | $ | 11,358,029 | |
| | | | |
| Total Investments | | $ | 11,358,029 | | | $ | — | | | $ | — | | | $ | 11,358,029 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Quality Dividend Index Fund | |
Investments | |
Common Stocks* | | $ | 1,685,254,955 | | | $ | — | | | $ | — | | | $ | 1,685,254,955 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
Bank Notes | | | — | | | | 5,000,000 | | | | — | | | | 5,000,000 | |
Certificates of Deposit | | | — | | | | 34,008,958 | | | | — | | | | 34,008,958 | |
Commercial Paper | | | — | | | | 6,498,887 | | | | — | | | | 6,498,887 | |
| | | | |
Repurchase Agreements | | | — | | | | 60,508,169 | | | | — | | | | 60,508,169 | |
| | | | |
| Total Investments | | $ | 1,685,254,955 | | | $ | 106,016,014 | | | $ | — | | | $ | 1,791,270,969 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
| | | | |
Futures Contracts | | $ | 322,592 | | | $ | — | | | $ | — | | | $ | 322,592 | |
| | | | |
| Total Other Financial Instruments | | $ | 322,592 | | | $ | — | | | $ | — | | | $ | 322,592 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Quality Dividend Defensive Index Fund | |
Investments | |
Common Stocks* | | $ | 442,948,036 | | | $ | — | | | $ | — | | | $ | 442,948,036 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
| | | | |
Repurchase Agreements | | | — | | | | 31,997,408 | | | | — | | | | 31,997,408 | |
| | | | |
| Total Investments | | $ | 442,948,036 | | | $ | 31,997,408 | | | $ | — | | | $ | 474,945,444 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
| | | | |
Futures Contracts | | $ | 111,057 | | | $ | — | | | $ | — | | | $ | 111,057 | |
| | | | |
| Total Other Financial Instruments | | $ | 111,057 | | | $ | — | | | $ | — | | | $ | 111,057 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | |
| 388 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Quality Dividend Dynamic Index Fund | |
Investments | |
Common Stocks* | | $ | 51,625,406 | | | $ | — | | | $ | — | | | $ | 51,625,406 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
| | | | |
Repurchase Agreements | | | — | | | | 1,936,741 | | | | — | | | | 1,936,741 | |
| | | | |
| Total Investments | | $ | 51,625,406 | | | $ | 1,936,741 | | | $ | — | | | $ | 53,562,147 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
| | | | |
Futures Contracts | | $ | 9,379 | | | $ | — | | | $ | — | | | $ | 9,379 | |
| | | | |
| Total Other Financial Instruments | | $ | 9,379 | | | $ | — | | | $ | — | | | $ | 9,379 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares International Quality Dividend Index Fund | |
Investments | |
Common Stocks* | | $ | 758,807,569 | | | $ | — | | | $ | — | | | $ | 758,807,569 | |
Securities Lending Reinvestments | | | | | | | | | | | | | | | | |
| | | | |
Repurchase Agreements | | | — | | | | 687,246 | | | | — | | | | 687,246 | |
| | | | |
| Total Investments | | $ | 758,807,569 | | | $ | 687,246 | | | $ | — | | | $ | 759,494,815 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 375,341 | | | $ | — | | | $ | — | | | $ | 375,341 | |
Forward Foreign Currency Contracts | | | — | | | | 40,078 | | | | — | | | | 40,078 | |
Liabilities | | | | | | | | | | | | | | | | |
Futures Contracts | | | (24,759 | ) | | | — | | | | — | | | | (24,759 | ) |
| | | | |
Forward Foreign Currency Contracts | | | — | | | | (112,663 | ) | | | — | | | | (112,663 | ) |
| | | | |
| Total Other Financial Instruments | | $ | 350,582 | | | $ | (72,585 | ) | | $ | — | | | $ | 277,997 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 389 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares International Quality Dividend Defensive Index Fund | |
Investments | |
| | | | |
| Common Stocks* | | $ | 77,814,489 | | | $ | — | | | $ | — | | | $ | 77,814,489 | |
| | | | |
| Total Investments | | $ | 77,814,489 | | | $ | — | | | $ | — | | | $ | 77,814,489 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
Futures Contracts | | $ | 25,373 | | | $ | — | | | $ | — | | | $ | 25,373 | |
Liabilities | | | | | | | | | | | | | | | | |
| | | | |
Forward Foreign Currency Contracts | | | — | | | | (936 | ) | | | — | | | | (936 | ) |
| | | | |
| Total Other Financial Instruments | | $ | 25,373 | | | $ | (936 | ) | | $ | — | | | $ | 24,437 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares International Quality Dividend Dynamic Index Fund | |
Investments | |
| | | | |
| Common Stocks* | | $ | 46,827,441 | | | $ | — | | | $ | — | | | $ | 46,827,441 | |
| | | | |
| Total Investments | | $ | 46,827,441 | | | $ | — | | | $ | — | | | $ | 46,827,441 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
| | | | |
Futures Contracts | | $ | 13,380 | | | $ | — | | | $ | — | | | $ | 13,380 | |
| | | | |
| Total Other Financial Instruments | | $ | 13,380 | | | $ | — | | | $ | — | | | $ | 13,380 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares iBoxx3-Year Target Duration TIPS Index Fund | |
Investments | |
| | | | |
| U.S. Treasury Obligations | | $ | — | | | $ | 1,177,285,005 | | | $ | — | | | $ | 1,177,285,005 | |
| | | | |
| Total Investments | | $ | — | | | $ | 1,177,285,005 | | | $ | — | | | $ | 1,177,285,005 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | |
| 390 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares iBoxx5-Year Target Duration TIPS Index Fund | |
Investments | |
| | | | |
| U.S. Treasury Obligations | | $ | — | | | $ | 556,179,873 | | | $ | — | | | $ | 556,179,873 | |
| | | | |
| Total Investments | | $ | — | | | $ | 556,179,873 | | | $ | — | | | $ | 556,179,873 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Disciplined Duration MBS Index Fund | |
Investments | |
| | | | |
| Mortgage-Backed Securities | | $ | — | | | $ | 35,075,032 | | | $ | — | | | $ | 35,075,032 | |
| | | | |
| Total Investments | | $ | — | | | $ | 35,075,032 | | | $ | — | | | $ | 35,075,032 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Credit-Scored US Corporate Bond Index Fund | |
Investments | |
| | | | |
| Corporate Bonds* | | $ | — | | | $ | 96,316,502 | | | $ | — | | | $ | 96,316,502 | |
| | | | |
| Total Investments | | $ | — | | | $ | 96,316,502 | | | $ | — | | | $ | 96,316,502 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Credit-Scored US Long Corporate Bond Index Fund | |
Investments | |
Asset-Backed Securities | | $ | — | | | $ | 20,273 | | | $ | — | | | $ | 20,273 | |
| | | | |
| Corporate Bonds* | | | — | | | | 17,043,903 | | | | — | | | | 17,043,903 | |
| | | | |
| Total Investments | | $ | — | | | $ | 17,064,176 | | | $ | — | | | $ | 17,064,176 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 391 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares High Yield Value-Scored Bond Index Fund | |
Investments | |
| | | | |
| Corporate Bonds* | | $ | — | | | $ | 98,088,178 | | | $ | — | | | $ | 98,088,178 | |
| | | | |
| Total Investments | | $ | — | | | $ | 98,088,178 | | | $ | — | | | $ | 98,088,178 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Ready Access Variable Income Fund | |
Investments | |
Asset-Backed Securities | | $ | — | | | $ | 25,800,738 | | | $ | — | | | $ | 25,800,738 | |
Collateralized Mortgage Obligations | | | — | | | | 262,747 | | | | — | | | | 262,747 | |
Corporate Bonds* | | | — | | | | 224,914,644 | | | | — | | | | 224,914,644 | |
Foreign Government Securities | | | — | | | | 3,000,514 | | | | — | | | | 3,000,514 | |
U.S. Government Agency Securities | | | — | | | | 499,920 | | | | — | | | | 499,920 | |
U.S. Treasury Obligations | | | — | | | | 5,002,159 | | | | — | | | | 5,002,159 | |
| | | | |
| Short-Term Investments | | | — | | | | 15,969,457 | | | | — | | | | 15,969,457 | |
| | | | |
| Total Investments | | $ | — | | | $ | 275,450,179 | | | $ | — | | | $ | 275,450,179 | |
| | | | |
| | | | | | | | | | | | | | | | |
| | | Level 1 — Quoted
Prices | | | Level 2 — Other
Significant
Observable
Inputs | | | Level 3 —
Significant
Unobservable
Inputs | | | Total | |
|
| FlexShares Core Select Bond Fund | |
Investments | |
Exchange Traded Funds | | $ | 25,910,152 | | | $ | — | | | $ | — | | | $ | 25,910,152 | |
| | | | |
| Short-Term Investments | | | — | | | | 164,467 | | | | — | | | | 164,467 | |
| | | | |
| Total Investments | | $ | 25,910,152 | | | $ | 164,467 | | | $ | — | | | $ | 26,074,619 | |
|
Other Financial Instruments | |
Assets | | | | | | | | | | | | | | | | |
| | | | |
Futures Contracts | | $ | 3,412 | | | $ | — | | | $ | — | | | $ | 3,412 | |
| | | | |
| Total Other Financial Instruments | | $ | 3,412 | | | $ | — | | | $ | — | | | $ | 3,412 | |
| * | See Schedules of Investments for segregation by industry type. |
Foreign Securities
The FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, FlexShares Emerging Markets Quality Low Volatility Index Fund, FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares Morningstar
Emerging Markets Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund (through its investment in its Underlying Fund), FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund (through its investment in its Underlying Fund), FlexShares
| | |
| 392 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
STOXX® Global ESG Impact Index Fund, FlexShares Morningstar Global Upstream Natural Resources Index Fund, FlexShares STOXX® Global Broad Infrastructure Index Fund, FlexShares Global Quality Real Estate Index Fund, FlexShares Real Assets Allocation Index Fund (through its investment in its Underlying Funds), FlexShares International Quality Dividend Index Fund, FlexShares International Quality Dividend Defensive Index Fund, and the FlexShares International Quality Dividend Dynamic Index Fund invest in publicly-traded equity securities of issuers in countries other than the United States of America (“U.S.”). Such investments include direct investments innon-U.S. dollar denominated securities traded outside the U.S. The Funds’ investments in foreign securities also may be in the form of ADRs and Global Depositary Receipts (“GDRs”) (collectively, “Depositary Receipts”) based on securities in their Underlying Indexes. ADRs are receipts that are traded in the United States evidencing ownership of the underlying foreign securities and are denominated in U.S. dollars. GDRs are receipts issued by anon-U.S. financial institution evidencing ownership of underlying foreign or U.S. securities and usually are denominated in foreign currencies. GDRs may not be denominated in the same currency as the securities they represent. Generally, GDRs are designed for use in foreign securities markets.
In addition to investment risks associated with the underlying issuer, ADRs and GDRs expose a Fund to risk associated withnon-uniform terms that apply to ADR and GDR programs, credit exposure to the depository bank and to the sponsors and other parties with whom the depository bank establishes the programs, currency and liquidity risk. ADRs and GDRs are generally subject to the same risks as the foreign securities that they evidence or into which they may be converted.
To the extent a Fund invests in ADRs, such ADRs will be listed on a national securities exchange. To the extent a Fund invests in GDRs, such GDRs will be listed on a foreign exchange. A Fund will not invest in any unlisted Depositary Receipt, any Depositary Receipt that NTI deems to be illiquid or any Depositary Receipt for which market quotations are not readily available. Generally, all Depositary Receipts must be sponsored.
The FlexShares Credit-Scored US Corporate Bond Index Fund, FlexShares Credit-Scored US Long Corporate Bond Index Fund and the FlexShares High Yield Value-Scored Bond Index Fund may invest in U.S. dollar denominated bonds ofnon-U.S. corporations to the extent such bonds are included in each Fund’s Underlying Index. The FlexShares Core Select Bond Fund may invest in U.S. dollar denominated bonds ofnon-U.S. corporations, either directly or indirectly through Underlying Funds, to achieve its investment objective.
The FlexShares Ready Access Variable Income Fund may invest, without limitation, in fixed-income securities and instruments of foreign issuers in developed and emerging markets, including debt securities of foreign governments.
Investing in foreign securities, including Depositary Receipts, may result in a Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in U.S. securities, due to less liquid markets, and adverse economic, political, diplomatic, financial, and regulatory factors. Foreign governments also may impose taxes and limits on investment and repatriation. Any of these events could cause the value of a Fund’s foreign investment to decline. To the extent that a Fund’s assets are significantly invested in a single country or geographic region, a Fund will be subject to the risks associated with that particular country or region.
The FlexShares Emerging Markets Quality Low Volatility Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund and the FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund (through its investment in its Underlying Fund) will invest primarily in emerging market countries. In addition, the FlexShares Morningstar Global Upstream Natural Resources Index Fund, FlexShares STOXX® Global Broad Infrastructure Index Fund, FlexShares Global Quality Real Estate Index Fund, FlexShares Real Assets Allocation Index Fund (through its investment in its Underlying Funds), FlexShares International Quality Dividend Index Fund, FlexShares International Quality Dividend Defensive Index Fund, and the FlexShares International Quality Dividend Dynamic Index Fund may invest its assets in emerging market countries. The FlexShares Ready Access Variable Income Fund may invest up to 20% of its total assets
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 393 | |
Notes to the Financial Statements (cont.)
in fixed-income securities and instruments of issuers in emerging markets. The markets of emerging market countries are less developed and less liquid, subject to greater price volatility and generally subject to increased economic, political, regulatory and other uncertainties than more developed foreign markets. The risks of foreign investment are increased when the issuer is located in a country with an emerging economy or securities market.
Inflation-Indexed Securities
The FlexShares iBoxx3-Year Target Duration TIPS Index Fund and the FlexShares iBoxx5-Year Target Duration TIPS Index Fund invest primarily in U.S. Treasury Inflation-Protected Securities (“TIPS”). The FlexShares Ready Access Variable Income Fund and the FlexShares Core Select Bond Fund (directly or through its Underlying Funds) may invest in inflation-indexed securities.
TIPS issued by the U.S. Treasury have varying maturities and pay interest on a semiannual basis equal to a fixed percentage of the inflation-adjusted principal amount. If the periodic adjustment rate measuring inflation falls, the principal value of TIPS will be adjusted downward, and consequently the interest payable on these securities (calculated with respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of TIPS, even during a period of deflation.
The value of TIPS is expected to change in response to changes in real interest rates. Real interest rates in turn are tied to the relationship between nominal interest rates and the rate of inflation. Therefore, if the rate of inflation rises at a faster rate than nominal interest rates, real interest rates might decline, leading to an increase in value of TIPS. In contrast, if nominal interest rates increase at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of TIPS. Any increase in the principal amount of TIPS will be considered taxable ordinary income, even though investors do not receive their principal until maturity.
While these securities are expected to be protected from long-term inflationary trends, short-term increases in inflation may lead to a decline in value. If interest rates rise due to reasons other than inflation, investors in these
securities may not be protected to the extent that the increase is not reflected in the TIPS’ inflation measure.
The periodic adjustment of TIPS is tied to the Consumer Price Index for Urban Consumers(“CPI-U”), which is calculated monthly by the U.S. Bureau of Labor Statistics. TheCPI-U is a measurement of changes in the cost of living, made up of components such as housing, food, transportation and energy. There can be no assurance that theCPI-U will accurately measure the real rate of inflation in the prices of goods and services.
Mortgage-Backed Pass-Through Securities
The FlexShares Disciplined Duration MBS Index Fund invests primarily in U.S. agency mortgage-backed pass-through securities (“MBS”), a category of pass-through securities backed by pools of mortgages and issued by one of the following U.S. government agencies: the Federal National Mortgage Association (FNMA or Fannie Mae), the Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac) or the Government National Mortgage Association (GNMA or Ginnie Mae) (each a “US Agency”). Under normal circumstances, the Fund will invest at least 80% of its total assets in the securities of its Underlying Index and in“to-be announced transactions” (“TBA transactions”) that represent securities in its Underlying Index. In a TBA transaction, the buyer and seller agree upon general trade parameters such as agency, coupon rate, settlement date, par amount and price. The actual pools delivered generally are determined two days prior to settlement.
Pending settlement of such TBA contracts, the FlexShares Disciplined Duration MBS Index Fund will invest in liquid, short-term instruments. The FlexShares Core Select Bond Fund may also invest either directly or through its Underlying Funds in MBS, including TBA transactions.
Mortgage Dollar Rolls
The FlexShares Disciplined Duration MBS Index Fund and the FlexShares Core Select Bond Fund (directly or through its Underlying Funds) may enter into mortgage dollar roll transactions. A mortgage dollar roll involves the sale by the Fund of securities for delivery in the future (generally within 30 days). The Fund simultaneously contracts with the same
| | |
| 394 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
counterparty to repurchase substantially similar (same type, coupon and maturity) but not identical securities on a specified future date. During the roll period, the Fund will not be entitled to accrue interest and receive principal payments on the securities sold. However, the Fund benefits to the extent of any difference between (a) the price received for the securities sold and (b) the lower forward price for the future purchase and/or fee income plus the interest earned on the cash proceeds of the securities sold. Successful use of mortgage dollar rolls depends upon the Investment Adviser’s ability to predict correctly interest rates and mortgage prepayments. The use of this technique may diminish the investment performance of the Fund compared with what such performance would have been without the use of mortgage dollar rolls.
For financial reporting and tax purposes, a Fund treats mortgage dollar rolls as two separate transactions: one involving the purchase of a security and a separate transaction involving a sale. The Fund currently does not intend to enter into mortgage dollar rolls that are accounted for as financing and does not treat them as borrowings.
Repurchase Agreements
To the extent consistent with its investment policies, each Fund may enter into repurchase agreements under which it purchases securities (collateral) for cash from a seller and agrees to resell those securities to the same seller within a specified time at a specified price. During the term of a repurchase agreement, the market value of the underlying collateral, including accrued interest, is required to equal or exceed the market value of the repurchase agreement. The underlying collateral fortri-party repurchase agreements is held in accounts at JP Morgan Chase, the Fund’s custodian, and is not reflected in the assets of the Funds, at the Bank of New York or JPMorgan Chase which, in turn, holds securities through the book-entry system at the Federal Reserve Bank of New York. The Fund is subject to credit risk on repurchase agreements to the extent that the counterparty fails to perform under the agreement and the value of the collateral received falls below the agreed repurchase price.
The Northern Trust Company, the parent of NTI, currently is a party to various Master Repurchase Agreements with a
number of different counterparties, and acts as agent on behalf of various disclosed principals, including the Funds and various other accounts managed by NTI, in entering into repurchase agreements under the Master Repurchase Agreements. NTI administers and manages these repurchase agreements in accordance with and as part of its duties under its investment advisory agreement with the Funds and does not collect any additional fees from the Funds for such services. As of October 31, 2019, none of the Funds presented in these financial statements had repurchase agreements outstanding.
As of October 31, 2019, the FlexShares Morningstar US Market Factor Tilt Index Fund, FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares US Quality Large Cap Index Fund, FlexShares STOXX® US ESG Impact Index Fund, FlexShares STOXX® Global ESG Impact Index Fund, FlexShares Morningstar Global Upstream Natural Resources Index Fund, FlexShares STOXX® Global Broad Infrastructure Index Fund, FlexShares Global Quality Real Estate Index Fund, FlexShares Quality Dividend Index Fund, FlexShares Quality Dividend Defensive Index Fund, FlexShares Quality Dividend Dynamic Index Fund, and the FlexShares International Quality Dividend Index Fund invested cash collateral for loans of portfolio securities in repurchase agreements, as reflected in the respective Schedule of Investments under the caption “Securities Lending Reinvestments.”
Securities Lending
Each Fund may lend securities to banks, brokers and dealers or other qualified institutions. In exchange, the Fund is required to receive minimum initial collateral value as follows:
| | | | |
| Type of Loan | | Minimum Initial
Collateral Requirement | |
| |
| U.S. dollar denominated securities secured by U.S. dollar denominated government securities or cash collateral | | | 102 | % |
| |
| U.S. dollar denominated securities secured bynon-U.S. dollar denominated government securities or cash collateral | | | 105 | % |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 395 | |
Notes to the Financial Statements (cont.)
| | | | |
| Type of Loan | | Minimum Initial
Collateral Requirement | |
| |
| Non-U.S. dollar denominated securities secured by government securities or cash collateral in the same denomination as the lent securities | | | 102 | % |
| |
| Non-U.S. dollar denominated securities secured by government securities or cash collateral in the different denomination from the lent securities | | | 105 | % |
| |
| U.S. dollar andNon-U.S. dollar denominated securities secured by equity securities collateral | | | 105 | % |
The collateral is maintained thereafter, at a value equal to at least 100% of the value of the securities loaned. The collateral amount is valued at the beginning of each business day and is compared to the market value of the loaned securities from the prior business day to determine if additional collateral is required. If additional collateral is required, a request is sent to the borrower.
Securities lending may represent no more thanone-third of the value of a Fund’s total assets (including the loan collateral). JPMorgan Chase Bank, N.A. (the “Securities Lending Agent”) serves as the securities lending agent for the securities lending program of a Fund.
Collateral for loans of portfolio securities made by a Fund may consist of cash, cash equivalents, securities issued or guaranteed by the U.S. government or foreign governments or its agencies (or any combination thereof). Any cash collateral received by the Fund in connection with these loans may be invested in a variety of short-term investments, either directly or indirectly through money market portfolios. The market value of securities on loan and the value of investments made with cash collateral received are disclosed in the Schedule of Investments. Securities lending income includes income from the securities lending program recorded when earned from the Securities Lending Agent and any fees charged to borrowers less expenses associated with the loan. The net amount is reflected in the Statement of Operations under “Securities lending income (net of fees).” The market value of the loaned securities is determined at the close of each business day of the Fund and
any additional required collateral is delivered to the Fund, or excess collateral returned by the Fund, on the next business day.
When a Fund lends its securities, it will continue to receive payments equal to the dividends and interest paid on the securities loaned and simultaneously may earn interest on the investment of the cash collateral.
A Fund will have the right to terminate a loan at any time and recall the loaned securities within the normal and customary settlement time for securities transactions. A Fund does not have the right to vote securities on loan, but can terminate the loan and regain the right to vote if a material event affecting the securities occurred. A borrower might become insolvent or refuse to honor its obligation to return the securities. In the event of a default by a borrower with respect to any loan, the Securities Lending Agent will exercise any and all remedies provided under the applicable borrower agreement. These remedies include purchasing replacement securities for the Fund by applying the collateral held from the defaulting borrower against the purchase cost of the replacement securities. If the proceeds from the collateral are less than the purchase cost of the replacement securities, the Securities Lending Agent is responsible for such shortfall, subject to certain limitations that are set forth in detail in the Securities Lending Agency Agreement. In this event, a Fund could experience delays in recovering its securities and possibly may incur a capital loss. Each Fund will be responsible for any loss that might result from its investment of the cash collateral it receives from a borrower.
In accordance with guidance presented in FASB Accounting Standard Update (“ASU”)2014-11, Transfers and Servicing (Topic 860):Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures, liabilities under the outstanding securities lending transactions as of October 31, 2019, which were comprised of cash, were as follows:
| | | | |
| Fund | | | |
| |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | $ | 107,470,616 | |
| |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 12,460,503 | |
| | |
| 396 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | |
| Fund | | | |
| |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | $ | 2,144,475 | |
| |
| FlexShares US Quality Large Cap Index Fund | | | 989,345 | |
| |
| FlexShares STOXX® US ESG Impact Index Fund | | | 151,550 | |
| |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 436,049 | |
| |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 91,272,813 | |
| |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 32,790,554 | |
| |
| FlexShares Global Quality Real Estate Index Fund | | | 14,662,391 | |
| |
| FlexShares Quality Dividend Index Fund | | | 106,021,374 | |
| |
| FlexShares Quality Dividend Defensive Index Fund | | | 31,997,408 | |
| |
| FlexShares Quality Dividend Dynamic Index Fund | | | 1,936,741 | |
| |
| FlexShares International Quality Dividend Index Fund | | | 687,246 | |
At October 31, 2019, the Securities Lending Agency Agreement does not permit the Funds to enforce a netting arrangement.
Regulations that began to take effect in 2019 will require certain bank-regulated counterparties and certain of their affiliates to include in certain financial contracts, including many securities lending agreements, terms that delay or restrict the rights of counterparties, such as a Fund, to terminate such agreements, foreclose upon collateral, exercise other default rights or restrict transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain types of resolution or insolvency proceedings. It is possible that these new requirements, as well as potential additional government regulation and other developments in the market, could adversely affect a Fund’s ability to terminate existing securities lending agreements or to realize amounts to be received under such agreements.
Derivative Contracts
Futures Contracts
All of the Index Funds may invest in futures contracts to help track the price and yield performance of their Underlying Indexes. At the time a Fund enters into a futures contract, it is generally required to make a margin deposit with the custodian of a specified amount of liquid assets. Subsequent payments to be made or received by the Funds equal to the change in contract value are recorded as variation margin payable or receivable and offset in unrealized gains or losses. Futures are marked to market each day with the change in value reflected in the unrealized gains or losses. A Fund recognizes a realized gain or loss when a contract is closed or expires. The Statements of Operations reflect unrealized gains or losses on open futures contracts, as “Net change in unrealized appreciation (depreciation) on futures contracts”, and any realized gains (losses) on closed futures contracts as “Net realized gain (loss) on futures contracts”.
The FlexShares Core Select Bond Fund may take long or short positions in futures to manage the Fund’s exposure to interest rate risk. When applicable, the Fund seeks to mitigate the potential impact of interest rates on the performance of bonds by entering into short positions in U.S. Treasury futures or transactions in interest rate swaps. The Fund’s short positions in U.S. Treasury futures and interest rate swaps are not intended to mitigate credit spread risk or other factors influencing the price of bonds, which may have a greater impact than interest rates. In addition, when interest rates fall, long-only bond investments will perform better than the Fund’s investments. As of October 31, 2019, the FlexShares Core Select Bond Fund did not hold swaps.
As of October 31, 2019, the FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, FlexShares Morningstar US Market Factor Tilt Index Fund, FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, FlexShares US Quality Large Cap Index Fund, FlexShares STOXX® US ESG Impact Index Fund, FlexShares STOXX® Global ESG Impact Index Fund, FlexShares Morningstar Global Upstream Natural Resources
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 397 | |
Notes to the Financial Statements (cont.)
Index Fund, FlexShares STOXX® Global Broad Infrastructure Index Fund, FlexShares Global Quality Real Estate Index Fund, FlexShares Quality Dividend Index Fund, FlexShares Quality Dividend Defensive Index Fund, FlexShares Quality Dividend Dynamic Index Fund, FlexShares International Quality Dividend Index Fund, FlexShares International Quality Dividend Defensive Index Fund, FlexShares International Quality Dividend Dynamic Index Fund, and the FlexShares Core Select Bond Fund had open futures contracts.
The use of futures contracts involves, to varying degrees, elements of market and counterparty risk, which may exceed the amounts recognized in the Statements of Assets and Liabilities. Futures contracts present the following risks: imperfect correlation between the change in market value of a Fund’s securities and the price of futures contracts; the possible inability to close a futures contract when desired; losses due to unanticipated market movements, which potentially are unlimited; and the possible inability of NTI to correctly predict the direction of securities prices, interest rates, currency exchange rates and other economic factors. Futures markets are highly volatile and the use of futures may increase the volatility of a Fund’s NAV. As a result of the low margin deposits normally required in futures trading, a relatively small price movement in a futures contract may result in substantial losses to a Fund. Futures contracts may be illiquid, and exchanges may limit fluctuations in futures contract prices during a single day. Foreign exchanges or boards of trade generally do not offer the same protection as U.S. exchanges.
Foreign Currency Translations
Values of investments denominated in foreign currencies are converted into U.S. dollars using the prevailing market rates on the date of valuation as quoted by one or more banks or dealers that make atwo-way market in such currencies (or a data service provider based on quotations received from such banks or dealers). Any use of a rate different from the rates used by an Index Fund’s index provider may affect a Fund’s ability to track its Underlying Index. The cost of purchases and proceeds from sales of investments, interest and dividend income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective
dates of such transactions. “Net realized gain (loss) on foreign currency transactions” on the Statements of Operations include the effect of changes in exchange rates between trade date and settlement date on investment security transactions, foreign currency transactions and interest and dividends received, and the portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase trade date and subsequent sale trade date is included in “Net realized gain (loss) on investment in securities” on the Statements of Operations. Unrealized gains and losses on assets and liabilities, other than investments in securities, which result from changes in foreign currency exchange rates have been included in “Net change in unrealized appreciation (depreciation) on translation of other assets and liabilities denominated in foreign currencies” on the Statements of Operations.
Forward Foreign Currency Exchange Contracts
The FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund and FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund intend to use forward foreign currency contracts to hedge the currency exposure resulting from investments in foreign securities, to facilitate local settlements or to protect against currency exposure in connection with their distributions to shareholders. The FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, FlexShares Emerging Markets Quality Low Volatility Index Fund, FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares STOXX® Global ESG Impact Index Fund, FlexShares Morningstar Global Upstream Natural Resources Index Fund, FlexShares STOXX® Global Broad Infrastructure Index Fund, FlexShares Global Quality Real Estate Index Fund, FlexShares Real Assets Allocation Index Fund, FlexShares International Quality Dividend Index Fund, FlexShares International Quality Dividend Defensive Index Fund, FlexShares International Quality Dividend Dynamic Index Fund, and the FlexShares Ready Access Variable Income Fund may enter into forward foreign currency exchange contracts to facilitate local settlements or to protect against currency exposure in connection with its distributions to shareholders. The Index Funds, however, do
| | |
| 398 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
not expect to engage in currency transactions for speculative purposes (e.g., for potential income or capital gain). The FlexShares Ready Access Variable Income Fund also may engage in forward foreign currency transactions for hedging purposes in order to protect against uncertainty in the level of future foreign currency exchange rates. The Fund, however, does not expect to engage in currency transactions for speculative purposes. All forward foreign currency exchange contracts held are“marked-to-market” daily at the applicable exchange rates and any resulting unrealized gains or losses are recorded. The Funds record realized gains or losses at the time the forward foreign currency exchange contract is offset by entering into a closing transaction or extinguished by delivery of the currency. The difference between the future foreign currency exchange rates at the date of entry into the contract and the rates at the reporting date are included in “Net change in unrealized appreciation (depreciation) on forward foreign currency contracts” in the Statements of Operations.Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in U.S. Dollars without the delivery of foreign currency.
There are several risks associated with these contracts. One risk is the potential inability of counterparties to meet the terms of their contracts, and unanticipated movements in the value of a foreign currency relative to the U.S. dollar. The contractual amounts of forward foreign currency exchange contracts do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. The Statements of Operations reflect (i) realized gains or losses, if any, in “Net realized gain (loss) from settlement of forward foreign currency contracts” and (ii) unrealized gains or losses in “Net change in unrealized appreciation (depreciation) on forward foreign currency contracts”. Forward foreign currency exchange contracts are privately negotiated transactions and can have substantial price volatility. As a result, they offer less protection against default by the other party than is available for instruments traded on an exchange. The institutions that deal in forward foreign currency exchange contracts are not required to continue to make markets in the currencies they trade, and these markets can experience periods of illiquidity.
As of October 31, 2019, the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, FlexShares Morningstar Global Upstream Natural Resources Index Fund, FlexShares STOXX® Global Broad Infrastructure Index Fund, FlexShares Global Quality Real Estate Index Fund, FlexShares International Quality Dividend Index Fund, and the FlexShares International Quality Dividend Defensive Index Fund had open forward foreign currency contracts.
Offsetting of Financial Assets and Derivative Assets
The Funds’ accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the International Swaps and Derivatives Association (ISDA) Master Agreement or similar agreement does not result in an offset of reported amounts of financial assets and financial liabilities in the Statements of Assets and Liabilities across transactions between the Fund and the applicable counterparty. In the event of a default, the agreement provides the right for thenon-defaulting party to liquidate the collateral and calculate the net exposure to the defaulting party or request additional collateral. The Funds’ right to setoff may be restricted or prohibited by the bankruptcy or insolvency laws of the particular jurisdiction to which a specific master netting agreement counterparty is subject.
For financial reporting purposes, the Trust can offset financial assets and financial liabilities of the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, FlexShares Morningstar Global Upstream Natural Resources Index Fund, FlexShares STOXX® Global Broad Infrastructure Index Fund, FlexShares Global Quality Real Estate Index Fund, FlexShares International Quality Dividend Index Fund, and the FlexShares International Quality Dividend Defensive
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 399 | |
Notes to the Financial Statements (cont.)
Index Fund that are subject to master netting arrangements or similar agreements in the Statements of Assets and
Liabilities. The following table presents the gross and net amounts of these assets and liabilities:
| | | | | | | | | | | | | | | | | | |
| | | | | | | | Gross Amounts Not Offset in the
Statement of Assets and Liabilities | | | | |
| | | | | Gross Amounts of
Assets presented in
Statements of Assets
and Liabilities | | | Financial
Instruments | | | Cash Collateral
Received | | | Net Amount | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | Foreign Currency Contracts — Bank of New York | | $ | 74 | | | $ | (74 | ) | | $ | — | | | $ | — | |
| | Foreign Currency Contracts — Citibank NA | | | 34,663 | | | | — | | | | — | | | | 34,663 | |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | 15,807 | | | | (7,205 | ) | | | — | | | | 8,602 | |
| | Foreign Currency Contracts — JPMorgan Chase Bank | | | 1,338 | | | | (37 | ) | | | — | | | | 1,301 | |
| | Foreign Currency Contracts — Morgan Stanley | | | 12,469 | | | | (12,469 | ) | | | — | | | | — | |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | 29,949 | | | | (783 | ) | | | — | | | | 29,166 | |
| | | Total | | $ | 94,300 | | | $ | (20,568 | ) | | $ | — | | | $ | 73,732 | |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | Foreign Currency Contracts — Bank of New York | | $ | 40 | | | $ | — | | | $ | — | | | $ | 40 | |
| | Foreign Currency Contracts — BNP Paribas SA | | | 404 | | | | — | | | | — | | | | 404 | |
| | Foreign Currency Contracts — Citibank NA | | | 3,285 | | | | (346 | ) | | | — | | | | 2,939 | |
| | | Foreign Currency Contracts — Goldman Sachs & Co. | | | 438 | | | | (438 | ) | | | — | | | | — | |
| | | Total | | $ | 4,167 | | | $ | (784 | ) | | $ | — | | | $ | 3,383 | |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | $ | 1,369 | | | $ | (1,369 | ) | | $ | — | | | $ | — | |
| | | Total | | $ | 1,369 | | | $ | (1,369 | ) | | $ | — | | | $ | — | |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | Foreign Currency Contracts — Goldman Sachs & Co. | | $ | 1,905 | | | $ | (1,905 | ) | | $ | — | | | $ | — | |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | 4,574 | | | | (2,104 | ) | | | — | | | | 2,470 | |
| | | Total | | $ | 6,479 | | | $ | (4,009 | ) | | $ | — | | | $ | 2,470 | |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | Foreign Currency Contracts — Bank of New York | | $ | 548 | | | $ | — | | | $ | — | | | $ | 548 | |
| | Foreign Currency Contracts — BNP Paribas SA | | | 6,362 | | | | (6,362 | ) | | | — | | | | — | |
| | Foreign Currency Contracts — Citibank NA | | | 38,597 | | | | (38,597 | ) | | | — | | | | — | |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | 72,914 | | | | (4,834 | ) | | | — | | | | 68,080 | |
| | Foreign Currency Contracts — Morgan Stanley | | | 25,077 | | | | (9,417 | ) | | | — | | | | 15,660 | |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | 196,009 | | | | (196,009 | ) | | | — | | | | — | |
| | | Total | | $ | 339,507 | | | $ | (255,219 | ) | | $ | — | | | $ | 84,288 | |
| FlexShares STOXX® Global Infrastructure Index Fund | | Foreign Currency Contracts — Bank of New York | | $ | 39 | | | $ | — | | | $ | — | | | $ | 39 | |
| | Foreign Currency Contracts — BNP Paribas SA | | | 2,924 | | | | — | | | | — | | | | 2,924 | |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | 16,399 | | | | (5,072 | ) | | | — | | | | 11,327 | |
| | Foreign Currency Contracts — Morgan Stanley | | | 4,512 | | | | (2,506 | ) | | | — | | | | 2,006 | |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | 17,584 | | | | (3,206 | ) | | | — | | | | 14,378 | |
| | | Total | | $ | 41,458 | | | $ | (10,784 | ) | | $ | — | | | $ | 30,674 | |
| | |
| 400 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | | | |
| | | | | | | | Gross Amounts Not Offset in the
Statement of Assets and Liabilities | | | | |
| | | | | Gross Amounts of
Assets presented in
Statements of Assets
and Liabilities | | | Financial
Instruments | | | Cash Collateral
Received | | | Net Amount | |
| FlexShares Global Quality Real Estate Index Fund | | Foreign Currency Contracts — Bank of New York | | $ | 10 | | | $ | — | | | $ | — | | | $ | 10 | |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | 543 | | | | (543 | ) | | | — | | | | — | |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | 210 | | | | — | | | | — | | | | 210 | |
| | | Total | | $ | 763 | | | $ | (543 | ) | | $ | — | | | $ | 220 | |
| FlexShares International Quality Dividend Index Fund | | Foreign Currency Contracts — Bank of New York | | $ | 8 | | | $ | — | | | $ | — | | | $ | 8 | |
| | Foreign Currency Contracts — Citibank NA | | | 11,488 | | | | (11,488 | ) | | | — | | | | — | |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | 4,179 | | | | (4,179 | ) | | | — | | | | — | |
| | Foreign Currency Contracts — JPMorgan Chase Bank | | | 671 | | | | — | | | | — | | | | 671 | |
| | Foreign Currency Contracts — Morgan Stanley | | | 7,605 | | | | (7,605 | ) | | | — | | | | — | |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | 16,127 | | | | (16,127 | ) | | | — | | | | — | |
| | | Total | | $ | 40,078 | | | $ | (39,399 | ) | | $ | — | | | $ | 679 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | Gross Amounts Not Offset in the
Statement of Assets and Liabilities | | | | |
| | | | | Gross Amounts of
Liabilities presented in
Statements of Assets
and Liabilities | | | Financial
Instruments | | | Cash Collateral
Pledged | | | Net Amount | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | Foreign Currency Contracts — Bank of New York | | $ | (1,012 | ) | | $ | 74 | | | $ | — | | | $ | (938 | ) |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | (7,205 | ) | | | 7,205 | | | | — | | | | — | |
| | Foreign Currency Contracts — JPMorgan Chase Bank | | | (37 | ) | | | 37 | | | | — | | | | — | |
| | Foreign Currency Contracts — Morgan Stanley | | | (16,949 | ) | | | 12,469 | | | | — | | | | (4,480 | ) |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | (783 | ) | | | 783 | | | | — | | | | — | |
| | | Total | | $ | (25,986 | ) | | $ | 20,568 | | | $ | — | | | $ | (5,418 | ) |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | Foreign Currency Contracts — Citibank NA | | $ | (346 | ) | | $ | 346 | | | $ | — | | | $ | — | |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | (10,821 | ) | | | 438 | | | | — | | | | (10,383 | ) |
| | Foreign Currency Contracts — Morgan Stanley | | | (8,256 | ) | | | — | | | | — | | | | (8,256 | ) |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | (26,444 | ) | | | — | | | | — | | | | (26,444 | ) |
| | | Total | | $ | (45,867 | ) | | $ | 784 | | | $ | — | | | $ | (45,083 | ) |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index | | Foreign Currency Contracts — Morgan Stanley | | $ | (798 | ) | | $ | — | | | $ | — | | | $ | (798 | ) |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | (15,486 | ) | | | 1,369 | | | | — | | | | (14,117 | ) |
| | | Total | | $ | (16,284 | ) | | $ | 1,369 | | | $ | — | | | $ | (14,915 | ) |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 401 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | | | |
| | | | | | | | Gross Amounts Not Offset in the
Statement of Assets and Liabilities | | | | |
| | | | | Gross Amounts of
Liabilities presented in
Statements of Assets
and Liabilities | | | Financial
Instruments | | | Cash Collateral
Pledged | | | Net Amount | |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | Foreign Currency Contracts — BNP Paribas SA | | $ | (10,626 | ) | | $ | — | | | $ | — | | | $ | (10,626 | ) |
| | Foreign Currency Contracts — Citibank NA | | | (1,330 | ) | | | — | | | | — | | | | (1,330 | ) |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | (11,583 | ) | | | 1,905 | | | | — | | | | (9,678 | ) |
| | Foreign Currency Contracts — JPMorgan Chase Bank | | | (1,942 | ) | | | — | | | | — | | | | (1,942 | ) |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | (2,104 | ) | | | 2,104 | | | | — | | | | — | |
| | | Total | | $ | (27,585 | ) | | $ | 4,009 | | | $ | — | | | $ | (23,576 | ) |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | Foreign Currency Contracts — BNP Paribas SA | | $ | (8,193 | ) | | $ | 6,362 | | | $ | — | | | $ | (1,831 | ) |
| | Foreign Currency Contracts — Citibank NA | | | (118,299 | ) | | | 38,597 | | | | — | | | | (79,702 | ) |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | (4,834 | ) | | | 4,834 | | | | — | | | | — | |
| | Foreign Currency Contracts — JPMorgan Chase Bank | | | (1,176 | ) | | | — | | | | — | | | | (1,176 | ) |
| | Foreign Currency Contracts — Morgan Stanley | | | (9,417 | ) | | | 9,417 | | | | — | | | | — | |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | (202,805 | ) | | | 196,009 | | | | — | | | | (6,796 | ) |
| | | Total | | $ | (344,724 | ) | | $ | 255,219 | | | $ | — | | | $ | (89,505 | ) |
| FlexShares STOXX® Global Infrastructure Index Fund | | Foreign Currency Contracts — Citibank NA | | $ | (19,151 | ) | | $ | — | | | $ | — | | | $ | (19,151 | ) |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | (5,072 | ) | | | 5,072 | | | | — | | | | — | |
| | Foreign Currency Contracts — Morgan Stanley | | | (2,506 | ) | | | 2,506 | | | | — | | | | — | |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | (3,206 | ) | | | 3,206 | | | | — | | | | — | |
| | | Total | | $ | (29,935 | ) | | $ | 10,784 | | | $ | — | | | $ | (19,151 | ) |
| FlexShares Global Quality Real Estate Index Fund | | Foreign Currency Contracts — Citibank NA | | $ | (65 | ) | | $ | — | | | $ | — | | | $ | (65 | ) |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | (899 | ) | | | 543 | | | | — | | | | (356 | ) |
| | Foreign Currency Contracts — JPMorgan Chase Bank | | | (30 | ) | | | — | | | | — | | | | (30 | ) |
| | | Foreign Currency Contracts — Morgan Stanley | | | (483 | ) | | | — | | | | — | | | | (483 | ) |
| | | Total | | $ | (1,477 | ) | | $ | 543 | | | $ | — | | | $ | (934 | ) |
| FlexShares International Quality Dividend Index Fund | | Foreign Currency Contracts — BNP Paribas SA | | $ | (9,169 | ) | | $ | — | | | $ | — | | | $ | (9,169 | ) |
| | Foreign Currency Contracts — Citibank NA | | | (41,150 | ) | | | 11,488 | | | | — | | | | (29,662 | ) |
| | Foreign Currency Contracts — Goldman Sachs & Co. | | | (24,742 | ) | | | 4,179 | | | | — | | | | (20,563 | ) |
| | Foreign Currency Contracts — Morgan Stanley | | | (17,879 | ) | | | 7,605 | | | | — | | | | (10,274 | ) |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | (19,723 | ) | | | 16,127 | | | | — | | | | (3,596 | ) |
| | | Total | | $ | (112,663 | ) | | $ | 39,399 | | | $ | — | | | $ | (73,264 | ) |
| FlexShares International Quality Dividend Defensive Index Fund | | Foreign Currency Contracts — Goldman Sachs & Co. | | $ | (627 | ) | | $ | — | | | $ | — | | | $ | (627 | ) |
| | Foreign Currency Contracts — Morgan Stanley | | | (151 | ) | | | — | | | | — | | | | (151 | ) |
| | | Foreign Currency Contracts — Toronto-Dominion Bank (The) | | | (158 | ) | | | — | | | | — | | | | (158 | ) |
| | | Total | | $ | (936 | ) | | $ | — | | | $ | — | | | $ | (936 | ) |
| | |
| 402 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
The following tables indicate the location of derivative-related items on the Statements of Assets and Liabilities as well as the effect of derivative instruments on the Statements of Operations during the reporting period.
Fair Value of Derivative Instruments as of October 31, 2019
| | | | | | | | |
| Derivatives by risk type | | Statements of Assets
and Liabilities Location | | Fund | | Value | |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares Developed Marketsex-US Quality Low Volatility Index Fund** | | $ | 2,933 | |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares Morningstar US Market Factor Tilt Index Fund | | | 212,856 | |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 366,866 | |
| | | |
| Equity Index Futures Contracts | | Liabilities — Unrealized depreciation on futures contracts* | | FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | (38,479 | ) |
| | | |
| Foreign Currency Contracts | | Assets — Unrealized appreciation on forward foreign currency contracts | | FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 94,300 | |
| | | |
| Foreign Currency Contracts | | Liabilities — Unrealized depreciation on forward foreign currency contracts | | FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | (25,986 | ) |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 50,750 | |
| | | |
| Foreign Currency Contracts | | Assets — Unrealized appreciation on forward foreign currency contracts | | FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 4,167 | |
| | | |
| Foreign Currency Contracts | | Liabilities — Unrealized depreciation on forward foreign currency contracts | | FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | (45,867 | ) |
| | | |
| Foreign Currency Contracts | | Assets — Unrealized appreciation on forward foreign currency contracts | | FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 1,369 | |
| | | |
| Foreign Currency Contracts | | Liabilities — Unrealized depreciation on forward foreign currency contracts | | FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | (16,284 | ) |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 943 | |
| | | |
| Foreign Currency Contracts | | Assets — Unrealized appreciation on forward foreign currency contracts | | FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 6,479 | |
| | | |
| Foreign Currency Contracts | | Liabilities — Unrealized depreciation on forward foreign currency contracts | | FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | (27,585 | ) |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares US Quality Large Cap Index Fund | | | 2,780 | |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares STOXX® US ESG Impact Index Fund | | | 9,738 | |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares STOXX® Global ESG Impact Index Fund | | | 28,232 | |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 70,138 | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 403 | |
Notes to the Financial Statements (cont.)
| | | | | | | | |
| Derivatives by risk type | | Statements of Assets
and Liabilities Location | | Fund | | Value | |
| | | |
| Equity Index Futures Contracts | | Liabilities — Unrealized depreciation on futures contracts* | | FlexShares Morningstar Global Upstream Natural Resources Index Fund | | $ | (55,490 | ) |
| | | |
| Foreign Currency Contracts | | Assets — Unrealized appreciation on forward foreign currency contracts | | FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 339,507 | |
| | | |
| Foreign Currency Contracts | | Liabilities — Unrealized depreciation on forward foreign currency contracts | | FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | (344,724 | ) |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 286,147 | |
| | | |
| Equity Index Futures Contracts | | Liabilities — Unrealized depreciation on futures contracts* | | FlexShares STOXX® Global Broad Infrastructure Index Fund | | | (6,830 | ) |
| | | |
| Foreign Currency Contracts | | Assets — Unrealized appreciation on forward foreign currency contracts | | FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 41,458 | |
| | | |
| Foreign Currency Contracts | | Liabilities — Unrealized depreciation on forward foreign currency contracts | | FlexShares STOXX® Global Broad Infrastructure Index Fund | | | (29,935 | ) |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares Global Quality Real Estate Index Fund | | | 55,918 | |
| | | |
| Equity Index Futures Contracts | | Liabilities — Unrealized depreciation on futures contracts* | | FlexShares Global Quality Real Estate Index Fund | | | (150 | ) |
| | | |
| Foreign Currency Contracts | | Assets — Unrealized appreciation on forward foreign currency contracts | | FlexShares Global Quality Real Estate Index Fund | | | 763 | |
| | | |
| Foreign Currency Contracts | | Liabilities — Unrealized depreciation on forward foreign currency contracts | | FlexShares Global Quality Real Estate Index Fund | | | (1,477 | ) |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares Quality Dividend Index Fund | | | 322,592 | |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares Quality Dividend Defensive Index Fund | | | 111,057 | |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares Quality Dividend Dynamic Index Fund | | | 9,379 | |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares International Quality Dividend Index Fund | | | 375,341 | |
| | | |
| Equity Index Futures Contracts | | Liabilities — Unrealized depreciation on futures contracts* | | FlexShares International Quality Dividend Index Fund | | | (24,759 | ) |
| | | |
| Foreign Currency Contracts | | Assets — Unrealized appreciation on forward foreign currency contracts | | FlexShares International Quality Dividend Index Fund | | | 40,078 | |
| | | |
| Foreign Currency Contracts | | Liabilities — Unrealized depreciation on forward foreign currency contracts | | FlexShares International Quality Dividend Index Fund | | | (112,663 | ) |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares International Quality Dividend Defensive Index Fund | | | 25,373 | |
| | | |
| Foreign Currency Contracts | | Liabilities — Unrealized depreciation on forward foreign currency contracts | | FlexShares International Quality Dividend Defensive Index Fund | | | (936 | ) |
| | |
| 404 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | |
| Derivatives by risk type | | Statements of Assets
and Liabilities Location | | Fund | | Value | |
| | | |
| Equity Index Futures Contracts | | Assets — Unrealized appreciation on futures contracts* | | FlexShares International Quality Dividend Dynamic Index Fund | | $ | 13,380 | |
| | | |
| Interest Rate Futures Contracts | | Assets — Unrealized appreciation on futures contracts | | FlexShares Core Select Bond Fund | | | 3,412 | |
| * | Includes cumulative appreciation/depreciation on futures contracts as reported in the Schedule of Investments. Current day’s variation margin is reported within the Statement of Assets and Liabilities for futures contracts. |
| ** | Commencement of operations on July 15, 2019 |
The Effect of Derivative Instruments on the Statements of Operations for the Period Ended October 31, 2019
| | | | | | | | | | | | |
Derivatives by
risk type | | Location of Gain or (Loss) on
Derivatives on the Statements of
Operations | | Fund | | Realized
Gain or
(Loss) on
Derivatives | | | Change in Unrealized
Appreciation or
(Depreciation) on
Derivatives | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares US Quality Low Volatility Index Fund* | | $ | (4,706 | ) | | $ | — | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Developed Marketsex-US Quality Low Volatility Index Fund* | | | (1,249 | ) | | | 2,933 | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Emerging Markets Quality Low Volatility Index Fund* | | | (7,276 | ) | | | — | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Morningstar US Market Factor Tilt Index Fund | | | (1,507,772 | ) | | | 1,376,463 | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | (88,940 | ) | | | 908,875 | |
| | | | |
| Foreign Currency Contracts | | Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts | | FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | (186,801 | ) | | | 216,278 | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 405 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | |
Derivatives by
risk type | | Location of Gain or (Loss) on
Derivatives on the Statements of
Operations | | Fund | | Realized
Gain or
(Loss) on
Derivatives | | | Change in Unrealized
Appreciation or
(Depreciation) on
Derivatives | |
| | | | |
| Equity Index Futures Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | $ | (158,930 | ) | | $ | 177,026 | |
| | | | |
| Foreign Currency Contracts | | Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts | | FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 44,437 | | | | (8,318 | ) |
| | | | |
| Foreign Currency Contracts | | Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts | | FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 183,080 | | | | (100,459 | ) |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 411 | | | | 3,724 | |
| | | | |
| Foreign Currency Contracts | | Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts | | FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 52,664 | | | | (58,310 | ) |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares US Quality Large Cap Index Fund | | | 86,319 | | | | 13,952 | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares STOXX® US ESG Impact Index Fund | | | 2,281 | | | | 36,636 | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares STOXX® Global ESG Impact Index Fund | | | 5,108 | | | | 94,406 | |
| | |
| 406 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | |
Derivatives by
risk type | | Location of Gain or (Loss) on
Derivatives on the Statements of
Operations | | Fund | | Realized
Gain or
(Loss) on
Derivatives | | | Change in Unrealized
Appreciation or
(Depreciation) on
Derivatives | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Morningstar Global Upstream Natural Resources Index Fund | | $ | 3,905,828 | | | $ | 1,835,269 | |
| | | | |
| Foreign Currency Contracts | | Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts | | FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | (753,480 | ) | | | 226,301 | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 627,613 | | | | 549,410 | |
| | | | |
| Foreign Currency Contracts | | Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts | | FlexShares STOXX® Global Broad Infrastructure Index Fund | | | (55,143 | ) | | | 25,842 | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Global Quality Real Estate Index Fund | | | (215,572 | ) | | | 476,157 | |
| | | | |
| Foreign Currency Contracts | | Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts | | FlexShares Global Quality Real Estate Index Fund | | | 3,301 | | | | (12,675 | ) |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Quality Dividend Index Fund | | | 48,190 | | | | 1,204,521 | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Quality Dividend Defensive Index Fund | | | 10,056 | | | | 257,602 | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 407 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | |
Derivatives by
risk type | | Location of Gain or (Loss) on
Derivatives on the Statements of
Operations | | Fund | | Realized
Gain or
(Loss) on
Derivatives | | | Change in Unrealized
Appreciation or
(Depreciation) on
Derivatives | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Quality Dividend Dynamic Index Fund | | $ | 24,573 | | | $ | 39,726 | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares International Quality Dividend Index Fund | | | 950,572 | | | | 676,327 | |
| | | | |
| Foreign Currency Contracts | | Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts | | FlexShares International Quality Dividend Index Fund | | | 190,624 | | | | (55,730 | ) |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares International Quality Dividend Defensive Index Fund | | | 55,699 | | | | 101,383 | |
| | | | |
| Foreign Currency Contracts | | Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts | | FlexShares International Quality Dividend Defensive Index Fund | | | 3,317 | | | | 547 | |
| | | | |
Equity Index Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares International Quality Dividend Dynamic Index Fund | | | 5,165 | | | | 42,894 | |
| | | | |
Interest Rate Futures
Contracts | | Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts | | FlexShares Core Select Bond Fund | | | 35,178 | | | | 3,412 | |
| * | Commencement of operations on July 15, 2019 |
| | |
| 408 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
At October 31, 2019, the volume of derivative activities, which represents activities throughout the period, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Foreign Exchange
Contracts | | | Equity Contracts | | | Interest Rate future | |
| Fund | | Number of
Trades | | | Average
Notional
Amount | | | Number of
Trades
Long | | | Average
Notional
Balance Long | | | Number of
Trades
Short | | | Average
Notional
Balance Short | | | Number of
Trades
Long | | | Average
Notional
Balance Long | | | Number of
Trades
Short | | | Average
Notional
Balance Short | |
| | | | | | | | | | |
| FlexShares US Quality Low Volatility Index Fund* | | | — | | | $ | — | | | | 1 | | | $ | 150,880 | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | |
| | | | | | | | | | |
| FlexShares Developed MarketsEx-US Quality Low Volatility Index Fund* | | | — | | | | — | | | | 2 | | | | 95,552 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Emerging Markets Quality Low Volatility Index Fund* | | | — | | | | — | | | | 2 | | | | 52,837 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | | — | | | | — | | | | 309 | | | | 484,861 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 110 | | | | 524,222 | | | | 277 | | | | 398,131 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 124 | | | | 336,363 | | | | 127 | | | | 358,921 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 338 | | | | 581,739 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 629 | | | | 297,579 | | | | 4 | | | | 50,841 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares US Quality Large Cap Index Fund | | | — | | | | — | | | | 32 | | | | 176,523 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares STOXX® US ESG Impact Index Fund | | | — | | | | — | | | | 29 | | | | 158,286 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares STOXX® Global ESG Impact Index Fund | | | — | | | | — | | | | 90 | | | | 93,351 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 487 | | | | 1,029,101 | | | | 593 | | | | 781,072 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 108 | | | | 326,884 | | | | 320 | | | | 325,330 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Global Quality Real Estate Index Fund | | | 96 | | | | 218,254 | | | | 171 | | | | 246,037 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Quality Dividend Index Fund | | | — | | | | — | | | | 124 | | | | 1,148,532 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Quality Dividend Defensive Index Fund | | | — | | | | — | | | | 104 | | | | 402,866 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Quality Dividend Dynamic Index Fund | | | — | | | | — | | | | 30 | | | | 155,147 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares International Quality Dividend Index Fund | | | 250 | | | | 328,355 | | | | 383 | | | | 324,455 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 409 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Foreign Exchange
Contracts | | | Equity Contracts | | | Interest Rate future | |
| Fund | | Number of
Trades | | | Average
Notional
Amount | | | Number of
Trades
Long | | | Average
Notional
Balance Long | | | Number of
Trades
Short | | | Average
Notional
Balance Short | | | Number of
Trades
Long | | | Average
Notional
Balance Long | | | Number of
Trades
Short | | | Average
Notional
Balance Short | |
| | | | | | | | | | |
| FlexShares International Quality Dividend Defensive Index Fund | | | 32 | | | $ | 32,989 | | | | 109 | | | $ | 134,391 | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | |
| | | | | | | | | | |
| FlexShares International Quality Dividend Dynamic Index Fund | | | — | | | | — | | | | 65 | | | | 86,570 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | |
| FlexShares Core Select Bond Fund | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 10 | | | | 1,395,838 | | | | 3 | | | | 762,750 | |
| * | Commencement of operations on July 15, 2019 |
Taxes and Distributions
Each Fund has qualified and intends to continue to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, which includes distributing substantially all of its net investment income and net capital gains to shareholders. Accordingly, no provision for federal and state income taxes is required in the financial statements.
As of October 31, 2019, management of the Funds has reviewed all open tax years and major jurisdictions and concluded that there is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns. The Funds are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next 12 months. On an ongoing basis management will monitor the tax positions taken to determine if adjustment to conclusions are necessary based on factors including but not limited to further implementation on guidance expected from FASB andon-going analysis of tax law, regulation, and interpretations thereof.
Dividends from net investment income, including any net foreign currency gains, are generally declared and paid by each Fund according to the following schedule:
| | | | | | | | | | | | |
| | | Dividends from Net Investment Income | |
| Fund | | Declared And Paid
Annually | | | Declared And Paid
Monthly | | | Declared And Paid
Quarterly | |
| | | |
| FlexShares US Quality Low Volatility Index Fund* | | | | | | | | | | | x | |
| | | |
| FlexShares Developed Markets ex-US Quality Low Volatility Index Fund* | | | | | | | | | | | x | |
| | | |
| FlexShares Emerging Markets Quality Low Volatility Index Fund* | | | | | | | | | | | x | |
| | | |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | | | | | | | | | x | |
| | |
| 410 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | |
| | | Dividends from Net Investment Income | |
| Fund | | Declared And Paid
Annually | | | Declared And Paid
Monthly | | | Declared And Paid
Quarterly | |
| | | |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares US Quality Large Cap Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares STOXX® US ESG Impact Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares STOXX® Global ESG Impact Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares Global Quality Real Estate Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares Real Assets Allocation Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares Quality Dividend Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares Quality Dividend Defensive Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares Quality Dividend Dynamic Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares International Quality Dividend Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares International Quality Dividend Defensive Index Fund | | | | | | | | | | | x | |
| | | | | | | | | | | | |
| | | Dividends from Net Investment Income | |
| Fund | | Declared And Paid
Annually | | | Declared And Paid
Monthly | | | Declared And Paid
Quarterly | |
| | | |
| FlexShares International Quality Dividend Dynamic Index Fund | | | | | | | | | | | x | |
| | | |
| FlexShares iBoxx3-Year Target Duration TIPS Index Fund | | | | | | | x | | | | | |
| | | |
| FlexShares iBoxx5-Year Target Duration TIPS Index Fund | | | | | | | x | | | | | |
| | | |
| FlexShares Disciplined Duration MBS Index Fund | | | | | | | x | | | | | |
| | | |
| FlexShares Credit-Scored Scored US Corporate Bond Index Fund | | | | | | | x | | | | | |
| | | |
| FlexShares Credit-Scored US Long Corporate Bond Index Fund | | | | | | | x | | | | | |
| | | |
| FlexShares High Yield Value-Scored Bond Index Fund | | | | | | | x | | | | | |
| | | |
| FlexShares Ready Access Variable Income Fund | | | | | | | x | | | | | |
| | | |
| FlexShares Core Select Bond Fund | | | | | | | x | | | | | |
| * | Commencement of investment operations on July 15, 2019. |
Distribution of net realized securities gains, if any, generally are distributed at least annually. The Trust reserves the right to declare special distributions if, in its reasonable discretion, such action is necessary or advisable to improve tracking error, to preserve its status as a regulated investment company or to avoid imposition of income or excise taxes on undistributed income or realized gains. Tracking error is a measurement of how much the return on a portfolio deviates from the return on its benchmark index.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 411 | |
Notes to the Financial Statements (cont.)
Dividends and securities gains distributions are distributed in U.S. dollars and cannot be automatically reinvested in additional shares of the Funds. The amount of distributions from net investment income and net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the composition of net assets based on their federaltax-basis treatment; temporary differences (e.g., wash sales) do not require a reclassification. The Funds may utilize equalization accounting for tax purposes and designate earnings and profits, including net realized gains distributed to shareholders on
redemption of shares, as a part of the dividends paid deduction for income tax purposes.
The Funds’ tax year end is October 31st and the tax character of current year distributions and current components of accumulated earnings (deficit) will be determined at the end of the current tax year.
Temporary differences are generally due to different book and tax treatments for the timing of the recognition of gains and losses on certain investment transactions, mark to market of forward foreign currency contracts, mark to market of futures contracts, mark to market of passive foreign investment companies (PFICs),non-taxable special dividends, wash sale loss deferrals and capital loss carryforward.
Permanent differences, primarily due to gain (loss) onin-kind redemptions, paydown loss reclassification, foreign currency gains and losses, forward foreign currency gains and losses, PFICs gains and losses,non-taxable special dividends, investments in partnerships, taxable over-distributions, foreign capital gains tax reclassification, perpetual bonds and equalization as of October 31, 2019 (the Funds’ tax year end), among the Funds’ components of net assets are as follows:
| | | | | | | | | | | | |
| Fund | | Accumulated
undistributed net
investment income (loss) | | | Accumulated net
realized gain (loss)
on investments | | | Paid in
capital | |
| | | |
| FlexShares Developed Marketsex-US Quality Low Volatility Index Fund* | | $ | 356 | | | $ | (356 | ) | | $ | — | |
| | | |
| FlexShares Emerging Markets Quality Low Volatility Index Fund* | | | (2,697 | ) | | | 2,697 | | | | — | |
| | | |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | | (517,301 | ) | | | (68,329,693 | ) | | | 68,846,994 | |
| | | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 2,723,421 | | | | (22,101,695 | ) | | | 19,378,274 | |
| | | |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 564,792 | | | | (2,732,037 | ) | | | 2,167,245 | |
| | | |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 49,661 | | | | (33,494 | ) | | | (16,167 | ) |
| | | |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 549 | | | | (143 | ) | | | (406 | ) |
| | | |
| FlexShares US Quality Large Cap Index Fund | | | (10,352 | ) | | | (4,139,400 | ) | | | 4,149,752 | |
| | | |
| FlexShares STOXX® US ESG Impact Index Fund | | | 2,053 | | | | (945,264 | ) | | | 943,211 | |
| | | |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 10,542 | | | | (1,797,702 | ) | | | 1,787,160 | |
| | | |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | (126,958 | ) | | | (48,775,613 | ) | | | 48,902,571 | |
| | | |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | (171,639 | ) | | | 165,504 | | | | 6,135 | |
| | | |
| FlexShares Global Quality Real Estate Index Fund | | | 1,500,936 | | | | (1,500,936 | ) | | | — | |
| | | |
| FlexShares Real Assets Allocation Index Fund | | | 1,694 | | | | (372,165 | ) | | | 370,471 | |
| | | |
| FlexShares Quality Dividend Index Fund | | | 224,688 | | | | (53,252,114 | ) | | | 53,027,426 | |
| | | |
| FlexShares Quality Dividend Defensive Index Fund | | | 54,729 | | | | (54,613 | ) | | | (116 | ) |
| | | |
| FlexShares Quality Dividend Dynamic Index Fund | | | (2,686 | ) | | | (2,766,372 | ) | | | 2,769,058 | |
| | |
| 412 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | |
| Fund | | Accumulated
undistributed net
investment income (loss) | | | Accumulated net
realized gain (loss)
on investments | | | Paid in
capital | |
| | | |
| FlexShares International Quality Dividend Index Fund | | $ | (679,815 | ) | | $ | (2,161,663 | ) | | $ | 2,841,478 | |
| | | |
| FlexShares International Quality Dividend Defensive Index Fund | | | (33,773 | ) | | | (1,015,608 | ) | | | 1,049,381 | |
| | | |
| FlexShares International Quality Dividend Dynamic Index Fund | | | (15,407 | ) | | | 1,727,311 | | | | (1,711,904 | ) |
| | | |
| FlexShares iBoxx3-Year Target Duration TIPS Index Fund | | | — | | | | 4,152,040 | | | | (4,152,040 | ) |
| | | |
| FlexShares iBoxx5-Year Target Duration TIPS Index Fund | | | — | | | | 6,136,682 | | | | (6,136,682 | ) |
| | | |
| FlexShares Disciplined Duration MBS Index Fund | | | 466,717 | | | | (466,717 | ) | | | — | |
| | | |
| FlexShares Credit-Scored US Long Corporate Bond Index Fund | | | — | | | | (406,126 | ) | | | 406,126 | |
| | | |
| FlexShares High Yield Value-Scored Bond Index Fund | | | 247,361 | | | | 155,477 | | | | (402,838 | ) |
| | | |
| FlexShares Ready Access Variable Income Fund | | | — | | | | 54,651 | | | | (54,651 | ) |
| | | |
| FlexShares Core Select Bond Fund | | | 4,913 | | | | (811,981 | ) | | | 807,068 | |
| * | Commencement of operations on July 15, 2019 |
As of October 31, 2019, the tax character of distributions paid for the tax year ended October 31, 2019, and October 31, 2018, were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended October 31, 2019 | | | Year Ended October 31, 2018 | |
| Fund | | Distributions
paid from
ordinary
income | | | Distributions
paid from net
long term
capital gains | | | Tax Return
of Capital | | | Total
Distributions | | | Distributions
paid from
ordinary
income | | | Distributions
paid from net
long term
capital gains | | | Tax Return
of Capital | | | Total
Distributions | |
| FlexShares US Quality Low Volatility Index Fund* | | $ | 12,079 | | | $ | — | | | $ | — | | | $ | 12,079 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| FlexShares Developed Marketsex-US Quality Low Volatility Index Fund* | | | 17,800 | | | | — | | | | — | | | | 17,800 | | | | — | | | | — | | | | — | | | | — | |
| FlexShares Emerging Markets Quality Low Volatility Index Fund* | | | 21,259 | | | | — | | | | — | | | | 21,259 | | | | — | | | | — | | | | — | | | | — | |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | | 23,379,823 | | | | — | | | | — | | | | 23,379,823 | | | | 21,895,299 | | | | — | | | | — | | | | 21,895,299 | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 29,033,991 | | | | — | | | | — | | | | 29,033,991 | | | | 33,761,589 | | | | — | | | | — | | | | 33,761,589 | |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 13,630,561 | | | | — | | | | — | | | | 13,630,561 | | | | 17,566,133 | | | | — | | | | — | | | | 17,566,133 | |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 247,071 | | | | — | | | | — | | | | 247,071 | | | | 413,050 | | | | — | | | | 152,741 | | | | 565,791 | |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 152,761 | | | | — | | | | — | | | | 152,761 | | | | 616,733 | | | | — | | | | 32,884 | | | | 649,617 | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 413 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended October 31, 2019 | | | Year Ended October 31, 2018 | |
| Fund | | Distributions
paid from
ordinary
income | | | Distributions
paid from net
long term
capital gains | | | Tax Return
of Capital | | | Total
Distributions | | | Distributions
paid from
ordinary
income | | | Distributions
paid from net
long term
capital gains | | | Tax Return
of Capital | | | Total
Distributions | |
| FlexShares US Quality Large Cap Index Fund | | $ | 1,241,265 | | | $ | — | | | $ | — | | | $ | 1,241,265 | | | $ | 695,332 | | | $ | — | | | $ | — | | | $ | 695,332 | |
| FlexShares STOXX® US ESG Impact Index Fund | | | 688,327 | | | | — | | | | — | | | | 688,327 | | | | 364,337 | | | | 23,150 | | | | — | | | | 387,487 | |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 1,626,069 | | | | — | | | | — | | | | 1,626,069 | | | | 1,253,536 | | | | — | | | | — | | | | 1,253,536 | |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 190,017,355 | | | | — | | | | — | | | | 190,017,355 | | | | 142,689,396 | | | | — | | | | — | | | | 142,689,396 | |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 26,640,580 | | | | — | | | | — | | | | 26,640,580 | | | | 25,040,675 | | | | — | | | | — | | | | 25,040,675 | |
| FlexShares Global Quality Real Estate Index Fund | | | 9,305,846 | | | | — | | | | — | | | | 9,305,846 | | | | 8,103,123 | | | | — | | | | — | | | | 8,103,123 | |
| FlexShares Real Assets Allocation Index Fund | | | 306,154 | | | | — | | | | — | | | | 306,154 | | | | 331,490 | | | | — | | | | — | | | | 331,490 | |
| FlexShares Quality Dividend Index Fund | | | 45,971,017 | | | | 23,559,180 | | | | — | | | | 69,530,197 | | | | 50,127,940 | | | | 9,015,863 | | | | — | | | | 59,143,803 | |
| FlexShares Quality Dividend Defensive Index Fund | | | 9,711,281 | | | | 12,581,459 | | | | — | | | | 22,292,740 | | | | 8,856,044 | | | | 270,126 | | | | — | | | | 9,126,170 | |
| FlexShares Quality Dividend Dynamic Index Fund | | | 1,341,578 | | | | — | | | | — | | | | 1,341,578 | | | | 1,451,340 | | | | — | | | | — | | | | 1,451,340 | |
| FlexShares International Quality Dividend Index Fund | | | 38,665,442 | | | | — | | | | — | | | | 38,665,442 | | | | 48,549,571 | | | | — | | | | — | | | | 48,549,571 | |
| FlexShares International Quality Dividend Defensive Index Fund | | | 4,343,474 | | | | — | | | | — | | | | 4,343,474 | | | | 5,084,444 | | | | — | | | | — | | | | 5,084,444 | |
| FlexShares International Quality Dividend Dynamic Index Fund | | | 2,113,234 | | | | — | | | | — | | | | 2,113,234 | | | | 3,934,883 | | | | — | | | | — | | | | 3,934,883 | |
| FlexShares iBoxx3-Year Target Duration TIPS Index Fund | | | 25,965,622 | | | | — | | | | — | | | | 25,965,622 | | | | 58,646,589 | | | | — | | | | — | | | | 58,646,589 | |
| FlexShares iBoxx5-Year Target Duration TIPS Index Fund | | | 11,908,603 | | | | — | | | | — | | | | 11,908,603 | | | | 27,570,542 | | | | — | | | | — | | | | 27,570,542 | |
| FlexShares Disciplined Duration MBS Index Fund | | | 1,969,840 | | | | — | | | | — | | | | 1,969,840 | | | | 1,511,413 | | | | — | | | | — | | | | 1,511,413 | |
| FlexShares Credit-Scored US Corporate Bond Index Fund | | | 2,860,050 | | | | — | | | | — | | | | 2,860,050 | | | | 1,546,217 | | | | — | | | | — | | | | 1,546,217 | |
| FlexShares Credit-Scored US Long Corporate Bond Index Fund | | | 997,024 | | | | — | | | | — | | | | 997,024 | | | | 940,216 | | | | — | | | | — | | | | 940,216 | |
| | |
| 414 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended October 31, 2019 | | | Year Ended October 31, 2018 | |
| Fund | | Distributions
paid from
ordinary
income | | | Distributions
paid from net
long term
capital gains | | | Tax Return
of Capital | | | Total
Distributions | | | Distributions
paid from
ordinary
income | | | Distributions
paid from net
long term
capital gains | | | Tax Return
of Capital | | | Total
Distributions | |
| FlexShares High Yield Value-Scored Bond Index Fund** | | $ | 3,203,781 | | | $ | — | | | $ | 826,269 | | | $ | 4,030,050 | | | $ | 1,244,147 | | | $ | — | | | $ | — | | | $ | 1,244,147 | |
| FlexShares Ready Access Variable Income Fund | | | 6,728,529 | | | | — | | | | — | | | | 6,728,529 | | | | 3,138,154 | | | | — | | | | — | | | | 3,138,154 | |
| FlexShares Core Select Bond Fund | | | 998,241 | | | | — | | | | — | | | | 998,241 | | | | 583,175 | | | | — | | | | — | | | | 583,175 | |
| * | Commencement of operations on July 15, 2019 |
| ** | Commencement of operations on July 17, 2018 |
As of October 31, 2019, the components of accumulated earnings (deficit) on a tax basis were as follows:
| | | | | | | | | | | | | | | | |
| Fund | | Undistributed
Ordinary
Income | | | Undistributed
Long-Term
Capital Gains | | | Accumulated
Capital and
Other Losses | | | Unrealized
Appreciated/
(Depreciated) | |
| | | | |
| FlexShares US Quality Low Volatility Index Fund* | | $ | 9,839 | | | $ | — | | | $ | (528 | ) | | $ | 52,851 | |
| | | | |
| FlexShares Developed Markets ex-US Quality Low Volatility Index Fund* | | | 25,442 | | | | — | | | | (11,869 | ) | | | 106,264 | |
| | | | |
| FlexShares Emerging Markets Quality Low Volatility Index Fund* | | | 29,207 | | | | — | | | | (36,254 | ) | | | (10,949 | ) |
| | | | |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | | 2,518,493 | | | | — | | | | (55,852,424 | ) | | | 460,692,311 | |
| | | | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 9,298,087 | | | | — | | | | (94,452,821 | ) | | | 83,880,022 | |
| | | | |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 2,414,251 | | | | — | | | | (65,379,736 | ) | | | 33,855,020 | |
| | | | |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 48,887 | | | | — | | | | (885,552 | ) | | | (339,030 | ) |
| | | | |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | — | | | | — | | | | (1,746,765 | ) | | | (531,043 | ) |
| | | | |
| FlexShares US Quality Large Cap Index Fund | | | 62,355 | | | | — | | | | (2,997,787 | ) | | | 2,883,677 | |
| | | | |
| FlexShares STOXX® US ESG Impact Index Fund | | | 111,322 | | | | — | | | | (539,616 | ) | | | 7,015,867 | |
| | | | |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 198,417 | | | | — | | | | (3,708,524 | ) | | | 10,404,890 | |
| | | | |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 10,399,179 | | | | — | | | | (780,816,682 | ) | | | 462,411,397 | |
| | | | |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 3,723,630 | | | | — | | | | (48,131,079 | ) | | | 186,331,725 | |
| | | | |
| FlexShares Global Quality Real Estate Index Fund | | | 7,833,532 | | | | — | | | | (8,782,915 | ) | | | 52,521,413 | |
| | | | |
| FlexShares Real Assets Allocation Index Fund | | | — | | | | — | | | | (6,375 | ) | | | 660,878 | |
| | | | |
| FlexShares Quality Dividend Index Fund | | | 5,235,399 | | | | 9,070,567 | | | | — | | | | 305,391,212 | |
| | | | |
| FlexShares Quality Dividend Defensive Index Fund | | | 1,336,157 | | | | 3,670,468 | | | | — | | | | 74,564,240 | |
| | | | |
| FlexShares Quality Dividend Dynamic Index Fund | | | 174,493 | | | | — | | | | (396,194 | ) | | | 7,344,332 | |
| | | | |
| FlexShares International Quality Dividend Index Fund | | | 1,661,993 | | | | — | | | | (138,208,852 | ) | | | 22,212,471 | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 415 | |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | | | | | |
| Fund | | Undistributed
Ordinary
Income | | | Undistributed
Long-Term
Capital Gains | | | Accumulated
Capital and
Other Losses | | | Unrealized
Appreciated/
(Depreciated) | |
| | | | |
| FlexShares International Quality Dividend Defensive Index Fund | | $ | 232,110 | | | $ | — | | | $ | (21,937,617 | ) | | $ | 1,990,805 | |
| | | | |
| FlexShares International Quality Dividend Dynamic Index Fund | | | 91,564 | | | | — | | | | (13,665,300 | ) | | | 2,302,783 | |
| | | | |
| FlexShares iBoxx3-Year Target Duration TIPS Index Fund | | | 176,715 | | | | — | | | | (64,406,875 | ) | | | 11,222,917 | |
| | | | |
| FlexShares iBoxx5-Year Target Duration TIPS Index Fund | | | 95,049 | | | | — | | | | (14,763,990 | ) | | | 11,492,832 | |
| | | | |
| FlexShares Disciplined Duration MBS Index Fund | | | 109,066 | | | | — | | | | (2,752,274 | ) | | | 570,857 | |
| | | | |
| FlexShares Credit-Scored US Corporate Bond Index Fund | | | 747,448 | | | | — | | | | — | | | | 4,345,098 | |
| | | | |
| FlexShares Credit-Scored US Long Corporate Bond Index Fund | | | 53,019 | | | | — | | | | (186,958 | ) | | | 1,698,387 | |
| | | | |
| FlexShares High Yield Value-Scored Bond Index Fund | | | — | | | | — | | | | (556,568 | ) | | | (578,110 | ) |
| | | | |
| FlexShares Ready Access Variable Income Fund | | | 569,305 | | | | — | | | | — | | | | 1,129,295 | |
| | | | |
| FlexShares Core Select Bond Fund | | | — | | | | — | | | | (372,766 | ) | | | 1,021,078 | |
| * | Commencement of operations on July 15, 2019 |
Capital loss carry forwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous law and may be carried forward indefinitely to offset future gains.
For the tax year ended October 31, 2019, the following Funds had available post-enactment capital loss carryforwards to offset future net capital gains to the extent provided by regulations:
| | | | | | | | | | | | |
| Fund | | Short-Term | | | Long-Term | | | Total | |
| | | |
| FlexShares US Quality Low Volatility Index Fund* | | $ | — | | | $ | 528 | | | $ | 528 | |
| | | |
| FlexShares Developed Markets ex-US Quality Low Volatility Index Fund* | | | 11,869 | | | | — | | | | 11,869 | |
| | | |
| FlexShares Emerging Markets Quality Low Volatility Index Fund* | | | 31,889 | | | | 4,365 | | | | 36,254 | |
| | | |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | | 51,205,957 | | | | 4,646,467 | | | | 55,852,424 | |
| | | | | | | | | | | | |
| Fund | | Short-Term | | | Long-Term | | | Total | |
| | | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | $ | 31,294,693 | | | $ | 63,158,128 | | | $ | 94,452,821 | |
| | | |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 19,594,578 | | | | 45,785,158 | | | | 65,379,736 | |
| | | |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 304,322 | | | | 581,230 | | | | 885,552 | |
| | | |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 682,428 | | | | 1,064,337 | | | | 1,746,765 | |
| | | |
| FlexShares US Quality Large Cap Index Fund | | | 2,997,787 | | | | — | | | | 2,997,787 | |
| | |
| 416 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | | | | | |
| Fund | | Short-Term | | | Long-Term | | | Total | |
| | | |
| FlexShares STOXX® US ESG Impact Index Fund | | $ | 539,616 | | | $ | — | | | $ | 539,616 | |
| | | |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 3,433,321 | | | | 275,203 | | | | 3,708,524 | |
| | | |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 176,771,048 | | | | 604,045,634 | | | | 780,816,682 | |
| | | |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 12,485,381 | | | | 35,645,698 | | | | 48,131,079 | |
| | | |
| FlexShares Global Quality Real Estate Index Fund | | | 8,782,915 | | | | — | | | | 8,782,915 | |
| | | |
| FlexShares Real Assets Allocation Index Fund | | | 6,375 | | | | — | | | | 6,375 | |
| | | |
| FlexShares Quality Dividend Dynamic Index Fund | | | 396,194 | | | | — | | | | 396,194 | |
| | | |
| FlexShares International Quality Dividend Index Fund | | | 95,179,226 | | | | 43,029,626 | | | | 138,208,852 | |
| | | |
| FlexShares International Quality Dividend Defensive Index Fund | | | 14,023,273 | | | | 7,914,344 | | | | 21,937,617 | |
| | | | | | | | | | | | |
| Fund | | Short-Term | | | Long-Term | | | Total | |
| | | |
| FlexShares International Quality Dividend Dynamic Index Fund | | $ | 8,974,764 | | | $ | 4,690,536 | | | $ | 13,665,300 | |
| | | |
| FlexShares iBoxx3-Year Target Duration TIPS Index Fund | | | 52,920,922 | | | | 11,485,953 | | | | 64,406,875 | |
| | | |
| FlexShares iBoxx5-Year Target Duration TIPS Index Fund | | | 10,224,772 | | | | 4,539,218 | | | | 14,763,990 | |
| | | |
| FlexShares Disciplined Duration MBS Index Fund | | | 1,222,998 | | | | 1,529,276 | | | | 2,752,274 | |
| | | |
| FlexShares Credit-Scored US Long Corporate Bond Index Fund | | | 186,958 | | | | — | | | | 186,958 | |
| | | |
| FlexShares High Yield Value-Scored Bond Index Fund | | | 238,697 | | | | 317,871 | | | | 556,568 | |
| | | |
| FlexShares Core Select Bond Fund | | | 95,771 | | | | 276,995 | | | | 372,766 | |
| * | Commencement of operations on July 15, 2019 |
During the year ended October 31, 2019, the following Funds utilized capital loss carryforwards to offset net capital gains:
| | | | |
| Fund | | Capital Loss
Utilized | |
| |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | $ | 64,089 | |
| |
| FlexShares iBoxx5-Year Target Duration TIPS Index Fund | | | 288,010 | |
| |
| FlexShares Disciplined Duration MBS Index Fund | | | 6,572 | |
| |
| FlexShares Credit-Scored US Corporate Bond Index Fund | | | 732,758 | |
| |
| FlexShares Credit-Scored US Long Corporate Bond Index Fund | | | 462,451 | |
| |
| FlexShares Ready Access Variable Income Fund | | | 6,697 | |
| |
| FlexShares Core Select Bond Fund | | | 9,444 | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 417 | |
Notes to the Financial Statements (cont.)
The FlexShares US Quality Low Volatility Index Fund, FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, FlexShares Emerging Markets Quality Low Volatility Index Fund, FlexShares Morningstar US Market Factor Tilt Index Fund, FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares US Quality Large Cap Index Fund, FlexShares STOXX® Global ESG Impact Index Fund, FlexShares Morningstar Global Upstream Natural Resources Index Fund, FlexShares STOXX® Global Broad Infrastructure Index Fund, FlexShares Global Quality Real Estate Index Fund, FlexShares Quality Dividend Defensive Index Fund, FlexShares Quality Dividend Dynamic Index Fund, FlexShares International Quality Dividend Index Fund, FlexShares International Quality Dividend Defensive Index Fund, and the FlexShares International Quality Dividend Dynamic Index Fund may be subject to foreign withholding taxes with respect to dividends or interest received from sources in foreign countries. If, at the close of the taxable year, more than 50% in value of a Fund’s assets consists of stock or securities in foreign corporations the Fund will be eligible to make an election to treat a proportionate amount of those taxes as constituting a distribution to each shareholder, which would allow all shareholders to either (1) credit that proportionate amount of taxes against U.S. Federal income tax liability as a foreign tax credit or (2) take that amount as an itemized deduction. If a Fund is not eligible to make this election or is eligible but does not make the election, it will be entitled to deduct such taxes in computing the amounts it is required to distribute.
3. Investment Transactions and Related Income and Expense
Throughout the reporting period, investment transactions are accounted for no later than one business day following the trade date. For financial reporting purposes, investment transactions are accounted for on the trade date on the last business day of the reporting period.
Interest income is recognized on an accrual basis. Bond discount is accreted and premium is amortized using the effective yield method. Dividend income is recorded on theex-dividend date, or as soon as information is available.
Gains or losses realized on sales of securities are determined using the specific identification method by comparing the identified cost of the security lot sold with the net sales proceeds.
Each Fund except the FlexShares iBoxx3-Year Target Duration TIPs Index Fund, FlexShares iBoxx5-Year Target Duration TIPs Index Fund and the FlexShares High Yield Value-Scored Bond Index Fund may hold the securities of real estate investment trusts (“REITs”). Distributions from such investments may be comprised of return of capital, capital gains and income. The actual character of amounts received during the year is not known until after the REIT’s fiscal year end. The Fund records the character of distributions received from REITs during the year based on estimates available. The characterization of distributions received by the Fund may be subsequently revised based on information received from the REITs after their tax reporting periods concluded.
All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which a Fund invests. These foreign taxes, if any, are paid by the Funds and disclosed in the Statements of Operations. Foreign taxes payable, if any, are reflected in the Funds’ Statements of Assets and Liabilities.
Expenses directly attributable to a Fund are charged to that Fund, while expenses which are attributable to more than one Fund are allocated among the respective Funds based upon relative net assets or another reasonable basis.
4. Investment Advisory Fees
NTI serves as the Investment Adviser of the Funds pursuant to the Investment Advisory Agreement. The Investment Adviser is responsible for making investment decisions for the Funds and for placing purchase and sale orders for portfolio securities, subject to the general supervision of the Board.
As compensation for its advisory services and assumption of certain Fund expenses, NTI is entitled to a unitary management fee (“Management Fee”), computed daily and payable monthly, at the annual rates set forth in the table below (expressed as a percentage of each Fund’s respective average daily net assets).
| | |
| 418 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
From the Management Fee, NTI pays most of the expenses of the Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other services (“Covered Expenses”). Covered Expenses do not include the following fees under the Investment Advisory Agreement: interest expenses, brokerage commissions and other trading expenses, fees and expenses of the independent trustees and their independent legal counsel, taxes and other extraordinary costs such as litigation and other expenses not incurred in the ordinary course of business.
The Management Fee rate payable by each Fund is set forth in the following table:
| | | | |
| Fund | | Unitary
Management Fee | |
| |
| FlexShares US Quality Low Volatility Index Fund* | | | 0.22 | % |
| |
| FlexShares Developed Marketsex-US Quality Low Volatility Index Fund* | | | 0.32 | % |
| |
| FlexShares Emerging Markets Quality Low Volatility Index Fund* | | | 0.40 | % |
| |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | | 0.25 | % |
| |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 0.39 | % |
| |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 0.59 | % |
| |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 0.44 | % |
| |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 0.64 | % |
| |
| FlexShares US Quality Large Cap Index Fund | | | 0.32 | % |
| |
FlexShares STOXX® US ESG Impact Index Fund | | | 0.32 | % |
| |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 0.42 | % |
| |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 0.46 | % |
| |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 0.47 | % |
| | | | |
| Fund | | Unitary
Management Fee | |
| |
| FlexShares Global Quality Real Estate Index Fund | | | 0.45 | % |
| |
| FlexShares Real Assets Allocation Index Fund | | | 0.57 | % |
| |
| FlexShares Quality Dividend Index Fund | | | 0.37 | % |
| |
| FlexShares Quality Dividend Defensive Index Fund | | | 0.37 | % |
| |
| FlexShares Quality Dividend Dynamic Index Fund | | | 0.37 | % |
| |
| FlexShares International Quality Dividend Index Fund | | | 0.47 | % |
| |
| FlexShares International Quality Dividend Defensive Index Fund | | | 0.47 | % |
| |
| FlexShares International Quality Dividend Dynamic Index Fund | | | 0.47 | % |
| |
| FlexShares iBoxx3-Year Target Duration TIPS Index Fund | | | 0.18 | % |
| |
| FlexShares iBoxx5-Year Target Duration TIPS Index Fund | | | 0.18 | % |
| |
| FlexShares Disciplined Duration MBS Index Fund | | | 0.20 | % |
| |
| FlexShares Credit-Scored US Corporate Bond Index Fund | | | 0.22 | % |
| |
| FlexShares Credit-Scored US Long Corporate Bond Index Fund | | | 0.22 | % |
| |
| FlexShares High Yield Value-Scored Bond Index Fund | | | 0.37 | % |
| |
| FlexShares Ready Access Variable Income Fund | | | 0.25 | % |
| |
| FlexShares Core Select Bond Fund | | | 0.35 | % |
| * | Commencement of operations on July 15, 2019 |
The Investment Adviser has contractually agreed until March 1, 2020, in the case of the FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund and FlexShares Real Assets Allocation Index Fund, to waive Management Fees or reimburse certain expenses in an amount equal to the acquired fund fees and expenses (“AFFE”) attributable to each Fund’s investments
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 419 | |
Notes to the Financial Statements (cont.)
in their respective Underlying Fund(s). In the case of the FlexShares Core Select Bond Fund, the Investment Adviser has contractually agreed to waive Management Fees or reimburse certain expenses in an amount equal to the sum of (a) any AFFE incurred by the Fund that are attributable to the Fund’s investment in Underlying Funds managed by NTI or an investment adviser controlling, controlled by, or under common control with NTI (“Affiliated Funds”); and (b) 0.05% or such lesser amount in AFFE incurred by the Fund that are attributable to the Fund’s investment in Underlying Funds that are not Affiliated Funds, until March 1, 2020. These expenses and the reimbursements are shown as Investment advisory fees reimbursed on the Statements of Operations. After these dates, the Investment Adviser and a Fund may mutually agree to extend the contractual arrangements. The Board may terminate the contractual arrangements at any time if it determines that it is in the best interest of a Fund and its shareholders. AFFE are expenses incurred indirectly by the Fund through its ownership of shares in other investment companies. Because AFFE are not direct expenses of the Fund, they are not reflected on the Fund’s financial statements.
In addition, effective October 29, 2018, NTI contractually agreed to reimburse the Funds for certain other fees and expenses that are not Covered Expenses. These fees and expenses and the reimbursements are shown as Other expenses and Other expenses reimbursed, respectively, in the Statements of Operations.
The Investment Adviser may voluntarily waive or reimburse additional management fees. Amounts waived or reimbursed by the Investment Adviser may not be recouped by the Investment Adviser. These waivers and/or reimbursements are shown as Expenses waived and/or reimbursed by Advisor on the Statements of Operations.
5. Administration Fees
JPMorgan Chase Bank, N.A. (“the Administrator”) serves as administrator of the Funds. The Administrator provides certain administrative services to the Funds. For these services, the Administrator is entitled to certain fees and reasonableout-of-pocket expenses. These fees and expenses are Covered Expenses as defined above.
6. Custodian Fees
JPMorgan Chase Bank, N.A. (the “Custodian”) acts as custodian for the Funds in accordance with a Global Custody Agreement. The Custodian holds cash, securities and other assets of the Funds as required by the 1940 Act. As compensation for the services rendered under the agreement, the Custodian is entitled to fees and reasonableout-of-pocket expenses. These fees and expenses are Covered Expenses as defined above.
7. Trustees Fees
The Trust compensates each Trustee who is not an officer, director or employee of Northern Trust Corporation, or its subsidiaries, for his or her services as a Trustee of the Trust and as a member of Board committees.
From November 1, 2018 until March 1, 2019, NTI contractually agreed with each Fund, except the FlexShares High Yield Value-Scored Bond Index Fund and the New Funds, to reimburse the fees and expenses of the Trust’s independent trustees and their independent legal counsel paid by each Fund. As of March 1, 2019, or, with respect to the New Funds, June 14, 2019, NTI has contractually agreed to reimburse each Fund its proportionate share of the expenses relating to the administration of the deferred compensation plan (“DC Plan”) for the Trust’s independent trustees allocated to such Fund until at least March 1, 2020 or, with respect to the New Funds, June 25, 2020. After these dates, NTI and each Fund may mutually agree to extend the contractual arrangement. The Board may terminate the contractual arrangement at any time if it determines that it is in the best interest of the Fund and its shareholders.
The Trust has adopted a DC Plan for its Trustees who are not officers of Northern Trust or NTI. Under the DC Plan, Independent Trustees may elect to defer all or a portion of their compensation. The amount deferred is adjusted periodically based upon the performance of the investment options selected by the Trustees. The investment options currently under the DC Plan are the FlexShares Morningstar US Market Factor Tilt Index Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares Morningstar Global Upstream Natural Resources Index Fund, FlexShares Global Quality Real Estate Index Fund, FlexShares
| | |
| 420 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
Quality Dividend Index Fund, FlexShares iBoxx5-Year Target Duration TIPS Index Fund, and the FlexShares Ready Access Variable Income Fund. Expenses related to the DC Plan are stated on the Statements of Operations.
8. Distribution and Service Plan
Foreside Fund Services, LLC (the “Distributor”) serves as the Funds’ distributor and distributes Creation Units (as defined in Note 9) for each Fund on an agency basis. The Distributor does not receive a fee from the Funds for its distribution services. However, it receives compensation from NTI for its services as distributor pursuant to a separate letter agreement between it and NTI.
The Trust has adopted a Distribution and Service Plan (“the Plan”) pursuant to Rule12b-1 under the 1940 Act. Payments to financial intermediaries under the Plan are tied directly to their ownout-of-pocket expenses. The Plan has not been implemented with respect to the Funds. The Plan may not be implemented without further Board approval. The maximum distribution fee is 0.25% of each Fund’s respective average daily net assets under the Plan. The Funds did not pay any12b-1 fees during the fiscal year.
9. Issuance and Redemption of Fund Shares
Each Fund issues and redeems shares only to Authorized Participants (typically market makers, large investors and institutions) in exchange for the deposit or delivery of a basket of assets (securities and/or cash), in large blocks known as Creation Units, each of which is comprised of a specified number of shares.
Retail investors may only purchase and sell fund shares on a national securities exchange through a broker-dealer and such transactions may be subject to customary commission rates imposed by the broker-dealer.
Authorized Participants may pay transaction fees to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units. The transaction fees are paid directly to the Fund and used to offset Fund custody fees. Certain fees or costs associated with Creation Unit purchases may be paid by NTI in certain circumstances. The net custody fees charged to the Fund are paid for by the
Advisor through the Fund’s Unitary Fee. Transaction fees remaining in the Funds were as follows:
| | | | | | | | |
| Fund | | As of
October 31,
2019 | | | As of
October 31,
2018 | |
| | |
| FlexShares US Quality Low Volatility Index Fund* | | $ | 350 | | | $ | — | |
| | |
| FlexShares Developed Marketsex-US Quality Low Volatility Index Fund* | | | — | | | | — | |
| | |
| FlexShares Emerging Markets Quality Low Volatility Index Fund* | | | — | | | | — | |
| | |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | | 7,500 | | | | 12,000 | |
| | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 40,000 | | | | 20,000 | |
| | |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 150,000 | | | | 150,000 | |
| | |
| FlexShares US Quality Large Cap Index Fund | | | 2,500 | | | | 2,500 | |
| | |
| FlexShares STOXX® US ESG Impact Index Fund | | | 1,750 | | | | 700 | |
| | |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 7,500 | | | | — | |
| | |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 19,500 | | | | 9,000 | |
| | |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 24,000 | | | | 14,000 | |
| | |
| FlexShares Global Quality Real Estate Index Fund | | | 6,000 | | | | 2,000 | |
| | |
| FlexShares Quality Dividend Index Fund | | | 8,250 | | | | 9,750 | |
| | |
| FlexShares Quality Dividend Defensive Index Fund | | | 9,750 | | | | 3,000 | |
| | |
| FlexShares Quality Dividend Dynamic Index Fund | | | 1,500 | | | | 750 | |
| | |
| FlexShares International Quality Dividend Index Fund | | | 30,000 | | | | 60,000 | |
| | |
| FlexShares International Quality Dividend Defensive Index Fund | | | 10,000 | | | | — | |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 421 | |
Notes to the Financial Statements (cont.)
| | | | | | | | |
| Fund | | As of
October 31,
2019 | | | As of
October 31,
2018 | |
| | |
| FlexShares International Quality Dividend Dynamic Index Fund | | $ | 5,000 | | | $ | 5,000 | |
| | |
| FlexShares Disciplined Duration MBS Index Fund | | | 800 | | | | 1,200 | |
| | |
| FlexShares Credit-Scored US Corporate Bond Index Fund | | | 500 | | | | 500 | |
| | |
| FlexShares Credit-Scored US Long Corporate Bond Index Fund | | | 500 | | | | — | |
| | |
| FlexShares High Yield Value-Scored Bond Index Fund | | | 3,000 | | | | — | |
| | |
| FlexShares Ready Access Variable Income Fund | | | 1,225 | | | | 2,100 | |
| * | Commencement of operations on July 15, 2019 |
The FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, FlexShares Real Assets Allocation Index Fund, FlexShares iBoxx3-Year Target Duration TIPS Index Fund, FlexShares iBoxx5-Year Target Duration TIPS Index Fund and the FlexShares Core Select Bond Fund do not charge creation unit transaction fees.
10. Investment Transactions
For the period ended October 31, 2019, the FlexShares iBoxx3-Year Target Duration TIPS Index, FlexShares iBoxx5-Year Target Duration TIPS Index and FlexShares Disciplined Duration MBS Index Funds invested solely in U.S. Government securities. The cost of securities purchased by each Fund and proceeds from sales of securities, excluding short-term securities, derivatives andin-kind transactions for the period ended October 31, 2019, were as follows:
| | | | | | | | |
| Fund | | Purchases | | | Sales | |
| | |
| FlexShares US Quality Low Volatility Index Fund* | | $ | 576,041 | | | $ | 431,243 | |
| | |
| FlexShares Developed Marketsex-US Quality Low Volatility Index Fund* | | | 920,210 | | | | 701,672 | |
| | |
| FlexShares Emerging Markets Quality Low Volatility Index Fund* | | | 4,358,105 | | | | 595,767 | |
| | | | | | | | |
| Fund | | Purchases | | | Sales | |
| | |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | $ | 389,226,903 | | | $ | 385,981,168 | |
| | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 238,623,140 | | | | 245,662,501 | |
| | |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 224,385,802 | | | | 297,976,843 | |
| | |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 597,438 | | | | 360,559 | |
| | |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 323,962 | | | | 278,738 | |
| | |
| FlexShares US Quality Large Cap Index Fund | | | 42,250,143 | | | | 42,497,092 | |
| | |
| FlexShares STOXX® US ESG Impact Index Fund | | | 32,589,241 | | | | 31,843,141 | |
| | |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 51,227,216 | | | | 50,627,059 | |
| | |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 1,304,532,542 | | | | 1,279,525,623 | |
| | |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 164,841,420 | | | | 123,818,590 | |
| | |
| FlexShares Global Quality Real Estate Index Fund | | | 180,988,542 | | | | 168,801,474 | |
| | |
| FlexShares Real Assets Allocation Index Fund | | | 428,825 | | | | 429,840 | |
| | |
| FlexShares Quality Dividend Index Fund | | | 1,600,467,697 | | | | 1,624,888,729 | |
| | |
| FlexShares Quality Dividend Defensive Index Fund | | | 335,016,674 | | | | 348,926,214 | |
| | |
| FlexShares Quality Dividend Dynamic Index Fund | | | 38,563,089 | | | | 38,508,898 | |
| | |
| 422 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
| | | | | | | | |
| Fund | | Purchases | | | Sales | |
| | |
| FlexShares International Quality Dividend Index Fund | | $ | 538,917,495 | | | $ | 546,213,689 | |
| | |
| FlexShares International Quality Dividend Defensive Index Fund | | | 53,413,188 | | | | 55,945,493 | |
| | |
| FlexShares International Quality Dividend Dynamic Index Fund | | | 39,696,886 | | | | 44,496,881 | |
| | |
| FlexShares iBoxx3-Year Target Duration TIPS Index Fund | | | 686,385,092 | | | | 708,501,065 | |
| | |
| FlexShares iBoxx5-Year Target Duration TIPS Index Fund | | | 262,584,886 | | | | 270,107,880 | |
| | |
| FlexShares Disciplined Duration MBS Index Fund | | | 32,128,853 | | | | 70,254,615 | |
| | |
| FlexShares Credit-Scored US Corporate Bond Index Fund | | | 87,339,507 | | | | 58,453,768 | |
| | |
| FlexShares Credit-Scored US Long Corporate Bond Index Fund | | | 10,006,773 | | | | 20,409,130 | |
| | |
| FlexShares High Yield Value-Scored Bond Index Fund | | | 104,127,571 | | | | 20,907,817 | |
| | |
| FlexShares Ready Access Variable Income Fund† | | | 222,307,121 | | | | 138,783,487 | |
| | |
| FlexShares Core Select Bond Fund†† | | | 45,334,072 | | | | 45,640,892 | |
| * | Commencement of operations on July 15, 2019 |
| † | Include $7,859,965 in purchases and $6,344,995 in sales in U.S. Government Securities. |
| †† | Include $211,438 in purchases and $212,063 in sales in U.S. Government Securities. |
11.In-Kind Transactions
During the year ended October 31, 2019, certain Funds received securities in exchange for subscriptions of shares(subscriptions-in-kind). For the year ended October 31, 2019, the fair value of the securities received for subscriptions for each Fund was as follows:
| | | | |
| Fund | | Fair Value | |
| |
| FlexShares US Quality Low Volatility Index Fund* | | $ | 5,847,731 | |
| |
| FlexShares Developed Marketsex-US Quality Low Volatility Index Fund* | | | 4,689,845 | |
| | | | |
| Fund | | Fair Value | |
| |
| FlexShares Emerging Markets Quality Low Volatility Index Fund* | | $ | 1,238,747 | |
| |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | | 74,918,159 | |
| |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 74,452,404 | |
| |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 11,036,909 | |
| |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 656,248 | |
| |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 635,796 | |
| |
| FlexShares US Quality Large Cap Index Fund | | | 24,942,333 | |
| |
| FlexShares STOXX® US ESG Impact Index Fund | | | 24,484,946 | |
| |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 18,175,546 | |
| |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 303,362,504 | |
| |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 509,356,808 | |
| |
| FlexShares Global Quality Real Estate Index Fund | | | 48,844,615 | |
| |
| FlexShares Real Assets Allocation Index Fund | | | 2,204,741 | |
| |
| FlexShares Quality Dividend Index Fund | | | 112,868,177 | |
| |
| FlexShares Quality Dividend Defensive Index Fund | | | 109,524,267 | |
| |
| FlexShares Quality Dividend Dynamic Index Fund | | | 15,546,602 | |
| |
| FlexShares International Quality Dividend Index Fund | | | 126,810,963 | |
| |
| FlexShares International Quality Dividend Defensive Index Fund | | | 16,316,795 | |
| |
| FlexShares International Quality Dividend Dynamic Index Fund | | | 8,510,452 | |
| |
| FlexShares iBoxx3-Year Target Duration TIPS Index Fund | | | 53,945,026 | |
| |
| FlexShares iBoxx5-Year Target Duration TIPS Index Fund | | | 65,895,025 | |
| |
| FlexShares Core Select Bond Fund | | | 13,997,246 | |
| * | Commencement of operations on July 15, 2019 |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 423 | |
Notes to the Financial Statements (cont.)
During the year ended October 31, 2019, certain Funds delivered securities in exchange for redemption of shares(redemptions-in-kind). For financial reporting purposes, the Funds recorded net realized gains and losses in connection with each transaction. For the period ended October 31, 2019, the fair value and realized gain (losses) of the securities transferred for redemptions for each Fund were as follows:
| | | | | | | | |
| Fund | | Fair Value | | | Net Realized
Gains(Losses) | |
| | |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | $ | 133,434,907 | | | $ | 68,997,686 | |
| | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 109,224,489 | | | | 21,035,972 | |
| | |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 27,841,953 | | | | 2,310,647 | |
| | |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 651,591 | | | | (3,143 | ) |
| | |
| FlexShares US Quality Large Cap Index Fund | | | 37,382,424 | | | | 4,142,326 | |
| | |
| FlexShares STOXX® US ESG Impact Index Fund | | | 3,428,821 | | | | 946,277 | |
| | |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 9,077,508 | | | | 1,787,706 | |
| | |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 210,168,542 | | | | 50,514,769 | |
| | |
| FlexShares Real Assets Allocation Index Fund | | | 6,323,930 | | | | 392,697 | |
| | |
| FlexShares Quality Dividend Index Fund | | | 233,105,695 | | | | 50,604,043 | |
| | |
| FlexShares Quality Dividend Dynamic Index Fund | | | 12,849,976 | | | | 2,766,106 | |
| | |
| FlexShares International Quality Dividend Index Fund | | | 130,678,590 | | | | 2,993,336 | |
| | |
| FlexShares International Quality Dividend Defensive Index Fund | | | 24,666,604 | | | | 1,096,052 | |
| | |
| FlexShares International Quality Dividend Dynamic Index Fund | | | 21,087,508 | | | | (1,693,816 | ) |
| | | | | | | | |
| Fund | | Fair Value | | | Net Realized
Gains(Losses) | |
| | |
| FlexShares iBoxx3-Year Target Duration TIPS Index Fund | | $ | 557,037,824 | | | $ | (2,837,460 | ) |
| | |
| FlexShares iBoxx5-Year Target Duration TIPS Index Fund | | | 449,791,027 | | | | (4,257,534 | ) |
| | |
| FlexShares Credit-Scored US Long Corporate Bond Index Fund | | | 2,820,292 | | | | 409,085 | |
| | |
| FlexShares High Yield Value-Scored Bond Index Fund | | | 32,884,934 | | | | (152,752 | ) |
| | |
| FlexShares Ready Access Variable Income Fund | | | 46,207,836 | | | | (142,215 | ) |
| | |
| FlexShares Core Select Bond Fund | | | 28,655,793 | | | | 832,976 | |
12. Guarantees and Indemnifications
In the normal course of business each Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and that provide general indemnifications. Additionally, under the Funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. The Funds’ maximum exposure under these arrangements is unknown, as it involves possible future claims that may or may not be made against the Funds.
13. New Accounting Pronouncements
On March 30, 2017, the FASB issued Accounting Standards Update (ASU)2017-08 “Premium Amortization on Purchased Callable Debt Securities”, which amends the amortization period for certain purchased callable debt securities held at premium, shortening such period to the earliest call date. The new guidance requires an entity to amortize the premium on a callable debt security within its scope to the earliest call date, unless the guidance for considering estimated prepayments as described above is applied. If the call option is not exercised at the earliest call date, the yield is reset to the effective yield using the payment terms of the security. If the security has more than one
| | |
| 424 | | FLEXSHARES ANNUAL REPORT |
Notes to the Financial Statements (cont.)
call date and the premium was amortized to a call price greater than the next call price, any excess of the amortized cost basis over the amount repayable at the next call date will be amortized to that date. If there are no other call dates, any excess of the amortized cost basis over the par amount will be amortized to maturity. The ASU2017-08 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Earlier application is permitted for all entities, including adoption in an interim period. If an entity early adopts the ASU in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. Management is still assessing the impact of the adoption of ASU2017-08 on the financial statements but does not expect it to have a material impact. The Funds have not early adopted ASU2017-08.
14. LIBOR Transition
Certain of the Funds’ investments, payment obligations and financing terms may be based on floating rates, such as London Interbank Offered Rate (“LIBOR”), Euro Interbank Offered Rate and other similar types of reference rates (each, a “Reference Rate”). On July 27, 2017, the Chief Executive of the UK Financial Conduct Authority (FCA), which regulates LIBOR, announced that the FCA will no longer persuade nor compel banks to submit rates for the calculation of LIBOR and certain other Reference Rates after 2021. Such announcement indicates that the continuation of LIBOR and other Reference Rates on the current basis cannot and will not be guaranteed after 2021. This announcement and any additional regulatory or market changes may have an adverse impact on a Fund’s investments, performance or financial condition. Until then, the Funds may continue to invest in instruments that reference such rates or otherwise use such Reference Rates due to favorable liquidity or pricing.
15. Subsequent Events
Management has evaluated subsequent events for the Funds through the date the financial statements were issued, and has concluded that there are no recognized ornon-recognized subsequent events relevant for financial statement disclosure.
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 425 | |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of FlexShares® Trust
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of FlexShares® Trust, comprising the funds listed in the table below (collectively, the “Funds”), including the schedules of investments, as of October 31, 2019, the related statements of operations, the statements of changes in net assets, and the financial highlights for each of the periods listed in the table below, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the funds constituting FlexShares® Trust as of October 31, 2019, and the results of their operations, the changes in their net assets, and the financial highlights for each of the periods listed in the table below in conformity with accounting principles generally accepted in the United States of America.
| | | | | | |
| Fund Name (s) | | Statement of
Operations | | Statement(s) of
Changes in Net
Assets | | Financial Highlights |
| | | |
| FlexShares® Morningstar US Market Factor Tilt Index Fund, FlexShares® Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares® Morningstar Global Upstream Natural Resources Index Fund, FlexShares® STOXX® Global Broad Infrastructure Index Fund, FlexShares® Global Quality Real Estate Index Fund, FlexShares® Quality Dividend Index Fund, FlexShares® Quality Dividend Defensive Index Fund, FlexShares® Quality Dividend Dynamic Index Fund, FlexShares® International Quality Dividend Index Fund, FlexShares® International Quality Dividend Defensive Index Fund, FlexShares® International Quality Dividend Dynamic Index Fund, FlexShares® iBoxx3-Year Target Duration TIPS Index Fund, FlexShares® iBoxx5-Year Target Duration TIPS Index Fund, FlexShares® Disciplined Duration MBS Index Fund, and FlexShares® Ready Access Variable Income Fund | | For the year ended October 31, 2019 | | For the years ended October 31, 2019 and 2018 | | For the years ended October 31, 2019, 2018, 2017, 2016, and 2015 |
| | | |
| FlexShares® US Quality Large Cap Index Fund and FlexShares® Credit-Scored US Long Corporate Bond Index Fund | | For the year ended October 31, 2019 | | For the years ended October 31, 2019 and 2018 | | For the years ended October 31, 2019, 2018, 2017, 2016 and for the period from September 23, 2015 (commencement of operations) through October 31, 2015 |
| | | |
| FlexShares® Credit-Scored US Corporate Bond Index Fund | | For the year ended October 31, 2019 | | For the years ended October 31, 2019 and 2018 | | For the years ended October 31, 2019, 2018, 2017, 2016 and for the period from November 12, 2014 (commencement of operations) through October 31, 2015 |
| | | |
| FlexShares® Currency Hedged Morningstar DMex-US Factor Tilt Index Fund and FlexShares® Currency Hedged Morningstar EM Factor Tilt Index Fund | | For the year ended October 31, 2019 | | For the years ended October 31, 2019 and 2018 | | For the years ended October 31, 2019, 2018, 2017 and for the period from November 9, 2015 (commencement of operations) through October 31, 2016 |
| | |
| 426 | | FLEXSHARES ANNUAL REPORT |
Report of Independent Registered Public Accounting Firm (cont.)
| | | | | | |
| Fund Name (s) | | Statement of
Operations | | Statement(s) of
Changes in Net
Assets | | Financial Highlights |
| | | |
| FlexShares® Real Assets Allocation Index Fund | | For the year ended October 31, 2019 | | For the years ended October 31, 2019 and 2018 | | For the years ended October 31, 2019, 2018, 2017 and for the period from November 23, 2015 (commencement of operations) through October 31, 2016 |
| | | |
| FlexShares® STOXX® US ESG Impact Index Fund and FlexShares® STOXX® Global ESG Impact Index Fund | | For the year ended October 31, 2019 | | For the years ended October 31, 2019 and 2018 | | For the years ended October 31, 2019, 2018, 2017 and for the period from July 13, 2016 (commencement of operations) through October 31, 2016 |
| | |
| FlexShares® High Yield Value-Scored Bond Index Fund | | For the year ended October 31, 2019 | | For the year ended October 31, 2019 and for the period from July 17, 2018 (commencement of operations) through October 31, 2018 |
| | | |
| FlexShares® Core Select Bond Fund | | For the year ended October 31, 2019 | | For the years ended October 31, 2019 and 2018 | | For the years ended October 31, 2019, 2018 and for the period from November 18, 2016 (commencement of operations) through October 31, 2017 |
| |
| FlexShares® US Quality Low Volatility Index Fund, FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund, and FlexShares® Emerging Markets Quality Low Volatility Index Fund | | For the period from July 15, 2019 (commencement of operations) through October 31, 2019 |
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management,
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 427 | |
Report of Independent Registered Public Accounting Firm (cont.)
as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2019, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
December 20, 2019
We have served as the auditor of one or more Northern Trust investment companies since 2002.
| | |
| 428 | | FLEXSHARES ANNUAL REPORT |
Tax InformationOctober 31, 2019 (Unaudited)
QUALIFIED DIVIDEND INCOME (QDI)
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the “Act”), the following percentages of ordinary dividends paid during the fiscal year ended October 31, 2019 are designated as “qualified dividend income”, as defined in the Act, subject to reduced tax rates in 2019:
| | | | |
| Fund | | QDI PERCENTAGE | |
| |
| FlexShares US Quality Low Volatility Index Fund | | | 100.00 | % |
| |
| FlexShares Developed MarketsEx-US Quality Low Volatility Index Fund | | | 100.00 | % |
| |
| FlexShares Emerging Markets Quality Low Volatility Index Fund | | | 100.00 | % |
| |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | | 92.76 | % |
| |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 74.11 | % |
| |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 59.49 | % |
| |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 70.15 | % |
| |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 52.92 | % |
| |
| FlexShares US Quality Large Cap Index Fund | | | 99.01 | % |
| |
| FlexShares STOXX® US ESG Impact Index Fund | | | 100.00 | % |
| |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 100.00 | % |
| |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 69.69 | % |
| |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 89.33 | % |
| |
| FlexShares Global Quality Real Estate Index Fund | | | 21.66 | % |
| |
| FlexShares Real Assets Allocation Index Fund | | | 61.98 | % |
| |
| FlexShares Quality Dividend Index Fund | | | 77.12 | % |
| |
| FlexShares Quality Dividend Defensive Index Fund | | | 90.13 | % |
| |
| FlexShares Quality Dividend Dynamic Index Fund | | | 88.04 | % |
| | | | |
| Fund | | QDI PERCENTAGE | |
| |
| FlexShares International Quality Dividend Index Fund | | | 58.86 | % |
| |
| FlexShares International Quality Dividend Defensive Index Fund | | | 63.10 | % |
| |
| FlexShares International Quality Dividend Dynamic Index Fund | | | 54.06 | % |
CORPORATE DIVIDENDS RECEIVED DEDUCTION (DRD)
A percentage of the dividends distributed during the fiscal year for the following Funds qualifies for the dividends received deduction for corporate shareholders:
| | | | |
| Fund | | CORPORATE
DRD
PERCENTAGE | |
| |
| FlexShares US Quality Low Volatility Index Fund | | | 100.00 | % |
| |
| FlexShares Emerging Markets Quality Low Volatility Index Fund | | | 0.46 | % |
| |
| FlexShares Morningstar US Market Factor Tilt Index Fund | | | 88.71 | % |
| |
| FlexShares Morningstar Developedex-US Markets Factor Tilt Index Fund | | | 0.34 | % |
| |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 0.05 | % |
| |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 0.32 | % |
| |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 0.05 | % |
| |
| FlexShares US Quality Large Cap Index Fund | | | 94.33 | % |
| |
| FlexShares STOXX® US ESG Impact Index Fund | | | 100.00 | % |
| |
| FlexShares STOXX® Global ESG Impact Index Fund | | | 54.63 | % |
| |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 21.15 | % |
| |
| FlexShares STOXX® Global Broad Infrastructure Index Fund | | | 38.57 | % |
| |
| FlexShares Global Quality Real Estate Index Fund | | | 0.35 | % |
| |
| FlexShares Real Assets Allocation Index Fund | | | 24.12 | % |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 429 | |
Tax Information (cont.)
| | | | |
| Fund | | CORPORATE
DRD
PERCENTAGE | |
| |
| FlexShares Quality Dividend Index Fund | | | 75.74 | % |
| |
| FlexShares Quality Dividend Defensive Index Fund | | | 88.38 | % |
| |
| FlexShares Quality Dividend Dynamic Index Fund | | | 84.38 | % |
FOREIGN TAX CREDIT
Each Fund below intends to make an election that will allow its shareholders to treat their proportionate share of foreign taxes paid by the Fund as having been paid by them. The amounts per share, which represent income from sources within, and taxes paid to foreign countries, are as follows:
| | | | | | | | |
| Fund | | TAXES | | | INCOME | |
| | |
| FlexShares Developed MarketsEx-US Quality Low Volatility Index Fund | | $ | 0.0185 | | | $ | 0.1880 | |
| | |
| FlexShares Emerging Markets Quality Low Volatility Index Fund | | | 0.0238 | | | | 0.2533 | |
| | |
| FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund | | | 0.1342 | | | | 2.1051 | |
| | |
| FlexShares Morningstar Emerging Markets Factor Tilt Index Fund | | | 0.2373 | | | | 2.0236 | |
| | |
| FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund | | | 0.0595 | | | | 0.8229 | |
| | |
| FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund | | | 0.1111 | | | | 0.7622 | |
| | |
| FlexShares Morningstar Global Upstream Natural Resources Index Fund | | | 0.0353 | | | | 0.8701 | |
| | |
| FlexShares STOXX Global Broad Infrastructure Index Fund | | | 0.0445 | | | | 0.6707 | |
| | |
| FlexShares Real Assets Allocation Index Fund | | | 0.0179 | | | | 0.2472 | |
| | |
| FlexShares International Quality Dividend Index Fund | | | 0.0866 | | | | 1.2559 | |
| | |
| FlexShares International Quality Dividend Defensive Index Fund | | | 0.0895 | | | | 1.3303 | |
| | |
| FlexShares International Quality Dividend Dynamic Index Fund | | | 0.0733 | | | | 1.1346 | |
| | |
| 430 | | FLEXSHARES ANNUAL REPORT |
Fund Expenses(Unaudited)
As a shareholder, you incur two types of costs:
(1) transaction costs for purchasing and selling shares and (2) ongoing costs, including advisory and other Fund expenses. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds.
Actual Expenses
The actual expense examples are based on an investment of $1,000 invested at the beginning of a six month period and held through the period ended October 31, 2019.
The first line under each Fund in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The hypothetical expense examples are based on an investment of $1,000 invested at the beginning of a six month period and held through the period ended October 31, 2019.
The second line under each Fund in the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as brokerage commissions on purchases or sales of Fund shares. Therefore, the second line for each Fund in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
| | | | | | | | | | | | | | | | |
| | | Beginning
Account
Value | | | Ending
Account
Value
10/31/19 | | | Expenses Paid
During the
Period* | | | Annualized
Expense Ratio
During Period | |
|
| FlexShares® US Quality Low Volatility Index Fund(a) | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,013.00 | | | $ | 0.66 | | | | 0.22 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,024.10 | | | $ | 1.12 | | | | 0.22 | % |
|
| FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund(a) | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,027.60 | | | $ | 0.97 | | | | 0.32 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.59 | | | $ | 1.63 | | | | 0.32 | % |
|
| FlexShares® Emerging Markets Quality Low Volatility Index Fund(a) | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,001.90 | | | $ | 1.20 | | | | 0.40 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.19 | | | $ | 2.04 | | | | 0.40 | % |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 431 | |
Fund Expenses (cont.)
| | | | | | | | | | | | | | | | |
| | | Beginning
Account
Value | | | Ending
Account
Value
10/31/19 | | | Expenses Paid
During the
Period* | | | Annualized
Expense Ratio
During Period | |
|
| FlexShares® Morningstar US Market Factor Tilt Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,017.90 | | | $ | 1.32 | | | | 0.26 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.89 | | | $ | 1.33 | | | | 0.26 | % |
|
| FlexShares® Morningstar Developed Marketsex-US Factor Tilt Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,026.60 | | | $ | 2.04 | | | | 0.40 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.19 | | | $ | 2.04 | | | | 0.40 | % |
|
| FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 962.90 | | | $ | 2.97 | | | | 0.60 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,022.18 | | | $ | 3.06 | | | | 0.60 | % |
|
| FlexShares® Currency Hedged Morningstar DMex-US Factor Tilt Index Fund(b) | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,027.10 | | | $ | 0.31 | | | | 0.06 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,024.90 | | | $ | 0.31 | | | | 0.06 | % |
|
| FlexShares® Currency Hedged Morningstar EM Factor Tilt Index Fund(b) | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 946.70 | | | $ | 0.29 | | | | 0.06 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,024.90 | | | $ | 0.31 | | | | 0.06 | % |
|
| FlexShares® US Quality Large Cap Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,021.00 | | | $ | 1.68 | | | | 0.33 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.54 | | | $ | 1.68 | | | | 0.33 | % |
|
| FlexShares® STOXX® US ESG Impact Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,040.10 | | | $ | 1.70 | | | | 0.33 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.54 | | | $ | 1.68 | | | | 0.33 | % |
|
| FlexShares® STOXX® Global ESG Impact Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,043.10 | | | $ | 2.21 | | | | 0.43 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.04 | | | $ | 2.19 | | | | 0.43 | % |
|
| FlexShares® Morningstar Global Upstream Natural Resources Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 975.70 | | | $ | 2.34 | | | | 0.47 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,022.84 | | | $ | 2.40 | | | | 0.47 | % |
|
| FlexShares® STOXX® Global Broad Infrastructure Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,063.80 | | | $ | 2.50 | | | | 0.48 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,022.79 | | | $ | 2.45 | | | | 0.48 | % |
|
| FlexShares® Global Quality Real Estate Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,070.90 | | | $ | 2.40 | | | | 0.46 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,022.89 | | | $ | 2.35 | | | | 0.46 | % |
| | |
| 432 | | FLEXSHARES ANNUAL REPORT |
Fund Expenses (cont.)
| | | | | | | | | | | | | | | | |
| | | Beginning
Account
Value | | | Ending
Account
Value
10/31/19 | | | Expenses Paid
During the
Period* | | | Annualized
Expense Ratio
During Period | |
|
| FlexShares® Real Assets Allocation Index Fund(b) | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,054.60 | | | $ | 0.57 | | | | 0.11 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,024.65 | | | $ | 0.56 | | | | 0.11 | % |
|
| FlexShares® Quality Dividend Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,023.70 | | | $ | 1.94 | | | | 0.38 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.29 | | | $ | 1.94 | | | | 0.38 | % |
|
| FlexShares® Quality Dividend Defensive Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,026.30 | | | $ | 1.94 | | | | 0.38 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.29 | | | $ | 1.94 | | | | 0.38 | % |
|
| FlexShares® Quality Dividend Dynamic Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,026.70 | | | $ | 1.94 | | | | 0.38 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.29 | | | $ | 1.94 | | | | 0.38 | % |
|
| FlexShares® International Quality Dividend Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,015.30 | | | $ | 2.44 | | | | 0.48 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,022.79 | | | $ | 2.45 | | | | 0.48 | % |
|
| FlexShares® International Quality Dividend Defensive Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,015.70 | | | $ | 2.44 | | | | 0.48 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,022.79 | | | $ | 2.45 | | | | 0.48 | % |
|
| FlexShares® International Quality Dividend Dynamic Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,021.20 | | | $ | 2.45 | | | | 0.48 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,022.79 | | | $ | 2.45 | | | | 0.48 | % |
|
| FlexShares® iBoxx3-Year Target Duration TIPS Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,021.90 | | | $ | 0.97 | | | | 0.19 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,024.25 | | | $ | 0.97 | | | | 0.19 | % |
|
| FlexShares® iBoxx5-Year Target Duration TIPS Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,036.40 | | | $ | 0.98 | | | | 0.19 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,024.25 | | | $ | 0.97 | | | | 0.19 | % |
|
| FlexShares® Disciplined Duration MBS Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,032.70 | | | $ | 1.08 | | | | 0.21 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,024.15 | | | $ | 1.07 | | | | 0.21 | % |
|
| FlexShares® Credit-Scored US Corporate Bond Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,054.40 | | | $ | 1.19 | | | | 0.23 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,024.05 | | | $ | 1.17 | | | | 0.23 | % |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 433 | |
Fund Expenses (cont.)
| | | | | | | | | | | | | | | | |
| | | Beginning
Account
Value | | | Ending
Account
Value
10/31/19 | | | Expenses Paid
During the
Period* | | | Annualized
Expense Ratio
During Period | |
|
| FlexShares® Credit-Scored US Long Corporate Bond Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,133.00 | | | $ | 1.18 | | | | 0.22 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,024.10 | | | $ | 1.12 | | | | 0.22 | % |
|
| FlexShares® High Yield Value-Scored Bond Index Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,019.60 | | | $ | 1.93 | | | | 0.38 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.29 | | | $ | 1.94 | | | | 0.38 | % |
|
| FlexShares® Ready Access Variable Income Fund | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,016.00 | | | $ | 1.32 | | | | 0.26 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,023.89 | | | $ | 1.33 | | | | 0.26 | % |
|
| FlexShares® Core Select Bond Fund(b) | |
| | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,057.70 | | | $ | 1.19 | | | | 0.23 | % |
| | | | |
| Hypothetical | | $ | 1,000.00 | | | $ | 1,024.05 | | | $ | 1.17 | | | | 0.23 | % |
| * | Expenses are equal to the average account value over the period multiplied by the Fund’s annualized expense ratio, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one half year period). |
| (a) | The Fund commenced operations on July 15, 2019. Actual Expenses Paid During the Period are equal to the Fund’s annualized net expense ratio, multiplied by the average account value over the period, multiplied by 109 divided by 365 (to reflect the actual days in the period). Hypothetical Expenses Paid During the Period are equal to the Fund’s annualized net expense ratio, multiplied by the average account value over the period, multiplied by 184 divided by 365 (to reflect theone-half year period). |
| (b) | Annualized expense ratio and expenses paid during the period do not include fees and expenses of the Underlying Fund(s) in which the Fund invests. |
| | |
| 434 | | FLEXSHARES ANNUAL REPORT |
Trustees and Officers(Unaudited)
| | | | | | | | | | | | |
| NON-INTERESTED TRUSTEES |
| Name, Address(1) and Age | | Position(s)
Held with
the Trust | | Term of
Office and
Length of
Time Served(2) | | Principal Occupation(s) During
Past 5 Years | | Number of
Funds in Fund
Complex(3)
Overseen
by Trustee | | | Other
Directorships
Held by
Trustee(4) |
Sarah N. Garvey Age: 67 | | Trustee | | July 2011 to present | | • Chairman of the Board of Navy Pier from 2011 to 2013 and Member of the Board since 2011; • Member of the Board of Directors of The Civic Federation since 2004; • Member of the Executive Committee and Chairman of the Audit Committee since 2017 and Trustee of the Art Institute of Chicago since 2011. | | | 29 | | | None |
Philip G. Hubbard Age: 68 | | Trustee | | July 2011 to present | | • Managing Partner of Solidian Fund, LP and Solidian Management, LLC (a fund of hedge funds platform for family and friends investments) since 2001; • President of Hubbard Management Group, LLC (a personal investment vehicle) since 2001; • Chairman of the Board of Trustees of the Wheaton College Trust Company, N. A. since 2004; • Member of the Board of Trustees of Wheaton College since 1998; • Chairman of the Board of Directors of the English Language Institute/China (a nonprofit educational organization) since 1993; • Member of the Board of First Cup, LLC (restaurant franchising) since 2014. | | | 29 | | | None |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 435 | |
Trustees and Officers (cont.)
| | | | | | | | | | | | |
| Name, Address(1) and Age | | Position(s)
Held with
the Trust | | Term of
Office and
Length of
Time Served(2) | | Principal Occupation(s) During
Past 5 Years | | Number of
Funds in Fund
Complex(3)
Overseen
by Trustee | | | Other
Directorships
Held by
Trustee(4) |
Eric T. McKissack Age: 65 | | Trustee and Chairman | | July 2011 to present | | • Founder, CEO from 2004 to 2019 and CEO Emeritus since 2019 of Channing Capital Management, LLC (an SEC registered investment adviser); • Member of the Board of Trustees, the Investment Committee, and the Finance Committee of the Art Institute of Chicago since 2002; • Member of the Board of Grand Victoria Foundation since 2011; • Member of the Board of the Graham Foundation since 2014. | | | 29 | | | Morgan
Stanley
Pathway Funds
(formerly,
Consulting
Group Capital
Markets Funds)
(11 Portfolios)
Since April
2013 |
|
| INTERESTED TRUSTEE |
Darek Wojnar(5) Age: 54 | | Trustee | | December 2018 to present | | • Director and Executive Vice President, Head of Funds and Managed Accounts, Northern Trust Investments, Inc. since 2018; • Managing Member of the Wojnar Group LLC (a publishing industry consulting company) since 2013; • Head of Exchange-Traded Funds at Hartford Funds from 2016 to 2017 and Managing Director of Lattice Strategies LLC from 2014 to 2016; • Managing Director and Head of US iShares Product at BlackRock (including Barclays Global Investors acquired by BlackRock) from 2005 to 2013. | | | 29 | | | Northern Funds
(43 Portfolios)
since January 1,
2019 and
Northern
Institutional
Funds
(7 Portfolios)
since January 1,
2019 |
| (1) | EachNon-Interested Trustee may be contacted by writing to the Trustee, c/o Paulita Pike, Ropes & Gray LLP, 191 North Wacker Drive, 32nd Floor, Chicago, IL 60606. Mr. Wojnar may be contacted by writing to him at 50 S. LaSalle St., Chicago, IL 60603. |
| (2) | Each Trustee will hold office for an indefinite term until the earliest of: (i) the next meeting of shareholders, if any, called for the purpose of considering the election orre-election of such Trustee and until the election and qualification of his or her successor, if any, elected at such meeting; or (ii) the date a Trustee resigns or retires, or a Trustee is removed by the Board or shareholders, in accordance with the Trust’s Agreement and Declaration of Trust. |
| (3) | The “Fund Complex” consists of the Trust. |
| (4) | This column includes only directorships of companies required to report to the SEC under the Securities Exchange Act of 1934, as amended (i.e., public companies) or other investment companies registered under the 1940 Act. |
| (5) | An “interested person,” as defined by the 1940 Act. Mr. Wojnar is deemed to be an “interested” Trustee because he is an officer of NTI and its parent company. |
The Statement of Additional Information (“SAI”) includes additional information about the Trust’s Trustees and is available, without charge, upon request by contacting the Fund directly at (855)933-6287.
| | |
| 436 | | FLEXSHARES ANNUAL REPORT |
Trustees and Officers (cont.)
| | | | | | |
| OFFICERS | | | | | | |
| Name, Address and Age | | Position(s)
Held with
the Trust | | Term of
Office(1) and
Length of
Time Served | | Principal Occupation(s) During Past 5 Years |
Darlene Chappell Age: 56 50 South LaSalle Street Chicago, IL 60603 | | Anti-Money Laundering Officer | | July 2011 to present | | Anti-Money Laundering Compliance Officer for Northern Trust Investments, Inc., Northern Trust Securities, Inc., Northern Funds, Northern Institutional Funds, and Alpha Core Strategies Fund (formerly NT Alpha Strategies Fund) since 2009, Equity Long/Short Opportunities Fund (formerly NT Equity Long/Short Strategies Fund) since 2011 and 50 South Capital Advisors, LLC since 2015; Vice President and Compliance Consultant for The Northern Trust Company since 2006;Anti-Money Laundering Compliance Officer for Northern Trust Company of Connecticut from 2009 to 2013. |
Susan W. Yee Age: 49 70 Fargo Street, Boston, MA 02110 | | Assistant Secretary | | October 2014 to present | | Vice President, Regulatory Services Group, J.P. Morgan Chase Bank, N.A. since 1994, in various positions. |
Jeff Beeson Age: 40 50 South LaSalle Street Chicago, IL 60603 | | Vice President | | December 2018 to present | | Senior ETF Product Manager, Northern Trust Investments, Inc. since 2018 and Vice President, The Northern Trust Company since April 2017; Product Development Manager of Invesco PowerShares from 2015 to 2017; Vice President of Guggenheim Investments from 2011 to 2015. |
Jose J. Del Real Age: 41 50 South LaSalle Street Chicago, IL 60603 | | Secretary | | December 2018 to present | | Senior Legal Counsel and Senior Vice President, Asset Management Practice Group of the Legal Department of The Northern Trust Company since March 2017; Senior Legal Counsel and Vice President, Asset Management Practice Group of the Legal Department of The Northern Trust Company from August 2015 to March 2017; Assistant Secretary of Northern Trust Investments, Inc. since 2016; Legal Counsel and Vice President, Asset Management Practice Group of the Legal Department of The Northern Trust Company from 2014 until 2015; Secretary of Northern Funds and Northern Institutional Funds since November 2018; Assistant Secretary of Northern Funds and Northern Institutional Funds from 2011 to 2014 and from May 2015 to November 2018; Assistant Secretary of FlexShares Trust from June 2015 to December 2018; Vice President and Regulatory Administration Senior Attorney of The Norther Trust Company from 2012 until 2014. |
Maya Teufel Age: 47 50 South LaSalle Street Chicago, IL 60603 | | Chief Compliance Officer | | July 2019 to present | | Chief Compliance Officer of FlexShares Trust since July 2019; Chief Compliance Officer of Northern Trust Investments, Inc. since July 2019;Co-Head of U.S. Regulatory Compliance Group of Goldman Sachs Asset Management, LP from September 2016 to June 2019; General Counsel and Chief Compliance Officer of Emerging Global Advisors, LLC from November 2013 to August 2016; and Vice President and Corporate Counsel of Jennison Associates LLC from July 2005 to November 2013. |
Randal E. Rein Age: 48 50 South LaSalle Street Chicago, IL 60603 | | Treasurer and Principal Financial Officer | | July 2011 to present | | Senior Vice President of Northern Trust Investments, Inc. since 2010; Treasurer of Northern Funds and Northern Institutional Funds since 2008; Treasurer of Alpha Core Strategies Fund from 2008 to 2018; Treasurer of Equity Long/Short Opportunities Fund from 2011 to 2018. |
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 437 | |
Trustees and Officers (cont.)
| | | | | | |
| Name, Address and Age | | Position(s)
Held with
the Trust | | Term of
Office(1) and
Length of
Time Served | | Principal Occupation(s) During Past 5 Years |
Peter K. Ewing Age: 60 50 South LaSalle Street Chicago, IL 60603 | | President | | March 2017 to present | | President of Northern Funds, Northern Institutional Funds and the Trust since March 2017; Vice President of the Trust from July 2011 to February 2017; Head of Product Management, ETFs & Mutual Funds, and Director of Northern Trust Investments, Inc. since March 2017; Senior Vice President, The Northern Trust Company, since September 2010; Director of ETF Product Management, Northern Trust Investments, Inc. from September 2010 to February 2017. |
Peter J. Flood Age: 61 50 South LaSalle Street Chicago, IL 60603 | | Vice President | | July 2011 to present | | Director of ETF Investment Strategy, Northern Trust Investments, Inc. since 2010; Portfolio Manager, Northern Trust Investments, Inc. from 2007 to 2014. |
Craig R. Carberry, Esq. Age: 58 50 South LaSalle Street Chicago, IL 60603 | | Chief Legal Officer | | June 2019 to present | | Chief Legal Officer and Secretary of Northern Trust Investments, Inc. since May 2000; Chief Compliance Officer of Northern Trust Investments, Inc. from October 2015 to June 2017; Chief Legal Officer and Secretary of 50 South Capital Advisors, LLC since 2015; Associate General Counsel and Senior Vice President at The Northern Trust Company since June 2015; Assistant General Counsel and U.S. Funds General Counsel at The Northern Trust Company from July 2014 to June 2015; Senior Legal Counsel and U.S. Funds General Counsel at The Northern Trust Company from 2000-2014; Secretary of Alpha Core Strategies Fund (formerly NT Alpha Strategies Fund) since 2004; Secretary of Equity Long/Short Opportunities Fund (formerly NT Equity Long/Short Strategies Fund) since 2011; Secretary of Northern Institutional Funds and Northern Funds from 2010-2018; Secretary of FlexShares Trust from 2011-2018. |
Christopher P. Fair Age: 37 50 South LaSalle Street Chicago, IL 60603 | | Vice President | | June 2019 to present | | ETF Product Manager, Northern Trust Investments, Inc. since 2015 and Second Vice President, The Northern Trust Company since 2015; Fund Administration Supervisor, Calamos Investments LLC from February 2015 to November 2015; Senior Mutual Fund Accountant, Calamos Investments LLC from February 2009 to January 2015. |
| (1) | Officers hold office at the pleasure of the Board until their successors are duly elected and qualified, or until they die, resign, are removed or become disqualified. |
| | |
| 438 | | FLEXSHARES ANNUAL REPORT |
Approval of Advisory Agreement(Unaudited)
The Board of Trustees (the “Board”) of the FlexShares Trust (the “Trust”) oversees the management of the Trust and each separate series of the Trust covered in this report (each, a “Fund” and, collectively, the “Funds”) and, as required by law, determines whether to approve the Trust’s investment advisory and ancillary services agreement (the “Advisory Agreement”) with Northern Trust Investments, Inc. (the “Adviser”), an indirect subsidiary of the Northern Trust Corporation.
* * * * *
At a meeting on June 14, 2019 (the “June Meeting”), the Board, including all of the Trustees who are not parties to the Advisory Agreement or interested persons of any such party (the “Independent Trustees”), considered whether to approve the continuation of the Advisory Agreement between the Adviser and the Trust, on behalf of each Fund (each, a “Current Fund” and together, the “Current Funds”) other than FlexShares® US Quality Low Volatility Index Fund, FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund and FlexShares® Emerging Markets Quality Low Volatility Index Fund (each, a “New Fund” and together, the “New Funds”). At the June Meeting, the Board, including all of the Independent Trustees, also considered whether to approve the Advisory Agreement for the New Funds, discussed separately below.
In advance of, and in preparation for, the Trustees’ consideration of the Advisory Agreement at the June Meeting, the Trustees received written materials relating to the Advisory Agreement and had the opportunity to ask questions and request further information in connection with their consideration. At the June Meeting, the Trustees considered the Adviser’s presentations and discussed all of the information that had been provided. Among other things, the Board considered comparisons with other funds in relevant peer universes and peer groups that had been objectively determined by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of fund data, which included, among other things, the following information: (1) a description of the types of funds chosen by Broadridge to compare to each Current Fund; (2) comparative performance data for each Current Fund; (3) data on each Current Fund’s expenses and fees; and
(4) comparative fee data for each Current Fund’s respective peer group, including comparisons of advisory fees and total expense ratios. In considering the Advisory Agreement, the Independent Trustees met with their independent legal counsel separately from the “interested” Trustee of the Trust and officers and employees of the Adviser. After evaluating all the materials, the Trustees, including the Independent Trustees, concluded that the Advisory Agreement was in the best interest of each of the Current Funds and their shareholders and approved the continuation of the Advisory Agreement on behalf of the Current Funds.
The material factors and conclusions that formed the basis for the Trustees reaching their determination to approve the continuation of the Advisory Agreement are separately discussed below.
Nature, Quality and Extent of Services for the Current Funds
The Board examined the nature, quality and extent of the services provided by the Adviser to each Current Fund. The Board also considered the Adviser’s responsibilities under the Advisory Agreement to perform securities trading services and ancillary services including, among other things: (i) filing reports with the Securities and Exchange Commission (the “SEC”), (ii) periodically updating the Trust’s registration statement, (iii) establishing and maintaining the Current Funds’ website to comply with regulatory requirements, (iv) monitoring anticipated purchases and redemptions of creation units by shareholders and new investors, (v) providing information and assistance as required by the Trust’s administrator and fund accountant in connection with the Trust’s shares, and (vi) providing assistance in connection with the operations of the Trust generally.
The Board also considered the quality of the Adviser’s resources that are made available to the Trust. The Board noted the Adviser’s and its affiliates’ financial position, stability and commitment to growing their exchange-traded funds business. The Board also considered the operation and strength of the Adviser’s compliance program.
The Board noted that Foreside Fund Services, LLC, an entity unaffiliated with the Adviser, provides distribution services
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 439 | |
Approval of Advisory Agreement (cont.)
to the Current Funds and that JPMorgan Chase Bank, N.A., also an unaffiliated entity, provides custody, transfer agency, securities lending and fund administration support services, and that these service provider arrangements were relevant to the Board’s considerations of the totality of the circumstances surrounding renewal of the Advisory Agreement. The Board concluded that each Current Fund benefited from the services provided under the Advisory Agreement and as a result of the Adviser’s operations, resources, experience, reputation and personnel.
Fees and Expenses—Investment Performance of the Current Funds and the Adviser
The Board considered the performance, fees and expenses of each Current Fund, including comparative information provided by Broadridge. The Broadridge comparisons ranked each Current Fund in various quintiles over the since inception,one-,two-, three-, four- and five-year periods ended March 31, 2019, as applicable, with the first quintile being the lowest or best 20% of the funds in terms of fund cost and fund performance, respectively. The Board noted that, in certain cases, the Broadridge peer funds included funds sponsored by an “at cost” service provider and that there were limitations in providing comparable peer funds. The Board also considered that the investment objective of each Current Fund other than FlexShares® Ready Access Variable Income Fund and FlexShares® Core Select Bond Fund (each, a “Current Index Fund”) was to seek investment results that correspond generally to the price and yield performance, before fees and expenses, of a specified index (each, an “Underlying Index”). The Board considered the Adviser’s explanation that performance information with respect to Broadridge comparisons is only one of several comparative data points and that none of the peer funds sought to track an index that was the same as the Current Index Fund’s Underlying Index. The Board also considered the information that the Adviser provided regarding the difference between each Current Fund’s performance, after fees and expenses, and the performance of its Underlying Index or benchmark index (as applicable) for the since inception,one-, three- and five-year periods ended March 31, 2019, as applicable. Moreover, the Board considered information regarding both the short- and long-term
investment performance of each Current Fund relative to relevant benchmark indexes as provided to the Board in advance of each of its quarterly meetings throughout the year, including for the June Meeting. The Board noted that the differences in performance between each Current Index Fund and that of its Underlying Index determined the Adviser’s expertise and effectiveness in managing index-based fixed-income and equity exchange-traded funds.
In reaching its determinations, the Board considered a large amount of data provided by the Adviser in response to a written request previously submitted by the Independent Trustees to the Adviser. Among the information considered by the Board was the following:
FlexShares® Morningstar US Market Factor Tilt Index Fund
The Board considered that the Fund’s performance ranked in the second quintile of its performance universe for the three- and four-year periods and the third quintile for the remaining periods. The Board also considered that the Fund’s performance, after fees and expenses, was within the performance of its Underlying Index by 27 basis points or less for all periods.
The Board noted that the Fund’s total expense ratio was equal to its expense group median while its advisory fee was higher than its expense group median.
FlexShares® Morningstar Developed Marketsex-US Factor Tilt Index Fund
The Board considered that the Fund’s performance ranked in the second quintile of its performance universe for the four-year period, the third quintile for the three- and five-year periods and the fourth quintile for the remaining periods. The Board also considered that the Fund’s performance, after fees and expenses, was above the performance of its Underlying Index for theone-year period and within eight basis of its Underlying Index for the remaining periods.
The Board took into account that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within seven basis points of its expense group median.
| | |
| 440 | | FLEXSHARES ANNUAL REPORT |
Approval of Advisory Agreement (cont.)
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund
The Board considered that the Fund’s performance ranked in the third quintile of its performance universe for all periods, except that the Fund’s performance ranked in the fourth quintile for thetwo-year period. The Board also considered that the Fund’s performance, after fees and expenses, was within 79 basis points of its Underlying Index for all periods.
The Board noted that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within seven basis points of its expense group median.
FlexShares® Currency Hedged Morningstar DM ex-US Factor Tilt Index Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe for all periods, except that the Fund’s performance ranked in the third quintile for the since inception period. The Board also considered that the Fund’s performance, after fees and expenses, was within 31 basis points of its Underlying Index for all periods.
The Board considered that the Fund’s total expense ratio and advisory fee were lower than its expense group median. The Board also considered that the Adviser had agreed to waive a portion of its advisory fee and/or reimburse operating expenses in an amount equal to any acquired fund fees and expenses incurred by the Fund that were attributable to its investment in other Funds.
FlexShares® Currency Hedged Morningstar EM Factor Tilt Index Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe for theone-year period, the third quintile for thetwo- and three-year periods and the fourth quintile for the since inception period. The Board also considered that the Fund’s performance, after fees and expenses, was within 204 basis points of its Underlying Index for all periods. The Board took into
account that the Fund had only commenced operations in November 2015 and had just three calendar years of performance data as of December 31, 2018. The Board noted, therefore, that it would be prudent to allow the portfolio managers more time to continue developing the Fund’s performance record.
The Board considered that the Fund’s total expense ratio and advisory fee were lower than its expense group median. The Board also considered that the Adviser had agreed to waive a portion of its advisory fee and/or reimburse operating expenses in an amount equal to any acquired fund fees and expenses incurred by the Fund that were attributable to its investment in other Funds.
FlexShares® US Quality Large Cap Index Fund
The Board considered that the Fund’s performance ranked in the third quintile of its performance universe for all periods, except that the Fund’s performance ranked in the fourth quintile for theone-year period. The Board also considered that the Fund’s performance, after fees and expenses, was within 35 basis points of its Underlying Index for all periods.
The Board considered that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within four basis points of its expense group median.
FlexShares® STOXX® US ESG Impact Index Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe since inception and the second quintile for the remaining periods. The Board also considered that the Fund’s performance, after fees and expenses, was above the performance of its Underlying Index for all periods.
The Board considered that the Fund’s total expense ratio and advisory fee were equal to its expense group median.
FlexShares® STOXX® Global ESG Impact Index Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe since
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 441 | |
Approval of Advisory Agreement (cont.)
inception and the second quintile for the remaining periods. The Board also considered that the Fund’s performance, after fees and expenses, was above the performance of its Underlying Index for all periods.
The Board considered that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within two basis points of its expense group median.
FlexShares® Morningstar Global Upstream Natural Resources Index Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe for all periods. The Board also considered that the Fund’s performance, after fees and expenses, was within 49 basis points of its Underlying Index for all periods.
The Board took into account that the Fund’s total expense ratio and advisory fee were lower than its expense group median.
FlexShares® STOXX® Global Broad Infrastructure Index Fund
The Board considered that the Fund’s performance ranked in the second quintile of its performance universe for theone-, four- and five-year periods, the third quintile for thetwo-year period and the fourth quintile for the three-year period. The Board also considered that the Fund’s performance, after fees and expenses, was above the performance of its Underlying Index for all periods.
The Board considered that the Fund’s advisory fee was equal to its expense group median while its total expense ratio was less than one basis point above its expense group median.
FlexShares® Global Quality Real Estate Index Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe for the five-year period, the second quintile for the four-year period, the fourth quintile for thetwo- and three-year periods and the fifth quintile for theone-year period. The Board also considered that the Fund’s performance, after fees and expenses, was
above the performance of its Underlying Index for theone- and five-year periods and within two basis points of its Underlying Index for the three-year period.
The Board considered that the Fund’s total expense ratio and advisory fee were lower than its expense group median.
FlexShares® Real Assets Allocation Index Fund
The Board considered that the Fund’s performance ranked in the second quintile of its performance universe for theone-year period, the third quintile for thetwo-year and since inception periods and the fourth quintile for the three-year period. The Board also considered that the Fund’s performance, after fees and expenses, was within 14 basis points of its Underlying Index for all periods.
The Board considered that the Fund’s total expense ratio and advisory fee were lower than its expense group median. The Board also considered that the Adviser had agreed to waive a portion of its advisory fee and/or reimburse operating expenses in an amount equal to any acquired fund fees and expenses incurred by the Fund that were attributable to its investment in other Funds.
FlexShares® Quality Dividend Index Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe for the five-year period, the second quintile for thetwo-, three- and four-year periods and the third quintile for theone-year period. The Board also considered that the Fund’s performance, after fees and expenses, was within 110 basis points of its Underlying Index for all periods.
The Board considered that the Fund’s total expense ratio and advisory fee were equal to its expense group median.
FlexShares® Quality Dividend Defensive Index Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe for all periods. The Board also considered that the Fund’s performance, after fees and expenses, was within 132 basis points of its Underlying Index for all periods.
The Board considered that the Fund’s total expense ratio and advisory fee were equal to its expense group median.
| | |
| 442 | | FLEXSHARES ANNUAL REPORT |
Approval of Advisory Agreement (cont.)
FlexShares® Quality Dividend Dynamic Index Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe for the three-year period, the second quintile for the five-year period and the third quintile for theone-,two- and four-year periods. The Board also considered that the Fund’s performance, after fees and expenses, was within 40 basis points of its Underlying Index for all periods.
The Board considered that the Fund’s advisory fee was slightly lower than its expense group median while its total expense ratio was equal to its expense group median.
FlexShares® International Quality Dividend Index Fund
The Board considered that the Fund’s performance ranked in the third quintile of its performance universe for all periods, except that the Fund’s performance ranked in the fourth quintile for theone- andtwo-year periods. The Board also considered that the Fund’s performance, after fees and expenses, was above the performance of its Underlying Index for theone-year period and within 40 basis points of its Underlying Index for the remaining periods.
The Board took into account that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within two basis points of its expense group median.
FlexShares® International Quality Dividend Defensive Index Fund
The Board considered that the Fund’s performance ranked in the fourth quintile of its performance universe for all periods, except that the Fund’s performance ranked in the fifth quintile for thetwo-year period. The Board also considered that the Fund’s performance, after fees and expenses, was above the performance of its Underlying Index for theone-year period and within 62 basis points of its Underlying Index for the remaining periods.
The Board took into account that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within two basis points of its expense group median.
FlexShares® International Quality Dividend Dynamic Index Fund
The Board considered that the Fund’s performance ranked in the second quintile of its performance universe for all periods, except that the Fund’s performance ranked in the fourth quintile for theone- andtwo-year periods. The Board also considered that the Fund’s performance, after fees and expenses, was above the performance of its Underlying Index for theone-year period and within 47 basis points of its Underlying Index for the remaining periods.
The Board took into account that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within two basis points of its expense group median.
FlexShares® iBoxx 3-Year Target Duration TIPS Index Fund
The Board considered that the Fund’s performance ranked in the third quintile of its performance universe for theone- and four-year periods and the fourth quintile for thetwo-, three- and five-year periods. The Board also considered that the Fund’s performance, after fees and expenses, was within 14 basis points of its Underlying Index for all periods. The Board further considered that Broadridge had changed its methodology for constituting peer groups and the Fund was being compared toopen-end funds, which the Adviser noted are different products that do not provide a meaningful comparative source.
The Board took into account that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within seven basis points of its expense group median. The Board also noted the reduction in the advisory fee rate payable by the Fund, as of November 1, 2017.
FlexShares® iBoxx5-Year Target Duration TIPS Index Fund
The Board noted that the Fund’s performance ranked in the first quintile of its performance universe for theone- and four-year periods, the second quintile for thetwo- and five-year periods and the third quintile for the three-year period. The Board also considered that the Fund’s performance,
| | | | |
| FLEXSHARES ANNUAL REPORT | | | 443 | |
Approval of Advisory Agreement (cont.)
after fees and expenses, was within 13 basis points of its Underlying Index for all periods. The Board further considered that Broadridge had changed its methodology for constituting peer groups and the Fund was being compared toopen-end funds, which the Adviser noted are different products that do not provide a meaningful comparative source.
The Board took into account that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within seven basis points of its expense group median. The Board also noted the reduction in the advisory fee rate payable by the Fund, as of November 1, 2017.
FlexShares® Disciplined Duration MBS Index Fund
The Board considered that the Fund’s performance ranked in the fifth quintile for all periods. The Board considered the Adviser’s assertion, however, that the Fund was designed to have different risk characteristics than its peers. The Board also considered that the Fund’s performance, after fees and expenses, was within 49 basis points of its Underlying Index for all periods.
The Board considered that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio was within five basis points of its expense group median. The Board also considered the Adviser’s assertion that the Fund’s expense universe was of limited relevance because its expense universe members were generally much larger and more beta-oriented than the Fund, whereas the Fund’s investment strategy required a greater investment of resources.
FlexShares® Credit-Scored US Corporate Bond Index Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe for theone-year period, the third quintile for the four-year and since inception periods, the fourth quintile for thetwo-year period and the fifth quintile for the three-year period. The Board further considered that the Fund’s performance, after fees and expenses, was within 44 basis points of its Underlying Index for all periods.
The Board considered that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within three basis points of its expense group median.
FlexShares® Credit-Scored US Long Corporate Bond Index Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe for all periods, except that the Fund’s performance ranked in the third quintile for theone-year period. The Board further considered that the Fund’s performance, after fees and expenses, was within 77 basis points of its Underlying Index for all periods.
The Board considered that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within three basis points of its expense group median.
FlexShares® Ready Access Variable Income Fund
The Board considered that the Fund’s performance ranked in the first quintile of its performance universe for theone-year period, the second quintile for thetwo- and five-year periods and the third quintile for the three- and four-year periods. The Board considered the Adviser’s assertion that, of the nine other exchange-traded funds (“ETFs”) in the Fund’s performance universe, only three of the funds were directly comparable to the Fund in consideration of the Fund’s specific investment strategy.
The Board considered that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within four basis points of its expense group median.
FlexShares® Core Select Bond Fund
The Board considered that the Fund’s performance ranked in the fourth quintile of its performance universe for theone- andtwo-year periods and the fifth quintile for the since inception period. The Board considered the Adviser’s
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assertion that the other ETFs in the Fund’s performance universe were not directly comparable to the Fund, in consideration of the Fund’s specific investment strategy.
The Board considered that the Fund’s total expense ratio and advisory fee were higher than its expense group median, but that the Fund’s total expense ratio (which represents the total cost to investors) was within eight basis points of its expense group median. The Board also considered that the Adviser had agreed to waive a portion of its advisory fee and/or reimburse operating expenses in an amount equal to any acquired fund fees and expenses incurred by the Fund that were attributable to its investment in other Funds, as well as up to 0.05% of acquired fund fees and expenses attributable to the Fund’s investment in unaffiliated funds.
FlexShares® High Yield Value-Scored Bond Index Fund
The Board noted that the Fund’s performance ranked in the second quintile of its performance universe for the period since inception on July 17, 2018.
The Board considered that the Fund’s total expense ratio was lower than its expense group median while its advisory fee was higher than its expense group median.
Costs of Services and Profits of the Adviser for the Current Funds
The Board considered the unitary fee structure and the expenses for each Current Fund and noted that, under the Advisory Agreement, the Adviser was responsible for most expenses of the Current Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services. The Board considered that the Adviser was not responsible under the Advisory Agreement for certain expenses, including the fees and expenses of the Trust’s Independent Trustees and their independent legal counsel, litigation expenses and other extraordinary expenses. The Board considered the agreement between the Trust and the Adviser, whereby the Adviser agreed to reimburse certain expenses of the Independent Trustees with respect to each Current Fund until at least March 1, 2020.
The Board considered the advisory fee for each Current Fund as compared to that of other comparable funds in relation to its respective Broadridge median. The Board
considered the Adviser’s explanation that each Current Index Fund’s contractual advisory fee (which, owing to the unitary fee structure and the existence of the expense reimbursement agreement, is identical to its total expense ratio) compared favorably with its respective Broadridge median contractual advisory fee for comparable funds set forth in the Broadridge report, especially taking into account, among other factors, important differences between the indexes upon which such comparable funds are based and the Current Index Fund’s Underlying Index, including in certain cases differences between the number of portfolio holdings for comparable funds and the Funds. The Board considered the advisory fee schedules for other accounts with similar investment advisory mandates as those of the Current Funds, noting that there were no comparable accounts for certain of the Current Funds. The Board considered (a) the differences in managing ETFs versus separately managed accounts which involve daily purchase and redemption activity along with robust regulatory and governance requirements; and (b) the Current Funds’ unitary fee structure.
The Board examined the Adviser’s profitability information provided by the Adviser, and the Trustees considered that the Adviser was profitable on apre-distribution basis and post-distribution basis. The Board considered that the Adviser’s potential for profitability would continue to be subject to financial uncertainties and risks. The Board also considered that the Adviser would continue to develop and offer additional new products in efforts to complete the overall integrity of the FlexShares product suite, consistent with its product strategy, and that these products may expose the Adviser to additional financial risks and uncertainties.
Economies of Scale for the Current Funds
The Board considered whether the Adviser may realize economies of scale in managing and supporting the Current Funds. The Board reviewed each Current Fund’s fee arrangements, which did not include breakpoints, and considered that, in light of the unitary fee structure and expense reimbursement agreement, the Adviser’s recent profitability from its services to the Trust and the significant investment that the Adviser had made and continues to make in the
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Trust, breakpoints were not necessary at this time. The Board also noted the reduction in the advisory fee rate payable by the FlexShares® iBoxx3-Year Target Duration TIPS Index and FlexShares® iBoxx5-Year Target Duration TIPS Index Funds, as of November 1, 2017.
Other Benefits to the Adviser for the Current Funds
In addition to considering the profits that may be realized by the Adviser, the Board considered information regarding other direct and indirect benefits the Adviser may receive as a result of its relationship with the Current Funds, including whether any compensation would be paid to its affiliates. The Board also considered that some of the Current Funds’ shareholders have other client relationships with the Adviser or its affiliates. The Board also reviewed the extent to which the Adviser and its other clients, as well as the Current Funds, benefit from receipt of the research products and services generated by the Current Funds.
The Board, including the Independent Trustees, considered the data provided by the Adviser and concluded that sufficient information had been provided to allow them to evaluate the terms of the Advisory Agreement and each Current Fund’s investment advisory fee. They determined that each Current Fund’s advisory fee was reasonable in light of the services provided and the performance achieved by the Current Fund.
* * * * *
At the June Meeting, the Board, including all of the Independent Trustees, also considered whether to approve the Advisory Agreement for the FlexShares® US Quality Low Volatility Index Fund, FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund and FlexShares® Emerging Markets Quality Low Volatility Index Fund (each, a “New Fund” and together, the “New Funds”).
In advance of, and in preparation for, the Trustees’ consideration of the Advisory Agreement at the June Meeting, the Trustees received written materials relating to the Advisory Agreement and had the opportunity to ask questions and request further information in connection with their consideration. At the June Meeting, the Trustees considered the presentations by the Adviser and discussed all of the
information that had been provided. Among other things, the Board considered comparisons with other funds in relevant peer universes and peer groups that had been objectively determined by Broadridge, an independent provider of fund data.
The Independent Trustees met with their independent legal counsel separately from the “interested” Trustee of the Trust and officers and employees of the Trust and the Adviser to consider approval of the Advisory Agreement. After evaluating all the materials, the Trustees, including the Independent Trustees, concluded that the Advisory Agreement was in the best interest of the New Funds and their shareholders and approved the Advisory Agreement.
In approving the Advisory Agreement, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors they deemed relevant, including, but not limited to: (1) the nature, extent and quality of the services that the Adviser is expected to provide to the New Funds; (2) the anticipated fees and projected expenses for the New Funds; (3) the projected profits to be realized by the Adviser and its affiliates from the relationship with the New Funds; (4) the extent to which economies of scale would be realized if the New Fund grew and whether the fee levels in the Advisory Agreement reflected these economies of scale; and (5) other benefits that the Adviser and its affiliates may realize as a result of their relationship with the New Funds. In their deliberations, the Trustees did not identify any single factor which alone was responsible for the Board’s decision to approve the Advisory Agreement.
The material factors and conclusions that formed the basis for the Trustees reaching their determinations to approve the Advisory Agreement are separately discussed below.
Nature, Quality and Extent of Services for the New Funds
The Board examined the nature, quality and extent of the services to be provided by the Adviser to the New Funds. The Board evaluated information regarding the Adviser’s organizational structure and the experience and professional qualifications of the Adviser’s key personnel. They also considered the Adviser’s responsibilities under the Advisory Agreement to perform securities trading services and ancillary services, including among other things: (i) filing
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Approval of Advisory Agreement (cont.)
reports with the SEC, (ii) periodically updating the New Funds’ registration statement, (iii) establishing and maintaining the Trust’s website to comply with regulatory requirements, (iv) monitoring anticipated purchases and redemptions of creation units by shareholders and new investors, (v) providing information and assistance as required by the Trust’s administrator and fund accountant in connection with the Trust’s shares, and (vi) providing assistance with the operations of the Trust generally. The Board also considered the quality of the Adviser’s resources that would be made available to the New Funds. The Board noted the Adviser’s and its affiliates’ financial position, stability, and commitment to growing their exchange-traded funds business. The Board also considered the operation and strength of the Adviser’s compliance program. The Board concluded that they were satisfied with the nature, quality and extent of the investment management services proposed to be provided by the Adviser to the New Funds. The Board further determined that there was a reasonable basis on which they could conclude that the New Funds would benefit from the services proposed to be provided by the Adviser under the Advisory Agreement.
Performance of the New Funds
The Board considered that, because the New Funds had not yet commenced operations, meaningful data relating to their performance was not available and could not be a factor in the initial approval of the Advisory Agreement.
Fees and Expenses for the New Funds
The Board considered the proposed unitary fee structure and each New Fund’s projected expenses, and noted that under the Advisory Agreement, the Adviser would be responsible for most expenses of the New Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services. The Board considered that the Adviser was not responsible under the Advisory Agreement for certain expenses, including the fees and expenses of the Independent Trustees and their independent legal counsel, litigation expenses, and other extraordinary expenses. The Board considered each New Fund’s proposed advisory fee compared to other funds managed by the Adviser with similar investment policies and strategies, if applicable. The
Trustees also noted that the Adviser did not manage any other accounts pursuing investment strategies similar to those of the New Funds that seek to track the investment results of an underlying index.
The Board considered comparative fee data for the New Funds, which included fees and expenses paid by comparable exchange-traded funds selected by Broadridge, as follows. The FlexShares® US Quality Low Volatility Index Fund’s estimated total expense ratio and proposed advisory fee were three basis points above its expense group median. The FlexShares® Developed Marketsex-US Quality Low Volatility Index Fund’s estimated total expense ratio was equal to its expense group median while its proposed advisory fee was higher than its expense group median. The FlexShares® Emerging Markets Quality Low Volatility Index Fund’s estimated total expense ratio and proposed advisory fee were lower than its Broadridge peer expense group median.
Projected Profits of the Adviser for the New Funds
The Board examined the Adviser’s projected profits in serving as the New Funds’ investment adviser. The Board noted the information provided by the Adviser with respect to the length of time it would take to become profitable with respect to the New Funds. The Trustees also considered the Adviser’s projected asset levels in the New Funds.
Economies of Scale for the New Funds
The Board considered whether the Adviser may realize economies of scale in managing and supporting the New Funds. In this regard, the Board considered that the proposed advisory fees did not contain any breakpoints. The Trustees determined that breakpoints were not necessary at the present time in light of the unitary fee structure, the fact that the Adviser did not expect to initially make any profit from its services to the New Funds, as well as the significant investment the Adviser was making in the New Funds.
Other Benefits to the Adviser for the New Funds
In addition to considering the profits that may be realized by the Adviser, the Board considered information regarding other direct and indirect benefits the Adviser may receive as a result of its relationship with the New Funds, including
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Approval of Advisory Agreement (cont.)
whether any compensation would be paid to the Adviser’s affiliates. The Board also considered that some of the New Funds’ expected shareholders are expected to have other client relationships with the Adviser’s affiliates. The Board also reviewed the extent to which the Adviser and its other clients, as well as the Current Funds, may benefit from receipt of the research products and services generated by the New Funds.
The Board, including the Independent Trustees, considered the data provided by the Adviser and concluded that sufficient information had been provided to allow them to evaluate the terms of the Advisory Agreement with respect to the New Funds and the proposed investment advisory fee for the New Funds. They determined that each New Fund’s advisory fee was reasonable in light of the services to be provided.
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Supplemental Information(Unaudited)
Principal Risks
As with any investment, you could lose all or part of your investment in a Fund, and the Fund’s performance could trail that of other investments. In addition to the discussion of the risks of certain of the Funds’ investments included in Note 2, some of the principal risks of investment in the Funds are summarized below. A more complete description of principal risks is included in each Fund’s Prospectus.
The following risks apply to all of the Funds:
Cyber Security and Operational Risk
Cyber security and operational risk is the risk that the Fund and its service providers may experience disruptions that arise from breaches in cyber security, human error, processing and communications errors, counterparty or third-party errors, technology or systems failures, any of which may have an adverse impact on the Fund. Failures or breaches of the electronic systems of the Fund, the Investment Adviser, distributor, and other service providers, market makers, Authorized Participants or the issuers of securities in which the Fund invests have the ability to cause disruptions and negatively impact the Fund’s business operations, potentially resulting in financial losses to the Fund and its shareholders.
Derivatives Risk
Changes in the value of a derivative instrument may not correlate perfectly with the underlying asset, rate or index, and the Funds could lose more than the principal amount invested.
Market Trading Risk
Each Fund’s shares are listed on a securities exchange, which presents risks including the potential lack of an active market for Fund shares, losses from trading in secondary markets, and disruption in the creation/redemption process of the Funds. Any of these factors may lead to the Funds’ shares trading at a premium or discount to NAV.
Valuation Risk
The sale price the Funds could receive for a security may differ from the Funds’ valuation of the security, particularly for securities that trade in low volume or volatile markets, or that are valued using a fair value methodology.
Authorized Participant Concentration Risk
Only an Authorized Participant may engage in creation or redemption transactions directly with the Funds. The Funds have a limited number of institutions that act as Authorized Participants. To the extent that these institutions exit the business or are unable to proceed with creation and/or redemption orders with respect to the Funds and no other Authorized Participant is able to step forward to create or redeem Creation Units, Fund shares may trade at a discount to NAV and possibly face trading halts and/or delisting. This risk may be heightened for a Fund if it invests innon-U.S. securities or other securities or instruments that are less widely traded. Such securities or instruments often involve greater settlement and operational issues and capital costs for Authorized Participants.
Market Risk
Market risk is the risk that general market conditions, such as real or perceived adverse economic or political conditions, inflation, changes in interest rates, lack of liquidity in the bond markets, volatility in the equities market or adverse investor sentiment could cause the value of your investment in a Fund to decline. It includes the risk that a particular style of investing,
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Supplemental Information (cont.)
such as growth or value, may underperform the market generally. The value of the securities in which a Fund invests may go up or down in response to the prospects of individual issuers and/or general economic conditions. Securities markets may experience great short-term volatility and may fall sharply at times. Different markets may behave differently from each other and a foreign market may move in the opposite direction from the U.S. market. Price changes may be temporary or last for extended periods. You could lose money over short periods due to fluctuation in a Fund’s NAV in response to market movements, and over longer periods during market downturns.
The following risk applies only to the Index Funds:
Tracking Error Risk
Tracking error risk is the risk that an Index Fund’s performance may vary substantially from the performance of the Underlying Index it tracks as a result of imperfect correlation between a Fund’s securities and those of the Underlying Index. Imperfect correlation may result from share purchases and redemptions, expenses, changes in the Underlying Indexes, asset valuations, foreign currency valuations, market impact, corporate actions (such as mergers and spinoffs), legal restrictions (such astax-related diversification requirements that apply to the Funds but not to the Underlying Index) and timing variances, among other factors.
Calculation Methodology Risk
Each of the Index Funds is subject to Calculation Methodology Risk. This is the risk that the Underlying Index’s calculation methodology or sources of information may not provide an accurate assessment of included issuers or correct valuation of securities, nor is the availability or timeliness of the production of the Index guaranteed.
The following risks apply to each Fund, as disclosed:
Concentration Risk
Each of the Funds, except theFlexShares iBoxx3-Year Target Duration TIPS Index Fund and the FlexShares iBoxx5-Year Target Duration TIPS Index Fund,is subject to Concentration Risk. To the extent that the investments of these Funds are concentrated in the securities of issuers in a particular region, country, market, industry, sector or asset class, the Funds may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that region, country, market, industry, sector or asset class.
Interest Rate/Maturity Risk
The FlexShares iBoxx3-Year Target Duration TIPS Index Fund, FlexShares iBoxx5-Year Target Duration TIPS Index Fund, FlexShares Disciplined Duration MBS Index Fund, FlexShares Credit-Scored US Corporate Bond Index Fund, FlexShares Credit-Scored US Long Corporate Bond Index Fund, FlexShares High Yield Value-Scored Bond Index Fund, FlexShares Ready Access Variable Income Fund, and the FlexShares Core Select Bond Fundare subject to the risk that the value of the Funds’ fixed-income assets will decline because of rising interest rates. The magnitude of this decline will often be greater for longer-term fixed income securities than shorter-term fixed-income securities. Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates.
MLP Risk
The FlexShares STOXX® Global Broad Infrastructure Index Fund and theFlexShares Real Assets Allocation Index Fund (including through its investment in its Underlying Fund(s))may invest in Master Limited Partnerships (“MLPs”). Each Fund may not
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Supplemental Information (cont.)
invest more than 25% of its net assets in MLPs. MLP Risk is the risk that accompanies an investment in MLP units. Investing in MLPs involves certain risks related to investing in the underlying assets of the MLPs and risks associated with pooled investment vehicles. MLPs that concentrate in a particular industry or a particular geographic region are subject to risks associated with such industry or region. MLPs may also be sensitive to changes in interest rates and, during periods of interest rate volatility, may not provide attractive returns. The benefit derived from the Fund’s investment in MLPs is largely dependent on the MLPs being treated as partnerships for federal income tax purposes. If any of the MLPs owned by the Fund were treated as corporations for U.S. federal income tax purposes, theafter-tax return to the Fund with respect to its investment in such MLPs would be materially reduced, which could cause a decline in the value of the Fund’s shares. The Fund must include its allocable share of the MLP’s taxable income in its taxable income, whether or not it receives a distribution of cash from the MLP. In such case, the Fund may have to liquidate securities to make required distributions to the Fund’s shareholders.
Non-diversification Risk
The FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, FlexShares Morningstar Global Upstream Natural Resources Index Fund, FlexShares STOXX® Global Broad Infrastructure Index Fund, FlexShares Global Quality Real Estate Index Fund, FlexShares Real Assets Allocation Index Fund, FlexShares iBoxx3-Year Target Duration TIPS Index Fund, FlexShares iBoxx5-Year Target Duration TIPS Index Fund, FlexShares Credit-Scored US Corporate Bond Index Fund, FlexShares Credit-Scored US Long Corporate Bond Index Fund, FlexShares Ready Access Variable Income Fund,FlexShares US Quality Low Volatility Index Fund, FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, and the FlexShares Emerging Markets Quality Low Volatility Index Fundarenon-diversified series of the Trust, pursuant to the 1940 Act. The performance of these Funds may depend on the performance of a small number of issuers because the Funds may invest a large percentage of its assets in securities issued by or representing a small number of issuers.
Large Cap Risk
The FlexShares US Quality Large Cap Index Fund, FlexShares STOXX® US ESG Impact Index Fund, FlexShares STOXX® Global ESG Impact Index Fund, FlexShares Quality Dividend Index Fund, FlexShares Quality Dividend Defensive Index Fund, FlexShares Quality Dividend Dynamic Index Fund, FlexShares International Quality Dividend Index Fund, FlexShares International Quality Dividend Defensive Index Fund, FlexShares International Quality Dividend Dynamic Index Fund, FlexShares US Quality Low Volatility Index Fund, FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, and the FlexShares Emerging Markets Quality Low Volatility Index Fundare subject to the risk that returns on investments in stocks of large U.S. companies could trail the returns on investments in stocks of smaller andmid-sized companies.
Mid Cap Stock Risk
The FlexShares STOXX® US ESG Impact Index Fund, FlexShares STOXX® Global ESG Impact Index Fund, the FlexShares US Quality Low Volatility Index Fund, FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, and the FlexShares Emerging Markets Quality Low Volatility Index Fundmay invest in stocks ofmid-sized companies which may be subject to more abrupt or erratic market movements than stocks of larger, more established companies.Mid-sized companies may have limited product lines or financial resources, and may be dependent upon a particular niche of the market.
Mid and Small Cap Stock Risk
The FlexShares Morningstar US Market Factor Tilt Index Fund, FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund (including through its investment in its Underlying Fund), FlexShares Currency Hedged Morningstar EM Factor
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Supplemental Information (cont.)
Tilt Index Fund (including through its investment in its Underlying Fund), FlexShares Morningstar GlobalUpstream Natural Resources Index Fund, FlexShares STOXX® Global Broad Infrastructure Index Fund, FlexShares Global Quality Real Estate Index Fund, and the FlexShares Real Assets Allocation Index Fund (including through its investment in its Underlying Fund(s)) may invest in stocks of smaller companies which may be more volatile than stocks of larger, more established companies. Small companies may have limited product lines or financial resources, or may be dependent upon a small or inexperienced management group, and their securities may trade less frequently and in lower volume than the securities of larger companies, which could lead to higher transaction costs. Generally the smaller the company size, the greater the risk.
Value Investing Risk
The FlexSharesMorningstar US Market Factor Tilt Index Fund, FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, FlexShares US Quality Large Cap Index Fund, FlexShares Global Quality Real Estate Index Fund, and the FlexShares Real Assets Allocation Index Fund’s (including through its investment in its Underlying Fund(s))investment in companies whose securities are believed to be undervalued, relative to their underlying profitability, may not appreciate in value as anticipated.
ESG Investment Risk
TheFlexShares STOXX® US ESG Impact Index Fund and the FlexShares STOXX® Global ESG Impact Index Fundare subject to the risk that because the methodology of the Underlying Index selects and assigns weights to securities of issuers for nonfinancial reasons, the Fund may underperform the broader equity market or other funds that do not utilize ESG criteria when selecting investments.
High Portfolio Turnover Risk
TheFlexShares STOXX® US ESG Impact Index Fund, FlexShares Ready Access Variable Income Fund, the FlexShares Core Select Bond Fund, the FlexShares iBoxx3-Year Target Duration TIPS Index Fund, the FlexShares Disciplined Duration MBS Index Fund, the FlexShares Credit-Scored US Long Corporate Bond Index Fund, and the FlexShares High Yield Value-Scored Bond Index Fundare subject to the risk that active and frequent trading of the Fund’s portfolio securities may result in increased transaction costs to the Fund, including brokerage commissions, dealermark-ups and other transaction costs, which could reduce the Fund’s return.
Global Natural Resources Industry Risk
TheFlexShares Morningstar Global Upstream Natural Resources Index Fund (which is also an Underlying Fund of the FlexShares Real Assets Allocation Index Fund) is subject to the risks associated with investment in the global natural resources sector in addition to the general risk of the stock market. The natural resources sector can significantly be affected by events relating to U.S. and foreign political and economic developments and environmental and other government regulations, as well as other factors including, but not limited to: commodity price volatility, technological developments and natural orman-made disasters. Declines in the demand for, or prices of, natural resources generally would be expected to contribute to declines in the value of the Fund’s equity securities. Such declines may occur quickly and without warning and may negatively impact the value of the Fund and your investment.
Hedging Risk
The FlexShares Core Select Bond Fundis subject to the risk that the Fund’s short positions in U.S. Treasury futures and transactions in interest rate swaps will not completely eliminate interest rate risk of long positions in bonds. In certain falling
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interest rate environments, the Fund’s hedging strategy could result in disproportionately larger losses in the short U.S. Treasury futures and interest rate swaps positions as compared to gains in the long bond positions attributable to interest rate changes.
Corporate Bond Risk
The FlexShares Credit-Scored US Corporate Bond Index Fund and the FlexShares Credit-Scored US Long Corporate Bond Index Fundinvest primarily in bonds issued by corporations. Corporate debt securities are subject to the risk of the issuer’s inability to meet principal and interest payments on the obligation and may also be subject to price volatility due to such factors as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity. When interest rates rise, the value of corporate debt can be expected to decline. Debt securities with longer maturities tend to be more sensitive to interest rate movements than those with shorter maturities.
Interest Rate Risk
The FlexShares STOXX® Global Broad Infrastructure Index Fund and the FlexShares Global Quality Real Estate Index Fund (which is also an Underlying Fund of the FlexShares Real Assets Allocation Index Fund) are subject to the risk that rising interest rates may adversely affect the Fund. Increases in interest rates typically lower the present value of a REIT’s future earnings stream, and may make financing property purchases and improvements more costly. Because the market price of REIT stocks may change based upon investors’ collective perceptions of future earnings, the value of the Fund may decline when investors anticipate or experience rising interest rates.
China Investment Risk
TheFlexShares Morningstar Emerging Markets Factor Tilt Index Fund, the FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, and the FlexShares Emerging Markets Quality Low Volatility Index Fund expects to have significant investment in securities of Chinese issuers. With respect to the FlexShares Emerging Markets Quality Low Volatility Index Fund, only shares of companies incorporated in mainland China that are listed on the Hong Kong Exchange or traded globally as a depositary receipt are eligible to be included in the Underlying Index for the Fund. Investment exposure to China subjects a Fund to risks specific to China. China may be subject to considerable degrees of economic, political and social instability. China is a developing market and demonstrates significantly higher volatility from time to time in comparison to developed markets. Over the past 25 years, the Chinese government has undertaken reform of economic and market practices and expansion of the sphere for private ownership of property in China. However, Chinese markets generally continue to experience inefficiency, volatility and pricing anomalies resulting from governmental influence, a lack of publicly available information and/or political and social instability. Internal social unrest or confrontations with other neighboring countries, including military conflicts in response to such events, may also disrupt economic development in China and result in a greater risk of currency fluctuations, currency convertibility, interest rate fluctuations and higher rates of inflation. Export growth continues to be a major driver of China’s rapid economic growth. Reduction in spending on Chinese products and services, institution of tariffs or other trade barriers, or a downturn in any of the economies of China’s key trading partners may have an adverse impact on the Chinese economy.
Currency Risk
TheFlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, the FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, the FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, the FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, the FlexShares STOXX Global ESG Impact Index Fund, the FlexShares Morningstar Global Upstream Natural Resources Index Fund, the FlexShares STOXX Global Broad Infrastructure Index Fund, theFlexShares Global Quality Real Estate Index Fund, the FlexShares Real Assets Allocation Index Fund, the FlexShares InternationalQuality Dividend Index Fund, the FlexShares International Quality Dividend Defensive Index Fund, the FlexShares International
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Supplemental Information (cont.)
Quality Dividend Dynamic Index Fund, the FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, the FlexShares Ready Access Variable Income Fund and the FlexShares Emerging Markets Quality Low Volatility Index Fund may invest in securities denominated in foreign currencies. While each Fund’s investments may be denominated in foreign currencies, the portfolio securities and other assets held by each Fund are valued in U.S. dollars. Price fluctuations may occur in the dollar value of foreign securities because of changing currency exchange rates. Currency exchange rates may fluctuate significantly over short periods of time causing a Fund’s NAV to fluctuate as well. Currency exchange rates can be affected unpredictably by the intervention or the failure to intervene by U.S. or foreign governments or central banks, or by currency controls or political developments in the U.S. or abroad. To the extent that a Fund’s total assets, adjusted to reflect the Fund’s net position after giving effect to currency transactions, are denominated in the currencies of foreign countries, that Fund will be more susceptible to the risk of adverse economic and political developments within those countries.
Foreign Securities Risk
TheFlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, the FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, the FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, the FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, the FlexShares STOXX Global ESG Impact Index Fund, the FlexShares Morningstar Global Upstream Natural Resources Index Fund, the FlexShares STOXX Global Broad Infrastructure Index Fund, the FlexShares Global Quality Real Estate Index Fund, the FlexShares Real Assets Allocation Index Fund, the FlexShares International Quality Dividend Index Fund, the FlexShares International Quality Dividend Defensive Index Fund, the FlexShares International Quality Dividend Dynamic Index Fund, the FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, the FlexShares Ready Access Variable Income Fund and the FlexShares Emerging Markets Quality Low Volatility Index Fund, will invest in foreign securities. Foreign securities include direct investments innon-U.S. dollar-denominated securities traded primarily outside of the United States and dollar-denominated securities of foreign issuers. Foreign securities also include indirect investments such as ADRs and GDRs. ADRs are U.S. dollar-denominated receipts representing shares of foreign-based corporations. ADRs are receipts that are traded in the U.S., and entitle the holder to all dividend and capital gain distributions that are paid out on the underlying foreign shares. GDRs are receipts that often trade on foreign exchanges. They represent ownership in an underlying foreign or U.S. security and generally are denominated in a foreign currency.
Emerging Markets Risk
TheFlexShares Morningstar Emerging Markets Factor Tilt Index Fund, the FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, the FlexShares Real Assets Allocation Index Fund, the FlexShares International Quality Dividend Index Fund, the FlexShares International Quality Dividend Defensive Index Fund, the FlexShares International Quality Dividend Dynamic Index Fund, the FlexShares Ready Access Variable Income Fund, the FlexShares Morningstar Global Upstream Natural Resources Index Fund, the FlexShares STOXX Global Broad Infrastructure Index Fund, the FlexShares Global Quality Real Estate Index Fund and the FlexShares Emerging Markets Quality Low Volatility Index Fund invest primarily in emerging market countries. The risks of foreign investment are increased when the issuer is located in a country with an emerging economy or securities market. Political and economic structures in many of these countries may be undergoing significant evolution and rapid development, and these countries may lack the social, political and economic stability characteristics of developed countries. The securities laws of emerging market countries may be relatively new and unsettled and, consequently, there is a risk of rapid and unpredictable change in laws regarding foreign investment, securities regulation, title to securities and shareholder rights. Global factors and foreign actions may inhibit the flow of foreign capital on which a country is dependent to sustain its growth. In general, securities markets of emerging countries are less liquid, are especially subject to greater price volatility, have smaller market capitalizations, and have problems with securities registration and custody. These securities markets also have less government regulation and are not subject to as extensive and frequent accounting, financial and other reporting
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requirements as the securities markets of more developed countries. In addition, because the securities settlement procedures are less developed in these countries, a Fund may be required to deliver securities before receiving payment and also may be unable to complete transactions during market disruptions. As a result of these and other risks, investments in these countries generally present a greater risk of loss to a Fund.
Japan Investment Risk
TheFlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, the FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, and the FlexShares Developed Marketsex-US Quality Low Volatility Index Fund expects to have significant investment in securities of Japanese issuers. The Japanese economy may be subject to considerable degrees of economic, political and social instability, which could negatively impact Japanese issuers. In recent times, Japan’s economic growth rate has remained low, and it may remain low in the future. In addition, Japan is subject to the risk of natural disasters, such as earthquakes, volcanic eruptions, typhoons and tsunamis, which could negatively affect a Fund. The growth of Japan’s economy has historically lagged that of its Asian neighbors and other major developed economies. The Japanese economy is heavily dependent on international trade and has been adversely affected by trade tariffs, other protectionist measures, competition from emerging economies and the economic conditions of its trading partners. Japan’s relations with its neighbors, particularly China, North Korea, South Korea and Russia, have at times been strained due to territorial disputes, historical animosities and defense concerns. Most recently, the Japanese government has shown concern over the increased nuclear and military activity by North Korea. Strained relations may cause uncertainty in the Japanese markets and adversely affect the overall Japanese economy in times of crisis. China has become an important trading partner with Japan, yet the countries’ political relationship has become strained. Should political tension increase, it could adversely affect the economy, especially the export sector, and destabilize the region as a whole.
U.S. Issuer Risk
TheFlexShares Morningstar US Market Factor Tilt Index Fund, the FlexShares US Quality Large Cap Index Fund, the FlexShares STOXX US ESG Impact Index Fund, the FlexShares STOXX Global ESG Impact Index Fund, the FlexShares Morningstar Global Upstream Natural Resources Index Fund, the FlexShares STOXX Global Broad Infrastructure Index Fund, the FlexShares Global Quality Real Estate Index Fund, the FlexShares Real Assets Allocation Index Fund, the FlexShares Quality Dividend Index Fund, the FlexShares Quality Dividend Defensive Index Fund, the FlexShares Quality Dividend Dynamic Index Fund, the FlexShares Disciplined Duration MBS Index Fund, the FlexShares Credit-Scored U.S. Corporate Bond Index Fund, the FlexShares Credit-Scored US Long Corporate Bond Index Fund, the FlexShares High Yield Value-Scored Bond Index Fund, and the FlexShares US Quality Low Volatility Index Fund has significant exposure to U.S. issuers. Decreasing imports or exports, changes in trade regulations and/or an economic recession in the United States may have a material adverse effect on the U.S. economy. The financial crisis that began in 2007 caused a significant decline in the value and liquidity of issuers in the United States. Policy and legislative changes in the United States are changing many aspects of financial and other regulation and may have a significant effect on the U.S. markets generally, as well as the value of certain securities. In addition, a continued rise in the U.S. public debt level or U.S. austerity measures may adversely affect U.S. economic growth and the securities to which the Funds have exposure.
The following risks apply to the FlexShares Quality Dividend Index Fund, FlexShares Quality Dividend Defensive Index Fund, FlexShares Quality Dividend Dynamic Index Fund, FlexShares International Quality Dividend Index Fund, FlexShares International Quality Dividend Defensive Index Fund, and the FlexShares International Quality Dividend Dynamic Index Fund:
Dividend Risk
The Fund is subject to the risk that an issuer of stock held by a Fund may choose not to declare a dividend or the dividend rate might not remain at current levels. Dividend paying stocks might not experience the same level of earnings growth or capital
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Supplemental Information (cont.)
appreciation asnon-dividend paying stocks. A Fund’s performance during a broad market advance could suffer because dividend paying stocks may not experience the same capital appreciation asnon-dividend paying stocks.
Volatility Risk
The Fund is subject to the risk that the actual level of volatility experienced by a Fund may be greater or lower than the targeted overall volatility of the Fund’s Underlying Index. Although a Fund’s Underlying Index is designed to have a targeted overall volatility, there is no guarantee that it will have the targeted overall volatility. A Fund will continue to seek to track the Underlying Index even if the Underlying Index does not have the targeted overall volatility. There is also the risk that a Fund may experience volatility greater or lower than that of the Underlying Index as a result of tracking error. A portfolio of securities with greater volatility is generally considered to have a higher risk profile than a portfolio with lower volatility.
The following risk applies to theFlexShares Global Quality Real Estate Index Fund (which is also an Underlying Fund of the FlexShares Real Assets Allocation Index Fund):
Real Estate Securities Risk
The Fund is subject to the risks associated with investment in the real estate sector in addition to the general risk of the stock market. Investing in securities of real estate companies will make the Fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general, as well as risks that relate specifically to the way in which real estate companies are organized and operated. Real estate companies may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets. The value of real estate securities may underperform other sectors of the economy or broader equity markets. To the extent that the Fund concentrates its investments in the real estate sector, it may be subject to greater risk of loss than if it were diversified across different industry sectors.
The following risk applies to theFlexShares Global Quality Real Estate Index Fund (which is also an Underlying Fund of the FlexShares Real Assets Allocation Index Fund)and the FlexShares STOXX® Global Broad Infrastructure Index Fund:
Real Estate Investment Trust (REIT) Risk
The Fund is subject to the risk that the Fund’s investments will be affected by factors affecting REITs and the real estate sector generally. Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. REITs whose underlying properties are concentrated in a particular industry or geographic region are also subject to risks affecting such industries and regions. By investing in REITs through the Fund, a shareholder will bear expenses of the REITs in addition to expenses of the Fund.
The following risk applies to the FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, FlexShares Real Assets Allocation Index Fund and the FlexShares Core Select Bond Fund:
Fund of Funds Risk (or Underlying Funds Risk)
The Fund is subject to the risk that the Fund’s investment performance largely depends on the investment performance of the Underlying Fund(s) in which it primarily invests. The Fund’s NAV will change with changes in the value of the Underlying Fund(s) and other securities in which the Fund invests based on their market valuations.
An investment in the Fund will entail more costs and expenses than direct investments in the Underlying Fund(s). The Fund will indirectly pay a proportional share of the expenses of the Underlying Fund(s) in which it invests (including operating
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expenses and management fees), in addition to the fees and expenses it pays directly. As the Fund’s allocation to an Underlying Fund changes from time to time, or to the extent that the expense ratio of an Underlying Fund changes, the weighted average operating expenses borne by the Fund may increase or decrease.
The following risk applies to the FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund and the FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund:
Currency Hedging Risk
The Fund is subject to the risk that the Fund’s hedging transactions will not be effective. The Fund enters into foreign currency forward contracts designed to offset the Fund’s currency exposure ofnon-U.S. dollar denominated securities included in the Underlying Index against the U.S. dollar. These contracts may not be successful. To the extent the Fund’s foreign currency contracts are not successful, the U.S. dollar value of your investment in the Fund may go down. Because the Fund’s currency hedge is reset on a monthly basis, currency risk can develop or increase intra-month. Furthermore, while the Fund is designed to hedge against currency fluctuations, it is possible that a degree of currency exposure may remain even at the time a hedging transaction is implemented. Currency exchange rates can be very volatile and can change quickly and unpredictably. Therefore, the value of an investment in the Fund may also go up or down quickly and unpredictably and investors may lose money. In addition, a Fund’s currency hedging activities may involve frequent trading of currency instruments, which may increase transaction costs and cause the Fund’s return to deviate from the Underlying Index.
In seeking to track the performance of the Underlying Index, the Fund will attempt to hedge the currency exposure ofnon-U.S. dollar denominated securities held in its portfolio by investing in foreign currency forward contracts, which may includenon-deliverable foreign currency forward contracts (“NDFs”). NDFs on currencies are often less liquid than deliverable forward currency contracts. A lack of liquidity in NDFs of the hedged currency could result in the Fund being unable to structure its hedging transactions as intended. In addition, NTI may seek to limit the size of the Fund in order to attempt to reduce a situation where the Fund is unable to obtain sufficient liquidity in an underlying currency to implement its investment objective.
The following risks apply to theFlexShares Disciplined Duration MBS Index Fund, FlexShares Credit-Scored US Corporate Bond Index Fund, FlexShares Credit-Scored US Long Corporate Bond Index Fund, FlexShares High Yield Value-Scored Bond Index Fund, FlexShares Ready Access Variable Income Fund, and the FlexShares Core Select Bond Fund:
Credit (or Default) Risk
The Fund is subject to the risk that the inability or unwillingness of an issuer or guarantor of a fixed-income security, or a counterparty to a TBA, repurchase or other transaction, to meet its payment or other financial obligations will adversely affect the value of the Fund’s investments and its returns. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also adversely affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on the issuer’s or counterparty’s financial condition and on the terms of the securities.
Debt Extension Risk
The Fund is subject to the risk that an issuer will exercise its right to pay principal on an obligation held by the Fund (such as a mortgage-backed security) later than expected. This may happen during a period of rising interest rates. Under these circumstances, the value of the obligation will decrease and the Fund will suffer from the inability to invest in higher yielding securities.
Liquidity Risk
The Fund is subject to the risk that certain portfolio securities may be less liquid than others, which may make them difficult or impossible to sell at the time and the price that the Fund would like, adversely affecting the value of the Fund’s investments and its returns.
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Supplemental Information (cont.)
Prepayment (or Call) Risk
The Fund is subject to the risk that prepayment of the underlying mortgages or other collateral of some fixed-income securities may result in a decreased rate of return and a decline in value of those securities.
The following risks apply to theFlexShares Disciplined Duration MBS Index Fund, FlexShares Ready Access Variable Income Fund and the FlexShares Core Select Bond Fund:
U.S. Government Securities Risk
The Fund is subject to the risk that the U.S. government will not provide financial support to its agencies, instrumentalities or sponsored enterprises if it is not obligated to do so by law. Many U.S. government securities that may be purchased by the Fund are not backed by the full faith and credit of the United States. It is possible that the issuers of such securities will not have the funds to meet their payment obligations in the future.
Mortgage-Related and Other Asset-Backed Risks
The Fund is subject to the risks of investing in mortgage-related and other asset-backed securities, including Interest Rate/Maturity Risk, Debt Extension Risk and Prepayment (or Call) Risk.
The following risk applies to theFlexShares Disciplined Duration MBS Index Fund:
Mortgage Backed Pass-Through Securities Risk
The Fund is subject to the risk of investing in mortgage-backed securities issued by a U.S. Agency. These securities may not be backed by the full faith and credit of the U.S. government. Mortgage-backed securities are subject to Credit (or Default) Risk, Interest Rate/ Maturity Risk, Debt Extension Risk and Prepayment (or Call) Risk. Because of these risks, mortgage-backed securities react differently to changes in interest rates than other bonds. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain mortgage-backed securities.
The following risk applies tothe FlexShares High Yield Value-Scored Bond Index Fund, the FlexShares US Quality Low Volatility Index Fund, the FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, and the FlexShares Emerging Markets Quality Low Volatility Index Fund:
New Fund Risk
New Fund Risk is the risk that the Fund will not grow to or maintain an economically viable size, in which case it may experience greater tracking error to its Underlying Index than it otherwise would at higher asset levels, or it could ultimately liquidate without shareholder approval. The timing of such liquidation may not be favorable and could have negative tax consequences for shareholders. From time to time, an Authorized Participant, a third-party investor, the Investment Adviser or an affiliate of the Investment Adviser, may invest in the Fund and hold its investment for a specific period of time in order to facilitate commencement of the Fund’s operations or for the Fund to achieve size or scale. There can be no assurance that any such entity would not redeem its investment or that the size of the Fund would be maintained at such levels, which could negatively impact the Fund. The Fund’s distributor does not maintain a secondary market in the shares.
The following risks apply tothe FlexShares High Yield Value-Scored Bond Index Fund:
Distressed Securities Risk
Distressed securities risk is the substantial risk of investing in distressed securities that is in addition to the risks of investing innon-investment grade securities generally. NTI defines securities issued by companies whose financial condition is troubled or
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Supplemental Information (cont.)
uncertain and that may be involved in bankruptcy proceedings, reorganizations or financial restructurings as “distressed securities.” Distressed securities are speculative and involve a substantial risk that principal will not be paid. In addition, the Fund will generally not receive interest payments on the distressed securities and may incur costs to protect its investment. These securities may present a substantial risk of default. The Fund may incur additional expenses to the extent it is required to seek recovery upon a default in the payment of principal of or interest on its portfolio holdings. In any reorganization or liquidation proceeding relating to a portfolio company, the Fund may lose its entire investment or may be required to accept cash or securities with a value less than its original investment. Distressed securities and any securities received in an exchange for such securities may be subject to restrictions on resale.
High Yield Securities Risk
High yield securities risk is the risk that the Fund will be subject to greater credit risk, price volatility and risk of loss than if it invested primarily in investment grade securities, which can adversely impact the Fund’s return and net asset value. High yield securities are considered highly speculative and are subject to increased risk of an issuer’s inability to make principal and interest payments. The Fund’s Underlying Index is designed to be comprised of securities with the potential for higher yields as compared to the overall high yield corporate bond market. As such, the Fund is expected to exhibit greater sensitivity to market fluctuations.
Substantial Volatility Risk
Substantial volatility riskis the risk that the value of the securities in the Fund’s portfolio may fluctuate, sometimes rapidly and unpredictably at a greater level than the overall market. There is a risk that the Fund could have substantial volatility.
Value Score Risk
Value score risk is the risk that the Fund’s investment in companies whose securities are believed to be undervalued will not appreciate in value as anticipated. Although the Fund’s Underlying Index is designed to measure a portfolio of bonds of companies with the potential for higher yields and less risk of insolvency relative to the Parent Index, there is no assurance that the Underlying Index or Fund will be comprised of such securities. Accordingly, the Fund may be subject to greater credit risk, price volatility and risk of loss relative to the Parent Index.
The following risk applies to theFlexShares Morningstar US Market Factor Tilt Index Fund, FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, FlexShares International Quality Dividend Index Fund, FlexShares International Quality Dividend Defensive Index Fund, FlexShares International Quality Dividend Dynamic Index Fund, FlexShares Credit-Scored US Corporate Bond Index Fund, FlexShares Credit-Scored US Long Corporate Bond Index Fund, FlexShares Ready Access Variable Income Fund, and the FlexShares Core Select Bond Fund, FlexShares US Quality Low Volatility Index Fund, FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, and FlexShares Emerging Markets Quality Low Volatility Index Fund:
Financial Sector Risk
The Fund is subject to the risk that the Fund will be impacted by events affecting the U.S. and/ornon-U.S. financial sectors if it invests a relatively large percentage of its assets in those sectors, adversely affecting the Fund’s performance. The U.S. andnon-U.S. financial sectors can be significantly affected by changes in interest rates, government regulation, the rate of corporate and consumer debt defaulted, price competitions and the availability and cost of capital funds. In 2008 and 2009, the U.S. financial sector was significantly impacted by bankruptcies and consolidations of major financial firms. Events affecting the
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U.S. andnon-U.S. financial sectors have had, and may continue to have, a significant negative impact on the valuations and stock prices of companies in this sector and have increased the volatility of investments in those sectors.
The following risk applies to theFlexShares Quality Dividend Index Fund, FlexShares Quality Dividend Defensive Index Fund, the FlexShares Quality Dividend Dynamic Index Fund, FlexShares STOXX US ESG Impact Index Fund and FlexShares US Quality Large Cap Index Fund:
Information Technology Sector Risk
The Fund is subject to the risk that the Fund will be impacted by events affecting the U.S. information technology sector if it invests a relatively large percentage of its assets in that sector, adversely affecting the Fund’s price.
The following risk applies to theFlexShares Morningstar US Market Factor Tilt Index Fund, the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, the FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, the FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index Fund, the FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, the FlexShares US Quality Large Cap Index Fund, the FlexShares STOXX US ESG Impact Index Fund, the FlexShares STOXX Global ESG Impact Index Fund, the FlexShares Morningstar Global Upstream Natural Resources Index Fund, the FlexShares STOXX Global Broad Infrastructure Index Fund, the FlexShares Global Quality Real Estate Index Fund, the FlexShares Real Assets Allocation Index Fund, the FlexShares Quality Dividend Index Fund, the FlexShares Quality Dividend Defensive Index Fund, the FlexShares Quality Dividend Dynamic Index Fund, the FlexShares International Quality Dividend Index Fund, the FlexShares International Quality Dividend Defensive Index Fund, the FlexShares International Quality Dividend Dynamic Index Fund, the FlexShares US Quality Low Volatility Index Fund, FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, and FlexShares Emerging Markets Quality Low Volatility Index Fund:
Equity Securities Risk
Each Fund invests in equity securities, primarily in the form of common stocks. Each of these Funds may also invest in preferred stocks and REITs. Preferred stocks are securities that represent an ownership interest providing the holder with claims on the issuer’s earnings and assets before common stock owners but after bond owners. REITs are pooled investment vehicles that invest primarily in real estate or real estate related loans.
Equity securities are subject to changes in value that may be attributable to market perception of a particular issuer, general stock market fluctuations that affect all issuers, or as a result of such factors as a company’s business performance, investor perceptions, stock market trends and general economic conditions. The equity securities owned by a Fund may be more volatile and underperform other asset classes and the general securities markets.
The following risks apply totheFlexShares US Quality Low Volatility Index Fund, FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, and FlexShares Emerging Markets Quality Low Volatility Index Fund:
Large Shareholder Risk
Certain shareholders, including other funds advised by the Investment Adviser, may from time to time own a substantial amount of the Fund’s shares. In addition, a third party investor, the Investment Adviser or an affiliate of the Investment Adviser, an authorized participant, a lead market maker, or another entity may invest in the Fund and hold its investment for a limited period of time solely to facilitate commencement of the Fund or to facilitate the Fund’s achieving a specified size or scale. There can be no assurance that any large shareholder would not redeem its investment, that the size of the Fund would be maintained at such levels or that the Fund would continue to meet applicable listing requirements. Redemptions by large
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shareholders could have a significant negative impact on the Fund. In addition, transactions by large shareholders may account for a large percentage of the trading volume on Fund’s listing exchange and may, therefore, have a material upward or downward effect on the market price of the shares.
To the extent a significant percentage of the shares of a Fund are owned or controlled by a small number of account shareholders (or a single account shareholder), including funds or accounts over which the Investment Adviser or an affiliate of the Investment Adviser has investment discretion, the Fund is subject to the risk that those shareholders may purchase or redeem Fund shares in significant amounts rapidly or unexpectedly, including as a result of an asset allocation decision made by the Investment Adviser or an affiliate of the Investment Adviser and may adversely affect a Fund’s performance if the Investment Adviser is forced to sell portfolio securities or invest cash when the Investment Adviser would not otherwise choose to do so. Redemptions of a large number of shares may affect the liquidity of a Fund’s portfolio, increase the Fund’s transaction costs, and accelerate the realization of taxable income and/or gains.
Low Volatility Risk
Although the Fund’s Underlying Index is designed to have overall volatility that is lower than that of the Parent Index, there is no guarantee it will be successful. Securities or other assets in the Fund’s portfolio may be subject to price volatility and the prices may not be any less volatile than the market as a whole and could be more volatile. Events or financial circumstances affecting individual securities or sectors may increase the volatility of a Fund. The price of a security may fluctuate due to factors affecting markets generally or particular industries. The market prices of the securities or other assets in a Fund’s portfolio may fluctuate, sometimes rapidly and unpredictably. The Fund will continue to seek to track the Underlying Index even if the Underlying Index does not have lower overall volatility than the Parent Index. There is also the risk that a Fund may experience volatility greater than that of its Parent Index as a result of tracking error. A portfolio of securities with greater volatility is generally considered to have a higher risk profile than a portfolio with lower volatility.
The following risk applies tothe FlexShares US Quality Low Volatility Index Fund, the FlexShares Developed Marketsex-US Quality Low Volatility Index Fund, the FlexShares Emerging Markets Quality Low Volatility Index Fund, the FlexShares Morningstar US Market Factor Tilt Index Fund, the FlexShares Morningstar Developed Marketsex-US Factor Tilt Index Fund, the FlexShares Morningstar Emerging Markets Factor Tilt Index Fund, the FlexShares Currency Hedged Morningstar DMex-US Factor Tilt Index, the FlexShares Currency Hedged Morningstar EM Factor Tilt Index Fund, the FlexShares US Quality Large CapIndex Fund, the FlexShares STOXX US ESG Impact Index Fund, the FlexShares STOXX Global ESG Impact Index Fund, the FlexShares Morningstar Global Upstream Natural Resources Index Fund, the FlexShares STOXX Global Broad Infrastructure Index Fund, the FlexShares Global Quality Real Estate Index Fund, the FlexShares Real Assets Allocation Index Fund, the FlexShares Quality Dividend Index Fund, the FlexShares Quality Dividend Defensive Index Fund, the FlexShares Quality Dividend Dynamic Index Fund, the FlexShares International Quality Dividend Index Fund, the FlexShares International Quality Dividend Defensive Index Fund, the FlexShares International Quality Dividend Dynamic Index Fund, the FlexShares iBoxx3-Year Target Duration TIPS Index Fund, the FlexShares iBoxx5-Year Target Duration TIPS Index Fund, the FlexShares Disciplined Duration MBS Index Fund, the FlexShares Credit Scored US Corporate Bond Index Fund, the FlexShares Credit Scored US Long Corporate Bond Index Fund, and the FlexShares High Yield Value-Scored Bond Index Fund:
Passive Investment Risk
The Funds are not actively managed. Each Fund may be affected by a general decline in the market segments relating to its Underlying Index. Each Fund invests in securities included in, or representative of, its Underlying Index regardless of their investment merit. NTI does not attempt to take defensive positions in any market conditions, including declining markets.
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Supplemental Information (cont.)
Premium/Discount Information
Information about the differences between the daily market prices on secondary markets for shares of the Funds and the Funds’ net asset values for various time periods, as applicable, is available by visiting the Funds’ website at www.flexshares.com.
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For More Information(Unaudited)
Portfolio Holdings
FlexShares® Trust files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on FormN-Q (or as an exhibit to its reports on FormN-Q’s successor, FormN-PORT). The Funds’ FormsN-Q and FormsN-PORT are available on the SEC’s Web site at www.sec.gov.
Proxy Voting
FlexShares® Trust Proxy Voting Policies and Procedures are available upon request and without charge by calling1-855-FLEXETF(1-855-353-9383) or by visiting the Funds’ Web site www.flexshares.com or the SEC’s Web site at sec.gov. Each Fund’s portfolio securities voting record for the12-month period ended June 30 is available upon request and without charge by calling1-855-FLEXETF(1-855-353-9383) or by visiting the SEC’s website at www.sec.gov.
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FlexShares® Trust
50 S. LaSalle Street
Chicago, IL 60603
800.595.9111
www.flexshares.com
FlexShares® is a registered trademark of NTI. Morningstar® is a registered trademark of Morningstar, Inc. (“Morningstar”). Morningstar® US Market Factor Tilt IndexSM, Morningstar® Developed Marketsex-US Factor Tilt IndexSM, Morningstar® Emerging Markets Factor Tilt IndexSM, Morningstar® Developed Marketsex-US Factor Tilt Hedged IndexSM, Morningstar® Emerging Markets Factor Tilt Hedged IndexSM and Morningstar® Global Upstream Natural Resources IndexSM are service marks of Morningstar, Inc. STOXX and its licensors (the “Licensors”) have no relationship to FlexShares® Trust other than the licensing of the STOXX® USA ESG Impact Index, STOXX® Global ESG Impact Index and STOXX® Global Broad Infrastructure Index and the related trademarks for use in connection with the FlexShares® STOXX® US ESG Impact Index Fund, FlexShares® STOXX® Global ESG Impact Index Fund and FlexShares®STOXX® Global Broad Infrastructure Index Fund, respectively. The iBoxx3-Year Target Duration TIPS Index and iBoxx5-Year Target Duration TIPS Index are each the property of Markit North America, Inc. (“Markit”) and have been licensed for use in connection the FlexShares iBoxx3-Year Target Duration TIPS Index Fund and the FlexShares iBoxx5-Year Target Duration TIPS Index Fund, respectively. Northern Trust Quality Low Volatility IndexSM, Northern Trust Developed Marketsex-US Quality Low Volatility IndexSM, Northern Trust Emerging Markets Quality Low Volatility IndexSM, Northern Trust Quality Large Cap IndexSM, Northern Trust Quality Dividend IndexSM, Northern Trust Quality Dividend Dynamic IndexSM, Northern Trust Quality Dividend Defensive IndexSM, Northern Trust International Quality Dividend IndexSM, Northern Trust Quality Dividend Dynamic IndexSM, Northern Trust International Quality Dividend Defensive IndexSM, Northern Trust Global Quality Real Estate IndexSM, Northern Trust Credit-Scored US Corporate Bond IndexSM, Northern Trust Credit-Scored US Long Corporate Bond IndexSM, Northern Trust Real Assets Allocation IndexSM, Northern Trust High Yield US Corporate Bond IndexSM, and Northern Trust High Yield Value-Scored US Corporate Bond IndexSM are service marks of NTI and have been licensed for use by FlexShares Trust. The ICE® BofAML® Constrained Duration US Mortgage Backed Securities IndexSM are trademarks of ICE Data Indices, LLC or its affiliates (“ICE”) and have been licensed for use by NTI.
FS00139-0619
Item 2. Code Of Ethics.
| (a) | As of the end of the period, October 31, 2019, the Registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Registrant or a third party (the “Code of Ethics”). |
| (c) | The Registrant has not amended its Code of Ethics during the period covered by this report. |
| (d) | The Registrant has not granted any waivers, including an implicit waiver, from any provisions of its Code of Ethics during the period covered by this report. |
| (f) | A copy of the Registrant’s Code of Ethics is attached as exhibit 13(a)(1) to this FormN-CSR. |
Item 3. Audit Committee Financial Expert.
The Registrant’s Board of Trustees has determined that the Registrant has at least one “audit committee financial expert” (as defined in Item 3 of FormN-CSR), serving on its audit committee. Philip G. Hubbard is the “audit committee financial expert” and is “independent” (as each term is defined in Item 3 of FormN-CSR).
Under applicable securities laws and regulations, a person who is determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for purposes of Section 11 of the Securities Act of 1933, as amended, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liability that are greater than the duties, obligations, and liability imposed on such person as a member of the Registrant’s Audit Committee and Board of Trustees in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations or liability of any other member of the Registrant’s Audit Committee or Board of Trustees.
Item 4. Principal Accountant Fees and Services.
In response to Items4(a)-4(d), aggregate fees for professional services rendered for FlexShares® Trust by Deloitte & Touche, LLP (“Deloitte”) for the fiscal years ended October 31, 2019 and October 31, 2018 were:
| | | | | | | | |
| | | 2019 | |
| | | All fees and
services to the
Trust that were
pre-approved | | | All fees and
services to
Service Affiliates(a)
that were pre-
approved | |
Audit Fees | | $ | 652,500 | | | | N/A | |
Audit Related Fees(b) | | $ | 0 | | | $ | 0 | |
Tax Fees(c) | | $ | 72,500 | (1) | | $ | 0 | |
All Other Fees(d) | | $ | 0 | | | $ | 0 | |
| | | | | | | | |
Total: | | $ | 725,000 | | | $ | 0 | |
| | | | | | | | |
| | | | | | | | |
| | | 2018 | |
| | | All fees and
services to the
Trust that were
pre-approved | | | All fees and
services to
Service Affiliates(a)
that were pre-
approved | |
Audit Fees | | $ | 585,000 | | | | N/A | |
Audit Related Fees(b) | | $ | 0 | | | $ | 0 | |
Tax Fees(c) | | $ | 65,000 | (1) | | $ | 0 | |
All Other Fees(d) | | $ | 0 | | | $ | 0 | |
| | | | | | | | |
Total: | | $ | 650,000 | | | $ | 0 | |
| | | | | | | | |
| (1) | Amounts relate to tax fees for the review of federal income tax returns, excise tax returns and year end distribution calculations. |
| (a) | “Service affiliates” as it relates to the aggregate “Audit Fees,” “Audit-Related Fees,” “Tax Fees” and “All Other Fees” that were billed by Deloitte for the periods ended October 31, 2019 and October 31, 2018 are Northern Trust Investments, Inc. (“NTI”) and entities controlling, controlled by or under common control with NTI that provide ongoing services to the Registrant. |
| (b) | “Audit-Related Fees” are fees for assurance and related services rendered by Deloitte that are reasonably related to the performance of the audit or review of the Registrant’s financial statements, but not reported as “Audit Fees.” |
| (c) | “Tax Fees” are fees for professional services rendered by Deloitte for tax compliance, tax advice and tax planning. |
| (d) | “All Other Fees” are for products and services provided by Deloitte other than those reported as Audit, Audit-Related or Tax Fees. |
| (e)(1) | The Registrant’s Audit Committee Charter provides that the Audit Committee is responsible for the approval of, prior to the appointment of, the engagement of the principal accountant to annually audit the Registrant’s financial statements. The Audit Committee must alsopre-approve the engagement of the principal accountant to providenon-audit services to the Registrant, NTI or to any entity controlling, controlled by or under common control with NTI that provides ongoing services to the Registrant, if the engagement has a direct impact on the operations or financial reporting of the Registrant. Thepre-approvals may be delegated to a designated representative (or representatives) of the audit committee and suchpre-approvals and approvals must be reported to the full Audit Committee at its next meeting. Each designated representative must be a member of the Audit Committee. |
| (e)(2) | No percentage of the principal accountant’s fees or services were approved pursuant to the waiver provision of paragraph (c)(7)(i)(C) or (c)(7)(ii) of Rule2-01 of RegulationS-X. |
| (g) | The aggregatenon-audit fees and services billed by Deloitte for services rendered to the Registrant and Service Affiliates for the periods ended October 31, 2019 and October 31, 2018, respectively, were $4,411,047 and $6,748,000. |
| (h) | The Registrant’s Audit Committee has considered whether the provision ofnon-audit services to Service Affiliates, notpre-approved pursuant to paragraph (c)(7)(ii) of Rule2-01 of RegulationS-X, is compatible with maintaining the registered public accountant’s independence in performing audit services. |
Item 5. Audit Committee of Listed Registrants.
| (a) | The Registrant has a separately-designated standing Audit Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. All of the Board’s independent Trustees, Philip G. Hubbard, Eric T. McKissack and Sarah N. Garvey, are members of the Audit Committee. |
Item 6. Investments
| (a) | Schedule I – Investments in Securities of Unaffiliated Issuers. |
The complete schedule of investments is included in the report to shareholders in Item 1 of this FormN-CSR.
| (b) | Securities Divested of in accordance with Section 13(c) of the Investment Company Act of 1940. |
Not Applicable.
Item 7. Disclosure Of Proxy Voting Policies And Procedures ForClosed-End Management Investment Companies.
Not Applicable.
Item 8. Portfolio Managers ofClosed-End Management Investment Companies.
Not Applicable.
Item 9. Purchase Of Equity Securities ByClosed-End Management Investment Company And Affiliated Purchasers.
Not Applicable.
Item 10. Submission Of Matters To A Vote Of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.
Item 11. Controls And Procedures.
| (a) | The Registrant’s principal executive officer and principal financial officer, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective, based on the evaluation of these controls and procedures required by Rule30a-3(b) under the 1940 Act and Rules13a-15(b) or15d-15(b) under the Securities Exchange Act of 1934 as of a date within 90 days of the filing date of this report. |
| (b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a - 3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities forClosed-End Management Investment Companies.
Not Applicable.
Item 13. Exhibits.
| (a)(1) | The code of ethics that is the subject of the disclosure required by Item 2 is attached hereto. |
| (a)(2) | Certifications pursuant to Rule30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
| (b) | Certification required by Rule30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 is attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | |
| FlexShares® Trust |
| |
| By: | | /s/ Peter K. Ewing |
| | Peter K. Ewing |
| | President |
| | January 6, 2020 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | |
| By: | | /s/ Peter K. Ewing |
| | Peter K. Ewing |
| | President |
| | January 6, 2020 |
| |
| By: | | /s/ Randal E. Rein |
| | Randal E. Rein |
| | Treasurer and Principal Financial Officer |
| | January 6, 2020 |
