FlexShares ESG & Climate Developed Markets ex-US Core Index Fund (FEDM)

Overview

The fund described is a financial instrument designed for investors seeking to integrate environmental, social, and governance (ESG) considerations into their investment strategy. It targets companies demonstrating ESG characteristics within developed markets, excluding the United States. The goal is to mirror the performance of these selected companies, providing investors with core, broad-market exposure to equities. This focus on ESG factors is indicative of the growing trend among investors to factor in sustainability and ethical considerations when making investment decisions. The fund is committed to investing a minimum of 80% of its assets in securities from its underlying index, which includes American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) based on those securities, indicating a significant concentration in its chosen market segment. Despite its broad-market approach, it is classified as non-diversified, meaning it may invest more heavily in fewer sectors or issuers than diversified funds.

Products and Services

• ESG-Focused Investment in Developed Markets (Excluding the U.S.)

  This product offers investors the opportunity to invest in companies outside of the United States that are notable for their environmental, social, and governance (ESG) characteristics. The fund seeks to reflect the performance of these companies, providing investors with the chance to participate in the growth of firms that align with their values.

• Investments in Securities of the Underlying ESG Index

  The majority of the fund's assets are allocated to securities that are part of the underlying ESG index. This approach ensures that investments are made in companies that have been vetted for their ESG practices, thereby contributing to a more sustainable and ethical investment portfolio.

• Utilization of ADRs and GDRs

  The fund utilizes American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) for investment diversification. This allows the fund to gain exposure to foreign equity markets without the complexities typically associated with direct investments in foreign companies. It bridges the gap for investors seeking international diversification with an ESG focus.

• Non-Diversified Fund Status

  As a non-diversified fund, this investment vehicle may concentrate its assets more heavily in fewer sectors or issuers than a diversified fund. This strategy can potentially offer higher returns but also poses a higher risk, making it suitable for investors who are comfortable with significant exposure to specific market segments.