FlexShares® Announces Liquidation of an Exchange Traded Fund

Rhea-AI Summary

Northern Trust's FlexShares has announced the liquidation and termination of the FlexShares International Quality Dividend Defensive Index Fund (IQDE). The fund will cease accepting creation unit purchase orders after 3:00 p.m. ET on January 17, 2025.

Trading of the fund's shares will be suspended before market open on January 22, 2025, with the final trading day being January 21, 2025. Shareholders can sell their shares until the close of trading on January 21, 2025, subject to standard brokerage fees. Those who retain their shares will receive cash equal to the NAV calculated at the close of business on the closing date, with liquidation proceeds expected around January 28, 2025.

Remaining shareholders won't incur fund transaction fees, but the NAV will reflect costs from selling portfolio securities. The liquidation may have tax implications, and shareholders are advised to consult tax professionals.

Positive

• None.

Negative

• Liquidation of IQDE fund indicates potential portfolio optimization or underperformance
• Shareholders may face tax consequences from forced liquidation
• Trading costs from portfolio liquidation will impact final NAV

Insights

ETF Specialist

The liquidation of FlexShares International Quality Dividend Defensive Index Fund (IQDE) represents a minor portfolio adjustment for Northern Trust, which manages over $1.4 trillion in assets. The fund's closure likely stems from insufficient asset gathering or declining investor interest in defensive international dividend strategies. The liquidation process is standard, giving investors until January 21, 2025, to sell their positions or await the NAV distribution.

This development carries minimal impact for Northern Trust (NTRS) shareholders, as ETF closures are routine industry events. With a market cap of $20.4 billion, NTRS generates revenue primarily from asset management and custody services, making single fund closures negligible to overall financial performance. The orderly wind-down process protects investor interests while streamlining the company's product lineup.

For existing IQDE shareholders, the key consideration is tax implications of the forced liquidation. The NAV distribution will trigger capital gains or losses, requiring careful tax planning. Institutional investors typically prefer executing market sales before the last trading date to maintain greater control over their exit timing and execution price.

CHICAGO--(BUSINESS WIRE)-- Northern Trust’s FlexShares Exchange Traded Funds announced the liquidation and termination of the FlexShares International Quality Dividend Defensive Index Fund (Ticker: IQDE) (the “Fund”). Prior to and through the close of regular trading (the “Close of Trading”) on the NYSE Arca, Inc. (“NYSE Arca”) on or about January 21, 2025 (the “Closing Date”), the Fund will undertake the process of closing down and liquidating its portfolio.

The Fund will discontinue accepting orders for the purchase of creation units after 3:00 p.m., Eastern time, on January 17, 2025. Trading of the Fund’s shares will be suspended prior to the open of regular trading (i.e., 9:30 a.m., Eastern time) on the NYSE Arca on January 22, 2025. Accordingly, the final date of trading of the Fund’s shares on the NYSE Arca will be January 21, 2025. Shareholders may sell their shares on or before the Close of Trading on January 21, 2025, and may incur customary brokerage charges associated with such sales.

Shareholders who do not sell their shares on or before the Close of Trading on January 21, 2025, will receive cash equal to the amount of the net asset value of their shares calculated as of the close of business on the Closing Date. Proceeds of the liquidation are currently expected to be sent to shareholders on or about January 28, 2025. Those shareholders remaining in the Fund on the Closing Date will not be charged any transaction fees by the Fund, but the net asset value of the Fund on the Closing Date will reflect trading costs associated with the sale of portfolio securities of the Fund.

If Fund shareholders sell their shares or receive a liquidating distribution, it is generally considered a taxable event and they should consult their tax advisor about the potential tax consequences.

About FlexShares

FlexShares Exchange Traded Funds are designed to pursue specific investment goals across both passive and active strategies. FlexShares offers differentiated ETF strategies that can improve and simplify the investment decision process for the long-term investor. Visit us on FlexShares.com.

About Northern Trust Asset Management

Northern Trust Asset Management is a global investment manager that helps investors navigate changing market environments in efforts to realize their long-term objectives. Entrusted with $1.3 trillion in assets under management as of September 30, 2024, we understand that investing ultimately serves a greater purpose and believe investors should be compensated for the risks they take — in all market environments and any investment strategy. That’s why we combine robust capital markets research, expert portfolio construction and comprehensive risk management in an effort to craft innovative and efficient solutions that seek to deliver targeted investment outcomes. As engaged contributors to our communities, we consider it a great privilege to serve our investors and our communities with integrity, respect and transparency.

Northern Trust Asset Management is composed of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Fund Managers (Ireland) Limited, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc., 50 South Capital Advisors, LLC, Northern Trust Asset Management Australia Pty Ltd, and investment personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2024, Northern Trust had assets under custody/administration of US$17.4 trillion, and assets under management of US$1.6 trillion. For more than 135 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit us on northerntrust.com. Follow us on Instagram @northerntrustcompany or Northern Trust on LinkedIn.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/terms-and-conditions.

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

Foreside Fund Services, LLC, distributor. FlexShares and Foreside are not related.

An investment in FlexShares is subject to numerous risks, including possible loss of principal. Fund returns may not match the return of the respective indexes. A full description of risks is in the prospectus. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns. An ESG investment methodology that includes and excludes issuers and assigns weights to issuers by applying non-financial factors, such as ESG factors, such ESG investment methodology may underperform the broader equity market or other investment products that do or do not use ESG investment criteria.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250103553717/en/

Doug Holt

312-557-1571

Doug.Holt@ntrs.com

Joanne Zalatoris

312-900-3462

Joanne.Zalatoris@ntrs.com

Source: Northern Trust Corporation

FAQ

When is the last day to trade FlexShares IQDE shares before liquidation?

The final trading day for FlexShares IQDE shares will be January 21, 2025, on the NYSE Arca.

What happens to IQDE shares not sold before the liquidation date?

Shareholders who don't sell their shares by January 21, 2025, will receive cash equal to the net asset value of their shares calculated at the close of business on the closing date.

When will IQDE shareholders receive their liquidation proceeds?

Liquidation proceeds are expected to be distributed to shareholders on or about January 28, 2025.

Will IQDE shareholders incur transaction fees during the liquidation?

While the Fund won't charge transaction fees, shareholders selling before the closing date will incur standard brokerage charges, and the final NAV will reflect costs from selling portfolio securities.

What are the tax implications of the IQDE fund liquidation?

The liquidation is generally considered a taxable event, and shareholders should consult their tax advisors about potential tax consequences.