QDF: Better Options Out There

seekingalpha07-18

The FlexShares Quality Dividend Index Fund offers quality stocks with dividends, suitable for volatile markets or economic slowdowns.QDF replicates the Northern Trust Quality Dividend Index, focusing ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nQDF: Better Options Out There\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-18 21:08 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4704775-qdf-better-options-out-there><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The FlexShares Quality Dividend Index Fund offers quality stocks with dividends, suitable for volatile markets or economic slowdowns.QDF replicates the Northern Trust Quality Dividend Index, focusing ...</p>\n\n<a href=\"https://seekingalpha.com/article/4704775-qdf-better-options-out-there\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"DGRW","symbol_name":"智慧树美国优质红利成长基金","start_time":0,"source_url":"https://seekingalpha.com/article/4704775-qdf-better-options-out-there","article_id":"2452890754","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1324869840/image_1324869840.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2452890754","pubTimestamp":1721308128,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"The FlexShares Quality Dividend Index Fund offers quality stocks with dividends, suitable for volatile markets or economic slowdowns.QDF replicates the Northern Trust Quality Dividend Index, focusing ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"DGRW":"智慧树美国优质红利成长基金","BK4585":"ETF&股票定投概念","BK4550":"红杉资本持仓","QDF":"Flexshares Quality Dividend Inde","BK4588":"碎股"},"translate_title":"QDF：更好的选择","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DGRW":1,"QDF":1},"content_text":"The FlexShares Quality Dividend Index Fund offers quality stocks with dividends, suitable for volatile markets or economic slowdowns.QDF replicates the Northern Trust Quality Dividend Index, focusing on US companies with strong quality characteristics and attractive dividend distributions.QDF has a large exposure to tech stocks, leading to concerns about potential volatility and low dividend yield. Comparisons with other funds show underperformance.Luis Alvarez Not all quality stocks pay dividends. Not all dividend stocks are quality. You know when you want quality AND dividends? When volatility is about to pick up in stocks, and/or when the economy is about to enter a slowdown. If you think either dynamic is likely in the near term, then you may want to consider the FlexShares Quality Dividend Index Fund (NYSEARCA:QDF). This passively managed exchange-traded fund replicates the Northern Trust Quality Dividend Index that captures the performance of a diverse universe of US companies which simultaneously make attractive dividend distributions while also embodying strong quality characteristics. Each constituent of the index is filtered by a proprietary scoring model that evaluates company-specific metrics such as management efficiency, profitability and cash flow generation. QDF has been around since 2012, with a healthy AUM of $1.8 billion. It's not terribly expensive at a 0.38% fee. The fund skews larger, with the weighted average market cap at $860 billion. A Look At The Holdings The top positions are all the ones you know and love, and which drive most major market averages. flexshares.com The biggest position is Apple at nearly 10% of the fund. Microsoft and Nvidia come in 2nd and 3rd, making 20% alone Tech quality dividend plays. Candidly, I'm not a fan of this, though I obviously recognize that these stocks fit the criteria. Nothing against the companies, it's just that you can get the same kind of exposure to the big drivers by just owning an S&P 500 fund. That point is an important one to consider. When we look at the sector allocation, Technology is the largest weighting, followed by Financials. flexshares.com Again - similar to what you see in large core equity funds. Tech isn't exactly the first sector I'd normally think of in terms of dividends, and yet it's the largest allocation here. My concern here is that, while these companies may have high quality and a steady dividend stream, they are also vulnerable to their own success given how much momentum these stocks (Nvidia in particular) have exhibited. A momentum, when it turns, turns ugly independent of quality, dividends, or both. When we look at the yield, it's honestly not that impressive at just 1.85%. Quality or not, the stocks selected in the index and fund have had so much momentum that the yield shrinks as a result. ycharts.com Peer Comparison One fund worth comparing QDF to is the WisdomTree U.S. Quality Dividend Growth Fund (DGRW). Both are focused on the same concept. When we look at the price ratio of QDF relative to DGRW, we find that QDF has meaningfully underperformed on a relative basis. stockcharts.com The reason? The second-largest sector in DGRW after Tech, which holds the same top position, is Health Care, whereas, for QDF, it's Financials. Health Care has outperformed Financials. So, the story here is ultimately more about sector allocation than stock picking. Pros and Cons On the positive side, it does appear to be a robust methodology for identifying quality stocks. The ETF should offer above-average protection from market downturns, and its broad-based sector diversity and investment in industry leaders should contribute to capital appreciation while delivering a solid stream of dividend income. But the low dividend yield of QDF might discourage investors trying to generate significant cash flow. Moreover, too much exposure to mega-cap tech stocks is problematic because it consists of only a handful of rapidly rising winners that may slow down at any time. I view this to be a significant risk, and one that the dividend filter can't counter properly. Conclusion  In the end, of course, it's your call. If you are seeking a balanced dividend investing approach - emphasizing quality and growth along with dividends - the FlexShares Quality Dividend Index Fund is a decent place to start. Its strict screening criteria, along with its exposure to the most profitable companies in each industry, make it an attractive blend of volatility and strength. But for income-oriented investors with more conservative risk tolerances, the fund's modest yield isn't compelling. I think there are better funds with more differentiated portfolio holdings to consider that are likely a better fit.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2452890754"}