2024-05-30 09:21:07 ET
Summary
- The FlexShares Quality Dividend Defense Index Fund aims to capture defensive, high-quality dividend stocks.
- However, the top holdings of the fund, such as Apple, Microsoft, Nvidia, and Broadcom, do not align with the defensive strategy.
- The sector composition of QDEF, with a large allocation to Information Technology, raises concerns about its defensive positioning.
I think we are nearing the point where defensive, high-quality dividend stocks can shine. We are due for a period of higher volatility, which should bring with it a rotation out of growth and momentum trades. The question is how you play that. Thankfully, there's an ETF for literally everything, and one that attempts to capture these types of stocks is the FlexShares Quality Dividend Defense Index Fund ( QDEF ). Long name, but does it do what it's supposed to do? This is an interesting one. This is a passive fund that tracks the Northern Trust Quality Dividend Defensive Index. The underlying index has been developed to provide exposure to a high-quality, income-oriented portfolio of US equities with an emphasis on long-term capital growth, and a targeted overall beta of generally 0.5 to 1.0 times that of the Northern Trust 1250 Index....
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QDEF: Great Name, But Holdings Don't Validate