Is FlexShares Quality Dividend ETF (QDF) a Strong ETF Right Now?

Designed to provide broad exposure to the Style Box - All Cap Blend category of the market, the FlexShares Quality Dividend ETF (QDF) is a smart beta exchange traded fund launched on 12/14/2012.

What Are Smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

QDF is managed by Flexshares, and this fund has amassed over $2.2 billion, which makes it one of the larger ETFs in the Style Box - All Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Northern Trust Quality Dividend Index.

The Northern Trust Quality Dividend Index is designed to provide exposure to a high-quality income-oriented portfolio of long-only U.S. equity securities, with an emphasis on long-term capital growth and a targeted overall beta that is similar to that of the Northern Trust 1250 Index and the Index are selected based on expected dividend payment and fundamental factors.

Cost & Other Expenses

Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.

Operating expenses on an annual basis are 0.39% for QDF, making it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 1.49%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

For QDF, it has heaviest allocation in the Information Technology sector --about 35.5% of the portfolio --while Financials and Industrials round out the top three.

Taking into account individual holdings, Apple Inc Common Stock Usd 0.00001 (AAPL) accounts for about 8.24% of the fund's total assets, followed by Nvidia Corp Common Stock Usd 0.001 (NVDA) and Broadcom Inc Common Stock Usd (AVGO).

QDF's top 10 holdings account for about 38.74% of its total assets under management.

Performance and Risk

So far this year, QDF has added roughly 12.22%, and was up about 21.06% in the last one year (as of 07/30/2026). During this past 52-week period, the fund has traded between $74.00 and $91.35.

The ETF has a beta of 0.91 and standard deviation of 13.92% for the trailing three-year period, making it a medium risk choice in the space. With about 121 holdings, it effectively diversifies company-specific risk .

Alternatives

FlexShares Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.

iShares Core S&P Total U.S. Stock Market ETF (ITOT) tracks S&P Total Market Index and the Vanguard Total Stock Market Index Fund ETF Shares (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $92.51 billion in assets, Vanguard Total Stock Market Index Fund ETF Shares has $647.84 billion. ITOT has an expense ratio of 0.03% and VTI changes 0.03%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Blend

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit

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This article originally published on Zacks Investment Research (zacks.com).

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