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Index Strategy - LKOR

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LKOR Methodology

LKOR Methodology

*Longer term is defined as 10 years or longer to maturity date at the time of each reconstitution.

**Composite Alpha is produced by combining each issue's Value Score and Quality Score along with their respective weights determined by Northern Trust Investments' Quantitative Research team.

***Duration: A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates.


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The FlexShares approach to investing is, first and foremost, investor-centric and goal oriented. We pride ourselves on our commitment to developing products that are designed to meet real-world objectives for both institutional and individual investors. If you would like to discuss the attributes of any of the ETFs discussed in this report in greater depth or find out more about the index methodology behind them please don’t hesitate to call us at 1-855-FlexETF (1-855-353-9383).

FlexShares Credit-Scored US Long Corporate Bond Index Fund (LKOR) is passively managed and uses a representative sampling strategy to track its underlying index. Use of a representative sampling strategy creates tracking risk where the Fund’s performance could vary substantially from the performance of the underlying index along with the risk of high portfolio turnover. It is subject corporate bond risk, which is the risk that the issuer is unable to meet principal and interest rate payments on the obligation and may also be subject to price volatility due to such factors as interest rate sensitivity, market perception of credit worthiness of and general market liquidity. When interest rates rise, the value of corporate debt can be expected to decline. The Fund may invest in derivative instruments. Changes in the value of the derivative may not correlate with the underlying asset, rate or index and the Fund could lose more than the principal amount invested. The Fund is also non-diversified meaning the Fund performance may depend on the performance of a small number of issuers because the Fund may invest a large percentage of assets in securities issued by or representing a small number of issuers. There is no guarantee that securities believed to be undervalued will appreciate in value or that the past performance of companies that have exhibited quality characteristics will continue.