QDEF: Heavy IT Concentration Challenges This Fund's 'Defensiveness'

Summary

• FlexShares Quality Dividend Defensive Index Fund is rated a hold due to mixed qualities and higher fees compared to similar ETFs.
• QDEF's heavy IT sector concentration presents potential risks, especially given high valuations of top holdings like Apple and NVIDIA.
• Despite a solid 10-year CAGR of 10.31%, QDEF lags behind peer funds like VIG, SCHD, and DGRW in performance and dividend growth.
• Investors might prefer VIG for lower volatility and SCHD for better sector diversification, valuation, and higher dividend yield.

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Investment Thesis

FlexShares Quality Dividend Defensive Index Fund ETF (NYSEARCA:QDEF) warrants a hold rating due to mixed qualities for the fund. While QDEF has solid fundamental qualities, there are other ETFs that achieve similar objectives with lower fees. Additionally, QDEF is

Analyst’s Disclosure:I/we have a beneficial long position in the shares of VIG, SCHD, AAPL, MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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