Flexshares Real Assets Allocation Index Fund

The fund seeks to replicate the total return performance of the benchmark index, before fees and expenses, by investing in companies outside the United States.

The fund is a fund of funds and invests primarily in the shares of other FlexShares ETFs (each an Underlying Fund and together, the Underlying Funds).

The Underlying Funds invest primarily in separate sets of securities representing or providing exposures to global real assets.

Examples of real assets include but are not limited to commodities, precious metals, oil, and real estate.

The investment process starts with a list of companies in the benchmark index and the research team utilizes quantitative techniques and fundamental analysis to identify investment opportunities.

As part of its strategy, the fund employs a passive or indexing approach.

Next, the research team invests significantly in the securities of the Underlying Index.

Additionally, the research team employs a representative sampling strategy to invest in a representative sample of securities that collectively has an investment profile similar to the Underlying Index.

Then the manager constructs a portfolio of stocks from a list of companies favored by the research team and allocates capital based on its conviction level.

The fund will concentrate its investments in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated.

In addition, the fund may also invest up to 20% of its assets in cash and cash equivalents, including shares of money market funds.

The fund may lend securities representing up to one-third of the value of its net assets.

Additionally, the fund is non-diversified and may invest more of its assets in fewer issuers than diversified funds.