FlexShares Disciplined Duration MBS Index Fund

The FlexShares Disciplined Duration Bond Fund is an exchange-traded fund specializing in U.S. agency residential mortgage-backed securities. Its primary objective is to provide income diversification for fixed income investors while managing interest rate risk through a disciplined approach to portfolio duration. The fund passively tracks the ICE BofA Constrained Duration US Mortgage Backed Securities Index, which includes investment-grade, fixed-rate mortgage pass-through securities issued by U.S. government agencies. A distinguishing feature of this fund is its rules-based methodology designed to keep the portfolio’s effective duration within a targeted range—typically between 3.25 and 4.25 years—helping to reduce the volatility associated with interest rate changes and mortgage prepayment risk. By focusing on agency-backed securities, the fund emphasizes credit quality while seeking to deliver yields higher than Treasurys. This approach makes the FlexShares Disciplined Duration Bond Fund a valuable tool for investors looking to balance predictable interest rate exposure with income generation and diversification in the fixed income segment of their portfolios.