N-CSRS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-22555

FlexShares Trust

(Exact name of registrant as specified in charter)

50 South LaSalle Street

Chicago, Illinois 60603

(Address of principal executive offices) (Zip code)

Diana E. McCarthy, Esq.

Drinker Biddle & Reath LLP

One Logan Square, Ste. 2000

Philadelphia, Pennsylvania 19103-6996

(Name and Address of Agent for Service)

with a copy to:

Peter K. Ewing

Craig R. Carberry, Esq.

Northern Trust Investments, Inc.

50 South LaSalle Street

Chicago, Illinois 60603

(Name and Address of Agent for Service)

Registrant’s telephone number, including area code: (800) 595-9111

Date of fiscal year end: October 31

Date of reporting period: April 30, 2013

Item 1. Reports To Stockholders.

The following is a copy of the report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).

FlexShares^® Trust

Semiannual Report

April 30, 2013

FlexShares^® Morningstar Global Upstream Natural Resources Index Fund

FlexShares^® iBoxx 3-Year Target Duration TIPS Index Fund

FlexShares^® iBoxx 5-Year Target Duration TIPS Index Fund

FlexShares^® Morningstar US Market Factor Tilt Index Fund

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund

FlexShares^® Quality Dividend Index Fund

FlexShares^® Quality Dividend Dynamic Index Fund

FlexShares^® Quality Dividend Defensive Index Fund

FlexShares^® International Quality Dividend Index Fund

FlexShares^® International Quality Dividend Dynamic Index Fund

FlexShares^® International Quality Dividend Defensive Index Fund

FlexShares^® Ready Access Variable Income Fund

Table of Contents

Statements of Assets and Liabilities	2
Statements of Operations	6
Statements of Changes in Net Assets	9
Financial Highlights	14
Schedules of Investments	16
FlexShares® Morningstar Global Upstream Natural Resources Index Fund	16
FlexShares® iBoxx 3-Year Target Duration TIPS Index Fund	20
FlexShares® iBoxx 5-Year Target Duration TIPS Index Fund	21
FlexShares® Morningstar US Market Factor Tilt Index Fund	22
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund	58
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund	98
FlexShares® Quality Dividend Index Fund	133
FlexShares® Quality Dividend Dynamic Index Fund	138
FlexShares® Quality Dividend Defensive Index Fund	143
FlexShares® International Quality Dividend Index Fund	147
FlexShares® International Quality Dividend Dynamic Index Fund	153
FlexShares® International Quality Dividend Defensive Index Fund	159
FlexShares® Ready Access Variable Income Fund	165
Notes to the Financial Statements	168
Fund Expenses	188
Approval of Advisory Agreement	190
For More Information	192

FlexShares^® Trust

Statements of Assets and Liabilities April 30, 2013 (Unaudited)

	FlexShares® Morningstar  Global Upstream Natural Resources Index Fund			FlexShares® iBoxx  3-Year Target Duration TIPS Index Fund			FlexShares® iBoxx  5-Year Target Duration TIPS Index Fund		FlexShares® Morningstar US Market Factor Tilt Index Fund
ASSETS
Securities, at cost	$	2,324,392,177		$	1,538,113,047		$	509,234,122	$	246,596,636
Affiliate securities, at cost		—			—			—		102,968
Repurchase Agreements, at cost		—			—			—		—
Securities, at value		2,268,099,926			1,537,191,103			517,909,320		281,536,308
Affiliate securities, at value		—			—			—		117,761
Repurchase Agreements, at value		—			—			—		—
Cash		21,816,341			1,394,027			262,789		2,800,717
Foreign cash†		27,582,414			—			—		—
Restricted cash*		781,650			—			—		—
Restricted foreign cash††*		1,792,844			—			—		—
Unrealized appreciation on futures contracts		32,899			—			—		—
Unrealized appreciation on forward foreign currency contracts		85,098			—			—		—
Receivables:
Dividends and interest		3,725,006			3,888,255			1,504,295		185,789
Capital shares issued		3,509			2,540,947			1,311,741		3,366,693
Investment adviser		37,543			33,408			19,675		8,194
Securities sold		—			309,442,252			58,613,497		280
Variation margin		—			—			—		6,590
Total Assets		2,323,957,230			1,854,489,992			579,621,317		288,022,332
LIABILITIES
Unrealized depreciation on forward foreign currency contracts		162,273			—			—		—
Payables:
Deferred compensation (Note 7)		26,248			22,377			12,902		5,291
Investment advisory fees		836,765			246,709			84,352		60,342
Trustee fees (Note 7)		11,295			11,031			6,772		2,903
Securities purchased		35,793,746			313,256,348			60,061,191		5,141,073
Due to Authorized Participant		781,650			—			—		—
Other		85,500			—			—		10,500
Total Liabilities		37,697,477			313,536,465			60,165,217		5,220,109
Net Assets	$	2,286,259,753		$	1,540,953,527		$	519,456,100	$	282,802,223
NET ASSETS CONSIST OF:
Paid-in capital	$	2,334,415,175		$	1,540,497,846		$	510,114,587	$	245,610,055
Undistributed (accumulated) net investment income (loss)		12,524,073			2,111,664			242,585		1,087,518
Undistributed (accumulated) net realized gain (loss) on investments and foreign currency transactions		(4,425,263	)		(734,039	)		423,730		1,099,383
Net unrealized appreciation (depreciation) on:
Investments		(56,292,251	)		(921,944	)		8,675,198		34,954,465
Futures contracts		32,899			—			—		50,802
Forward foreign currency contracts and foreign currency translations		5,120			—			—		—
Net Assets	$	2,286,259,753		$	1,540,953,527		$	519,456,100	$	282,802,223
Shares Outstanding		66,550,001			60,654,000			19,800,001		4,200,001
Net Asset Value	$	34.35		$	25.41		$	26.24	$	67.33
† Cost of foreign cash	$	27,325,267		$	—		$	—	$	—
†† Cost of restricted foreign cash	$	1,760,028		$	—		$	—	$	—

* Restricted cash includes both cash pledged by the Fund to cover margin requirements for open futures contracts as of 04/30 as well as cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units.

See Accompanying Notes to the Financial Statements.

2 FLEXSHARES SEMIANNUAL REPORT

Statements of Assets and Liabilities (cont.)

	FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund		FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund			FlexShares® Quality Dividend Index Fund		FlexShares® Quality Dividend Dynamic Index Fund
ASSETS
Securities, at cost	$	94,722,720	$	105,311,079		$	66,059,070	$	5,483,239
Affiliate securities, at cost		—		—			—		—
Repurchase Agreements, at cost		—		—			—		—
Securities, at value		101,169,677		106,677,721			69,998,493		5,836,916
Affiliate securities, at value		—		—			—		—
Repurchase Agreements, at value		—		—			—		—
Cash		50,891		3,442,934			22,964		2,065
Foreign cash†		478,782		876,575			—		—
Restricted cash*		—		—			7,755		—
Restricted foreign cash††*		94,133		419,954			—		—
Unrealized appreciation on futures contracts		43,955		68,552			—		—
Unrealized appreciation on forward foreign currency contracts		704		61,603			—		—
Receivables:
Dividends and interest		457,691		166,443			64,272		3,187
Capital shares issued		—		—			8,717,886		2,918,978
Investment adviser		893		920			224		95
Securities sold		702		—			—		—
Variation margin		—		—			200		—
Total Assets		102,297,428		111,714,702			78,811,794		8,761,241
LIABILITIES
Payables:
Deferred compensation (Note 7)		749		755			222		27
Investment advisory fees		34,040		57,915			16,793		896
Trustee fees (Note 7)		144		165			2		68
Securities purchased		—		4,335			8,706,737		2,922,296
Due to Authorized Participant		—		—			—		—
Other		40,000		75,000			7,000		—
Total Liabilities		74,933		138,170			8,730,754		2,923,287
Net Assets	$	102,222,495	$	111,576,532		$	70,081,040	$	5,837,954
NET ASSETS CONSIST OF:
Paid-in capital	$	94,810,831	$	109,906,730		$	65,766,626	$	5,419,003
Undistributed (accumulated) net investment income (loss)		893,917		322,451			177,100		12,271
Undistributed (accumulated) net realized gain (loss) on investments and foreign currency transactions		22,797		(158,805	)		195,797		53,003
Net unrealized appreciation (depreciation) on:
Investments		6,446,957		1,366,642			3,939,423		353,677
Futures contracts		43,955		68,552			2,094		—
Forward foreign currency contracts and foreign currency translations		4,038		70,962			—		—
Net Assets	$	102,222,495	$	111,576,532		$	70,081,040	$	5,837,954
Shares Outstanding		1,800,001		2,100,001			2,400,001		200,001
Net Asset Value	$	56.79	$	53.13		$	29.20	$	29.19
† Cost of foreign cash	$	560,095	$	923,168		$	—	$	—
†† Cost of restricted foreign cash	$	94,133	$	488,506		$	—	$	—

* Restricted cash includes both cash pledged by the Fund to cover margin requirements for open futures contracts as of 04/30 as well as cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units.

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 3

Statements of Assets and Liabilities (cont.)

	FlexShares® Quality Dividend Defensive Index Fund		FlexShares® International Quality Dividend Index Fund		FlexShares® International Quality Dividend Dynamic Index Fund
ASSETS
Securities, at cost	$	13,747,421	$	2,502,947	$	2,503,760
Affiliate securities, at cost		—		—		—
Repurchase Agreements, at cost		—		—		—
Securities, at value		14,532,345		2,554,554		2,543,862
Affiliate securities, at value		—		—		—
Repurchase Agreements, at value		—		—		—
Cash		7,755		3,294		937
Foreign cash†		—		8,094		10,747
Restricted foreign cash††*		—		1,607		—
Unrealized appreciation on futures contracts		—		140		—
Receivables:
Dividends and interest		14,792		6,614		6,686
Capital shares issued		2,901,493		—		—
Investment adviser		74		87		87
Securities sold		—		—		—
Variation margin		—		—		—
Total Assets		17,456,459		2,574,390		2,562,319
LIABILITIES
Payables:
Deferred compensation (Note 7)		61		—		—
Investment advisory fees		3,488		512		509
Trustee fees (Note 7)		13		87		87
Securities purchased		2,915,855		—		—
Due to Authorized Participant		—		—		—
Other		1,000		5,000		5,000
Total Liabilities		2,920,417		5,599		5,596
Net Assets	$	14,536,042	$	2,568,791	$	2,556,723
NET ASSETS CONSIST OF:
Paid-in capital	$	13,660,302	$	2,503,785	$	2,504,294
Undistributed (accumulated) net investment income (loss)		38,502		11,992		11,584
Undistributed (accumulated) net realized gain (loss) on investments and foreign currency transactions		52,314		1,130		572
Net unrealized appreciation (depreciation) on:
Investments		784,924		51,607		40,102
Futures contracts		—		140		—
Forward foreign currency contracts and foreign currency translations		—		137		171
Net Assets	$	14,536,042	$	2,568,791	$	2,556,723
Shares Outstanding		500,001		100,001		100,001
Net Asset Value	$	29.07	$	25.69	$	25.57
† Cost of foreign cash	$	—	$	8,151	$	10,648
†† Cost of restricted foreign cash	$	—	$	1,747	$	—

* Restricted cash includes both cash pledged by the Fund to cover margin requirements for open futures contracts as of 04/30 as well as cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units.

See Accompanying Notes to the Financial Statements.

4 FLEXSHARES SEMIANNUAL REPORT

Statements of Assets and Liabilities (cont.)

	FlexShares® International Quality Dividend Defensive Index Fund		FlexShares® Ready  Access Variable Income Fund
ASSETS
Securities, at cost	$	2,502,144	$	7,368,187
Affiliate securities, at cost		—		—
Repurchase Agreements, at cost		—		100,000
Securities, at value		2,551,947		7,386,947
Affiliate securities, at value		—		—
Repurchase Agreements, at value		—		100,000
Cash		2,326		29,654
Foreign cash†		9,810		—
Restricted foreign cash††*		1,607		—
Unrealized appreciation on futures contracts		140		—
Receivables:
Dividends and interest		6,318		9,323
Capital shares issued		—		—
Investment adviser		87		223
Securities sold		3,728		—
Variation margin		—		—
Total Assets		2,575,963		7,526,147
LIABILITIES
Payables:
Deferred compensation (Note 7)		—		77
Investment advisory fees		513		1,554
Trustee fees (Note 7)		87		146
Securities purchased		3,735		—
Due to Authorized Participant		—		—
Other		5,000		—
Total Liabilities		9,335		1,777
Net Assets	$	2,566,628	$	7,524,370
NET ASSETS CONSIST OF:
Paid-in capital	$	2,504,093	$	7,500,075
Undistributed (accumulated) net investment income (loss)		11,683		4,311
Undistributed (accumulated) net realized gain (loss) on investments and foreign currency transactions		734		1,224
Net unrealized appreciation (depreciation) on:
Investments		49,803		18,760
Futures contracts		140		—
Forward foreign currency contracts and foreign currency translations		175		—
Net Assets	$	2,566,628	$	7,524,370
Shares Outstanding		100,001		100,001
Net Asset Value	$	25.67	$	75.24
† Cost of foreign cash	$	9,822	$	—
†† Cost of restricted foreign cash	$	1,747	$	—

* Restricted cash includes both cash pledged by the Fund to cover margin requirements for open futures contracts as of 04/30 as well as cash pledged by an Authorized Participant for missing deposit securities required to secure Creation Units.

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 5

FlexShares^® Trust

Statements of Operations

For the six months ended April 30, 2013 (Unaudited)

	FlexShares® Morningstar  Global Upstream Natural Resources Index Fund			FlexShares® iBoxx  3-Year Target Duration TIPS Index Fund			FlexShares® iBoxx  5-Year Target Duration TIPS Index Fund			FlexShares® Morningstar  US Market Factor Tilt Index Fund
INVESTMENT INCOME
Dividend income	$	18,741,318		$	—		$	—		$	2,322,036
Dividend income received from affiliate		—			—			—			991
Interest income		11,688			4,471,463			1,303,253			134
Foreign withholding tax on dividends		(1,077,214	)		—			—			(90	)
Total Investment Income		17,675,792			4,471,463			1,303,253			2,323,071
EXPENSES
Deferred compensation (Note 7)		1,863			1,249			530			276
Investment advisory fees		3,038,210			980,441			430,745			284,803
Trustee fees (Note 7)		38,843			31,419			14,887			7,163
Total Gross Expenses Before Fees Reimbursed		3,078,916			1,013,109			446,162			292,242
Less:
Deferred compensation reimbursed (Note 7)		(1,863	)		(1,249	)		(530	)		(276	)
Trustee fees reimbursed (Note 7)		(38,843	)		(31,419	)		(14,887	)		(7,163	)
Total Net Expenses		3,038,210			980,441			430,745			284,803
Net Investment Income		14,637,582			3,491,022			872,508			2,038,268
NET REALIZED GAIN (LOSS) ON:
Investments in affiliate securities		—			—			—			488
Investments in securities		(3,535,470	)		(571,086	)		489,339			(52,137	)
In-kind redemptions of investments		—			—			—			1,049,918
Futures contracts		105,948			—			—			197,166
Foreign currency transactions		167,109			—			—			—
Net Realized Gain (Loss)		(3,262,413	)		(571,086	)		489,339			1,195,435
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments in securities		(73,674,346	)		(5,185,708	)		71,332			28,335,056	1
Futures contracts		29,944			—			—			57,728
Forward foreign currency contracts		(70,383	)		—			—			—
Translation of other assets and liabilities denominated in foreign currencies		47,631			—			—			—
Net Change in Unrealized Appreciation (Depreciation)		(73,667,154	)		(5,185,708	)		71,332			28,392,784
Net Realized and Unrealized Gain (Loss)		(76,929,567	)		(5,756,794	)		560,671			29,588,219
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(62,291,985	)	$	(2,265,772	)	$	1,433,179		$	31,626,487

¹  Includes $9,809 change in unrealized appreciation on investments in affiliates.

See Accompanying Notes to the Financial Statements.

6 FLEXSHARES SEMIANNUAL REPORT

Statements of Operations (cont.)

	FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund			FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund			FlexShares® Quality Dividend Index Fund			FlexShares® Quality Dividend Dynamic Index Fund
							December 14, 2012* through April 30, 2013			December 14, 2012* through April 30, 2013
INVESTMENT INCOME
Dividend income	$	1,186,074		$	622,479		$	279,738		$	30,182
Dividend income received from affiliate		—			—			—			—
Interest income		1,138			—			—			—
Foreign withholding tax on dividends		(99,983	)		(42,957	)		—			—
Total Investment Income		1,087,229			579,522			279,738			30,182
EXPENSES
Deferred compensation (Note 7)		91			96			31			3
Investment advisory fees		124,448			209,240			38,299			3,754
Trustee fees (Note 7)		1,769			1,892			543			145
Total Gross Expenses Before Fees Reimbursed		126,308			211,228			38,873			3,902
Less:
Deferred compensation reimbursed (Note 7)		(91	)		(96	)		(31	)		(3	)
Trustee fees reimbursed (Note 7)		(1,769	)		(1,892	)		(543	)		(145	)
Total Net Expenses		124,448			209,240			38,299			3,754
Net Investment Income		962,781			370,282			241,439			26,428
NET REALIZED GAIN (LOSS) ON:
Investments in securities		6,133			(30,122	)		199,436			53,003
In-kind redemptions of investments		—			—			—			—
Futures contracts		27,178			(82,697	)		(3,639	)		—
Foreign currency transactions		(3,815	)		(41,154	)		—			—
Net Realized Gain (Loss)		29,496			(153,973	)		195,797			53,003
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments in securities		6,613,264			1,401,907			3,939,423			353,677
Futures contracts		46,511			73,799			2,094			—
Forward foreign currency contracts		690			68,358			—			—
Translation of other assets and liabilities denominated in foreign currencies		4,024			9,790			—			—
Net Change in Unrealized Appreciation (Depreciation)		6,664,489			1,553,854			3,941,517			353,677
Net Realized and Unrealized Gain (Loss)		6,693,985			1,399,881			4,137,314			406,680
Net Increase (Decrease) in Net Assets Resulting from Operations	$	7,656,766		$	1,770,163		$	4,378,753		$	433,108

* Commencement of investment operations.

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 7

Statements of Operations (cont.)

	FlexShares® Quality Dividend Defensive Index Fund			FlexShares® International Quality Dividend Index Fund			FlexShares® International Quality Dividend Dynamic Index Fund			FlexShares® International Quality Dividend Defensive Index Fund			FlexShares® Ready Access Variable Income Fund
	December 14, 2012* through April 30, 2013			April 12, 2013* through April 30, 2013			April 12, 2013* through April 30, 2013			April 12, 2013* through April 30, 2013
INVESTMENT INCOME
Dividend income	$	59,541		$	14,335		$	13,522		$	13,792		$	—
Dividend income received from affiliate		—			—			—			—			—
Interest income		—			—			—			33			25,621
Foreign withholding tax on dividends		—			(1,831	)		(1,429	)		(1,629	)		—
Total Investment Income		59,541			12,504			12,093			12,196			25,621
EXPENSES
Deferred compensation (Note 7)		7			—			—			—			9
Investment advisory fees		8,200			512			509			513			9,306
Trustee fees (Note 7)		163			87			87			87			270
Total Gross Expenses Before Fees Reimbursed		8,370			599			596			600			9,585
Less:
Deferred compensation reimbursed (Note 7)		(7	)		—			—			—			(9	)
Trustee fees reimbursed (Note 7)		(163	)		(87	)		(87	)		(87	)		(270	)
Total Net Expenses		8,200			512			509			513			9,306
Net Investment Income		51,341			11,992			11,584			11,683			16,315
NET REALIZED GAIN (LOSS) ON:
Investments in securities		52,314			—			—			—			1,255
In-kind redemptions of investments		—			—			—			—			—
Futures contracts		—			607			—			607			—
Foreign currency transactions		—			523			572			127			—
Net Realized Gain (Loss)		52,314			1,130			572			734			1,255
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments in securities		784,924			51,607			40,102			49,803			22,444
Futures contracts		—			140			—			140			—
Translation of other assets and liabilities denominated in foreign currencies		—			137			171			175			—
Net Change in Unrealized Appreciation (Depreciation)		784,924			51,884			40,273			50,118			22,444
Net Realized and Unrealized Gain (Loss)		837,238			53,014			40,845			50,852			23,699
Net Increase (Decrease) in Net Assets Resulting from Operations	$	888,579		$	65,006		$	52,429		$	62,535		$	40,014

* Commencement of investment operations.

See Accompanying Notes to the Financial Statements.

8 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Trust

Statements of Changes in Net Assets

	FlexShares®  Morningstar Global Upstream Natural Resources Index Fund						FlexShares® iBoxx 3-Year Target Duration TIPS Index Fund
	Six Months Ended April 30, 2013 (Unaudited)			Year Ended October 31, 2012			Six Months Ended April 30, 2013 (Unaudited)			Year Ended October 31, 2012
OPERATIONS
Net investment income	$	14,637,582		$	6,322,940		$	3,491,022		$	1,700,307
Net realized gain (loss)		(3,262,413	)		536,629			(571,086	)		503,743
Net change in unrealized appreciation (depreciation)		(73,667,154	)		8,096,961			(5,185,708	)		3,183,569
Net Increase (Decrease) in Net Assets
Resulting from Operations		(62,291,985	)		14,956,530			(2,265,772	)		5,387,619
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income		(7,891,756	)		(402,120	)		(1,379,358	)		(2,141,001	)
Net realized gain		—			—			(208,483	)		(198,119	)
Total distributions		(7,891,756	)		(402,120	)		(1,587,841	)		(2,339,120	)
CAPITAL TRANSACTIONS(1)
Proceeds from shares issued		1,789,957,895			460,648,576			860,772,785			551,443,939
Cost of shares redeemed		(46,506	)		(11,938,905	)		—			(11,369,874	)
Net Increase from Capital Transactions		1,789,911,389			448,709,671			860,772,785			540,074,065
Total Increase (Decrease) in Net Assets		1,719,727,648			463,264,081			856,919,172			543,122,564
NET ASSETS
Beginning of Period	$	566,532,105		$	103,268,024		$	684,034,355		$	140,911,791
End of Period	$	2,286,259,753		$	566,532,105		$	1,540,953,527		$	684,034,355
Undistributed (accumulated) net investment income (loss) included in end of period net assets	$	12,524,073		$	5,778,247		$	2,111,664		$	—
SHARE TRANSACTIONS
Beginning of period		16,100,001			2,950,001			26,904,000			5,604,000
Shares issued		—			400,000			—			300,000
Shares issued in-kind		50,450,000			13,100,000			33,750,000			21,450,000
Shares redeemed		—			—			—			—
Shares redeemed in-kind		—			(350,000	)		—			(450,000	)
Shares Outstanding, End of Period		66,550,001			16,100,001			60,654,000			26,904,000

⁽¹⁾  Capital share transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements.

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 9

Statements of Changes in Net Assets (cont.)

	FlexShares®  iBoxx 5-Year Target Duration TIPS Index Fund						FlexShares® Morningstar US Market Factor Tilt Index Fund
	Six Months Ended April 30, 2013 (Unaudited)			Year Ended October 31, 2012			Six Months Ended April 30, 2013 (Unaudited)			Year Ended October 31, 2012
OPERATIONS
Net investment income	$	872,508		$	1,917,466		$	2,038,268		$	1,116,112
Net realized gain (loss)		489,339			2,026,671			1,195,435			(76,180	)
Net change in unrealized appreciation (depreciation)		71,332			7,783,227			28,392,784			6,131,777
Net Increase (Decrease) in Net Assets
Resulting from Operations		1,433,179			11,727,364			31,626,487			7,171,709
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income		(737,424	)		(2,106,998	)		(2,015,968	)		(59,483	)
Net realized gain		(1,526,604	)		(56,248	)		—			—
Total distributions		(2,264,028	)		(2,163,246	)		(2,015,968	)		(59,483	)
CAPITAL TRANSACTIONS(1)
Proceeds from shares issued		145,556,862			256,981,090			106,812,437			134,804,108
Cost of shares redeemed		(80	)		(37,009,292	)		(3,297,597	)		—
Net Increase from Capital Transactions		145,556,782			219,971,798			103,514,840			134,804,108
Total Increase (Decrease) in Net Assets		144,725,933			229,535,916			133,125,359			141,916,334
NET ASSETS
Beginning of Period	$	374,730,167		$	145,194,251		$	149,676,864		$	7,760,530
End of Period	$	519,456,100		$	374,730,167		$	282,802,223		$	149,676,864
Undistributed (accumulated) net investment income (loss) included in end of period net assets	$	242,585		$	107,501		$	1,087,518		$	1,065,218
SHARE TRANSACTIONS
Beginning of period		14,250,001			5,800,001			2,550,001			150,001
Shares issued		—			—			—			—
Shares issued in-kind		5,550,000			9,900,000			1,700,000			2,400,000
Shares redeemed		—			—			—			—
Shares redeemed in-kind		—			(1,450,000	)		(50,000	)		—
Shares Outstanding, End of Period		19,800,001			14,250,001			4,200,001			2,550,001

⁽¹⁾  Capital share transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements.

See Accompanying Notes to the Financial Statements.

10 FLEXSHARES SEMIANNUAL REPORT

Statements of Changes in Net Assets (cont.)

	FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund						FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund						FlexShares® Quality Dividend Index Fund
	Six Months Ended April 30, 2013 (Unaudited)			September 25, 2012* through October 31, 2012			Six Months Ended April 30, 2013 (Unaudited)			September 25, 2012* through October 31, 2012			December 14, 2012* through April 30, 2013
OPERATIONS
Net investment income	$	962,781		$	24,170		$	370,282		$	3,703		$	241,439
Net realized gain (loss)		29,496			(9,085	)		(153,973	)		(21,586	)		195,797
Net change in unrealized appreciation (depreciation)		6,664,489			(169,539	)		1,553,854			(47,698	)		3,941,517
Net Increase (Decrease) in Net Assets
Resulting from Operations		7,656,766			(154,454	)		1,770,163			(65,581	)		4,378,753
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income		(90,648	)		—			(46,755	)		—			(64,339	)
Net realized gain		—			—			—			—			—
Total distributions		(90,648	)		—			(46,755	)		—			(64,339	)
CAPITAL TRANSACTIONS(1)
Proceeds from shares issued		84,795,407			—			99,934,399			4,979,625			63,266,601
Cost of shares redeemed		(732	)		—			(1,619	)		—			—
Net Increase from Capital Transactions		84,794,675			—			99,932,780			4,979,625			63,266,601
Total Increase (Decrease) in Net Assets		92,360,793			(154,454	)		101,656,188			4,914,044			67,581,015
NET ASSETS
Beginning of Period	$	9,861,702		$	10,016,156		$	9,920,344		$	5,006,300		$	2,500,025
End of Period	$	102,222,495		$	9,861,702		$	111,576,532		$	9,920,344		$	70,081,040
Undistributed (accumulated) net investment income (loss) included in end of period net assets	$	893,917		$	21,784		$	322,451		$	(1,076	)	$	177,100
SHARE TRANSACTIONS
Beginning of period		200,001			200,001			200,001			100,001			100,001
Shares issued		1,400,000			—			1,600,000			100,000			—
Shares issued in-kind		200,000			—			300,000			—			2,300,000
Shares redeemed		—			—			—			—			—
Shares redeemed in-kind		—			—			—			—			—
Shares Outstanding, End of Period		1,800,001			200,001			2,100,001			200,001			2,400,001

* Commencement of investment operations.

⁽¹⁾  Capital share transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements.

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 11

Statements of Changes in Net Assets (cont.)

	FlexShares® Quality Dividend Dynamic Index Fund			FlexShares® Quality Dividend Defensive Index Fund			FlexShares® International Quality Dividend Index Fund
	December 14, 2012* through April 30, 2013			December 14, 2012* through April 30, 2013			April 12, 2013* through April 30, 2013
OPERATIONS
Net investment income	$	26,428		$	51,341		$	11,992
Net realized gain (loss)		53,003			52,314			1,130
Net change in unrealized appreciation (depreciation)		353,677			784,924			51,884
Net Increase (Decrease) in Net Assets
Resulting from Operations		433,108			888,579			65,006
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income		(14,157	)		(12,839	)		—
Net realized gain		—			—			—
Total distributions		(14,157	)		(12,839	)		—
CAPITAL TRANSACTIONS(1)
Proceeds from shares issued		2,918,978			11,160,277			3,760
Cost of shares redeemed		—			—			—
Net Increase from Capital Transactions		2,918,978			11,160,277			3,760
Total Increase (Decrease) in Net Assets		3,337,929			12,036,017			68,766
NET ASSETS
Beginning of Period	$	2,500,025		$	2,500,025		$	2,500,025
End of Period	$	5,837,954		$	14,536,042		$	2,568,791
Undistributed (accumulated) net investment income (loss) included in end of period net assets	$	12,271		$	38,502		$	11,992
SHARE TRANSACTIONS
Beginning of period		100,001			100,001			100,001
Shares issued		—			—			—
Shares issued in-kind		100,000			400,000			—
Shares redeemed		—			—			—
Shares redeemed in-kind		—			—			—
Shares Outstanding, End of Period		200,001			500,001			100,001

* Commencement of investment operations.

⁽¹⁾  Capital share transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements.

See Accompanying Notes to the Financial Statements.

12 FLEXSHARES SEMIANNUAL REPORT

Statements of Changes in Net Assets (cont.)

	FlexShares® International Quality Dividend Dynamic Index Fund		FlexShares® International Quality Dividend Defensive Index Fund		FlexShares® Ready Access Variable Income Fund
	April 12, 2013* through April 30, 2013		April 12, 2013* through April 30, 2013		Six Months Ended April 30, 2013 (Unaudited)			October 9, 2012* through October 31, 2012
OPERATIONS
Net investment income	$	11,584	$	11,683	$	16,315		$	736
Net realized gain (loss)		572		734		1,255			(31	)
Net change in unrealized appreciation (depreciation)		40,273		50,118		22,444			(3,684	)
Net Increase (Decrease) in Net Assets
Resulting from Operations		52,429		62,535		40,014			(2,979	)
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income		—		—		(12,740	)		—
Net realized gain		—		—		—			—
Total distributions		—		—		(12,740	)		—
CAPITAL TRANSACTIONS(1)
Proceeds from shares issued		4,269		4,068		—			—
Cost of shares redeemed		—		—		—			—
Net Increase from Capital Transactions		4,269		4,068		—			—
Total Increase (Decrease) in Net Assets		56,698		66,603		27,274			(2,979	)
NET ASSETS
Beginning of Period	$	2,500,025	$	2,500,025	$	7,497,096		$	7,500,075
End of Period	$	2,556,723	$	2,566,628	$	7,524,370		$	7,497,096
Undistributed (accumulated) net investment income (loss) included in end of period net assets	$	11,584	$	11,683	$	4,311		$	736
SHARE TRANSACTIONS
Beginning of period		100,001		100,001		100,001			100,001
Shares issued		—		—		—			—
Shares issued in-kind		—		—		—			—
Shares redeemed		—		—		—			—
Shares redeemed in-kind		—		—		—			—
Shares Outstanding, End of Period		100,001		100,001		100,001			100,001

* Commencement of investment operations.

⁽¹⁾  Capital share transactions may include transaction fees associated with creation and redemption transactions which occurred during the period. See Note 9 to the Financial Statements.

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 13

FlexShares^® Trust

Financial Highlights

			PER SHARE
			Investment Operations									Distributions
	Net asset value, beginning of period		Net Investment Income			Net Realized and Unrealized Gain (Loss)			Total from Operations			Net Investment income			From Net Realized Gains			Total
Flexshares® Morningstar Global Upstream Natural Resources Index
Six Months ended April 30, 2013 (Unaudited)	$	35.19	$	0.40	(a)	$	(0.87	)	$	(0.47	)	$	(0.37	)	$	—		$	(0.37	)
Year ended October 31, 2012		35.01		0.44			(0.17	)(g)		0.27			(0.09	)		—			(0.09	)
For the period 09/16/11* through 10/31/11		35.00		0.03	(a)		(0.02	)(g)		0.01			—			—			—
Flexshares® iBoxx 3-Year Target Duration TIPS Index
Six Months ended April 30, 2013 (Unaudited)		25.43		0.09	(a)		(0.05	)		0.04			(0.05	)		(0.01	)		(0.06	)
Year ended October 31, 2012		25.14		0.15	(a)		0.39			0.54			(0.22	)		(0.03	)		(0.25	)
For the period 09/19/11* through 10/31/11		25.00		0.06	(a)		0.08			0.14			—			—			—
Flexshares® iBoxx 5-Year Target Duration TIPS Index
Six Months ended April 30, 2013 (Unaudited)		26.30		0.05	(a)		0.04			0.09			(0.05	)		(0.10	)		(0.15	)
Year ended October 31, 2012		25.03		0.24	(a)		1.31			1.55			(0.27	)		(0.01	)		(0.28	)
For the period 09/19/11* through 10/31/11		25.00		0.07	(a)		(0.04	)(g)		0.03			—			—			—
Flexshares® Morningstar US Market Factor Tilt Index
Six Months ended April 30, 2013 (Unaudited)		58.70		0.60	(a)		8.69			9.29			(0.66	)		—			(0.66	)
Year ended October 31, 2012		51.74		0.91	(a)		6.17			7.08			(0.12	)		—			(0.12	)
For the period 09/16/11* through 10/31/11		50.00		0.07	(a)		1.67			1.74			—			—			—
Flexshares® Morningstar Developed Markets ex-US Factor Tilt Index
Six Months ended April 30, 2013 (Unaudited)		49.31		0.87	(a)		6.72			7.59			(0.11	)		—			(0.11	)
For the period 09/25/12* through 10/31/12		50.00		0.12	(a)		(0.81	)		(0.69	)		—			—			—
Flexshares® Morningstar Emerging Markets Factor Tilt Index
Six Months ended April 30, 2013 (Unaudited)		49.60		0.30	(a)		3.28			3.58			(0.05	)		—			(0.05	)
For the period 09/25/12* through 10/31/12		50.00		0.03	(a)		(0.43	)		(0.40	)		—			—			—
Flexshares® Quality Dividend Index Fund
For the period 12/14/12* through 04/30/13 (Unaudited)		25.00		0.24	(a)		4.08			4.32			(0.12	)		—			(0.12	)
Flexshares® Quality Dividend Dynamic Index Fund
For the period 12/14/12* through 04/30/13 (Unaudited)		25.00		0.26	(a)		4.07			4.33			(0.14	)		—			(0.14	)
Flexshares® Quality Dividend Defensive Index Fund
For the period 12/14/12* through 04/30/13 (Unaudited)		25.00		0.24	(a)		3.92			4.16			(0.09	)		—			(0.09	)
Flexshares® International Quality Dividend Index Fund
For the period 04/12/13* through 04/30/13 (Unaudited)		25.00		0.12	(a)		0.57			0.69			—			—			—
Flexshares® International Quality Dividend Dynamic Index Fund
For the period 04/12/13* through 04/30/13 (Unaudited)		25.00		0.12	(a)		0.45			0.57			—			—			—
Flexshares® International Quality Dividend Defensive Index
For the period 04/12/13* through 04/30/13 (Unaudited)		25.00		0.12	(a)		0.55			0.67			—			—			—
Flexshares® Ready Access Variable Income
Six Months ended April 30, 2013 (Unaudited)		74.97		0.16	(a)		0.24			0.40			(0.13	)		—			(0.13	)
For the period 10/09/12* through 10/31/12		75.00		0.01	(a)		(0.04	)		(0.03	)		—			—			—

* Commencement of investment operations.

(a) Net investment income per share is based on average shares outstanding.

(b) Not annualized for periods less than one year.

(c) Annualized for periods less than one year.

(d) Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at adjusted net asset value.

(e) Market value total return is calculated assuming an initial investment made at the market value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period and redemption on the last day of the period at market value. Market value is determined by the mid point of the bid/ask spread at 4:00 p.m. Eastern Time from the primary listing exchange. Market value returns may vary from net asset value returns.

(f) In-kind transactions are not included in portfolio turnover calculations.

(g) The amount shown for a share outstanding throughout the period is not in accordance with the aggregate net realized and unrealized gain (loss) for that period because of the timing of sales and repurchases of the Fund shares in relation to fluctuating market value of the investments in the Fund.

See Accompanying Notes to the Financial Statements.

14 FLEXSHARES SEMIANNUAL REPORT

								RATIOS/SUPPLEMENTAL DATA
		Total Return(b)						Ratios to Average Net Assets( c)												Supplemental Data
Net Asset Value, end of period		Net  Asset Value(d)			Market Value (Unaudited)(e)			Expenses			Expenses net of reimbursements			Net investment Income before reimbursements			Net investment Income net of reimbursements			Portfolio Turnover Rate(b)(f)			Net assets, end of period (thousands)
$	34.35		(1.36	)%		(1.47	)%		0.49	%		0.48	%		2.31	%		2.31	%		9	%	$	2,286,260
	35.19		0.79			1.71			0.50			0.48			2.02			2.03			5			566,532
	35.01		0.03			(0.57	)		0.77			0.48			0.53			0.82			1			103,268
	25.41		0.13			0.13			0.21			0.20			0.71			0.71			42			1,540,954
	25.43		2.15			1.94			0.22			0.20			0.57			0.59			55			684,034
	25.14		0.56			0.82			0.51			0.20			1.72			2.03			23			140,912
	26.24		0.30			0.22			0.21			0.20			0.40			0.41			39			519,456
	26.30		6.13			5.87			0.22			0.20			0.90			0.92			60			374,730
	25.03		0.12			0.56			0.50			0.20			2.03			2.34			10			145,194
	67.33		15.98			12.79			0.28			0.27			1.92			1.93			7			282,802
	58.70		13.71			16.86			0.29			0.27			1.57			1.59			15			149,677
	51.74		3.48			3.56			0.49			0.27			1.02			1.24			1			7,761
	56.79		15.44			(7.96	)		0.43			0.42			3.24			3.25			2			102,222
	49.31		(1.40	)		23.98			0.43			0.42			2.47			2.49			1			9,862
	53.13		7.22			(13.34	)		0.66			0.65			1.14			1.15			5			111,577
	49.60		(0.80	)		23.52			0.67			0.65			0.50			0.52			1			9,920
	29.20		17.34			17.30			0.38			0.37			2.32			2.33			18			70,081
	29.19		17.38			18.51			0.38			0.37			2.59			2.60			15			5,838
	29.07		16.71			16.83			0.38			0.37			2.31			2.31			16			14,536
	25.69		2.76			3.04			0.55			0.47			10.91			10.99			—			2,569
	25.57		2.28			2.20			0.55			0.47			10.62			10.70			—			2,557
	25.67		2.68			3.20			0.55			0.47			10.62			10.70			—			2,567
	75.24		0.53			4.73			0.26			0.25			0.43			0.44			34			7,524
	74.97		(0.04	)		(3.96	)		0.27			0.25			0.14			0.16			2			7,497

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 15

Schedule of Investments

FlexShares^® Morningstar Global Upstream Natural Resources Index Fund

April 30, 2013 (Unaudited)

	Shares		Value
COMMON STOCKS – 99.2%
Beverages – 0.1%
Tibet 5100 Water Resources Holdings Ltd.		4,042,000	$	1,442,716
Chemicals – 23.7%
Agrium, Inc.		387,397		35,568,040
CF Industries Holdings, Inc.		163,713		30,534,112
Incitec Pivot Ltd.		3,967,711		11,902,992
Israel Chemicals Ltd.		1,203,224		14,317,140
K+S AG		487,146		21,560,442
Monsanto Co.		1,300,651		138,935,540
The Mosaic Co.		750,684		46,234,628
Phosagro OAO (GDR)		114,274		1,615,834
Potash Corp. of Saskatchewan, Inc.		2,254,887		95,051,159
The Scotts Miracle-Gro Co., Class A		114,466		5,191,033
Sociedad Quimica y Minera de Chile S.A. (ADR)		295,482		14,623,404
Syngenta AG		237,273		101,504,161
Taiwan Fertilizer Co. Ltd.		1,331,000		3,184,081
Yara International ASA		453,871		21,286,105
				541,508,671
Containers & Packaging – 0.4%
MeadWestvaco Corp.		254,221		8,765,540
Food Products – 7.6%
Archer-Daniels-Midland Co.		1,718,480		58,325,211
Bunge Ltd.		355,471		25,668,561
Charoen Pokphand Foods PCL		8,518,400		9,214,964
Charoen Pokphand Indonesia Tbk PT		20,007,000		10,391,911
Felda Global Ventures Holdings Bhd		5,471,200		8,307,952
GrainCorp Ltd., Class A		609,598		8,112,408
IOI Corp. Bhd		6,853,505		11,330,528
Kuala Lumpur Kepong Bhd		838,572		5,942,354
Nutreco N.V.		89,345		8,489,302
PPB Group Bhd		1,744,000		7,337,124
Suedzucker AG		183,678		7,412,550

	Shares		Value
Food Products – (continued)
Tongaat Hulett Ltd.		311,454	$	4,524,932
Wilmar International Ltd.		3,331,126		9,006,333
				174,064,130
Metals & Mining – 24.0%
Agnico Eagle Mines Ltd.		202,409		6,544,058
Alcoa, Inc.		1,076,779		9,152,621
Anglo American PLC		1,545,291		37,639,672
AngloGold Ashanti Ltd.		453,871		8,458,542
Antofagasta Aberdeen Asset Management PLC		370,018		5,168,667
Barrick Gold Corp.		1,291,070		25,491,525
BHP Billiton Ltd.		3,093,244		104,997,796
Cia de Minas Buenaventura S.A. (ADR)		174,636		3,496,213
Eldorado Gold Corp.		879,791		6,971,153
First Quantum Minerals Ltd.		593,626		10,381,152
Franco-Nevada Corp.		151,734		6,616,348
Freeport-McMoRan Copper & Gold, Inc.		1,249,809		38,031,688
Glencore International PLC		4,058,219		20,019,234
Gold Fields Ltd.		855,833		6,085,462
Goldcorp, Inc.		1,092,751		32,396,316
Grupo Mexico SAB de CV		3,863,208		13,852,330
Impala Platinum Holdings Ltd.		568,337		7,748,324
Industrias Penoles SAB de CV		140,158		5,879,405
KGHM Polska Miedz S.A.		125,114		5,860,604
Kinross Gold Corp.		1,279,091		6,981,368
MMC Norilsk Nickel OJSC (ADR)		453,432		6,946,578
Newcrest Mining Ltd.		923,714		16,118,458
Newmont Mining Corp.		666,831		21,605,324
Randgold Resources Ltd.		121,121		9,538,744
Rio Tinto PLC		1,327,406		60,305,801
Sibanye Gold Ltd.*		855,833		809,870
Silver Wheaton Corp.		425,920		10,429,398
Sumitomo Metal Mining Co. Ltd.		246,031		3,427,411
Teck Resources Ltd., Class B		510,257		13,595,355
Xstrata PLC		2,138,917		32,075,015
Yamana Gold, Inc.		972,961		12,062,259
				548,686,691

See Accompanying Notes to the Financial Statements.

16 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Global Upstream Natural Resources Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Multi-Utilities – 0.6%
Veolia Environnement S.A.		1,018,215	$	14,048,369
Oil, Gas & Consumable Fuels – 31.7%
Anadarko Petroleum Corp.		177,023		15,004,469
Apache Corp.		174,361		12,881,791
BG Group PLC		1,488,058		25,117,166
BP PLC		7,960,711		57,787,195
Canadian Natural Resources Ltd.		455,202		13,372,987
Cenovus Energy, Inc.		331,419		9,934,168
Chevron Corp.		803,924		98,086,767
China Petroleum & Chemical Corp., Class H		5,924,000		6,480,782
CNOOC Ltd.		5,594,112		10,437,691
ConocoPhillips		489,808		29,608,894
Cosan Ltd., Class A		411,741		8,543,626
Cosan S.A. Industria e Comercio		278,290		6,569,286
Devon Energy Corp.		173,030		9,527,032
Encana Corp.		324,764		5,995,792
ENI S.p.A.		1,075,448		25,748,530
EOG Resources, Inc.		105,149		12,739,853
Exxon Mobil Corp.		1,267,292		112,776,315
Gazprom OAO (ADR)		2,179,236		17,292,238
Hess Corp.		118,459		8,550,371
Lukoil OAO (ADR)		235,587		14,936,216
Marathon Oil Corp.		288,827		9,435,978
Noble Energy, Inc.		63,155		7,154,830
Occidental Petroleum Corp.		340,736		30,414,095
PetroChina Co. Ltd., Class H		8,472,018		10,774,788
Petroleo Brasileiro S.A., Class A (ADR)		874,467		17,463,106
Royal Dutch Shell PLC, Class A		1,485,917		50,611,616
Sasol Ltd.		239,580		10,344,263
Statoil ASA		344,027		8,407,882
Suncor Energy, Inc.		666,831		20,823,345
Total S.A.		803,164		40,523,774
Tullow Oil PLC		455,202		7,091,849
Woodside Petroleum Ltd.		290,158		11,313,015
				725,749,710

	Shares		Value
Paper & Forest Products – 3.4%
Canfor Corp.*		131,769	$	2,756,295
Deltic Timber Corp.		15,972		997,931
Duratex S.A.		706,509		5,310,744
Empresas CMPC S.A.		1,037,579		3,829,030
International Paper Co.		642,873		30,202,174
Louisiana-Pacific Corp.*		202,312		3,665,893
Mondi PLC		748,022		9,913,345
Stora Enso Oyj, Class R		817,234		5,683,503
Sumitomo Forestry Co. Ltd.		279,096		3,323,595
UPM-Kymmene Oyj		756,008		7,913,964
West Fraser Timber Co. Ltd.		41,261		3,608,209
				77,204,683
Real Estate Investment Trusts (REITs) – 2.2%
Plum Creek Timber Co., Inc.		260,876		13,445,549
Rayonier, Inc.		189,002		11,230,499
Weyerhaeuser Co.		834,537		25,461,724
				50,137,772
Trading Companies & Distributors – 0.3%
Noble Group Ltd.		8,697,031		7,943,945
Water Utilities – 5.2%
Aguas Andinas S.A., Class A		7,002,391		5,569,240
American Water Works Co., Inc.		436,568		18,283,468
Aqua America, Inc.		311,642		9,888,401
Cia de Saneamento Basico do Estado de Sao Paulo		2,418		34,066
Cia de Saneamento de Minas Gerais-COPASA		142,772		3,291,717
CIA Saneamento Basico de Sao Paolo (ADR)		900,312		12,874,462
Hyflux Ltd.		2,990,000		3,325,864
Inversiones Aguas Metropolitanas S.A.		1,327,007		2,814,155
Kurita Water Industries Ltd.		266,910		5,477,395
Manila Water Co., Inc.		798,600		775,123
Pennon Group PLC		1,050,159		11,204,274
Severn Trent PLC		531,279		15,057,533

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 17

FlexShares^® Morningstar Global Upstream Natural Resources Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Water Utilities – (continued)
Suez Environnement Co.		761,332	$	10,945,786
United Utilities Group PLC		1,649,109		19,006,215
				118,547,699
Total Common Stocks (Cost $2,324,392,177)				2,268,099,926
Total Investment Securities (Cost $2,324,392,177) – 99.2%				2,268,099,926
Other assets less liabilities – 0.8%				18,159,827
NET ASSETS – 100.0%			$	2,286,259,753

* Non-income producing security.

Percentages shown are based on Net Assets.

Abbreviations:

ADR – American Depositary Receipt

GDR – Global Depositary Receipt

REIT – Real Estate Investment Trust

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	82,824,005
Aggregate gross unrealized depreciation		(139,473,090	)
Net unrealized depreciation	$	(56,649,085	)
Federal income tax cost of investments	$	2,324,749,011

Futures Contracts Purchased

FlexShares^® Morningstar Global Upstream Natural Resources Index had the following open long futures contracts as of April 30, 2013:

	Number of Contracts		Expiration Date		Notional Amount at Value		Unrealized Appreciation (Depreciation)
E-Mini S&P 500® Futures Contract		6		06/21/13	$	477,660	$	(103	)
FTSE 100® Index Futures Contracts		51		06/21/13		5,066,992		33,672
Mini Russell 2000® Futures Contracts		29		06/21/13		2,740,790		65,501
S&P Toronto Stock Exchange 60® Index Futures Contracts		63		06/20/13		8,883,949		(122,859	)
SPI 200® Futures Contracts		13		06/20/13		1,743,509		56,688
							$	32,899

Cash collateral in the amount of $1,792,844 was pledged to cover margin requirements for open futures contracts as of April 30, 2013.

Forward Foreign Currency Contracts

FlexShares^® Morningstar Global Upstream Natural Resources Index had the following outstanding contracts as of April 30, 2013:

Contracts to Deliver	Counterparty	In Exchange For		Delivery Date		Unrealized Appreciation (Depreciation)
GBP  416,916	Goldman Sachs Capital		USD    626,000		06/19/13		$ 22,686
CAD 1,130,916	Citibank N.A.		USD 1,100,000		06/19/13		23,040
JPY   168,489,475	Morgan Stanley		USD 1,750,000		06/19/13		(19,879	)
SGD 3,324,617	Citibank N.A.		USD 2,660,000		06/19/13		39,372
							$ 65,219
Contracts to Receive	Counterparty	In Exchange For		Receipt Date		Unrealized (Depreciation)
USD 2,240,000	Morgan Stanley		AUD 2,178,988		06/19/13	$	(13,592	)
USD 5,665,000	Citibank N.A.		EUR 4,371,132		06/19/13		(99,749	)
USD 1,070,000	UBS AG		CHF 1,020,470		06/19/13		(29,053	)
						$	(142,394	)

See Accompanying Notes to the Financial Statements.

18 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Global Upstream Natural Resources Index Fund (cont.)

FlexShares^® Morningstar Global Upstream Natural Resources Index invested, as a percentage of net assets, in the following countries as of April 30, 2013:

Australia	6.7	%
Brazil	2.4
Canada	13.9
Chile	1.2
China	1.3
Finland	0.6
France	2.9
Germany	1.3
Indonesia	0.4
Israel	0.6
Italy	1.1
Japan	0.5
Malaysia	1.4
Mexico	0.9
Netherlands	0.4
Norway	1.3
Peru	0.1
Philippines	0.0	†
Poland	0.3
Russia	1.8
Singapore	0.9
South Africa	1.7
Switzerland	4.4
Taiwan	0.1
Thailand	0.4
United Kingdom	15.8
United States	36.8
Other1	0.8
	100.0	%

^†  Amount represents less than 0.05%.

¹  Includes any non-equity securities and net other assets (liabilities).

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 19

Schedule of Investments

FlexShares^® iBoxx 3-Year Target Duration TIPS Index Fund

April 30, 2013 (Unaudited)

	Principal Amount		Value
U.S. TREASURY OBLIGATIONS – 99.8%
U.S. Treasury Inflation Index Notes
2.00%, due 07/15/14	$	56,042,217	$	58,472,528
1.63%, due 01/15/15		55,270,257		58,092,193
0.50%, due 04/15/15		55,594,561		57,600,430
1.88%, due 07/15/15		135,763,645		146,730,777
2.00%, due 01/15/16		133,137,467		146,143,407
0.13%, due 04/15/16		700,009,006		733,506,359
2.50%, due 07/15/16		62,757,210		71,495,586
2.38%, due 01/15/17		47,531,659		54,658,220
0.13%, due 04/15/17		108,725,156		115,785,559
2.63%, due 07/15/17		37,559,971		44,574,680
1.63%, due 01/15/18		43,506,108		50,131,364
				1,537,191,103
Total U.S. Treasury Obligations (Cost $1,538,113,047)				1,537,191,103
Total Investment Securities (Cost $1,538,113,047) – 99.8%				1,537,191,103
Other assets less liabilities – 0.2%				3,762,424
NET ASSETS – 100.0%			$	1,540,953,527

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	1,336,902
Aggregate gross unrealized depreciation		(2,597,963	)
Net unrealized depreciation	$	(1,261,061	)
Federal income tax cost of investments	$	1,538,452,164

Percentages shown are based on Net Assets.

See Accompanying Notes to the Financial Statements.

20 FLEXSHARES SEMIANNUAL REPORT

Schedule of Investments

FlexShares^® iBoxx 5-Year Target Duration TIPS Index Fund

April 30, 2013 (Unaudited)

	Principal Amount		Value
U.S. TREASURY OBLIGATIONS – 99.7%
U.S. Treasury Inflation Index Notes
2.50%, due 07/15/16	$	15,865,768	$	18,074,933
2.38%, due 01/15/17		13,702,178		15,756,585
0.13%, due 04/15/17		168,699,959		179,655,010
2.63%, due 07/15/17		43,387,199		51,490,203
1.63%, due 01/15/18		50,125,447		57,758,717
1.38%, due 07/15/18		44,354,338		51,415,777
2.13%, due 01/15/19		44,042,304		53,233,200
1.88%, due 07/15/19		11,413,808		13,860,728
1.38%, due 01/15/20		14,078,379		16,671,046
1.25%, due 07/15/20		23,852,755		28,350,728
1.13%, due 01/15/21		26,915,075		31,642,393
				517,909,320
Total U.S. Treasury Obligations (Cost $509,234,122)				517,909,320
Total Investment Securities (Cost $509,234,122) – 99.7%				517,909,320
Other assets less liabilities – 0.3%				1,546,780
NET ASSETS – 100.0%			$	519,456,100

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	8,605,746
Aggregate gross unrealized depreciation		—
Net unrealized appreciation	$	8,605,746
Federal income tax cost of investments	$	509,303,574

Percentages shown are based on Net Assets.

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 21

Schedule of Investments

FlexShares^® Morningstar US Market Factor Tilt Index Fund

April 30, 2013 (Unaudited)

	Shares		Value
COMMON STOCKS – 99.5%
Aerospace & Defense – 2.3%
AAR Corp.		5,796	$	103,516
Aerovironment, Inc.*		924		17,889
Alliant Techsystems, Inc.		4,200		312,312
American Science & Engineering, Inc.		420		27,082
Astronics Corp.*		504		14,011
BE Aerospace, Inc.*		924		57,972
The Boeing Co.		7,056		644,989
Cubic Corp.		840		36,095
Curtiss-Wright Corp.		6,132		201,375
DigitalGlobe, Inc.*		4,116		120,146
Ducommun, Inc.*		1,092		26,743
Esterline Technologies Corp.*		4,116		308,865
Exelis, Inc.		24,780		276,793
GenCorp, Inc.*		2,856		37,328
General Dynamics Corp.		2,688		198,804
HEICO Corp., Class A		2,352		79,545
Hexcel Corp.*		5,208		158,844
Honeywell International, Inc.		8,064		593,026
Huntington Ingalls Industries, Inc.		6,468		342,157
The KEYW Holding Corp.*		840		11,416
Kratos Defense & Security Solutions, Inc.*		3,948		20,095
L-3 Communications Holdings, Inc.		840		68,250
LMI Aerospace, Inc.*		1,260		26,951
Lockheed Martin Corp.		2,100		208,089
Moog, Inc., Class A*		5,712		263,951
National Presto Industries, Inc.		504		37,800
Northrop Grumman Corp.		2,016		152,692
Orbital Sciences Corp.*		3,108		56,006
Precision Castparts Corp.		1,512		289,230
Raytheon Co.		2,604		159,833
Rockwell Collins, Inc.		1,512		95,135
Spirit Aerosystems Holdings, Inc., Class A*		14,028		280,420
Sypris Solutions, Inc.		1,008		3,226
Taser International, Inc.*		3,360		29,602
Teledyne Technologies, Inc.*		1,932		145,016
Textron, Inc.		2,352		60,564
TransDigm Group, Inc.		420		61,656

	Shares		Value
Aerospace & Defense – (continued)
Triumph Group, Inc.		420	$	33,558
United Technologies Corp.		8,820		805,178
				6,366,160
Air Freight & Logistics – 0.5%
Air Transport Services Group, Inc.*		7,140		41,198
Atlas Air Worldwide Holdings, Inc.*		3,360		125,664
C.H. Robinson Worldwide, Inc.		1,680		99,775
Echo Global Logistics, Inc.*		756		13,116
Expeditors International of Washington, Inc.		1,932		69,417
FedEx Corp.		3,024		284,286
Forward Air Corp.		1,512		55,778
Hub Group, Inc., Class A*		1,932		70,808
Pacer International, Inc.*		2,352		13,383
Park-Ohio Holdings Corp.*		1,092		40,164
United Parcel Service, Inc., Class B		7,476		641,740
UTi Worldwide, Inc.		5,628		82,675
XPO Logistics, Inc.*		504		8,220
				1,546,224
Airlines – 0.6%
Alaska Air Group, Inc.*		8,904		548,843
Allegiant Travel Co.		756		67,964
Delta Air Lines, Inc.*		6,636		113,741
Hawaiian Holdings, Inc.*		6,384		35,048
JetBlue Airways Corp.*		29,568		203,724
Republic Airways Holdings, Inc.*		5,712		63,917
SkyWest, Inc.		7,140		102,173
Southwest Airlines Co.		7,224		98,969
Spirit Airlines, Inc.*		6,636		177,181
United Continental Holdings, Inc.*		2,604		84,109
US Airways Group, Inc.*		20,412		344,963
				1,840,632
Auto Components – 0.9%
American Axle & Manufacturing Holdings, Inc.*		8,652		115,677
Autoliv, Inc.		756		57,774
BorgWarner, Inc.*		1,008		78,795
Cooper Tire & Rubber Co.		7,896		196,531

See Accompanying Notes to the Financial Statements.

22 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Auto Components – (continued)
Dana Holding Corp.		18,732	$	323,127
Delphi Automotive PLC		2,184		100,923
Dorman Products, Inc.		1,344		50,723
Drew Industries, Inc.		1,008		36,389
Exide Technologies*		10,836		9,179
Federal-Mogul Corp.*		3,192		23,876
Fuel Systems Solutions, Inc.*		840		13,196
Gentex Corp.		7,812		175,770
Gentherm, Inc.*		1,764		26,866
The Goodyear Tire & Rubber Co.*		2,520		31,487
Johnson Controls, Inc.		6,132		214,681
Lear Corp.		840		48,535
Modine Manufacturing Co.*		6,888		62,956
Spartan Motors, Inc.		1,764		9,384
Standard Motor Products, Inc.		2,604		79,787
Stoneridge, Inc.*		4,200		31,794
Superior Industries International, Inc.		3,024		55,521
Tenneco, Inc.*		7,728		298,842
TRW Automotive Holdings Corp.*		840		50,459
Visteon Corp.*		6,888		404,946
				2,497,218
Automobiles – 0.3%
Ford Motor Co.		32,760		449,140
General Motors Co.*		6,132		189,111
Harley-Davidson, Inc.		2,436		133,127
Tesla Motors, Inc.*		588		31,746
Thor Industries, Inc.		2,856		105,929
Winnebago Industries, Inc.*		1,596		29,239
				938,292
Beverages – 1.3%
Beam, Inc.		1,596		103,277
The Boston Beer Co., Inc., Class A*		504		85,337
Brown-Forman Corp., Class B		1,344		94,752
Coca-Cola Bottling Co. Consolidated		252		15,498
The Coca-Cola Co.		39,312		1,664,077
Coca-Cola Enterprises, Inc.		2,940		107,692
Constellation Brands, Inc., Class A*		1,428		70,472

	Shares		Value
Beverages – (continued)
Dr Pepper Snapple Group, Inc.		2,184	$	106,645
Molson Coors Brewing Co., Class B		1,428		73,685
Monster Beverage Corp.*		1,428		80,539
National Beverage Corp.		504		7,424
PepsiCo, Inc.		15,540		1,281,584
				3,690,982
Biotechnology – 2.4%
ACADIA Pharmaceuticals, Inc.*		4,032		51,972
Achillion Pharmaceuticals, Inc.*		3,864		29,135
Acorda Therapeutics, Inc.*		2,100		83,097
Affymax, Inc.*		1,848		1,663
Agenus, Inc.*		1,008		4,899
Alexion Pharmaceuticals, Inc.*		2,184		214,032
Alnylam Pharmaceuticals, Inc.*		2,352		56,330
AMAG Pharmaceuticals, Inc.*		1,092		24,079
Amgen, Inc.		7,812		814,088
Amicus Therapeutics, Inc.*		1,008		3,276
Arena Pharmaceuticals, Inc.*		11,424		94,134
Ariad Pharmaceuticals, Inc.*		4,368		78,056
Arqule, Inc.*		504		1,487
Array BioPharma, Inc.*		4,620		27,489
Astex Pharmaceuticals*		6,552		45,078
AVEO Pharmaceuticals, Inc.*		2,268		11,589
BioCryst Pharmaceuticals, Inc.*		2,772		5,572
Biogen Idec, Inc.*		2,436		533,313
BioMarin Pharmaceutical, Inc.*		1,092		71,635
Celgene Corp.*		4,452		525,648
Celldex Therapeutics, Inc.*		3,696		48,233
Celsion Corp.*		1,092		913
Cepheid, Inc.*		3,528		134,523
Chelsea Therapeutics International Ltd.*		3,864		7,496
Cubist Pharmaceuticals, Inc.*		3,696		169,720
Curis, Inc.*		4,032		15,120
Cytori Therapeutics, Inc.*		2,604		7,317
Dendreon Corp.*		20,076		94,558
Dyax Corp.*		6,972		19,173
Dynavax Technologies Corp.*		8,316		19,543
Emergent Biosolutions, Inc.*		1,260		19,328
Exact Sciences Corp.*		2,772		25,890
Exelixis, Inc.*		8,988		46,648
Galena Biopharma, Inc.*		1,596		4,581

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 23

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Biotechnology – (continued)
Genomic Health, Inc.*		924	$	28,053
Geron Corp.*		6,888		8,059
Gilead Sciences, Inc.*		15,624		791,199
GTx, Inc.*		4,452		20,568
Halozyme Therapeutics, Inc.*		4,536		27,397
Idenix Pharmaceuticals, Inc.*		5,376		19,891
ImmunoCellular Therapeutics Ltd.*		2,604		6,562
ImmunoGen, Inc.*		4,956		79,395
Immunomedics, Inc.*		3,528		9,032
Incyte Corp. Ltd.*		7,644		169,315
Infinity Pharmaceuticals, Inc.*		2,436		104,967
InterMune, Inc.*		3,696		34,484
Ironwood Pharmaceuticals, Inc.*		4,116		62,604
Isis Pharmaceuticals, Inc.*		4,956		110,965
Keryx Biopharmaceuticals, Inc.*		4,620		37,653
Lexicon Pharmaceuticals, Inc.*		25,284		50,062
Ligand Pharmaceuticals, Inc., Class B*		1,428		39,013
MannKind Corp.*		6,552		25,880
Maxygen, Inc.		924		2,218
Medivation, Inc.*		1,008		53,132
Merrimack Pharmaceuticals, Inc.*		756		3,720
Momenta Pharmaceuticals, Inc.*		2,184		26,907
Myriad Genetics, Inc.*		4,788		133,346
Nanosphere, Inc.*		588		1,629
Neostem, Inc.*		7,056		3,528
Neurocrine Biosciences, Inc.*		3,444		39,744
NewLink Genetics Corp.*		1,260		17,564
Novavax, Inc.*		5,124		12,041
NPS Pharmaceuticals, Inc.*		4,536		60,918
OncoGenex Pharmaceutical, Inc.*		672		6,807
Oncothyreon, Inc.*		2,604		6,536
Onyx Pharmaceuticals, Inc.*		672		63,706
Opko Health, Inc.*		8,148		54,266
Orexigen Therapeutics, Inc.*		4,620		28,090
Osiris Therapeutics, Inc.*		420		4,712
PDL BioPharma, Inc.		17,808		137,834
Peregrine Pharmaceuticals, Inc.*		4,956		6,889
Pharmacyclics, Inc.*		1,092		88,998
Pluristem Therapeutics, Inc.*		1,344		4,274
Progenics Pharmaceuticals, Inc.*		2,604		11,978
Protalix BioTherapeutics, Inc.*		3,444		19,527
Raptor Pharmaceutical Corp.*		1,764		12,172
Regeneron Pharmaceuticals, Inc.*		756		162,646
Rigel Pharmaceuticals, Inc.*		3,696		17,704

	Shares		Value
Biotechnology – (continued)
Sangamo Biosciences, Inc.*		3,276	$	33,350
Sarepta Therapeutics, Inc.*		1,848		53,666
Savient Pharmaceuticals, Inc.*		3,696		2,758
Seattle Genetics, Inc.*		2,772		102,425
SIGA Technologies, Inc.*		2,100		6,930
Spectrum Pharmaceuticals, Inc.		2,436		18,051
StemCells, Inc.*		924		1,562
Synageva BioPharma Corp.*		420		21,710
Synta Pharmaceuticals Corp.*		1,764		18,081
Targacept, Inc.*		1,764		8,132
Theravance, Inc.*		3,780		127,575
Threshold Pharmaceuticals, Inc.*		2,184		10,527
Trius Therapeutics, Inc.*		1,260		8,782
United Therapeutics Corp.*		2,520		168,286
Vertex Pharmaceuticals, Inc.*		2,184		167,775
Vical, Inc.*		3,528		13,018
Zalicus, Inc.*		8,400		4,915
ZIOPHARM Oncology, Inc.*		3,108		5,221
				6,668,364
Building Products – 0.4%
A.O. Smith Corp.		2,016		152,067
AAON, Inc.		1,092		31,024
American Woodmark Corp.*		1,008		33,919
Apogee Enterprises, Inc.		1,512		38,526
Armstrong World Industries, Inc.*		672		34,299
Builders FirstSource, Inc.*		1,344		8,319
Fortune Brands Home & Security, Inc.*		1,932		70,305
Gibraltar Industries, Inc.*		1,596		29,845
Griffon Corp.		5,208		53,642
Lennox International, Inc.		2,688		166,656
Masco Corp.		3,696		71,850
NCI Building Systems, Inc.*		1,092		18,695
Nortek, Inc.*		672		48,290
Owens Corning*		1,176		49,463
Quanex Building Products Corp.		1,932		31,434
Simpson Manufacturing Co., Inc.		2,100		60,354
Trex Co., Inc.*		756		36,802
Universal Forest Products, Inc.		1,008		38,909
USG Corp.*		2,016		52,396
				1,026,795

See Accompanying Notes to the Financial Statements.

24 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Capital Markets – 1.6%
Affiliated Managers Group, Inc.*		504	$	78,463
Ameriprise Financial, Inc.		1,848		137,731
Arlington Asset Investment Corp., Class A		924		25,031
Artio Global Investors, Inc.		9,576		26,238
The Bank of New York Mellon Corp.		9,492		267,864
BGC Partners, Inc., Class A		13,356		76,396
BlackRock, Inc.		1,260		335,790
Calamos Asset Management, Inc., Class A		2,268		25,742
The Charles Schwab Corp.		12,012		203,724
Cohen & Steers, Inc.		1,092		43,145
Cowen Group, Inc., Class A*		11,592		29,676
Diamond Hill Investment Group, Inc.		168		12,682
E*TRADE Financial Corp.*		14,028		144,348
Eaton Vance Corp.		1,176		46,899
Evercore Partners, Inc., Class A		1,428		53,907
Federated Investors, Inc., Class B		4,704		108,004
Financial Engines, Inc.		2,184		79,432
Franklin Resources, Inc.		1,512		233,846
FXCM, Inc., Class A		2,520		34,146
GAMCO Investors, Inc., Class A		252		13,230
GFI Group, Inc.		10,332		41,431
The Goldman Sachs Group, Inc.		3,528		515,335
Greenhill & Co., Inc.		1,512		69,839
HFF, Inc., Class A		1,596		33,436
ICG Group, Inc.*		1,932		22,933
INTL FCStone, Inc.*		2,016		34,514
Invesco Ltd.		4,368		138,640
Investment Technology Group, Inc.*		5,208		56,715
Janus Capital Group, Inc.		23,688		211,297
Knight Capital Group, Inc., Class A*		36,540		129,352
Legg Mason, Inc.		1,176		37,467
LPL Financial Holdings, Inc.		336		11,612
Manning & Napier, Inc.		840		14,708
Medallion Financial Corp.		1,176		17,569
Morgan Stanley		11,508		254,902
Northern Trust Corp.‡		2,184		117,761

	Shares		Value
Capital Markets – (continued)
Piper Jaffray Cos.*		2,436	$	82,239
Raymond James Financial, Inc.		756		31,314
Safeguard Scientifics, Inc.*		2,520		40,673
SEI Investments Co.		1,512		43,334
State Street Corp.		3,612		211,194
Stifel Financial Corp.*		3,192		102,847
SWS Group, Inc.*		4,116		23,420
T Rowe Price Group, Inc.		2,604		188,790
TD Ameritrade Holding Corp.		2,268		45,156
Virtus Investment Partners, Inc.*		336		64,176
Waddell & Reed Financial, Inc., Class A		840		36,011
Walter Investment Management Corp.*		2,016		67,657
				4,620,616
Chemicals – 2.5%
A Schulman, Inc.		3,612		93,804
ADA-ES, Inc.*		420		11,596
Air Products & Chemicals, Inc.		2,100		182,616
Airgas, Inc.		672		64,949
Albemarle Corp.		924		56,595
American Vanguard Corp.		1,176		33,916
Arabian American Development Co.*		420		3,196
Ashland, Inc.		588		50,103
Axiall Corp.		9,156		480,232
Balchem Corp.		1,596		69,171
Cabot Corp.		7,560		283,954
Calgon Carbon Corp.*		3,108		52,960
Celanese Corp.		1,092		53,956
CF Industries Holdings, Inc.		504		94,001
Chemtura Corp.*		12,852		273,233
Cytec Industries, Inc.		1,176		85,683
The Dow Chemical Co.		10,332		350,358
E.I. du Pont de Nemours & Co.		9,156		499,094
Eastman Chemical Co.		1,596		106,373
Ecolab, Inc.		3,024		255,891
Ferro Corp.*		9,912		69,780
Flotek Industries, Inc.*		2,688		43,116
FMC Corp.		1,344		81,581
FutureFuel Corp.		1,176		14,406
Hawkins, Inc.		504		18,744
HB Fuller Co.		2,352		89,141

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 25

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Chemicals – (continued)
Huntsman Corp.		1,596	$	30,101
Innophos Holdings, Inc.		2,688		137,921
Innospec, Inc.		2,688		118,299
International Flavors & Fragrances, Inc.		588		45,388
Intrepid Potash, Inc.		2,688		49,486
Koppers Holdings, Inc.		2,436		106,965
Kraton Performance Polymers, Inc.*		2,772		62,952
Kronos Worldwide, Inc.		2,436		43,068
Landec Corp.*		1,680		22,529
LSB Industries, Inc.*		1,932		63,099
Minerals Technologies, Inc.		1,680		68,258
Monsanto Co.		5,460		583,237
The Mosaic Co.		2,604		160,380
NewMarket Corp.		84		22,571
Olin Corp.		10,668		257,846
OM Group, Inc.*		4,200		102,774
Omnova Solutions, Inc.*		5,628		37,539
PolyOne Corp.		7,220		162,667
PPG Industries, Inc.		1,596		234,835
Praxair, Inc.		3,024		345,643
Quaker Chemical Corp.		1,596		98,505
Rockwood Holdings, Inc.		756		49,057
RPM International, Inc.		1,092		35,381
The Scotts Miracle-Gro Co., Class A		420		19,047
Sensient Technologies Corp.		2,688		105,773
The Sherwin-Williams Co.		924		169,194
Sigma-Aldrich Corp.		924		72,710
Stepan Co.		1,764		100,442
Tredegar Corp.		2,940		87,024
Tronox Ltd., Class A		1,260		25,880
The Valspar Corp.		840		53,609
W.R. Grace & Co.*		504		38,863
Westlake Chemical Corp.		252		20,951
Zep, Inc.		1,260		19,152
Zoltek Cos., Inc.*		1,596		21,083
				6,990,678
Commercial Banks – 4.4%
1st Source Corp.		1,260		29,648
Ameris Bancorp*		2,688		37,283

	Shares		Value
Commercial Banks – (continued)
Arrow Financial Corp.		588	$	14,224
Associated Banc-Corp		21,588		308,061
Bancfirst Corp.		924		38,660
Bancorp Inc./DE*		1,764		22,932
BancorpSouth, Inc.		4,116		65,856
Bank of Hawaii Corp.		2,940		140,209
Bank of the Ozarks, Inc.		2,016		82,515
BankUnited, Inc.		2,604		66,011
Banner Corp.		1,764		57,630
BB&T Corp.		6,468		199,020
BBCN Bancorp, Inc.		9,912		127,667
BOK Financial Corp.		168		10,498
Boston Private Financial Holdings, Inc.		4,116		39,678
Bryn Mawr Bank Corp.		1,428		33,172
Capital Bank Financial Corp., Class A*		1,344		24,017
CapitalSource, Inc.		24,528		219,526
Cardinal Financial Corp.		1,512		23,058
Cathay General Bancorp		4,116		81,126
Central Pacific Financial Corp.*		1,848		31,120
Chemical Financial Corp.		3,192		79,162
CIT Group, Inc.*		2,016		85,700
City Holding Co.		1,596		60,935
City National Corp./CA		1,260		72,110
CoBiz Financial, Inc.		3,948		33,795
Columbia Banking Systems, Inc.		2,016		43,284
Comerica, Inc.		1,512		54,810
Commerce Bancshares, Inc./MO		588		23,585
Community Bank System, Inc.		4,620		132,317
Community Trust Bancorp, Inc.		1,764		61,070
Cullen/Frost Bankers, Inc.		504		30,447
CVB Financial Corp.		11,592		126,005
Eagle Bancorp, Inc.*		1,008		23,315
East West Bancorp, Inc.		1,512		36,787
Enterprise Financial Services Corp.		2,436		35,030
Fifth Third Bancorp		7,728		131,608
Financial Institutions, Inc.		1,764		33,745
First Busey Corp.		7,728		33,230
First California Financial Group, Inc.*		672		5,423
First Citizens BancShares, Inc./NC, Class A		756		140,934

See Accompanying Notes to the Financial Statements.

26 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Commercial Banks – (continued)
First Commonwealth Financial Corp.		7,560	$	54,054
First Community Bancshares, Inc./VA		2,016		31,268
First Connecticut Bancorp, Inc./CT		840		12,466
First Financial Bancorp		7,056		108,451
First Financial Bankshares, Inc.		1,680		83,009
First Financial Corp./IN		1,428		44,111
First Financial Holdings, Inc.		1,344		26,934
First Horizon National Corp.		13,776		143,270
First Interstate Bancsystem, Inc.		2,268		46,086
First Merchants Corp.		3,780		61,349
First Midwest Bancorp, Inc./IL		3,864		48,493
First Niagara Financial Group, Inc.		3,696		35,149
First Republic Bank/CA		756		28,713
FirstMerit Corp.		23,268		398,581
FNB Corp./PA		18,480		210,487
Fulton Financial Corp.		25,368		280,570
German American Bancorp, Inc.		2,100		44,772
Glacier Bancorp, Inc.		3,780		69,741
Great Southern Bancorp, Inc.		1,260		33,226
Hancock Holding Co.		1,260		34,360
Hanmi Financial Corp.*		2,184		33,699
Home BancShares, Inc./AR		1,344		53,384
Hudson Valley Holding Corp.		924		14,211
Huntington Bancshares, Inc./OH		6,720		48,182
Iberiabank Corp.		1,596		72,810
Independent Bank Corp./MA		2,688		83,436
International Bancshares Corp.		7,308		141,775
Investors Bancorp, Inc.		2,436		48,233
KeyCorp		6,636		66,161
Lakeland Bancorp, Inc.		2,772		26,500
Lakeland Financial Corp.		1,848		49,526
M&T Bank Corp.		1,008		101,002
MB Financial, Inc.		7,308		180,946
Mercantile Bank Corp.		1,764		29,476
National Bank Holdings Corp., Class A		1,428		25,790
National Penn Bancshares, Inc.		6,720		65,789
NBT Bancorp, Inc.		5,292		107,163
OFG Bancorp		5,712		91,792
Old National Bancorp/IN		13,524		164,722

	Shares		Value
Commercial Banks – (continued)
OmniAmerican Bancorp, Inc.*		756	$	18,824
PacWest Bancorp		3,948		109,478
Park National Corp.		1,680		114,878
Park Sterling Corp.*		3,696		21,178
Peoples Bancorp, Inc./OH		1,092		22,255
Pinnacle Financial Partners, Inc.*		1,764		42,812
The PNC Financial Services Group, Inc.		4,368		296,500
PrivateBancorp, Inc.		3,360		64,445
Prosperity Bancshares, Inc.		2,436		111,910
Regions Financial Corp.		14,784		125,516
Renasant Corp.		3,192		72,841
Republic Bancorp, Inc./KY, Class A		1,260		27,972
S&T Bancorp, Inc.		3,528		66,573
Sandy Spring Bancorp, Inc.		3,108		63,652
SCBT Financial Corp.		756		36,114
Signature Bank/NY*		1,092		78,198
Simmons First National Corp., Class A		840		20,597
Southside Bancshares, Inc.		2,293		49,016
Southwest Bancorp, Inc./Stillwater OK*		420		5,552
State Bank Financial Corp.		2,688		39,540
StellarOne Corp.		1,176		17,628
Sterling Bancorp/NY		3,948		44,533
Sterling Financial Corp./WA		3,696		80,573
SunTrust Banks, Inc.		5,460		159,705
Susquehanna Bancshares, Inc.		23,184		270,557
SVB Financial Group*		2,520		179,197
SY Bancorp, Inc.		1,596		36,644
Synovus Financial Corp.		49,056		131,961
TCF Financial Corp.		21,336		310,439
Texas Capital Bancshares, Inc.*		1,932		80,487
Tompkins Financial Corp.		1,680		70,224
TowneBank/VA		1,512		21,637
Trustmark Corp.		8,568		210,344
U.S. Bancorp		16,464		547,922
UMB Financial Corp.		2,352		118,400
Umpqua Holdings Corp.		14,532		174,384
Union First Market Bankshares Corp.		2,856		54,007
United Bankshares, Inc./WV		6,552		165,831

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 27

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Commercial Banks – (continued)
United Community Banks, Inc./GA*		2,520	$	27,594
Valley National Bancorp		11,424		102,702
Washington Trust Bancorp, Inc.		1,680		44,940
Webster Financial Corp.		10,668		249,311
Wells Fargo & Co.		41,160		1,563,257
WesBanco, Inc.		3,192		79,896
Westamerica Bancorp.		1,428		61,961
Western Alliance Bancorp*		4,284		63,018
Wilshire Bancorp, Inc.*		8,316		53,139
Wintrust Financial Corp.		1,848		66,269
Zions Bancorp.		1,680		41,362
				12,510,663
Commercial Services & Supplies – 1.4%
ABM Industries, Inc.		6,552		147,748
ACCO Brands Corp.*		14,952		100,926
Acorn Energy, Inc.		420		3,150
The ADT Corp.*		2,268		98,975
Avery Dennison Corp.		924		38,300
The Brink’s Co.		5,964		158,106
Casella Waste Systems, Inc., Class A*		1,848		8,057
Cenveo, Inc.*		7,392		15,080
Cintas Corp.		1,176		52,767
Clean Harbors, Inc.*		504		28,713
Consolidated Graphics, Inc.*		1,176		41,948
Copart, Inc.*		1,176		41,454
Covanta Holding Corp.		7,560		151,200
Deluxe Corp.		6,552		249,893
EnergySolutions, Inc.*		9,240		38,161
EnerNOC, Inc.*		2,436		42,679
Ennis, Inc.		3,276		50,352
G&K Services, Inc., Class A		1,008		47,366
Healthcare Services Group, Inc.		3,276		73,022
Heritage-Crystal Clean, Inc.*		420		6,531
Herman Miller, Inc.		7,476		187,573
HNI Corp.		2,604		89,656
InnerWorkings, Inc.*		1,512		15,226
Interface, Inc.		3,024		50,622
Intersections, Inc.		924		8,833
Iron Mountain, Inc.		1,428		54,064

	Shares		Value
Commercial Services & Supplies – (continued)
KAR Auction Services, Inc.		4,704	$	105,228
Kimball International, Inc., Class B		420		3,860
Knoll, Inc.		6,300		98,028
McGrath RentCorp		1,260		39,136
Metalico, Inc.*		7,476		11,139
Mine Safety Appliances Co.		1,680		80,640
Mobile Mini, Inc.*		2,016		56,710
Multi-Color Corp.		1,680		43,445
Pitney Bowes, Inc.		1,344		18,372
Quad/Graphics, Inc.		2,940		61,446
R.R. Donnelley & Sons Co.		24,192		297,803
Republic Services, Inc.		2,352		80,156
Rollins, Inc.		756		18,386
Standard Parking Corp.*		840		18,052
Steelcase, Inc., Class A		11,340		144,018
Stericycle, Inc.*		840		90,989
Swisher Hygiene, Inc.*		7,896		11,528
Team, Inc.*		1,008		39,070
Tetra Tech, Inc.*		3,276		86,126
TMS International Corp., Class A*		1,680		24,259
Tyco International Ltd.		4,788		153,791
UniFirst Corp.		1,008		91,778
United Stationers, Inc.		5,376		174,559
US Ecology, Inc.		924		25,133
Viad Corp.		1,092		28,447
Waste Connections, Inc.		1,176		44,629
Waste Management, Inc.		4,284		175,558
				3,822,688
Communications Equipment – 1.7%
ADTRAN, Inc.		3,276		68,796
Anaren, Inc.*		1,008		23,597
ARRIS Group, Inc.*		6,804		112,334
Aruba Networks, Inc.*		6,216		139,798
Aviat Networks, Inc.*		2,940		9,408
Bel Fuse, Inc., Class B		672		9,892
Black Box Corp.		2,184		47,436
Brocade Communications Systems, Inc.*		59,472		346,127
CalAmp Corp.*		840		9,349
Calix, Inc.*		2,100		17,913
Ciena Corp.*		5,208		77,912
Cisco Systems, Inc.		44,436		929,601
Comtech Telecommunications Corp.		1,092		26,874

See Accompanying Notes to the Financial Statements.

28 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Communications Equipment – (continued)
Digi International, Inc.*		1,344	$	12,257
EchoStar Corp., Class A*		2,184		85,766
Emulex Corp.*		11,424		68,544
Extreme Networks*		10,836		36,084
F5 Networks, Inc.*		840		64,201
Finisar Corp.*		4,872		62,556
Globecomm Systems, Inc.*		1,176		14,406
Harmonic, Inc.*		13,944		79,202
Harris Corp.		1,008		46,570
Infinera Corp.*		5,544		46,680
InterDigital, Inc.		2,352		104,452
Ixia*		2,604		42,888
JDS Uniphase Corp.*		13,272		179,172
Juniper Networks, Inc.*		4,956		82,022
KVH Industries, Inc.*		420		5,548
Loral Space & Communications, Inc.		1,008		62,012
Motorola Solutions, Inc.		2,940		168,168
NETGEAR, Inc.*		1,932		57,554
Oclaro, Inc.*		9,408		12,795
Oplink Communications, Inc.*		1,092		17,931
Palo Alto Networks, Inc.*		168		9,089
Parkervision, Inc.*		3,192		12,736
Plantronics, Inc.		2,436		106,745
Polycom, Inc.*		10,332		108,486
Procera Networks, Inc.*		840		9,316
QUALCOMM, Inc.		17,556		1,081,801
Riverbed Technology, Inc.*		1,596		23,717
ShoreTel, Inc.*		2,604		9,400
Sonus Networks, Inc.*		16,296		34,222
Symmetricom, Inc.*		1,764		9,173
Tellabs, Inc.		44,436		91,982
Telular Corp.		588		7,509
Tessco Technologies, Inc.		420		8,585
Ubiquiti Networks, Inc.		504		7,787
ViaSat, Inc.*		2,016		97,716
				4,686,109
Computers & Peripherals – 2.4%
3D Systems Corp.*		4,116		157,396
Apple, Inc.		9,576		4,239,774
Avid Technology, Inc.*		4,368		28,785

	Shares		Value
Computers & Peripherals – (continued)
Cray, Inc.*		1,680	$	35,549
Datalink Corp.*		1,848		20,679
Dell, Inc.		12,264		164,338
Diebold, Inc.		8,400		246,036
Electronics for Imaging, Inc.*		2,436		65,090
EMC Corp.*		21,672		486,103
Fusion-io, Inc.*		3,780		70,988
Hewlett-Packard Co.		16,380		337,428
Imation Corp.*		5,796		21,329
Immersion Corp.*		1,512		16,012
Intermec, Inc.*		2,688		26,450
Lexmark International, Inc., Class A		8,568		259,696
NCR Corp.*		1,260		34,360
NetApp, Inc.*		3,612		126,023
OCZ Technology Group, Inc.*		10,416		13,645
QLogic Corp.*		5,880		63,857
Quantum Corp.*		33,264		47,567
SanDisk Corp.*		2,352		123,339
Seagate Technology PLC		2,940		107,898
Silicon Graphics International Corp.*		1,848		24,024
STEC, Inc.*		5,208		18,905
Super Micro Computer, Inc.*		1,932		18,586
Synaptics, Inc.*		1,764		72,730
Western Digital Corp.		1,848		102,157
				6,928,744
Construction & Engineering – 0.5%
AECOM Technology Corp.*		13,692		398,026
Aegion Corp.*		2,016		42,457
Ameresco, Inc., Class A*		1,008		7,429
Argan, Inc.		672		11,894
Comfort Systems USA, Inc.		2,016		25,865
Dycom Industries, Inc.*		1,764		34,081
EMCOR Group, Inc.		5,208		194,779
Fluor Corp.		1,764		100,513
Furmanite Corp.*		1,932		12,268
Granite Construction, Inc.		1,848		51,134
Great Lakes Dredge & Dock Corp.		3,696		25,576
Jacobs Engineering Group, Inc.*		1,260		63,605
KBR, Inc.		1,092		32,847
Layne Christensen Co.*		1,932		39,471
MasTec, Inc.*		5,124		142,447

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 29

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Construction & Engineering – (continued)
Michael Baker Corp.		1,008	$	24,545
MYR Group, Inc.*		1,092		24,898
Northwest Pipe Co.*		840		22,924
Orion Marine Group, Inc.*		3,108		28,469
Primoris Services Corp.		3,276		72,203
Quanta Services, Inc.*		2,100		57,708
Tutor Perini Corp.*		4,536		74,572
URS Corp.		588		25,825
				1,513,536
Construction Materials – 0.1%
Eagle Materials, Inc.		2,352		159,348
Headwaters, Inc.*		2,352		25,542
Martin Marietta Materials, Inc.		504		50,899
Texas Industries, Inc.*		1,260		80,237
Vulcan Materials Co.		1,176		58,659
				374,685
Consumer Finance – 0.8%
American Express Co.		9,156		626,362
Capital One Financial Corp.		4,704		271,797
Cash America International, Inc.		3,612		157,592
Credit Acceptance Corp.*		588		58,994
DFC Global Corp.*		6,300		85,050
Discover Financial Services		4,284		187,382
Encore Capital Group, Inc.*		2,604		74,188
Ezcorp, Inc., Class A*		5,796		97,952
First Cash Financial Services, Inc.*		1,512		77,823
Green Dot Corp., Class A*		2,352		36,950
Nelnet, Inc., Class A		3,108		105,672
Netspend Holdings, Inc.*		1,848		29,494
Portfolio Recovery Associates, Inc.*		1,260		154,665
SLM Corp.		4,032		83,261
World Acceptance Corp.*		1,932		171,677
				2,218,859
Containers & Packaging – 0.3%
AEP Industries, Inc.*		336		25,906
Aptargroup, Inc.		588		32,987
Ball Corp.		1,428		63,003
Bemis Co., Inc.		840		33,054
Boise, Inc.		12,768		102,016

	Shares		Value
Containers & Packaging – (continued)
Crown Holdings, Inc.*		1,176	$	50,192
Graphic Packaging Holding Co.*		24,108		181,292
Greif, Inc., Class A		3,612		173,990
MeadWestvaco Corp.		1,344		46,341
Myers Industries, Inc.		1,932		28,632
Owens-Illinois, Inc.*		1,260		33,113
Packaging Corp of America		840		39,950
Rock Tenn Co., Class A		504		50,471
Sealed Air Corp.		1,344		29,729
Silgan Holdings, Inc.		504		24,126
Sonoco Products Co.		840		29,434
				944,236
Distributors – 0.1%
Core-Mark Holding Co., Inc.		1,428		74,313
Genuine Parts Co.		1,512		115,411
LKQ Corp.*		3,024		72,818
Pool Corp.		2,520		123,530
VOXX International Corp.*		3,024		28,819
				414,891
Diversified Consumer Services – 0.8%
American Public Education, Inc.*		924		30,982
Apollo Group, Inc., Class A*		13,356		245,350
Ascent Capital Group, Inc., Class A*		1,260		83,777
Bridgepoint Education, Inc.*		2,352		25,355
Capella Education Co.*		1,428		50,580
Career Education Corp.*		7,812		17,108
Carriage Services, Inc.		1,428		24,976
Coinstar, Inc.*		3,780		199,622
Corinthian Colleges, Inc.*		10,416		20,832
DeVry, Inc.		7,476		209,403
Education Management Corp.*		3,864		21,909
Grand Canyon Education, Inc.*		2,772		70,880
H&R Block, Inc.		2,352		65,244
Hillenbrand, Inc.		7,224		181,539
ITT Educational Services, Inc.*		2,268		41,527
K12, Inc.*		1,848		47,069
Lincoln Educational Services Corp.		2,856		15,908
Matthews International Corp., Class A		3,612		132,958
Regis Corp.		7,392		138,600

See Accompanying Notes to the Financial Statements.

30 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Diversified Consumer Services – (continued)
Service Corp. International		7,896	$	133,284
Sotheby’s		3,696		131,134
Steiner Leisure Ltd.*		1,512		73,226
Stewart Enterprises, Inc., Class A		9,324		83,077
Strayer Education, Inc.		1,512		71,608
Universal Technical Institute, Inc.		1,176		13,959
Weight Watchers International, Inc.		336		14,169
				2,144,076
Diversified Financial Services – 1.9%
Bank of America Corp.		109,956		1,353,558
CBOE Holdings, Inc.		4,704		176,541
Citigroup, Inc.		25,284		1,179,751
CME Group, Inc.		3,024		184,041
Interactive Brokers Group, Inc., Class A		5,124		77,167
IntercontinentalExchange, Inc.*		756		123,175
JPMorgan Chase & Co.		31,668		1,552,049
Leucadia National Corp.		2,604		80,444
MarketAxess Holdings, Inc.		2,352		99,537
The McGraw-Hill Cos., Inc.		2,688		145,448
Moody’s Corp.		2,100		127,785
MSCI, Inc.*		1,176		40,102
The NASDAQ OMX Group, Inc.		1,092		32,192
NewStar Financial, Inc.*		1,680		20,076
NYSE Euronext		1,764		68,461
PHH Corp.*		7,140		150,511
PICO Holdings, Inc.*		1,176		25,519
				5,436,357
Diversified Telecommunication Services – 1.5%
8x8, Inc.*		3,360		24,293
Alaska Communications Systems Group, Inc.		4,704		7,620
AT&T, Inc.		45,780		1,714,919
Atlantic Tele-Network, Inc.		1,092		55,441
Cbeyond, Inc.*		1,596		14,013
CenturyLink, Inc.		5,040		189,353
Cincinnati Bell, Inc.*		13,608		47,900
Cogent Communications Group, Inc.		2,436		69,767

	Shares		Value
Diversified Telecommunication Services – (continued)
Consolidated Communications Holdings, Inc.		2,520	$	46,444
Fairpoint Communications, Inc.*		1,932		15,726
Frontier Communications Corp.		8,988		37,390
General Communication, Inc., Class A*		1,848		17,944
IDT Corp., Class B		2,100		31,059
inContact, Inc.*		2,940		23,814
Iridium Communications, Inc.*		7,308		49,037
Level 3 Communications, Inc.*		1,596		32,127
Lumos Networks Corp.		1,932		26,063
Neutral Tandem, Inc.		5,040		15,019
Premiere Global Services, Inc.*		3,108		34,903
Primus Telecommunications Group, Inc.		2,184		27,453
Towerstream Corp.*		3,276		7,862
tw telecom inc*		1,512		40,945
Verizon Communications, Inc.		29,064		1,566,840
Vonage Holdings Corp.*		19,236		58,670
Windstream Corp.		4,200		35,784
				4,190,386
Electric Utilities – 2.0%
ALLETE, Inc.		4,452		228,610
American Electric Power Co., Inc.		3,780		194,405
Cleco Corp.		3,864		191,345
Duke Energy Corp.		7,644		574,829
Edison International		2,352		126,538
El Paso Electric Co.		4,956		185,652
The Empire District Electric Co.		5,376		124,024
Entergy Corp.		1,512		107,700
Exelon Corp.		7,476		280,425
FirstEnergy Corp.		3,696		172,234
Great Plains Energy, Inc.		1,092		26,350
Hawaiian Electric Industries, Inc.		12,180		344,694
IDACORP, Inc.		6,300		310,023
ITC Holdings Corp.		504		46,479
MGE Energy, Inc.		1,428		79,754
NextEra Energy, Inc.		4,368		358,307
Northeast Utilities		2,687		121,802
NV Energy, Inc.		1,848		39,972
OGE Energy Corp.		1,008		73,009
Otter Tail Corp.		1,932		60,278

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 31

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Electric Utilities – (continued)
Pepco Holdings, Inc.		1,764	$	39,866
Pinnacle West Capital Corp.		840		51,156
PNM Resources, Inc.		10,752		258,156
Portland General Electric Co.		9,576		308,826
PPL Corp.		4,536		151,412
The Southern Co.		9,576		461,850
UIL Holdings Corp.		6,468		269,328
Unitil Corp.		756		22,914
UNS Energy Corp.		4,872		248,277
Westar Energy, Inc.		924		32,303
Xcel Energy, Inc.		3,780		120,166
				5,610,684
Electrical Equipment – 1.0%
Acuity Brands, Inc.		2,268		165,473
American Superconductor Corp.*		4,536		11,385
AMETEK, Inc.		2,352		95,750
AZZ, Inc.		1,344		56,838
The Babcock & Wilcox Co.		1,176		31,987
Belden, Inc.		2,520		124,538
Brady Corp., Class A		5,964		202,060
Capstone Turbine Corp.*		13,524		11,903
Eaton Corp. PLC		4,368		268,239
Emerson Electric Co.		7,560		419,656
Encore Wire Corp.		1,008		33,012
EnerSys, Inc.*		5,964		273,390
Enphase Energy, Inc.*		1,260		8,870
Franklin Electric Co., Inc.		2,016		65,258
FuelCell Energy, Inc.*		5,964		6,262
Generac Holdings, Inc.		2,520		90,544
General Cable Corp.*		6,552		225,913
Global Power Equipment Group, Inc.		1,176		19,404
GrafTech International Ltd.*		8,484		60,915
Hubbell, Inc., Class B		504		48,364
II-VI, Inc.*		2,688		41,583
Polypore International, Inc.*		2,436		102,142
Powell Industries, Inc.*		504		24,817
Regal-Beloit Corp.		420		33,020
Rockwell Automation, Inc.		1,428		121,066
Roper Industries, Inc.		924		110,557

	Shares		Value
Electrical Equipment – (continued)
Sensata Technologies Holding N.V.*		1,260	$	42,147
Thermon Group Holdings, Inc.*		840		16,464
				2,711,557
Electronic Equipment, Instruments & Components – 1.4%
Aeroflex Holding Corp.*		2,100		15,624
Amphenol Corp., Class A		1,764		133,217
Anixter International, Inc.		3,360		241,046
Arrow Electronics, Inc.*		924		36,249
Audience, Inc.*		672		9,939
Avnet, Inc.*		1,680		55,020
AVX Corp.		6,636		75,053
Badger Meter, Inc.		756		33,022
Benchmark Electronics, Inc.*		7,560		134,870
Checkpoint Systems, Inc.*		2,436		28,185
Cognex Corp.		1,848		73,366
Coherent, Inc.		1,260		70,472
Corning, Inc.		12,264		177,828
CTS Corp.		4,368		46,519
Daktronics, Inc.		2,016		20,140
Dolby Laboratories, Inc., Class A		504		16,556
DTS, Inc.*		1,008		16,914
Echelon Corp.*		2,940		6,497
Electro Rent Corp.		2,184		36,189
Electro Scientific Industries, Inc.		1,260		13,583
Fabrinet*		2,940		40,366
FARO Technologies, Inc.*		840		32,584
FEI Co.		2,100		134,148
Flextronics International Ltd.*		4,704		33,634
FLIR Systems, Inc.		2,856		69,429
Ingram Micro, Inc., Class A*		19,404		345,585
Insight Enterprises, Inc.*		5,544		100,457
InvenSense, Inc.*		1,680		15,658
IPG Photonics Corp.		252		16,047
Itron, Inc.*		5,124		203,167
Jabil Circuit, Inc.		1,512		26,914
Kemet Corp.*		6,636		41,342
Key Tronic Corp.*		504		5,695
Littelfuse, Inc.		1,260		87,973
Maxwell Technologies, Inc.*		1,680		10,248
Measurement Specialties, Inc.*		756		32,334
Mercury Systems, Inc.*		1,932		14,934

See Accompanying Notes to the Financial Statements.

32 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Electronic Equipment, Instruments & Components – (continued)
Methode Electronics, Inc.		1,932	$	27,782
Microvision, Inc.*		2,604		5,338
Molex, Inc.		504		13,895
MTS Systems Corp.		840		51,198
Multi-Fineline Electronix, Inc.*		1,176		17,922
National Instruments Corp.		924		25,253
Neonode, Inc.*		1,260		7,195
Newport Corp.*		2,100		31,815
OSI Systems, Inc.*		840		48,132
Park Electrochemical Corp.		924		22,056
Plexus Corp.*		4,368		117,805
Power-One, Inc.*		15,792		99,806
RealD, Inc.*		1,932		28,922
Rofin-Sinar Technologies, Inc.*		1,428		35,557
Rogers Corp.*		840		35,818
Sanmina Corp.*		10,584		133,570
ScanSource, Inc.*		3,276		94,906
SYNNEX Corp.*		3,276		113,350
Tech Data Corp.*		5,208		243,370
Trimble Navigation Ltd.*		2,520		72,425
TTM Technologies, Inc.*		6,384		46,156
Universal Display Corp.*		2,184		68,665
Vishay Intertechnology, Inc.*		17,556		246,486
Vishay Precision Group, Inc.*		672		9,630
Zygo Corp.*		1,008		15,080
				4,062,936
Energy Equipment & Services – 2.2%
Atwood Oceanics, Inc.*		420		20,601
Baker Hughes, Inc.		3,612		163,949
Basic Energy Services, Inc.*		3,948		54,206
Bristow Group, Inc.		1,848		116,794
C&J Energy Services, Inc.*		5,628		111,378
Cal Dive International, Inc.*		9,660		16,132
Cameron International Corp.*		2,604		160,276
CARBO Ceramics, Inc.		1,092		77,150
Core Laboratories NV		504		72,969
Dawson Geophysical Co.*		1,176		36,150
Diamond Offshore Drilling, Inc.		756		52,240
Dresser-Rand Group, Inc.*		840		46,712
Dril-Quip, Inc.*		336		28,127

	Shares		Value
Energy Equipment & Services – (continued)
Exterran Holdings, Inc.*		5,544	$	146,472
FMC Technologies, Inc.*		2,268		123,152
Forum Energy Technologies, Inc.*		504		14,016
Geospace Technologies Corp.*		672		56,697
Global Geophysical Services, Inc.*		2,940		10,702
Gulf Island Fabrication, Inc.		840		17,270
Gulfmark Offshore, Inc., Class A		1,428		59,433
Halliburton Co.		7,392		316,156
Helix Energy Solutions Group, Inc.*		11,928		274,821
Helmerich & Payne, Inc.		924		54,165
Hercules Offshore, Inc.*		10,668		78,623
Hornbeck Offshore Services, Inc.*		1,680		75,466
ION Geophysical Corp.*		6,216		38,788
Key Energy Services, Inc.*		20,244		120,249
Lufkin Industries, Inc.		1,680		148,327
Matrix Service Co.*		2,688		40,401
McDermott International, Inc.*		31,164		332,831
Mitcham Industries, Inc.*		1,848		27,443
Nabors Industries Ltd.		2,436		36,028
National Oilwell Varco, Inc.		4,368		284,881
Natural Gas Services Group, Inc.*		672		13,568
Newpark Resources, Inc.*		10,920		114,660
Noble Corp.		2,352		88,200
Oceaneering International, Inc.		1,008		70,731
Oil States International, Inc.*		504		45,037
Pacific Drilling S.A.*		4,956		49,461
Parker Drilling Co.*		17,556		72,331
Patterson-UTI Energy, Inc.		19,152		403,916
PHI, Inc.*		1,344		37,323
Pioneer Energy Services Corp.*		8,400		59,220
Rowan Cos., PLC, Class A*		1,176		38,255
RPC, Inc.		9,240		122,338
Schlumberger Ltd.		13,524		1,006,591
SEACOR Holdings, Inc.		924		66,630
Superior Energy Services, Inc.*		2,352		64,892
Tesco Corp.*		3,864		47,141
TETRA Technologies, Inc.*		10,248		93,564
TGC Industries, Inc.		1,764		15,647
Tidewater, Inc.		6,300		330,435
Unit Corp.*		5,712		240,075
Willbros Group, Inc.*		5,712		54,264
				6,246,884

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 33

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Food & Staples Retailing – 1.8%
The Andersons, Inc.		2,352	$	128,231
Casey’s General Stores, Inc.		1,848		107,018
The Chefs’ Warehouse, Inc*		924		16,992
Costco Wholesale Corp.		4,452		482,730
CVS Caremark Corp.		12,516		728,181
The Fresh Market, Inc.*		2,268		92,829
Harris Teeter Supermarkets, Inc.		6,804		284,339
Ingles Markets, Inc., Class A		1,176		25,072
The Kroger Co.		3,948		135,732
Nash Finch Co.		1,680		34,524
The Pantry, Inc.*		2,016		29,454
Pricesmart, Inc.		924		82,449
Rite Aid Corp.*		96,096		254,654
Roundy’s, Inc.		4,284		30,673
Safeway, Inc.		2,352		52,967
Spartan Stores, Inc.		2,940		49,333
SUPERVALU, Inc.		28,812		168,262
Susser Holdings Corp.*		1,176		62,528
Sysco Corp.		5,964		207,905
United Natural Foods, Inc.*		2,520		125,849
Village Super Market, Inc., Class A		756		26,611
Walgreen Co.		6,804		336,866
Wal-Mart Stores, Inc.		16,884		1,312,225
Weis Markets, Inc.		1,344		56,220
Whole Foods Market, Inc.		1,764		155,797
				4,987,441
Food Products – 1.6%
Amira Nature Foods Ltd.*		588		4,504
Annie’s, Inc.*		840		31,744
Archer-Daniels-Midland Co.		5,376		182,461
B&G Foods, Inc.		2,688		82,952
Boulder Brands, Inc.*		3,108		28,003
Bunge Ltd.		1,176		84,919
Calavo Growers, Inc.		840		23,822
Cal-Maine Foods, Inc.		1,512		64,532
Campbell Soup Co.		2,016		93,563
Chiquita Brands International, Inc.*		5,796		50,020
ConAgra Foods, Inc.		3,276		115,872
Darling International, Inc.*		14,952		276,762
Dean Foods Co.*		4,704		90,035

	Shares		Value
Food Products – (continued)
Diamond Foods, Inc.*		3,024	$	45,602
Dole Food Co., Inc.*		4,452		47,904
Feihe International, Inc.*		1,596		11,683
Flowers Foods, Inc.		1,092		35,971
Fresh Del Monte Produce, Inc.		5,040		128,066
General Mills, Inc.		6,888		347,293
Green Mountain Coffee Roasters, Inc.*		1,176		67,502
H.J. Heinz Co.		3,276		237,248
The Hain Celestial Group, Inc.*		2,352		153,468
The Hershey Co.		1,596		142,299
Hillshire Brands Co.		1,092		39,214
Hormel Foods Corp.		1,428		58,934
Ingredion, Inc.		588		42,342
J&J Snack Foods Corp.		756		56,715
The JM Smucker Co.		1,176		121,398
John B Sanfilippo & Son, Inc.		588		12,336
Kellogg Co.		2,520		163,901
Lancaster Colony Corp.		1,008		79,561
McCormick & Co., Inc.		1,176		84,601
Mead Johnson Nutrition Co.		2,016		163,477
Mondelez International, Inc., Class A		17,892		562,703
Omega Protein Corp.*		2,436		22,679
Pilgrim’s Pride Corp.*		4,956		48,519
Sanderson Farms, Inc.		1,932		118,354
Seaboard Corp.		84		230,662
Seneca Foods Corp., Class A*		756		24,638
Smithfield Foods, Inc.*		1,260		32,256
Snyders-Lance, Inc.		3,276		82,490
Tootsie Roll Industries, Inc.		1,597		49,859
TreeHouse Foods, Inc.*		1,848		117,736
Tyson Foods, Inc., Class A		2,436		59,999
				4,518,599
Gas Utilities – 0.5%
AGL Resources, Inc.		1,092		47,884
Atmos Energy Corp.		672		29,817
Chesapeake Utilities Corp.		1,260		67,234
The Laclede Group, Inc.		2,436		113,786
National Fuel Gas Co.		756		47,416
New Jersey Resources Corp.		2,520		118,944
Northwest Natural Gas Co.		1,008		44,826

See Accompanying Notes to the Financial Statements.

34 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Gas Utilities – (continued)
ONEOK, Inc.		1,512	$	77,656
Piedmont Natural Gas Co., Inc.		3,780		130,145
Questar Corp.		1,764		44,788
South Jersey Industries, Inc.		1,596		98,473
Southwest Gas Corp.		3,864		195,789
UGI Corp.		840		34,423
WGL Holdings, Inc.		5,040		232,949
				1,284,130
Health Care Equipment & Supplies – 2.3%
Abaxis, Inc.		1,176		50,203
Abbott Laboratories		16,464		607,851
ABIOMED, Inc.*		1,764		32,581
Accuray, Inc.*		3,276		14,414
Alere, Inc.*		9,912		254,540
Align Technology, Inc.*		3,864		127,976
Analogic Corp.		672		53,411
AngioDynamics, Inc.*		1,764		17,869
Anika Therapeutics, Inc.*		252		3,364
Antares Pharma, Inc.*		5,124		19,420
ArthroCare Corp.*		1,428		49,480
AtriCure, Inc.*		672		5,605
Baxter International, Inc.		5,460		381,490
Becton Dickinson and Co.		2,604		245,557
Boston Scientific Corp.*		15,456		115,765
C.R. Bard, Inc.		756		75,116
Cantel Medical Corp.		1,008		31,863
Cardiovascular Systems, Inc.*		924		15,856
CareFusion Corp.*		2,268		75,842
Cerus Corp.*		3,276		17,428
Conceptus, Inc.*		1,344		41,677
CONMED Corp.		3,276		102,637
The Cooper Cos., Inc.		504		55,642
Covidien PLC		5,040		321,754
Cyberonics, Inc.*		1,512		65,651
Cynosure, Inc., Class A*		420		10,861
Delcath Systems, Inc.*		4,788		3,984
DENTSPLY International, Inc.		1,428		60,476
DexCom, Inc.*		3,864		63,408
Edwards Lifesciences Corp.*		1,092		69,659
Endologix, Inc.*		2,772		41,635
GenMark Diagnostics, Inc.*		1,344		20,899

	Shares		Value
Health Care Equipment & Supplies – (continued)
Greatbatch, Inc.*		2,940	$	82,144
Haemonetics Corp.*		2,856		109,956
Hansen Medical, Inc.*		2,856		5,598
HeartWare International, Inc.*		588		57,154
Hill-Rom Holdings, Inc.		7,392		251,845
Hologic, Inc.*		2,688		54,755
ICU Medical, Inc.*		672		40,488
IDEXX Laboratories, Inc.*		588		51,721
Insulet Corp.*		2,184		55,124
Integra LifeSciences Holdings Corp.*		1,512		52,965
Intuitive Surgical, Inc.*		420		206,762
Invacare Corp.		3,696		49,711
MAKO Surgical Corp.*		1,932		20,460
Masimo Corp.		2,856		57,291
Medtronic, Inc.		10,584		494,061
MELA Sciences, Inc.*		2,352		2,893
Meridian Bioscience, Inc.		2,100		42,609
Merit Medical Systems, Inc.*		2,184		21,119
Natus Medical, Inc.*		1,512		18,915
Navidea Biopharmaceuticals, Inc.*		4,536		11,113
Neogen Corp.*		1,260		64,046
NuVasive, Inc.*		2,268		47,560
NxStage Medical, Inc.*		2,772		30,963
OraSure Technologies, Inc.*		2,688		11,988
Orthofix International N.V.*		1,008		32,659
Palomar Medical Technologies, Inc.*		924		12,520
PhotoMedex, Inc.*		1,176		19,169
Quidel Corp.*		1,512		33,748
ResMed, Inc.		1,596		76,640
Rockwell Medical Technologies, Inc.*		1,428		6,055
RTI Biologics, Inc.*		3,528		14,041
Sirona Dental Systems, Inc.*		588		43,242
Solta Medical, Inc.*		2,688		5,242
Spectranetics Corp.*		2,268		42,298
St. Jude Medical, Inc.		2,772		114,262
Staar Surgical Co.*		1,596		11,140
STERIS Corp.		2,856		118,781
Stryker Corp.		3,024		198,314
SurModics, Inc.*		840		22,218

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 35

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Health Care Equipment & Supplies – (continued)
Symmetry Medical, Inc.*		4,368	$	52,067
Synergetics USA, Inc.*		1,848		5,452
Teleflex, Inc.		3,444		269,080
Thoratec Corp.*		3,192		115,550
Tornier NV*		420		7,640
Unilife Corp.*		4,788		9,480
Varian Medical Systems, Inc.*		1,176		76,605
Vascular Solutions, Inc.*		1,176		18,710
Volcano Corp.*		2,688		54,540
West Pharmaceutical Services, Inc.		1,764		112,649
Wright Medical Group, Inc.*		2,100		49,224
Zeltiq Aesthetics, Inc.*		1,008		4,415
Zimmer Holdings, Inc.		1,764		134,858
				6,555,754
Health Care Providers & Services – 2.7%
Accretive Health, Inc.*		2,856		30,102
Aetna, Inc.		2,940		168,874
Air Methods Corp.		1,764		64,545
Almost Family, Inc.		1,008		19,898
Amedisys, Inc.*		3,780		37,951
AmerisourceBergen Corp.		1,848		100,014
AMN Healthcare Services, Inc.*		2,100		28,833
Amsurg Corp.*		2,352		78,933
Assisted Living Concepts, Inc., Class A		1,092		13,017
Bio-Reference Labs, Inc.*		1,260		32,130
BioScrip, Inc.*		2,856		39,584
Brookdale Senior Living, Inc.*		2,856		73,656
Capital Senior Living Corp.*		1,428		34,643
Cardinal Health, Inc.		3,528		156,008
Centene Corp.*		2,772		128,066
Chemed Corp.		1,848		150,834
Cigna Corp.		2,520		166,748
Community Health Systems, Inc.		11,592		528,247
Corvel Corp.*		252		11,962
Coventry Health Care, Inc.		1,176		58,271
Cross Country Healthcare, Inc.*		1,596		7,980
DaVita HealthCare Partners, Inc.*		924		109,633
Emeritus Corp.*		1,596		41,017
The Ensign Group, Inc.		2,184		76,156
ExamWorks Group, Inc.*		4,032		72,979

	Shares		Value
Health Care Providers & Services – (continued)
Express Scripts Holding Co.*		8,316	$	493,721
Five Star Quality Care, Inc.*		6,552		30,991
Gentiva Health Services, Inc.*		3,948		41,415
Hanger, Inc.*		1,932		58,714
HCA Holdings, Inc.		1,344		53,612
Health Management Associates, Inc., Class A*		33,852		388,960
Health Net, Inc.*		4,284		125,950
HealthSouth Corp.*		5,292		145,530
Healthways, Inc.*		4,368		60,672
Henry Schein, Inc.*		924		83,530
Humana, Inc.		1,176		87,153
IPC The Hospitalist Co., Inc.*		840		38,321
Kindred Healthcare, Inc.*		6,804		71,374
Laboratory Corp of America Holdings*		1,008		94,107
Landauer, Inc.		504		28,158
LHC Group, Inc.*		2,436		52,910
LifePoint Hospitals, Inc.*		6,048		290,304
Magellan Health Services, Inc.*		3,696		189,087
McKesson Corp.		2,520		266,666
MEDNAX, Inc.*		504		44,720
Molina Healthcare, Inc.*		3,528		117,130
MWI Veterinary Supply, Inc.*		672		79,101
National Healthcare Corp.		1,344		62,402
Omnicare, Inc.		924		40,443
Owens & Minor, Inc.		8,148		265,380
Patterson Cos., Inc.		1,008		38,254
PharMerica Corp.*		3,780		48,724
The Providence Service Corp.*		1,848		32,358
Quest Diagnostics, Inc.		1,260		70,976
Select Medical Holdings Corp.		5,208		42,966
Skilled Healthcare Group, Inc., Class A*		2,688		18,924
Team Health Holdings, Inc.*		1,512		56,367
Tenet Healthcare Corp.*		13,608		617,259
U.S. Physical Therapy, Inc.		588		14,030
UnitedHealth Group, Inc.		8,484		508,446
Universal American Corp.		5,376		45,965
Universal Health Services, Inc., Class B		672		44,748
Vanguard Health Systems, Inc.*		5,880		86,024
VCA Antech, Inc.*		4,536		109,318

See Accompanying Notes to the Financial Statements.

36 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Health Care Providers & Services – (continued)
WellCare Health Plans, Inc.*		5,712	$	333,067
WellPoint, Inc.		2,520		183,758
				7,691,616
Health Care Technology – 0.3%
Allscripts Healthcare Solutions, Inc.*		9,408		130,207
athenahealth, Inc.*		1,848		177,888
Cerner Corp.*		1,428		138,188
Computer Programs & Systems, Inc.		588		30,846
Greenway Medical Technologies*		252		3,394
HealthStream, Inc.*		1,092		25,072
HMS Holdings Corp.*		4,704		118,588
MedAssets, Inc.*		4,200		78,666
Medidata Solutions, Inc.*		1,344		89,188
Merge Healthcare, Inc.*		3,108		9,697
Omnicell, Inc.*		1,764		31,787
Quality Systems, Inc.		2,016		36,026
Vocera Communications, Inc.*		252		4,990
				874,537
Hotels, Restaurants & Leisure – 2.2%
AFC Enterprises, Inc.*		1,260		40,169
Ameristar Casinos, Inc.		4,116		108,621
Bally Technologies, Inc.*		2,352		125,315
Biglari Holdings, Inc.*		84		32,531
BJ’s Restaurants, Inc.*		1,260		43,218
Bob Evans Farms, Inc.		3,612		156,544
Boyd Gaming Corp.*		7,812		93,744
Bravo Brio Restaurant Group, Inc.*		924		15,708
Brinker International, Inc.		4,620		179,718
Buffalo Wild Wings, Inc.*		924		83,160
Caesars Entertainment Corp.*		3,024		48,112
Carnival Corp.		4,200		144,942
Carrols Restaurant Group, Inc.*		1,680		7,980
CEC Entertainment, Inc.		2,352		78,486
The Cheesecake Factory, Inc.		2,856		113,726
Chipotle Mexican Grill, Inc.*		336		122,032
Choice Hotels International, Inc.		1,428		55,778
Churchill Downs, Inc.		672		51,381
Chuy’s Holdings, Inc.*		1,848		60,430

	Shares		Value
Hotels, Restaurants & Leisure – (continued)
Cracker Barrel Old Country Store, Inc.		2,940	$	243,256
Darden Restaurants, Inc.		840		43,369
Denny’s Corp.*		12,348		70,013
DineEquity, Inc.		1,176		83,778
Domino’s Pizza, Inc.		3,024		166,925
Dunkin’ Brands Group, Inc.		1,512		58,681
Einstein Noah Restaurant Group, Inc.		672		9,683
Hyatt Hotels Corp., Class A*		420		17,926
Ignite Restaurant Group, Inc.*		672		11,720
International Game Technology		2,856		48,409
International Speedway Corp., Class A		1,428		46,938
Interval Leisure Group, Inc.		2,100		40,026
Isle of Capri Casinos, Inc.*		1,260		9,652
Jack in the Box, Inc.*		2,352		84,319
Krispy Kreme Doughnuts, Inc.*		3,108		42,455
Las Vegas Sands Corp.		3,360		189,000
Life Time Fitness, Inc.*		2,100		96,978
Marcus Corp.		2,016		25,885
Marriott International, Inc., Class A		3,024		130,213
Marriott Vacations Worldwide Corp.*		2,016		91,688
McDonald’s Corp.		10,080		1,029,571
MGM Resorts International*		2,940		41,513
Morgans Hotel Group Co.*		1,596		9,783
Multimedia Games Holding Co., Inc.*		1,512		37,286
Orient-Express Hotels Ltd., Class A*		4,872		49,207
Panera Bread Co., Class A*		336		59,549
Papa John’s International, Inc.*		1,008		63,504
Penn National Gaming, Inc.*		672		39,346
Pinnacle Entertainment, Inc.*		3,276		62,441
Red Robin Gourmet Burgers, Inc.*		756		36,568
Royal Caribbean Cruises Ltd.		1,092		39,891
Ruby Tuesday, Inc.*		7,980		76,927
Ruth’s Hospitality Group, Inc.*		1,848		18,314
Scientific Games Corp., Class A*		3,192		28,345
SHFL Entertainment, Inc.*		2,772		43,798
Six Flags Entertainment Corp.		1,428		104,058
Sonic Corp.*		3,192		39,996
Speedway Motorsports, Inc.		1,680		30,290

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 37

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Hotels, Restaurants & Leisure – (continued)
Starbucks Corp.		7,308	$	444,619
Starwood Hotels & Resorts Worldwide, Inc.		2,016		130,072
Texas Roadhouse, Inc.		3,276		76,986
Town Sports International Holdings, Inc.		1,092		10,996
Vail Resorts, Inc.		1,932		116,500
The Wendy’s Co.		16,380		93,202
WMS Industries, Inc.*		2,856		72,485
Wyndham Worldwide Corp.		1,260		75,701
Wynn Resorts Ltd.		756		103,799
Yum! Brands, Inc.		4,620		314,714
				6,321,970
Household Durables – 0.7%
American Greetings Corp., Class A		3,696		68,154
Bassett Furniture Industries, Inc.		168		2,357
Beazer Homes USA, Inc.*		2,184		35,293
Blyth, Inc.		1,260		20,765
Cavco Industries, Inc.*		336		15,328
DR Horton, Inc.		2,856		74,485
Ethan Allen Interiors, Inc.		1,428		41,812
Garmin Ltd.		1,176		41,254
Harman International Industries, Inc.		588		26,290
Helen of Troy Ltd.*		4,200		146,496
Hovnanian Enterprises, Inc., Class A*		4,284		23,348
iRobot Corp.*		1,344		39,097
Jarden Corp.*		878		39,519
KB Home		5,292		119,282
La-Z-Boy, Inc.		2,772		50,062
Leggett & Platt, Inc.		1,428		46,039
Lennar Corp., Class A		1,596		65,787
Libbey, Inc.*		1,596		30,915
M/I Homes, Inc.*		1,596		39,262
MDC Holdings, Inc.		2,352		88,435
Meritage Homes Corp.*		1,428		69,672
Mohawk Industries, Inc.*		588		65,197
NACCO Industries, Inc., Class A		672		38,989
Newell Rubbermaid, Inc.		2,268		59,739
NVR, Inc.*		84		86,520

	Shares		Value
Household Durables – (continued)
PulteGroup, Inc.*		4,116	$	86,395
The Ryland Group, Inc.		2,352		105,981
Skullcandy, Inc.*		924		4,749
Standard Pacific Corp.*		5,628		50,933
Tempur-Pedic International, Inc.*		3,192		154,812
Toll Brothers, Inc.*		1,512		51,877
Tupperware Brands Corp.		588		47,216
Universal Electronics, Inc.*		2,016		46,328
Whirlpool Corp.		588		67,197
Zagg, Inc.*		2,520		17,060
				1,966,645
Household Products – 1.2%
Central Garden and Pet Co., Class A*		3,192		28,090
Church & Dwight Co., Inc.		1,428		91,235
The Clorox Co.		1,344		115,920
Colgate-Palmolive Co.		4,620		551,674
Energizer Holdings, Inc.		588		56,795
Kimberly-Clark Corp.		3,612		372,722
The Procter & Gamble Co.		27,636		2,121,616
Spectrum Brands Holdings, Inc.		1,680		94,080
WD-40 Co.		756		40,771
				3,472,903
Independent Power Producers & Energy Traders – 0.1%
The AES Corp.		4,788		66,362
Calpine Corp.*		3,696		80,314
Dynegy, Inc.*		5,040		124,538
NRG Energy, Inc.		3,360		93,643
Ormat Technologies, Inc.		924		20,088
				384,945
Industrial Conglomerates – 1.1%
3M Co.		6,384		668,469
Carlisle Cos., Inc.		672		43,592
Danaher Corp.		6,132		373,684
General Electric Co.		86,268		1,922,914
Raven Industries, Inc.		1,764		59,182
				3,067,841
Insurance – 4.6%
ACE Ltd.		2,688		239,608
Aflac, Inc.		3,696		201,210

See Accompanying Notes to the Financial Statements.

38 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Insurance – (continued)
Alleghany Corp.*		168	$	66,148
Allied World Assurance Co. Holdings AG		336		30,512
The Allstate Corp.		4,704		231,719
American Equity Investment Life Holding Co.		7,644		116,495
American Financial Group, Inc./OH		672		32,437
American International Group, Inc.*		11,928		494,058
American National Insurance Co.		1,176		110,579
American Safety Insurance Holdings Ltd.*		1,092		26,295
AMERISAFE, Inc.		1,092		35,665
Amtrust Financial Services, Inc.		3,276		103,718
Aon PLC		3,360		202,776
Arch Capital Group Ltd.*		1,344		71,313
Argo Group International Holdings Ltd.		3,948		163,645
Arthur J Gallagher & Co.		1,092		46,355
Aspen Insurance Holdings Ltd.		8,820		336,836
Assurant, Inc.		756		35,940
Assured Guaranty Ltd.		25,368		523,342
Axis Capital Holdings Ltd.		1,092		48,736
Berkshire Hathaway, Inc., Class B*		18,144		1,929,070
Brown & Brown, Inc.		1,176		36,444
The Chubb Corp.		2,772		244,130
Cincinnati Financial Corp.		1,512		73,952
Citizens, Inc./TX*		2,100		13,734
CNA Financial Corp.		168		5,663
CNO Financial Group, Inc.		30,240		342,317
eHealth, Inc.*		1,092		22,867
Employers Holdings, Inc.		1,932		43,760
Endurance Specialty Holdings Ltd.		5,376		263,263
Enstar Group Ltd.*		1,092		138,782
Erie Indemnity Co., Class A		252		20,052
Everest Re Group Ltd.		420		56,696
FBL Financial Group, Inc., Class A		1,764		69,343
Fidelity National Financial, Inc., Class A		1,764		47,363
First American Financial Corp.		13,356		357,540
Genworth Financial, Inc., Class A*		3,780		37,913

	Shares		Value
Insurance – (continued)
Greenlight Capital Re Ltd., Class A*		3,696	$	90,959
The Hanover Insurance Group, Inc.		5,628		283,820
Hartford Financial Services Group, Inc.		3,612		101,461
HCC Insurance Holdings, Inc.		840		35,784
Hilltop Holdings, Inc.*		2,184		29,244
Homeowners Choice, Inc.		1,008		26,752
Horace Mann Educators Corp.		5,040		113,652
Infinity Property & Casualty Corp.		672		38,129
Kemper Corp.		7,224		230,157
Lincoln National Corp.		2,184		74,278
Loews Corp.		3,612		161,348
Maiden Holdings Ltd.		7,896		81,566
Markel Corp.*		84		45,045
Marsh & McLennan Cos., Inc.		5,964		226,692
MBIA, Inc.*		8,232		77,875
Meadowbrook Insurance Group, Inc.		6,720		52,282
Mercury General Corp.		4,704		215,020
MetLife, Inc.		8,988		350,442
Montpelier Re Holdings Ltd.		6,888		177,435
National Financial Partners Corp.*		4,872		123,456
National Interstate Corp.		672		19,522
National Western Life Insurance Co., Class A		336		61,360
The Navigators Group, Inc.*		672		38,895
Old Republic International Corp.		19,824		267,624
OneBeacon Insurance Group Ltd., Class A		2,688		36,530
PartnerRe Ltd.		504		47,547
The Phoenix Cos, Inc.*		924		26,898
Platinum Underwriters Holdings Ltd.		4,620		262,185
Primerica, Inc.		4,956		168,306
Principal Financial Group, Inc.		2,352		84,907
ProAssurance Corp.		3,024		148,146
The Progressive Corp.		6,048		152,954
Protective Life Corp.		9,828		374,054
Prudential Financial, Inc.		3,696		223,312
Reinsurance Group of America, Inc.		588		36,779
RenaissanceRe Holdings Ltd.		420		39,434
RLI Corp.		840		60,354
Safety Insurance Group, Inc.		1,680		83,446

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 39

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Insurance – (continued)
Selective Insurance Group, Inc.		5,880	$	137,768
StanCorp Financial Group, Inc.		5,628		243,017
State Auto Financial Corp.		2,016		35,038
Stewart Information Services Corp.		2,100		56,847
Symetra Financial Corp.		9,828		133,956
Torchmark Corp.		840		52,139
Tower Group International Ltd.		5,044		95,427
The Travelers Cos., Inc.		3,276		279,803
United Fire Group, Inc.		1,596		44,624
Unum Group		2,184		60,912
Validus Holdings Ltd.		1,848		71,351
W.R. Berkley Corp.		1,008		43,767
White Mountains Insurance Group Ltd.		84		48,578
Willis Group Holdings PLC		1,680		66,662
XL Group PLC		2,352		73,241
				12,931,056
Internet & Catalog Retail – 0.7%
Amazon.com, Inc.*		3,612		916,762
Blue Nile, Inc.*		756		24,668
Expedia, Inc.		1,008		56,287
Groupon, Inc.*		2,520		15,372
HomeAway, Inc.*		1,680		51,324
HSN, Inc.		1,092		57,417
Liberty Interactive Corp., Class A*		5,796		123,397
Netflix, Inc.*		588		127,049
Nutrisystem, Inc.		2,436		19,732
Orbitz Worldwide, Inc.*		1,344		8,037
Overstock.com, Inc.*		588		12,230
PetMed Express, Inc.		840		10,500
priceline.com, Inc.*		504		350,779
Shutterfly, Inc.*		1,596		71,070
TripAdvisor, Inc.*		1,428		75,084
Valuevision Media, Inc., Class A*		3,780		16,254
Vitacost.com, Inc.*		924		7,189
				1,943,151
Internet Software & Services – 2.0%
The Active Network, Inc.*		1,848		9,295
Akamai Technologies, Inc.*		1,848		81,146
Angie’s List, Inc.*		1,764		42,759

	Shares		Value
Internet Software & Services – (continued)
AOL, Inc.*		2,268	$	87,636
Bankrate, Inc.*		2,268		30,573
Bazaarvoice, Inc.*		1,428		10,353
Blucora, Inc.*		2,016		29,776
Brightcove, Inc.*		1,428		8,597
Carbonite, Inc.*		924		9,831
comScore, Inc.*		1,428		23,091
Constant Contact, Inc.*		1,512		22,090
Cornerstone OnDemand, Inc.*		1,428		51,808
CoStar Group, Inc.*		1,344		145,703
Dealertrack Technologies, Inc.*		2,184		60,824
Demand Media, Inc.*		2,016		17,459
Demandware, Inc.*		168		4,586
Dice Holdings, Inc.*		2,688		22,687
Digital River, Inc.*		1,932		27,975
EarthLink, Inc.		15,036		85,555
eBay, Inc.*		12,012		629,309
Envestnet, Inc.*		1,176		21,427
Equinix, Inc.*		504		107,906
ExactTarget, Inc.*		1,092		21,381
Google, Inc., Class A*		2,688		2,216,444
IAC/InterActiveCorp		672		31,631
Internap Network Services Corp.*		2,772		22,121
IntraLinks Holdings, Inc.*		4,452		25,465
j2 Global, Inc.		6,384		259,829
Keynote Systems, Inc.		840		9,416
Limelight Networks, Inc.*		8,148		15,726
LinkedIn Corp., Class A*		672		129,085
Liquidity Services, Inc.*		1,176		38,690
LivePerson, Inc.*		2,520		32,306
LogMeIn, Inc.*		1,176		26,554
MeetMe, Inc.*		1,344		2,594
Millennial Media, Inc.*		672		4,657
Monster Worldwide, Inc.*		6,384		27,962
Move, Inc.*		2,016		23,003
NIC, Inc.		3,360		56,582
OpenTable, Inc.*		1,260		69,791
Perficient, Inc.*		1,596		16,726
QuinStreet, Inc.*		3,192		20,876
Rackspace Hosting, Inc.*		1,092		52,634
RealNetworks, Inc.*		4,368		33,634
SciQuest, Inc.*		924		21,123
SPS Commerce, Inc.*		588		27,712

See Accompanying Notes to the Financial Statements.

40 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Internet Software & Services – (continued)
Stamps.com, Inc.*		756	$	25,583
support.com, Inc.*		3,192		12,736
Synacor, Inc.*		672		1,956
Travelzoo, Inc.*		420		10,723
United Online, Inc.		11,172		75,970
Unwired Planet, Inc.*		5,124		10,146
ValueClick, Inc.*		4,200		129,612
VeriSign, Inc.*		1,596		73,528
VistaPrint N.V.*		1,764		71,971
Vocus, Inc.*		1,008		8,477
Web.com Group, Inc.*		1,512		26,309
WebMD Health Corp.*		2,940		71,001
XO Group, Inc.*		1,596		17,971
Yahoo!, Inc.*		9,996		247,201
Yelp, Inc.*		840		21,865
Zix Corp.*		3,024		11,370
				5,532,747
IT Services – 2.9%
Accenture PLC, Class A		6,468		526,754
Acxiom Corp.*		4,284		85,209
Alliance Data Systems Corp.*		420		72,143
Amdocs Ltd.		1,764		62,975
Automatic Data Processing, Inc.		5,124		345,050
Booz Allen Hamilton Holding Corp.		4,200		63,798
Broadridge Financial Solutions, Inc.		1,260		31,727
CACI International, Inc., Class A*		3,024		176,874
Cardtronics, Inc.*		2,268		63,527
Cass Information Systems, Inc.		420		17,556
CIBER, Inc.*		3,276		13,956
Cognizant Technology Solutions Corp., Class A*		3,108		201,398
Computer Sciences Corp.		1,176		55,096
Computer Task Group, Inc.		1,092		22,408
Convergys Corp.		7,812		132,960
CoreLogic, Inc.*		5,040		137,491
CSG Systems International, Inc.*		4,200		90,762
DST Systems, Inc.		2,856		197,492
EPAM Systems, Inc.*		336		7,224
Euronet Worldwide, Inc.*		2,688		82,065
ExlService Holdings, Inc.*		1,344		43,841

	Shares		Value
IT Services – (continued)
Fidelity National Information Services, Inc.		2,436	$	102,434
Fiserv, Inc.*		1,428		130,105
FleetCor Technologies, Inc.*		1,008		77,515
Forrester Research, Inc.		672		24,091
Gartner, Inc.*		924		53,453
Genpact Ltd.		840		15,624
Global Cash Access Holdings, Inc.*		5,292		37,732
Global Payments, Inc.		840		38,976
Heartland Payment Systems, Inc.		1,932		63,543
Higher One Holdings, Inc.*		1,764		17,393
iGATE Corp.*		1,428		23,833
Innodata, Inc.*		2,604		8,541
International Business Machines Corp.		10,668		2,160,697
Jack Henry & Associates, Inc.		840		38,976
Lender Processing Services, Inc.		11,172		309,911
Lionbridge Technologies, Inc.*		6,636		22,695
ManTech International Corp., Class A		2,772		73,985
Mastercard, Inc., Class A		1,092		603,800
MAXIMUS, Inc.		1,848		147,267
MoneyGram International, Inc.*		1,764		29,124
NCI, Inc., Class A*		1,596		6,735
NeuStar, Inc., Class A*		3,612		158,458
Paychex, Inc.		3,276		119,279
SAIC, Inc.		2,436		36,394
Sapient Corp.*		5,460		63,773
ServiceSource International, Inc.*		2,604		16,666
Sykes Enterprises, Inc.*		5,376		82,737
Syntel, Inc.		756		47,756
TeleTech Holdings, Inc.*		3,444		73,323
Teradata Corp.*		1,512		77,218
Total System Services, Inc.		1,764		41,666
Unisys Corp.*		5,376		102,843
Vantiv, Inc., Class A*		1,092		24,603
VeriFone Systems, Inc.*		1,008		21,652
Virtusa Corp.*		924		20,522
Visa, Inc., Class A		5,124		863,189
The Western Union Co.		4,788		70,910
WEX, Inc.*		1,344		101,848
				8,339,573

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 41

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Leisure Equipment & Products – 0.2%
Arctic Cat, Inc.*		588	$	26,454
Black Diamond, Inc.*		1,092		10,702
Brunswick Corp.		4,620		146,269
Callaway Golf Co.		3,444		23,075
Hasbro, Inc.		1,092		51,728
JAKKS Pacific, Inc.		1,176		12,830
LeapFrog Enterprises, Inc.*		2,352		21,027
Mattel, Inc.		3,444		157,253
Polaris Industries, Inc.		672		57,920
Smith & Wesson Holding Corp.*		3,108		27,288
Steinway Musical Instruments, Inc.*		504		12,570
Sturm Ruger & Co., Inc.		1,008		51,680
				598,796
Life Sciences Tools & Services – 0.5%
Affymetrix, Inc.*		7,224		26,295
Agilent Technologies, Inc.		3,528		146,200
Bio-Rad Laboratories, Inc., Class A*		252		30,177
Bruker Corp.*		4,956		88,068
Cambrex Corp.*		3,612		45,114
Charles River Laboratories International, Inc.*		2,688		116,901
Covance, Inc.*		588		43,841
Fluidigm Corp.*		924		15,560
Furiex Pharmaceuticals, Inc.*		168		5,704
Illumina, Inc.*		1,260		81,510
Life Technologies Corp.*		1,848		136,179
Luminex Corp.*		2,016		33,526
Mettler-Toledo International, Inc.*		336		70,211
Pacific Biosciences of California, Inc.*		6,384		16,343
PAREXEL International Corp.*		3,108		127,273
PerkinElmer, Inc.		1,176		36,044
Sequenom, Inc.*		6,720		25,334
Techne Corp.		1,932		123,919
Thermo Fisher Scientific, Inc.		3,528		284,639
Waters Corp.*		924		85,378
				1,538,216

	Shares		Value
Machinery – 3.0%
Accuride Corp.*		7,224	$	37,131
Actuant Corp., Class A		4,116		128,831
AGCO Corp.		756		40,257
Alamo Group, Inc.		588		23,561
Albany International Corp., Class A		3,360		97,608
Altra Holdings, Inc.		1,344		35,818
American Railcar Industries, Inc.		504		17,998
Ampco-Pittsburgh Corp.		1,008		18,890
Astec Industries, Inc.		1,008		33,093
Barnes Group, Inc.		2,436		67,648
Blount International, Inc.*		2,520		35,003
Briggs & Stratton Corp.		6,384		143,576
Caterpillar, Inc.		5,712		483,635
Chart Industries, Inc.*		1,596		135,357
CIRCOR International, Inc.		2,100		99,393
CLARCOR, Inc.		2,520		130,284
Colfax Corp.*		2,352		109,768
Columbus McKinnon Corp.*		1,848		34,705
Commercial Vehicle Group, Inc.*		2,856		20,020
Crane Co.		6,300		339,129
Cummins, Inc.		1,596		169,798
Deere & Co.		3,192		285,046
Donaldson Co., Inc.		1,092		39,727
Douglas Dynamics, Inc.		2,268		31,729
Dover Corp.		1,428		98,503
Dynamic Materials Corp.		672		10,671
EnPro Industries, Inc.*		1,092		53,814
ESCO Technologies, Inc.		1,428		51,365
Federal Signal Corp.*		3,276		25,422
Flow International Corp.*		1,596		5,841
Flowserve Corp.		504		79,692
FreightCar America, Inc.		1,176		24,555
Gardner Denver, Inc.		504		37,845
The Gorman-Rupp Co.		924		26,103
Graco, Inc.		588		35,592
Graham Corp.		504		12,247
Greenbrier Cos., Inc.*		3,192		72,011
Harsco Corp.		10,164		221,880
IDEX Corp.		840		43,705
Illinois Tool Works, Inc.		4,032		260,306
Ingersoll-Rand PLC		3,276		176,249
ITT Corp.		5,628		155,333

See Accompanying Notes to the Financial Statements.

42 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Machinery – (continued)
John Bean Technologies Corp.		3,276	$	67,944
Joy Global, Inc.		1,008		56,972
Kadant, Inc.		1,680		46,486
Kaydon Corp.		3,780		90,115
Kennametal, Inc.		840		33,592
L.B. Foster Co., Class A		1,260		55,629
Lincoln Electric Holdings, Inc.		1,344		70,909
Lindsay Corp.		672		51,623
Lydall, Inc.*		1,428		20,477
The Manitowoc Co., Inc.		7,140		133,946
Meritor, Inc.*		11,676		67,721
Middleby Corp.*		1,008		150,777
Miller Industries, Inc.		924		13,962
Mueller Industries, Inc.		1,596		82,641
Mueller Water Products, Inc., Class A		8,148		48,236
Navistar International Corp.*		10,584		350,542
NN, Inc.*		2,016		18,164
Nordson Corp.		588		40,860
Oshkosh Corp.*		11,508		451,804
PACCAR, Inc.		3,696		183,987
Pall Corp.		1,176		78,451
Parker Hannifin Corp.		1,428		126,478
PMFG, Inc.*		1,512		8,709
Proto Labs, Inc.*		336		17,163
RBC Bearings, Inc.*		1,176		56,566
Rexnord Corp.*		1,848		33,671
Snap-on, Inc.		588		50,686
SPX Corp.		420		31,294
Standex International Corp.		1,512		79,985
Stanley Black & Decker, Inc.		1,260		94,261
Sun Hydraulics Corp.		1,092		35,763
Tennant Co.		924		44,186
Terex Corp.*		14,616		418,018
Timken Co.		588		30,911
Titan International, Inc.		7,140		159,293
The Toro Co.		3,192		143,672
Trimas Corp.*		1,428		43,554
Trinity Industries, Inc.		10,332		436,114
Twin Disc, Inc.		1,176		25,072
Valmont Industries, Inc.		504		73,448

	Shares		Value
Machinery – (continued)
Wabash National Corp.*		8,400	$	79,212
WABCO Holdings, Inc.*		672		48,539
Wabtec Corp.		504		52,890
Watts Water Technologies, Inc., Class A		1,596		75,108
Woodward, Inc.		3,360		120,926
Xylem, Inc.		2,772		76,923
				8,426,419
Marine – 0.1%
Diana Containerships, Inc.		336		1,912
Eagle Bulk Shipping, Inc.*		4,284		15,080
Genco Shipping & Trading Ltd.*		6,384		10,916
Kirby Corp.*		588		44,035
Matson, Inc.		5,124		120,619
				192,562
Media – 3.0%
AMC Networks, Inc., Class A*		504		31,757
Arbitron, Inc.		1,428		66,673
Belo Corp., Class A		12,096		129,669
Cablevision Systems Corp., Class A		1,848		27,461
Carmike Cinemas, Inc.*		420		7,375
CBS Corp., Class B		6,132		280,723
Charter Communications, Inc., Class A*		840		84,622
Cinemark Holdings, Inc.		4,116		127,143
Clear Channel Outdoor Holdings, Inc., Class A*		4,788		34,617
Comcast Corp., Class A		26,208		1,082,390
Cumulus Media, Inc., Class A*		8,820		28,136
Digital Generation, Inc.*		2,520		16,884
DIRECTV*		5,880		332,573
Discovery Communications, Inc., Class A*		2,436		192,006
DISH Network Corp., Class A		1,596		62,547
DreamWorks Animation SKG, Inc., Class A*		3,528		68,020
E.W. Scripps Co., Class A*		1,680		23,335
Entercom Communications Corp., Class A*		3,360		26,578
Fisher Communications, Inc.		504		20,876
Gannett Co., Inc.		1,848		37,256

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 43

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Media – (continued)
Harte-Hanks, Inc.		5,124	$	40,633
The Interpublic Group of Cos., Inc.		4,704		65,103
John Wiley & Sons, Inc., Class A		420		16,031
Journal Communications, Inc., Class A*		5,208		35,466
Lamar Advertising Co., Class A*		1,176		55,060
Liberty Global, Inc., Class A*		2,352		170,214
Liberty Media Corp., Class A*		756		86,849
LIN TV Corp., Class A*		4,200		51,702
Lions Gate Entertainment Corp.*		4,536		112,538
Live Nation Entertainment, Inc.*		20,076		253,560
The Madison Square Garden Co., Class A*		2,016		121,504
The McClatchy Co., Class A*		7,392		17,076
Meredith Corp.		4,620		179,348
Morningstar, Inc.		252		16,635
National CineMedia, Inc.		2,184		35,468
The New York Times Co., Class A*		12,180		107,915
News Corp., Class A		20,076		621,754
Omnicom Group, Inc.		2,856		170,703
Pandora Media, Inc.*		5,292		73,718
ReachLocal, Inc.*		924		15,403
Regal Entertainment Group, Class A		9,408		168,780
Rentrak Corp.*		420		9,509
Scholastic Corp.		3,276		89,926
Scripps Networks Interactive, Inc., Class A		924		61,520
Sinclair Broadcast Group, Inc., Class A		6,552		175,594
Sirius XM Radio, Inc.		39,816		129,402
Starz – Liberty Capital*		1,176		27,495
Time Warner Cable, Inc.		3,024		283,923
Time Warner, Inc.		9,324		557,389
Valassis Communications, Inc.		5,292		135,634
Viacom, Inc., Class B		4,872		311,759
Virgin Media, Inc.		2,520		122,926
The Walt Disney Co.		17,640		1,108,498
The Washington Post Co., Class B		588		260,684
World Wrestling Entertainment, Inc., Class A		2,940		26,989
				8,397,349

	Shares		Value
Metals & Mining – 1.0%
A.M. Castle & Co.*		1,932	$	33,462
AK Steel Holding Corp.		17,892		59,938
Alcoa, Inc.		12,264		104,244
Allegheny Technologies, Inc.		840		22,663
Allied Nevada Gold Corp.*		756		8,089
AMCOL International Corp.		1,428		43,940
Carpenter Technology Corp.		672		30,213
Century Aluminum Co.*		6,048		49,352
Cliffs Natural Resources, Inc.		1,260		26,888
Coeur d’Alene Mines Corp.*		5,880		89,611
Commercial Metals Co.		14,616		213,686
Compass Minerals International, Inc.		1,932		167,195
Freeport-McMoRan Copper & Gold, Inc.		8,232		250,500
General Moly, Inc.*		3,444		6,406
Globe Specialty Metals, Inc.		4,200		54,852
Gold Resource Corp.		1,764		18,063
Golden Minerals Co.*		3,024		5,504
Haynes International, Inc.		1,932		93,915
Hecla Mining Co.		14,028		47,695
Horsehead Holding Corp.*		2,268		24,268
Kaiser Aluminum Corp.		840		52,920
Materion Corp.		2,268		60,079
McEwen Mining, Inc.*		17,388		40,514
Molycorp, Inc.*		5,460		31,886
Newmont Mining Corp.		5,628		182,347
Nucor Corp.		3,696		161,220
Olympic Steel, Inc.		1,344		26,880
Paramount Gold and Silver Corp.*		6,048		9,556
Reliance Steel & Aluminum Co.		588		38,261
Royal Gold, Inc.		588		32,681
RTI International Metals, Inc.*		1,596		46,316
Schnitzer Steel Industries, Inc., Class A		3,108		76,239
Steel Dynamics, Inc.		1,680		25,267
Stillwater Mining Co.*		7,392		91,957
SunCoke Energy, Inc.*		8,736		132,176
United States Steel Corp.		1,428		25,418
Universal Stainless & Alloy Products, Inc.*		336		11,747
US Silica Holdings, Inc.		588		12,013
Walter Energy, Inc.		8,148		146,012

See Accompanying Notes to the Financial Statements.

44 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Metals & Mining – (continued)
Worthington Industries, Inc.		6,804	$	218,953
				2,772,926
Multiline Retail – 0.6%
Big Lots, Inc.*		7,644		278,395
The Bon-Ton Stores, Inc.		840		12,886
Dillard’s, Inc., Class A		252		20,767
Dollar General Corp.*		2,688		140,018
Dollar Tree, Inc.*		2,352		111,861
Family Dollar Stores, Inc.		1,008		61,861
Fred’s, Inc., Class A		3,528		50,203
Gordmans Stores, Inc.*		252		2,843
J.C. Penney Co., Inc.*		1,344		22,068
Kohl’s Corp.		2,016		94,873
Macy’s, Inc.		4,368		194,813
Nordstrom, Inc.		1,596		90,318
Saks, Inc.*		6,468		74,705
Sears Holdings Corp.*		336		17,250
Target Corp.		6,300		444,528
Tuesday Morning Corp.*		4,368		35,424
				1,652,813
Multi-Utilities – 1.0%
Alliant Energy Corp.		840		44,948
Ameren Corp.		1,848		66,990
Avista Corp.		7,392		207,346
Black Hills Corp.		5,880		275,713
CenterPoint Energy, Inc.		3,612		89,144
CH Energy Group, Inc.		1,008		65,490
CMS Energy Corp.		2,016		60,359
Consolidated Edison, Inc.		2,604		165,745
Dominion Resources, Inc.		6,216		383,403
DTE Energy Co.		1,344		97,951
Integrys Energy Group, Inc.		588		36,197
MDU Resources Group, Inc.		1,848		46,108
NiSource, Inc.		2,184		67,114
NorthWestern Corp.		4,536		195,139
PG&E Corp.		4,116		199,379
Public Service Enterprise Group, Inc.		3,948		144,536
SCANA Corp.		924		50,081
Sempra Energy		2,184		180,944

	Shares		Value
Multi-Utilities – (continued)
TECO Energy, Inc.		1,596	$	30,531
Vectren Corp.		10,248		384,915
Wisconsin Energy Corp.		2,352		105,699
				2,897,732
Office Electronics – 0.1%
Xerox Corp.		10,080		86,487
Zebra Technologies Corp., Class A*		2,856		133,232
				219,719
Oil, Gas & Consumable Fuels – 5.6%
Abraxas Petroleum Corp.*		5,964		13,359
Alon USA Energy, Inc.		2,100		34,860
Alpha Natural Resources, Inc.*		12,432		92,245
Amyris, Inc.*		2,604		7,083
Anadarko Petroleum Corp.		5,040		427,190
Apache Corp.		3,444		254,443
Apco Oil and Gas International, Inc.*		2,688		27,176
Approach Resources, Inc.*		1,848		43,835
Arch Coal, Inc.		27,468		133,220
Berry Petroleum Co., Class A		3,108		148,904
Bill Barrett Corp.*		2,940		58,388
BPZ Resources, Inc.*		5,544		11,864
Cabot Oil & Gas Corp.		2,184		148,621
Callon Petroleum Co.*		5,292		18,945
Carrizo Oil & Gas, Inc.*		1,848		44,759
Cheniere Energy, Inc.*		4,704		133,970
Chesapeake Energy Corp.		4,872		95,199
Chevron Corp.		15,960		1,947,280
Cimarex Energy Co.		672		49,177
Clayton Williams Energy, Inc.*		924		35,666
Clean Energy Fuels Corp.*		3,696		48,750
Cloud Peak Energy, Inc.*		7,812		152,647
Cobalt International Energy, Inc.*		1,848		51,633
Comstock Resources, Inc.*		2,352		36,832
Concho Resources, Inc.*		1,092		94,054
ConocoPhillips		9,996		604,258
CONSOL Energy, Inc.		2,016		67,818
Contango Oil & Gas Co.		672		25,281
Continental Resources, Inc.*		588		46,993
Crimson Exploration, Inc.*		840		2,579

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 45

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Oil, Gas & Consumable Fuels – (continued)
Crosstex Energy, Inc.		3,948	$	72,683
CVR Energy, Inc.		1,092		53,803
Delek US Holdings, Inc.		4,704		169,767
Denbury Resources, Inc.*		3,528		63,116
Devon Energy Corp.		4,032		222,002
DHT Holdings, Inc.		2,436		10,475
Emerald Oil, Inc.*		1,680		10,802
Endeavour International Corp.*		2,688		7,365
Energen Corp.		756		35,850
Energy XXI Bermuda Ltd.		672		15,281
EOG Resources, Inc.		2,856		346,033
EPL Oil & Gas, Inc.*		3,024		98,794
EQT Corp.		1,680		126,202
Evolution Petroleum Corp.*		1,092		10,855
EXCO Resources, Inc.		18,480		134,165
Exxon Mobil Corp.		36,960		3,289,070
Forest Oil Corp.*		15,792		66,169
FX Energy, Inc.*		2,772		10,645
Gevo, Inc.*		4,872		8,989
Goodrich Petroleum Corp.*		1,680		21,907
Gran Tierra Energy, Inc.*		12,936		71,536
Green Plains Renewable Energy, Inc.*		2,940		36,779
Gulfport Energy Corp.*		3,864		201,662
Halcon Resources Corp.*		4,536		29,665
Harvest Natural Resources, Inc.*		5,124		16,807
Hess Corp.		2,436		175,830
HollyFrontier Corp.		1,512		74,768
Hyperdynamics Corp.*		12,852		7,114
James River Coal Co.*		5,040		8,316
Kinder Morgan, Inc.		6,552		256,183
Kodiak Oil & Gas Corp.*		14,364		112,470
Laredo Petroleum Holdings, Inc.*		504		8,669
Magnum Hunter Resources Corp.*		8,904		24,219
Marathon Oil Corp.		5,544		181,122
Marathon Petroleum Corp.		2,772		217,214
Matador Resources Co.*		3,192		31,505
McMoRan Exploration Co.*		5,964		98,704
Midstates Petroleum Co., Inc.*		2,184		12,602
Miller Energy Resources, Inc.*		1,848		7,022
Murphy Oil Corp.		1,512		93,880

	Shares		Value
Oil, Gas & Consumable Fuels – (continued)
Newfield Exploration Co.*		1,008	$	21,964
Noble Energy, Inc.		2,016		228,393
Nordic American Tankers Ltd.		6,720		59,875
Northern Oil and Gas, Inc.*		3,108		40,062
Oasis Petroleum, Inc.*		756		25,878
Occidental Petroleum Corp.		6,804		607,325
Pacific Ethanol, Inc.*		11,760		3,175
PDC Energy, Inc.*		1,680		72,744
Peabody Energy Corp.		2,184		43,811
Penn Virginia Corp.		7,728		31,144
PetroQuest Energy, Inc.*		3,108		13,302
Phillips 66		5,124		312,308
Pioneer Natural Resources Co.		1,344		164,277
Plains Exploration & Production Co.*		1,260		56,952
QEP Resources, Inc.		1,764		50,644
Quicksilver Resources, Inc.*		17,052		42,971
Range Resources Corp.		1,680		123,514
Renewable Energy Group, Inc.*		1,260		12,386
Rentech, Inc.		11,592		23,995
Resolute Energy Corp.*		2,436		22,460
REX American Resources Corp.*		924		17,270
Rex Energy Corp.*		3,024		48,596
Rosetta Resources, Inc.*		2,604		111,738
Sanchez Energy Corp.*		588		10,649
SandRidge Energy, Inc.*		3,612		18,566
SemGroup Corp., Class A*		2,352		121,951
Ship Finance International Ltd.		6,552		107,977
SM Energy Co.		672		40,992
Solazyme, Inc.*		2,184		19,874
Southwestern Energy Co.*		3,948		147,734
Spectra Energy Corp.		6,048		190,693
Stone Energy Corp.*		6,300		124,299
Swift Energy Co.*		2,604		33,696
Synergy Resources Corp.*		756		5,103
Targa Resources Corp.		1,680		110,477
Teekay Corp.		2,856		101,674
Tesoro Corp.		1,092		58,313
Triangle Petroleum Corp.*		1,932		10,607
Ultra Petroleum Corp.*		1,512		32,357
Uranium Energy Corp.*		4,620		7,161
Uranium Resources, Inc.*		1,343		2,713
USEC, Inc.*		20,748		6,639

See Accompanying Notes to the Financial Statements.

46 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Oil, Gas & Consumable Fuels – (continued)
Vaalco Energy, Inc.*		7,224	$	48,545
Valero Energy Corp.		4,452		179,505
W&T Offshore, Inc.		4,620		53,962
Warren Resources, Inc.*		10,248		26,952
Western Refining, Inc.		7,728		238,872
Whiting Petroleum Corp.*		1,092		48,594
The Williams Cos., Inc.		6,720		256,234
World Fuel Services Corp.		9,156		371,276
WPX Energy, Inc.*		1,596		24,945
				15,832,213
Paper & Forest Products – 0.5%
Buckeye Technologies, Inc.		4,704		176,823
Clearwater Paper Corp.*		2,436		112,105
Deltic Timber Corp.		672		41,987
Domtar Corp.		336		23,355
International Paper Co.		3,192		149,960
KapStone Paper and Packaging Corp.		4,536		134,175
Louisiana-Pacific Corp.*		6,972		126,333
Mercer International, Inc.*		2,352		14,794
Neenah Paper, Inc.		1,932		55,564
PH Glatfelter Co.		5,880		141,120
Resolute Forest Products, Inc.*		13,104		191,711
Schweitzer-Mauduit International, Inc.		3,864		155,681
Wausau Paper Corp.		2,688		27,364
				1,350,972
Personal Products – 0.2%
Avon Products, Inc.		4,284		99,218
Elizabeth Arden, Inc.*		1,428		58,477
The Estee Lauder Cos., Inc., Class A		2,352		163,111
Herbalife Ltd.		1,092		43,363
Inter Parfums, Inc.		2,016		58,404
Medifast, Inc.*		1,512		39,614
Nature’s Sunshine Products, Inc.		840		12,289
Nu Skin Enterprises, Inc., Class A		588		29,829
Prestige Brands Holdings, Inc.*		3,024		81,497
Revlon, Inc., Class A*		1,092		21,130

	Shares		Value
Personal Products – (continued)
Star Scientific, Inc.*		7,056	$	8,750
USANA Health Sciences, Inc.*		672		37,914
				653,596
Pharmaceuticals – 3.5%
AbbVie, Inc.		16,212		746,563
Actavis, Inc.*		1,176		124,338
Akorn, Inc.*		3,444		51,832
Alexza Pharmaceuticals, Inc.*		1,092		4,685
Allergan, Inc.		3,108		352,913
Auxilium Pharmaceuticals, Inc.*		2,352		35,115
AVANIR Pharmaceuticals, Inc., Class A*		6,552		20,901
Bristol-Myers Squibb Co.		17,388		690,651
Cadence Pharmaceuticals, Inc.*		3,108		22,005
Corcept Therapeutics, Inc.*		4,788		8,475
Depomed, Inc.*		1,764		9,720
Eli Lilly & Co.		9,912		548,926
Endo Health Solutions, Inc.*		840		30,778
Endocyte, Inc.*		1,428		19,835
Forest Laboratories, Inc.*		2,352		87,988
Hi-Tech Pharmacal Co., Inc.		1,344		44,433
Hospira, Inc.*		1,428		47,295
Impax Laboratories, Inc.*		3,444		60,270
Jazz Pharmaceuticals PLC*		756		44,113
Johnson & Johnson		28,056		2,391,213
The Medicines Co.*		3,612		121,941
Merck & Co., Inc.		30,828		1,448,916
Mylan, Inc.*		3,360		97,810
Nektar Therapeutics*		5,964		64,650
Optimer Pharmaceuticals, Inc.*		2,352		36,315
Pacira Pharmaceuticals, Inc.*		924		26,676
Pain Therapeutics, Inc.*		2,016		8,306
Perrigo Co.		756		90,274
Pfizer, Inc.		60,564		1,760,595
Pozen, Inc.*		1,008		4,969
Questcor Pharmaceuticals, Inc.		7,476		229,812
Repros Therapeutics, Inc.*		1,092		22,211
Sagent Pharmaceuticals, Inc.*		840		13,894
Salix Pharmaceuticals Ltd.*		3,024		158,125
Santarus, Inc.*		3,780		69,439
Sciclone Pharmaceuticals, Inc.*		2,520		11,920
Supernus Pharmaceuticals, Inc.*		504		2,591

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 47

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Pharmaceuticals – (continued)
Taro Pharmaceutical Industries Ltd.*		1,848	$	112,007
Transcept Pharmaceuticals, Inc.*		840		3,326
ViroPharma, Inc.*		3,696		100,716
Vivus, Inc.*		5,880		78,145
Warner Chilcott PLC, Class A		1,176		16,911
XenoPort, Inc.*		1,848		11,476
Zogenix, Inc.*		2,940		5,086
				9,838,160
Professional Services – 0.6%
Acacia Research Corp.*		2,856		68,030
The Advisory Board Co.*		1,680		82,572
Barrett Business Services, Inc.		84		4,447
CBIZ, Inc.*		5,544		35,981
CDI Corp.		672		10,530
The Corporate Executive Board Co.		1,848		104,153
CRA International, Inc.*		1,344		24,783
The Dolan Co.*		5,208		9,010
The Dun & Bradstreet Corp.		420		37,149
Equifax, Inc.		1,260		77,112
Exponent, Inc.		756		39,841
FTI Consulting, Inc.*		5,376		178,053
GP Strategies Corp.*		1,092		24,079
Heidrick & Struggles International, Inc.		1,260		16,657
Huron Consulting Group, Inc.*		1,176		49,133
ICF International, Inc.*		2,520		68,317
IHS, Inc., Class A*		420		40,921
Insperity, Inc.		1,260		34,814
Kelly Services, Inc., Class A		3,864		65,765
Kforce, Inc.		2,100		31,752
Korn/Ferry International*		6,132		101,485
Manpowergroup, Inc.		756		40,189
Mistras Group, Inc.*		840		15,918
Navigant Consulting, Inc.*		6,048		74,572
Nielsen Holdings N.V.		1,596		55,254
Odyssey Marine Exploration, Inc.*		3,864		11,399
On Assignment, Inc.*		1,932		46,890
Resources Connection, Inc.		2,352		26,719
Robert Half International, Inc.		1,512		49,624

	Shares		Value
Professional Services – (continued)
RPX Corp.*		3,108	$	41,678
Towers Watson & Co., Class A		420		30,626
TrueBlue, Inc.*		2,100		43,512
Verisk Analytics, Inc., Class A*		1,260		77,225
WageWorks, Inc.*		1,092		27,966
				1,646,156
Real Estate Investment Trusts (REITs) – 5.4%
Acadia Realty Trust		2,100		59,955
Agree Realty Corp.		1,176		35,362
Alexander’s, Inc.		168		51,742
Alexandria Real Estate Equities, Inc.		588		42,789
American Assets Trust, Inc.		1,596		53,881
American Campus Communities, Inc.		756		33,748
American Capital Agency Corp.		3,192		106,326
American Tower Corp.		3,864		324,537
Annaly Capital Management, Inc.		7,308		116,490
Anworth Mortgage Asset Corp.		16,212		102,298
Apartment Investment & Management Co., Class A		1,260		39,199
Apollo Commercial Real Estate Finance, Inc.		2,604		46,195
Arbor Realty Trust, Inc.		4,704		36,315
ARMOUR Residential REIT, Inc.		47,376		307,470
Ashford Hospitality Trust, Inc.		8,652		111,438
Associated Estates Realty Corp.		4,368		78,056
AvalonBay Communities, Inc.		1,176		156,455
BioMed Realty Trust, Inc.		3,780		85,088
Boston Properties, Inc.		1,596		174,650
Brandywine Realty Trust		14,112		210,692
BRE Properties, Inc.		756		38,163
Camden Property Trust		756		54,689
Campus Crest Communities, Inc.		1,596		21,801
CapLease, Inc.		8,568		60,147
Capstead Mortgage Corp.		12,516		166,213
CBL & Associates Properties, Inc.		4,284		103,416
Cedar Realty Trust, Inc.		5,460		34,999
Chatham Lodging Trust		672		12,304
Chesapeake Lodging Trust		1,680		39,749
Chimera Investment Corp.		8,148		26,888
Colonial Properties Trust		4,872		113,079

See Accompanying Notes to the Financial Statements.

48 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Real Estate Investment Trusts (REITs) – (continued)
Colony Financial, Inc.		6,720	$	149,856
CommonWealth REIT		15,624		348,884
Coresite Realty Corp.		1,848		66,861
Corporate Office Properties Trust		4,452		129,064
Corrections Corp of America		2,184		79,061
Cousins Properties, Inc.		9,492		103,653
CubeSmart		5,964		104,787
CYS Investments, Inc.		23,772		295,486
DCT Industrial Trust, Inc.		12,936		101,289
DDR Corp.		2,268		41,595
DiamondRock Hospitality Co.		11,088		110,658
Digital Realty Trust, Inc.		1,344		94,779
Douglas Emmett, Inc.		1,596		41,767
Duke Realty Corp.		2,268		40,008
DuPont Fabros Technology, Inc.		3,948		99,253
EastGroup Properties, Inc.		1,428		90,064
Education Realty Trust, Inc.		7,056		77,545
Equity Lifestyle Properties, Inc.		504		40,950
Equity One, Inc.		3,192		81,364
Equity Residential		3,276		190,205
Essex Property Trust, Inc.		420		65,961
Excel Trust, Inc.		5,376		81,876
Extra Space Storage, Inc.		2,520		109,822
Federal Realty Investment Trust		672		78,631
FelCor Lodging Trust, Inc.*		6,132		36,669
First Industrial Realty Trust, Inc.		4,200		75,348
First Potomac Realty Trust		2,436		38,976
Franklin Street Properties Corp.		3,864		59,003
General Growth Properties, Inc.		4,788		108,783
The Geo Group, Inc.		5,040		188,748
Getty Realty Corp.		3,444		73,736
Gladstone Commercial Corp.		1,092		20,901
Glimcher Realty Trust		8,316		104,283
Government Properties Income Trust		2,688		70,022
Gramercy Property Trust, Inc.*		5,460		25,935
Hatteras Financial Corp.		12,600		344,358
HCP, Inc.		4,452		237,292
Health Care REIT, Inc.		2,436		182,627
Healthcare Realty Trust, Inc.		4,872		146,257
Healthcare Trust of America, Inc., Class A		2,604		32,498

	Shares		Value
Real Estate Investment Trusts (REITs) – (continued)
Hersha Hospitality Trust		7,308	$	43,702
Highwoods Properties, Inc.		4,368		179,219
Home Properties, Inc.		924		59,561
Hospitality Properties Trust		1,092		32,116
Host Hotels & Resorts, Inc.		7,140		130,448
Hudson Pacific Properties, Inc.		3,276		74,726
Inland Real Estate Corp.		3,276		37,084
Invesco Mortgage Capital, Inc.		16,800		359,520
Investors Real Estate Trust		8,736		85,001
iStar Financial, Inc.*		4,536		52,980
Kilroy Realty Corp.		1,008		57,043
Kimco Realty Corp.		4,116		97,878
Kite Realty Group Trust		3,108		20,513
LaSalle Hotel Properties		5,544		143,756
Lexington Realty Trust		7,224		92,539
Liberty Property Trust		1,176		50,556
LTC Properties, Inc.		1,596		74,214
The Macerich Co.		1,428		100,031
Mack-Cali Realty Corp.		4,788		132,963
Medical Properties Trust, Inc.		7,644		122,992
MFA Financial, Inc.		14,532		134,712
Mid-America Apartment Communities, Inc.		2,268		155,880
Monmouth Real Estate Investment Corp., Class A		1,680		17,875
MPG Office Trust, Inc.*		588		1,835
National Health Investors, Inc.		1,260		83,462
National Retail Properties, Inc.		4,536		179,988
New York Mortgage Trust, Inc.		3,444		24,590
NorthStar Realty Finance Corp.		21,000		209,370
Omega Healthcare Investors, Inc.		5,376		176,709
One Liberty Properties, Inc.		588		13,489
Parkway Properties, Inc.		2,772		50,534
Pebblebrook Hotel Trust		2,688		73,006
Pennsylvania Real Estate Investment Trust		6,048		125,375
PennyMac Mortgage Investment Trust		6,972		176,043
Piedmont Office Realty Trust, Inc., Class A		1,764		36,197
Plum Creek Timber Co., Inc.		1,680		86,587
Post Properties, Inc.		2,856		141,172
Potlatch Corp.		2,100		99,435

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 49

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Real Estate Investment Trusts (REITs) – (continued)
Prologis, Inc.		4,620	$	193,809
PS Business Parks, Inc.		840		67,032
Public Storage		1,344		221,760
RAIT Financial Trust		6,804		58,106
Ramco-Gershenson Properties Trust		2,016		35,220
Rayonier, Inc.		1,260		74,869
Realty Income Corp.		1,848		94,200
Redwood Trust, Inc.		4,032		92,010
Regency Centers Corp.		924		51,984
Resource Capital Corp.		13,020		85,802
Retail Opportunity Investments Corp.		4,536		67,178
Retail Properties of America, Inc., Class A		1,596		24,435
RLJ Lodging Trust		6,132		141,281
Rouse Properties, Inc.		756		14,326
Ryman Hospitality Properties		2,856		126,978
Sabra Health Care REIT, Inc.		2,184		65,127
Saul Centers, Inc.		420		18,816
Select Income REIT		252		7,190
Senior Housing Properties Trust		2,352		66,867
Simon Property Group, Inc.		3,192		568,399
SL Green Realty Corp.		840		76,188
Sovran Self Storage, Inc.		1,428		97,961
Spirit Realty Capital, Inc.		924		19,894
STAG Industrial, Inc.		3,948		87,014
Starwood Property Trust, Inc.		21,000		577,290
Strategic Hotels & Resorts, Inc.*		9,744		78,634
Summit Hotel Properties, Inc.		6,384		63,776
Sun Communities, Inc.		1,260		64,449
Sunstone Hotel Investors, Inc.*		8,064		100,074
Tanger Factory Outlet Centers		3,108		115,369
Taubman Centers, Inc.		504		43,097
Two Harbors Investment Corp.		10,080		120,758
UDR, Inc.		2,436		59,877
Universal Health Realty Income Trust		1,092		58,673
Urstadt Biddle Properties, Inc., Class A		1,092		24,319
Ventas, Inc.		2,940		234,112
Vornado Realty Trust		1,596		139,746

	Shares		Value
Real Estate Investment Trusts (REITs) – (continued)
Washington Real Estate Investment Trust		3,612	$	103,159
Weingarten Realty Investors		1,176		40,066
Weyerhaeuser Co.		5,376		164,022
Whitestone		1,344		22,176
Winthrop Realty Trust		1,176		14,947
				15,327,080
Real Estate Management & Development – 0.2%
CBRE Group, Inc., Class A*		2,940		71,207
Forest City Enterprises, Inc., Class A*		4,704		87,824
Forestar Group, Inc.*		1,848		39,806
The Howard Hughes Corp.*		1,596		150,630
Jones Lang LaSalle, Inc.		420		41,588
Kennedy-Wilson Holdings, Inc.		1,764		29,335
Realogy Holdings Corp.*		1,008		48,384
The St. Joe Co.*		5,208		101,921
Tejon Ranch Co.*		756		22,060
Zillow, Inc., Class A*		588		34,592
				627,347
Road & Rail – 1.2%
AMERCO		924		148,487
Arkansas Best Corp.		3,276		34,431
Avis Budget Group, Inc.*		14,280		411,835
Celadon Group, Inc.		2,520		42,311
Con-way, Inc.		6,972		235,653
CSX Corp.		10,248		251,998
Genesee & Wyoming, Inc., Class A*		1,428		121,666
Heartland Express, Inc.		2,940		39,896
Hertz Global Holdings, Inc.*		2,436		58,659
J.B. Hunt Transport Services, Inc.		1,008		71,638
Kansas City Southern		1,092		119,104
Knight Transportation, Inc.		3,024		47,235
Landstar System, Inc.		2,268		123,969
Marten Transport Ltd.		756		15,400
Norfolk Southern Corp.		2,604		201,602
Old Dominion Freight Line, Inc.*		2,436		93,786
Quality Distribution, Inc.*		2,688		21,396
Roadrunner Transportation Systems, Inc.*		588		13,236

See Accompanying Notes to the Financial Statements.

50 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Road & Rail – (continued)
Ryder System, Inc.		6,720	$	390,230
Saia, Inc.*		1,092		44,685
Swift Transportation Co.*		11,172		156,631
Union Pacific Corp.		4,704		696,004
Werner Enterprises, Inc.		2,604		59,788
				3,399,640
Semiconductors & Semiconductor Equipment – 2.6%
Advanced Energy Industries, Inc.*		4,200		71,316
Advanced Micro Devices, Inc.*		81,312		229,300
Altera Corp.		3,108		99,487
Amkor Technology, Inc.*		9,240		39,085
ANADIGICS, Inc.*		5,460		11,466
Analog Devices, Inc.		3,024		133,026
Applied Materials, Inc.		9,156		132,854
Applied Micro Circuits Corp.*		3,528		26,319
Atmel Corp.*		25,368		164,131
ATMI, Inc.*		1,596		34,713
Avago Technologies Ltd.		2,268		72,485
Axcelis Technologies, Inc.*		15,120		19,656
AXT, Inc.*		4,452		12,777
Broadcom Corp., Class A		5,124		184,464
Brooks Automation, Inc.		8,736		84,914
Cabot Microelectronics Corp.*		1,176		39,408
Cavium, Inc.*		3,024		95,105
Ceva, Inc.*		1,260		19,228
Cirrus Logic, Inc.*		3,528		68,126
Cohu, Inc.		2,688		25,724
Cree, Inc.*		1,092		61,774
Cymer, Inc.*		1,764		184,797
Cypress Semiconductor Corp.*		8,064		81,366
Diodes, Inc.*		2,016		40,844
Entegris, Inc.*		7,392		70,076
Entropic Communications, Inc.*		11,592		49,150
Exar Corp.*		2,016		21,732
Fairchild Semiconductor International, Inc.*		7,056		91,022
First Solar, Inc.*		8,232		383,282
FormFactor, Inc.*		3,612		17,879
Freescale Semiconductor Ltd.*		2,772		42,911
GT Advanced Technologies, Inc.*		16,044		63,053
Hittite Microwave Corp.*		1,512		84,838

	Shares		Value
Semiconductors & Semiconductor Equipment – (continued)
Inphi Corp.*		1,092	$	10,276
Integrated Device Technology, Inc.*		7,644		54,349
Integrated Silicon Solution, Inc.*		3,444		31,581
Intel Corp.		41,496		993,829
Intermolecular, Inc.*		924		8,048
International Rectifier Corp.*		3,696		78,392
Intersil Corp., Class A		7,140		55,406
IXYS Corp.		1,344		12,177
KLA-Tencor Corp.		1,344		72,912
Kopin Corp.*		3,528		11,678
Kulicke & Soffa Industries, Inc.*		9,240		106,814
Lam Research Corp.*		1,680		77,650
Lattice Semiconductor Corp.*		7,140		33,201
Linear Technology Corp.		2,100		76,650
LSI Corp.*		5,460		35,708
LTX-Credence Corp.*		2,940		17,346
M/A-COM Technology Solutions Holdings, Inc.*		756		10,607
Magnachip Semiconductor Corp.*		3,024		48,505
Marvell Technology Group Ltd.		4,284		46,096
Maxim Integrated Products, Inc.		2,940		90,934
MaxLinear, Inc., Class A*		924		5,756
MEMC Electronic Materials, Inc.*		31,500		170,100
Micrel, Inc.		2,520		25,351
Microchip Technology, Inc.		1,764		64,245
Micron Technology, Inc.*		8,316		78,337
Microsemi Corp.*		11,760		244,608
Mindspeed Technologies, Inc.*		2,352		5,386
MKS Instruments, Inc.		3,108		83,512
Monolithic Power Systems, Inc.		1,764		42,548
Nanometrics, Inc.*		1,344		18,856
NVE Corp.*		252		13,374
NVIDIA Corp.		5,628		77,498
OmniVision Technologies, Inc.*		7,056		94,621
ON Semiconductor Corp.*		8,652		68,005
PDF Solutions, Inc.*		1,428		24,433
Pericom Semiconductor Corp.*		1,344		8,682
Photronics, Inc.*		7,980		62,962
PLX Technology, Inc.*		1,680		7,846
PMC – Sierra, Inc.*		9,660		55,642
Power Integrations, Inc.		1,428		59,133
QuickLogic Corp.*		2,436		6,236

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 51

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Semiconductors & Semiconductor Equipment – (continued)
Rambus, Inc.*		6,636	$	46,187
RF Micro Devices, Inc.*		14,952		83,881
Rudolph Technologies, Inc.*		3,612		42,152
Semtech Corp.*		3,444		110,449
Sigma Designs, Inc.*		3,192		15,194
Silicon Image, Inc.*		4,284		21,120
Silicon Laboratories, Inc.*		2,352		93,398
Skyworks Solutions, Inc.*		1,764		38,931
Spansion, Inc., Class A*		2,604		33,826
STR Holdings, Inc.*		7,476		16,821
SunPower Corp.*		4,872		66,210
Supertex, Inc.		588		12,395
Teradyne, Inc.*		1,512		24,857
Tessera Technologies, Inc.		6,048		123,198
Texas Instruments, Inc.		11,676		422,788
TriQuint Semiconductor, Inc.*		10,416		60,829
Ultra Clean Holdings, Inc.*		3,696		23,137
Ultratech, Inc.*		1,344		39,608
Veeco Instruments, Inc.*		2,604		99,134
Volterra Semiconductor Corp.*		1,260		16,393
Xilinx, Inc.		2,688		101,902
				7,338,008
Software – 3.1%
Accelrys, Inc.*		2,940		28,959
ACI Worldwide, Inc.*		2,268		106,619
Activision Blizzard, Inc.		4,032		60,278
Actuate Corp.*		2,520		15,473
Adobe Systems, Inc.*		5,040		227,203
Advent Software, Inc.*		1,680		48,787
American Software, Inc./Georgia, Class A		1,848		15,357
ANSYS, Inc.*		924		74,715
Aspen Technology, Inc.*		5,040		153,619
Autodesk, Inc.*		2,100		82,698
Blackbaud, Inc.		2,268		66,475
BMC Software, Inc.*		1,596		72,586
Bottomline Technologies de, Inc.*		2,184		57,221
BroadSoft, Inc.*		1,512		38,647
CA, Inc.		2,940		79,292
Cadence Design Systems, Inc.*		3,360		46,368
Callidus Software, Inc.*		1,764		7,568

	Shares		Value
Software – (continued)
Check Point Software Technologies Ltd.*		1,764	$	82,238
Citrix Systems, Inc.*		1,848		114,890
CommVault Systems, Inc.*		2,436		179,143
Compuware Corp.*		11,508		138,096
Concur Technologies, Inc.*		504		36,847
Digimarc Corp.		336		7,372
Ebix, Inc.		1,764		32,828
Electronic Arts, Inc.*		3,024		53,253
Ellie Mae, Inc.*		588		15,300
Envivio, Inc.*		1,092		1,747
EPIQ Systems, Inc.		3,864		53,980
FactSet Research Systems, Inc.		336		31,608
Fair Isaac Corp.		2,016		93,905
Fortinet, Inc.*		1,092		19,612
Glu Mobile, Inc.*		3,108		9,573
Guidance Software, Inc.*		756		7,953
Guidewire Software, Inc.*		1,260		50,501
Imperva, Inc.*		504		19,646
Infoblox, Inc.*		2,016		44,574
Informatica Corp.*		1,008		33,193
Interactive Intelligence Group, Inc.*		756		31,321
Intuit, Inc.		2,856		170,332
Jive Software, Inc.*		1,260		17,123
Manhattan Associates, Inc.*		1,092		76,669
Mentor Graphics Corp.		4,872		88,963
MICROS Systems, Inc.*		840		35,624
Microsoft Corp.		63,084		2,088,080
MicroStrategy, Inc., Class A*		420		37,880
Mitek Systems, Inc.*		1,428		7,597
Monotype Imaging Holdings, Inc.		1,848		42,855
Net 1 UEPS Technologies, Inc.*		5,376		40,374
Netscout Systems, Inc.*		1,848		42,153
NetSuite, Inc.*		588		51,721
Nuance Communications, Inc.*		2,940		55,978
Oracle Corp.		37,380		1,225,316
Pegasystems, Inc.		924		23,386
Progress Software Corp.*		3,528		79,627
Proofpoint, Inc.*		504		9,233
PROS Holdings, Inc.*		1,092		28,305
PTC INC*		6,552		157,314
QLIK Technologies, Inc.*		4,200		109,242

See Accompanying Notes to the Financial Statements.

52 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Software – (continued)
RealPage, Inc.*		2,016	$	41,126
Red Hat, Inc.*		2,184		104,679
Rosetta Stone, Inc.*		672		11,377
Rovi Corp.*		13,188		308,467
Salesforce.com, Inc.*		5,376		221,007
Seachange International, Inc.*		1,512		16,420
SolarWinds, Inc.*		924		46,985
Solera Holdings, Inc.		756		43,530
Sourcefire, Inc.*		1,512		72,213
Splunk, Inc.*		588		23,990
SS&C Technologies Holdings, Inc.*		3,108		95,385
Symantec Corp.*		6,804		165,337
Synchronoss Technologies, Inc.*		1,428		40,470
Synopsys, Inc.*		1,512		53,782
Take-Two Interactive Software, Inc.*		6,888		105,111
Tangoe, Inc.*		1,680		21,605
TeleCommunication Systems, Inc., Class A*		5,964		11,511
Telenav, Inc.*		2,688		14,085
TIBCO Software, Inc.*		1,512		29,348
TiVo, Inc.*		6,384		74,820
Tyler Technologies, Inc.*		1,680		106,243
Ultimate Software Group, Inc.*		1,344		129,817
VASCO Data Security International, Inc.*		1,260		10,723
Verint Systems, Inc.*		2,604		86,036
VirnetX Holding Corp.*		2,268		46,313
VMware, Inc., Class A*		840		59,220
Vringo, Inc.*		2,856		8,054
Websense, Inc.*		1,932		34,467
Zynga, Inc., Class A*		28,140		89,767
				8,699,105
Specialty Retail – 3.1%
Aaron’s, Inc.		3,696		106,112
Abercrombie & Fitch Co., Class A		10,500		520,380
Advance Auto Parts, Inc.		588		49,321
Aeropostale, Inc.*		4,116		60,341
American Eagle Outfitters, Inc.		1,680		32,676
America’s Car-Mart, Inc.*		924		42,754

	Shares		Value
Specialty Retail – (continued)
ANN, Inc.*		2,688	$	79,404
Asbury Automotive Group, Inc.*		3,696		148,173
Ascena Retail Group, Inc.*		3,696		68,376
AutoNation, Inc.*		420		19,114
AutoZone, Inc.*		336		137,454
Barnes & Noble, Inc.*		5,208		94,421
bebe stores, inc.		1,932		10,935
Bed Bath & Beyond, Inc.*		2,268		156,038
Best Buy Co., Inc.		2,352		61,128
Big 5 Sporting Goods Corp.		2,436		40,925
Body Central Corp.*		672		6,841
Brown Shoe Co., Inc.		3,108		52,556
The Buckle, Inc.		1,428		69,329
Cabela’s, Inc.*		1,344		86,285
CarMax, Inc.*		2,268		104,419
The Cato Corp., Class A		3,360		80,674
Chico’s FAS, Inc.		5,040		92,081
The Children’s Place Retail Stores, Inc.*		1,176		57,530
Christopher & Banks Corp.*		1,764		12,260
Citi Trends, Inc.*		1,680		19,774
Coldwater Creek, Inc.*		1,176		4,198
Conn’s, Inc.*		1,428		61,847
Destination Maternity Corp.		1,680		39,900
Destination XL Group, Inc.*		5,460		27,191
Dick’s Sporting Goods, Inc.		924		44,444
DSW, Inc., Class A		1,512		99,973
Express, Inc.*		11,004		200,383
The Finish Line, Inc., Class A		6,636		128,672
Foot Locker, Inc.		1,092		38,078
Francesca’s Holdings Corp.*		2,604		74,370
GameStop Corp., Class A		1,092		38,111
The Gap, Inc.		3,360		127,646
Genesco, Inc.*		3,192		196,468
GNC Holdings, Inc., Class A		504		22,846
Group 1 Automotive, Inc.		2,688		162,570
Guess?, Inc.		7,476		206,936
Haverty Furniture Cos, Inc.		1,008		23,970
hhgregg, Inc.*		2,604		35,180
Hibbett Sports, Inc.*		1,260		69,111
The Home Depot, Inc.		15,372		1,127,536
Hot Topic, Inc.		2,268		31,639
Jos A Bank Clothiers, Inc.*		1,344		58,706

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 53

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Specialty Retail – (continued)
Kirkland’s, Inc.*		1,680	$	20,261
L Brands, Inc.		2,520		127,033
Lithia Motors, Inc., Class A		2,856		141,429
Lowe’s Cos., Inc.		11,424		438,910
Lumber Liquidators Holdings, Inc.*		1,260		103,270
MarineMax, Inc.*		1,260		14,603
Mattress Firm Holding Corp.*		1,344		51,502
The Men’s Wearhouse, Inc.		6,132		205,422
Monro Muffler Brake, Inc.		1,512		62,536
New York & Co., Inc.*		1,260		5,620
Office Depot, Inc.*		16,548		63,875
OfficeMax, Inc.		10,920		125,689
O’Reilly Automotive, Inc.*		1,176		126,208
Pacific Sunwear of California, Inc.*		2,184		6,006
Penske Automotive Group, Inc.		5,124		158,434
The Pep Boys-Manny Moe & Jack*		2,436		28,258
PetSmart, Inc.		1,092		74,518
Pier 1 Imports, Inc.		6,132		142,324
RadioShack Corp.		15,036		47,664
Rent-A-Center, Inc.		7,392		258,203
Ross Stores, Inc.		2,268		149,847
rue21, Inc.*		840		26,796
Sally Beauty Holdings, Inc.*		1,176		35,351
Select Comfort Corp.*		2,856		60,604
Shoe Carnival, Inc.		1,596		33,245
Signet Jewelers Ltd.		420		28,867
Sonic Automotive, Inc., Class A		4,620		101,594
Stage Stores, Inc.		3,528		97,690
Staples, Inc.		4,956		65,617
Stein Mart, Inc.		3,528		27,906
Tiffany & Co.		1,176		86,648
TJX Cos., Inc.		7,224		352,314
Tractor Supply Co.		672		72,018
Ulta Salon Cosmetics & Fragrance, Inc.*		504		44,176
Urban Outfitters, Inc.*		1,260		52,214
Vitamin Shoppe, Inc.*		1,512		74,315
The Wet Seal, Inc., Class A*		7,896		25,741
Williams-Sonoma, Inc.		924		49,600
Zale Corp.*		420		1,865
Zumiez, Inc.*		1,092		31,635
				8,648,884

	Shares		Value
Textiles, Apparel & Luxury Goods – 1.1%
Carter’s, Inc.*		1,260	$	82,391
Coach, Inc.		2,940		173,048
Columbia Sportswear Co.		756		44,302
Crocs, Inc.*		11,088		177,630
Deckers Outdoor Corp.*		4,452		245,394
Fifth & Pacific Cos., Inc.*		7,308		150,691
Fossil, Inc.*		504		49,452
G-III Apparel Group Ltd.*		1,764		71,724
Hanesbrands, Inc.*		756		37,921
Iconix Brand Group, Inc.*		8,148		233,440
The Jones Group, Inc.		9,240		129,360
Lululemon Athletica, Inc.*		1,092		83,134
Maidenform Brands, Inc.*		1,092		19,656
Michael Kors Holdings Ltd.*		1,848		105,225
Movado Group, Inc.		924		27,942
NIKE, Inc., Class B		7,392		470,131
Oxford Industries, Inc.		672		39,735
Perry Ellis International, Inc.		1,764		30,994
PVH Corp.		756		87,250
Quiksilver, Inc.*		6,972		46,922
Ralph Lauren Corp.		588		106,769
Skechers U.S.A., Inc., Class A*		3,024		62,839
Steven Madden Ltd.*		2,016		98,038
True Religion Apparel, Inc.		1,260		34,096
Tumi Holdings, Inc.*		2,940		67,708
Under Armour, Inc., Class A*		672		38,358
Vera Bradley, Inc.*		1,176		26,836
VF Corp.		840		149,705
Wolverine World Wide, Inc.		2,604		124,393
				3,015,084
Thrifts & Mortgage Finance – 0.8%
Astoria Financial Corp.		11,340		108,750
Beneficial Mutual Bancorp, Inc.*		1,932		16,518
Berkshire Hills Bancorp, Inc.		2,688		69,512
BofI Holding, Inc.*		840		34,255
Brookline Bancorp, Inc.		9,240		77,616
Capitol Federal Financial, Inc.		8,820		104,429
Dime Community Bancshares, Inc.		4,032		57,537
Doral Financial Corp.*		16,884		12,717
EverBank Financial Corp.		1,428		22,848
Federal Agricultural Mortgage Corp., Class C		1,092		34,704

See Accompanying Notes to the Financial Statements.

54 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Thrifts & Mortgage Finance – (continued)
Flagstar Bancorp, Inc.*		2,688	$	33,358
Flushing Financial Corp.		4,032		61,206
HomeStreet, Inc.		1,512		32,508
Hudson City Bancorp, Inc.		3,696		30,714
MGIC Investment Corp.*		45,108		243,583
Nationstar Mortgage Holdings, Inc.*		420		15,443
New York Community Bancorp, Inc.		3,360		45,528
Northwest Bancshares, Inc.		5,460		66,885
OceanFirst Financial Corp.		2,184		31,035
Ocwen Financial Corp.*		3,024		110,618
Oritani Financial Corp.		2,772		42,883
People’s United Financial, Inc.		3,780		49,745
Provident Financial Services, Inc.		7,224		110,744
Provident New York Bancorp		2,016		18,225
Radian Group, Inc.		21,840		260,988
Rockville Financial, Inc.		672		8,736
Territorial Bancorp, Inc.		756		17,675
TFS Financial Corp.*		924		10,044
TrustCo Bank Corp. NY		11,760		63,034
United Financial Bancorp, Inc./MD		840		12,440
ViewPoint Financial Group, Inc.		1,764		32,846
Walker & Dunlop, Inc.*		1,764		31,417
Washington Federal, Inc.		13,860		237,976
Westfield Financial, Inc.		1,008		7,590
WSFS Financial Corp.		924		45,220
				2,159,327
Tobacco – 1.0%
Alliance One International, Inc.*		11,172		41,895
Altria Group, Inc.		19,740		720,707
Lorillard, Inc.		4,032		172,932
Philip Morris International, Inc.		16,884		1,613,942
Reynolds American, Inc.		3,192		151,365
Universal Corp.		3,024		174,031
Vector Group Ltd.		5,544		90,423
				2,965,295
Trading Companies & Distributors – 0.6%
Aceto Corp.		3,192		33,197
Air Lease Corp.		3,612		99,366

	Shares		Value
Trading Companies & Distributors – (continued)
Aircastle Ltd.		7,980	$	111,401
Applied Industrial Technologies, Inc.		2,268		95,823
Beacon Roofing Supply, Inc.*		2,436		92,885
CAI International, Inc.*		1,680		42,823
DXP Enterprises, Inc.*		504		33,707
Edgen Group, Inc.*		1,428		9,782
Fastenal Co.		2,604		127,726
GATX Corp.		2,436		124,114
H&E Equipment Services, Inc.		1,428		29,074
Houston Wire & Cable Co.		2,184		29,746
Kaman Corp.		1,344		45,414
MRC Global, Inc.*		3,864		115,727
MSC Industrial Direct Co., Inc., Class A		420		33,096
Rush Enterprises, Inc., Class B*		4,704		93,139
TAL International Group, Inc.		4,284		177,358
Textainer Group Holdings Ltd.		2,016		77,959
Titan Machinery, Inc.*		1,848		41,691
United Rentals, Inc.*		1,344		70,708
W.W. Grainger, Inc.		588		144,924
Watsco, Inc.		1,680		141,758
WESCO International, Inc.*		588		42,154
				1,813,572
Transportation Infrastructure – 0.0%†
Aegean Marine Petroleum Network, Inc.		4,032		23,789
Wesco Aircraft Holdings, Inc.*		1,176		19,416
				43,205
Water Utilities – 0.1%
American States Water Co.		1,008		55,924
American Water Works Co., Inc.		1,764		73,876
Aqua America, Inc.		1,344		42,645
California Water Service Group		2,184		43,789
Connecticut Water Service, Inc.		672		19,139
Middlesex Water Co.		840		16,472
SJW Corp.		672		17,042
York Water Co.		1,260		23,625
				292,512

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 55

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Wireless Telecommunication Services – 0.4%
Boingo Wireless, Inc.*		924	$	5,756
Clearwire Corp., Class A*		11,760		39,514
Crown Castle International Corp.*		2,940		226,380
Leap Wireless International, Inc.*		7,476		42,763
MetroPCS Communications, Inc.*		2,604		30,831
NII Holdings, Inc.*		24,948		217,048
NTELOS Holdings Corp.		1,596		23,493
SBA Communications Corp., Class A*		1,176		92,892
Shenandoah Telecommunications Co.		2,940		48,187
Sprint Nextel Corp.*		23,520		165,816
Telephone & Data Systems, Inc.		12,852		288,399
United States Cellular Corp.*		168		6,458
USA Mobility, Inc.		2,856		38,756
				1,226,293
Total Common Stocks (Cost $246,494,689)				281,449,141

	Principal Amount
U.S. GOVERNMENT & AGENCY SECURITY – 0.1%
U.S. Treasury Bill 0.00%, due 10/17/13(a) (b)	$	205,000		204,928
Total U.S. Government & Agency Security (Cost $204,915)				204,928
Total Investment Securities (Cost $246,699,604) – 99.6%				281,654,069
Other assets less liabilities – 0.4%				1,148,154
NET ASSETS – 100.0%			$	282,802,223

* Non-income producing security.

^‡  Investment in affiliated company. Northern Trust Investments, Inc., the Investment Adviser of the Fund, is an indirect subsidiary of Northern Trust Corporation.

^(a)  Security pledged as collateral to cover margin requirements for open futures contracts.

^(b)  Zero coupon security. Rate disclosed is the yield as of April 30, 2013.

^†  Amount represents less than 0.05%.

Percentages shown are based on Net Assets.

Abbreviation:

REIT – Real Estate Investment Trust

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	39,318,298
Aggregate gross unrealized depreciation		(4,322,406	)
Net unrealized appreciation	$	34,995,892
Federal income tax cost of investments	$	246,658,177

See Accompanying Notes to the Financial Statements.

56 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar US Market Factor Tilt Index Fund (cont.)

Investment in a company which was affiliated for the period ending April 30, 2013, was as follows:

Security	Value October 31, 2012		Purchases at Cost		Sales at Cost		Value April 30, 2013		Dividend Income		Realized Gain (Loss)
Northern Trust Corp.	$	63,356	$	45,532	$	1,425	$	117,761	$	991	$	488

Futures Contracts Purchased

FlexShares^® Morningstar US Market Factor Tilt Index Fund had the following open long futures contracts as of April 30, 2013:

	Number of Contracts		Expiration Date		Notional Amount at Value		Unrealized Appreciation
E-Mini S&P 500® Futures Contracts		8		06/21/13	$	636,880	$	29,434
E-Mini S&P MidCap 400® Futures Contracts		2		06/21/13		231,540		9,110
Mini Russell 2000® Futures Contracts		5		06/21/13		472,550		12,258
							$	50,802

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 57

Schedule of Investments

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund

April 30, 2013 (Unaudited)

	Shares		Value
COMMON STOCKS – 98.6%
Aerospace & Defense – 0.8%
BAE Systems PLC		17,443	$	101,942
Bombardier, Inc., Class A		800		3,165
Bombardier, Inc., Class B		10,985		43,684
CAE, Inc.		544		5,890
Chemring Group PLC		10,829		45,692
Cobham PLC		2,758		10,753
European Aeronautic Defence and Space Co. N.V.		2,817		148,947
Finmeccanica SpA*		838		4,366
Kongsberg Gruppen AS		903		17,097
Meggitt PLC		4,080		29,757
MTU Aero Engines Holding AG		245		23,205
QinetiQ Group PLC		1,474		4,345
Rolls-Royce Holdings PLC*		9,955		175,082
Saab AB, Class B		233		5,118
Safran S.A.		1,170		57,521
Singapore Technologies Engineering Ltd.		11,000		39,297
Thales S.A.		649		28,219
Ultra Electronics Holdings PLC		1,083		27,812
Zodiac Aerospace		182		22,836
				794,728
Air Freight & Logistics – 0.3%
Bollore S.A.		30		12,657
Deutsche Post AG		4,779		113,538
Freightways Ltd.		1,452		5,605
Goodpack Ltd.		11,000		15,004
Mainfreight Ltd.		2,379		21,510
Oesterreichische Post AG		116		5,146
Panalpina Welttransport Holding AG		30		2,923
PostNL NV*		23,204		52,863
The Shibusawa Warehouse Co. Ltd.		2,000		12,155
Singapore Post Ltd.		5,000		5,237
TNT Express NV		2,492		19,167
Toll Holdings Ltd.		1,936		11,455
Yamato Holdings Co. Ltd.		1,900		36,611
Yusen Logistics Co. Ltd.		400		4,205
				318,076

	Shares		Value
Airlines – 0.2%
Air Berlin PLC*		3,525	$	10,466
Air France-KLM*		1,677		17,016
Air New Zealand Ltd.		2,717		3,496
ANA Holdings, Inc.		8,000		17,411
Cathay Pacific Airways Ltd.		2,000		3,515
Deutsche Lufthansa AG		1,669		33,402
easyJet PLC		302		5,250
Finnair OYJ		4,086		13,467
International Consolidated Airlines Group S.A.*		6,610		27,983
Japan Airlines Co. Ltd.		200		10,143
Norwegian Air Shuttle AS*		303		14,579
Qantas Airways Ltd.*		1,868		3,684
SAS AB*		6,944		15,072
Singapore Airlines Ltd.		2,000		18,025
Skymark Airlines, Inc.*		500		1,848
Tiger Airways Holdings Ltd.*		16,800		9,003
Virgin Australia Holdings Ltd.*		9,609		4,538
				208,898
Auto Components – 1.7%
Aisin Seiki Co. Ltd.		900		32,476
Akebono Brake Industry Co. Ltd.		5,500		26,424
Brembo SpA		1,904		31,202
Bridgestone Corp.		3,600		135,818
Cie Generale des Etablissements Michelin		974		82,351
Continental AG*		543		64,545
Daido Metal Co. Ltd.		1,000		7,915
Denso Corp.		2,700		120,989
ElringKlinger AG		730		23,854
Exedy Corp.		1,800		45,088
Faurecia		2,766		51,418
Futaba Industrial Co. Ltd.		1,600		7,441
GKN PLC		8,949		38,275
G-Tekt Corp.		400		12,607
HI-LEX Corp.		1,300		27,892
Keihin Corp.		2,000		32,687
Kinugawa Rubber Industrial Co. Ltd.		3,000		15,707
Koito Manufacturing Co. Ltd.		1,000		19,320
KYB Co. Ltd.		9,000		49,061

See Accompanying Notes to the Financial Statements.

58 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Auto Components – (continued)
Leoni AG		1,765	$	79,664
Linamar Corp.		2,475		58,685
Magna International, Inc.		1,128		67,959
Martinrea International, Inc.*		4,368		37,042
Musashi Seimitsu Industry Co. Ltd.		1,800		43,406
NGK Spark Plug Co. Ltd.		1,000		16,846
NHK Spring Co. Ltd.		400		4,328
Nifco, Inc./Japan		200		4,560
Nippon Seiki Co. Ltd.		3,000		39,575
Nissin Kogyo Co. Ltd.		2,000		44,205
NOK Corp.		800		11,522
Nokian Renkaat OYJ		480		20,833
Pirelli & C. SpA		507		5,271
Plastic Omnium S.A.		1,359		66,419
Press Kogyo Co. Ltd.		5,000		25,562
Riken Corp.		7,000		28,241
Sanden Corp.		6,000		25,131
Showa Corp.		2,500		36,264
Stanley Electric Co. Ltd.		400		7,671
Sumitomo Rubber Industries Ltd.		1,600		29,516
Tachi-S Co. Ltd.		1,200		22,150
Tokai Rubber Industries Ltd.		2,700		30,296
Topre Corp.		2,000		18,602
Toyo Tire & Rubber Co. Ltd.		9,000		48,414
Toyoda Gosei Co. Ltd.		200		5,186
Toyota Industries Corp.		900		36,772
TPR Co. Ltd.		1,500		26,856
TS Tech Co. Ltd.		300		9,113
Valeo S.A.		370		21,512
Xinyi Glass Holdings Ltd.		10,000		6,842
The Yokohama Rubber Co. Ltd.		1,000		13,120
Yorozu Corp.		1,200		20,018
				1,736,651
Automobiles – 2.2%
Bayerische Motoren Werke AG		1,867		169,100
Daihatsu Motor Co. Ltd.		1,000		19,834
Daimler AG		4,906		271,756
FFP		130		5,269
Fiat SpA*		4,529		27,120
Fuji Heavy Industries Ltd.		3,000		56,668

	Shares		Value
Automobiles – (continued)
Honda Motor Co. Ltd.		9,000	$	358,023
Isuzu Motors Ltd.		9,000		59,963
Mazda Motor Corp.*		14,000		48,003
Mitsubishi Motors Corp.*		18,000		21,250
Nissan Motor Co. Ltd.		13,600		141,850
Peugeot S.A.*		488		3,912
Piaggio & C SpA		4,425		11,376
Renault S.A.		993		68,496
Suzuki Motor Corp.		1,900		48,724
Toyota Motor Corp.		15,000		868,494
Volkswagen AG		154		29,968
Yamaha Motor Co. Ltd.		2,000		27,882
				2,237,688
Beverages – 1.8%
Anheuser-Busch InBev N.V.		4,208		400,830
Asahi Group Holdings Ltd.		2,000		49,769
Britvic PLC		4,366		29,899
C&C Group PLC		3,999		24,885
Carlsberg A/S, Class B		568		52,783
Coca Cola Hellenic Bottling Co. S.A.*		901		22,249
Coca-Cola Amatil Ltd.		3,168		49,789
Coca-Cola Central Japan Co. Ltd.		1,500		22,636
Coca-Cola West Co. Ltd.		200		3,722
Corby Distilleries Ltd., Class A		238		4,813
Cott Corp.		2,918		32,114
Davide Campari-Milano SpA		2,464		20,043
Diageo PLC		13,096		400,315
Heineken Holding N.V.		540		32,507
Heineken N.V.		1,152		81,438
Ito En Ltd.		200		4,815
Kirin Holdings Co. Ltd.		5,000		87,619
Mikuni Coca-Cola Bottling Co. Ltd.		1,400		16,586
Molson Coors Canada, Inc., Class B		120		6,228
Pernod-Ricard S.A.		1,172		145,245
Remy Cointreau S.A.		137		15,969
Royal UNIBREW A/S		174		15,785
SABMiller PLC		5,034		271,754

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 59

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Beverages – (continued)
Sapporo Holdings Ltd.		2,000	$	9,096
Treasury Wine Estates Ltd.		3,352		20,320
				1,821,209
Biotechnology – 0.4%
Abcam PLC		3,224		22,028
Actelion Ltd.*		873		53,426
Active Biotech AB*		270		2,367
Algeta ASA*		597		20,273
Basilea Pharmaceutica*		88		4,869
CK Life Sciences International Holdings, Inc.		48,000		4,206
CSL Ltd.		2,730		178,421
Elan Corp. PLC*		2,403		27,737
Genmab A/S*		575		15,008
Genus PLC		993		20,942
Grifols S.A.*		813		32,660
Grifols S.A., Class B*		668		20,635
NicOx S.A.*		2,113		7,229
QLT, Inc.*		600		4,818
Swedish Orphan Biovitrum AB*		2,704		17,252
Takara Bio, Inc.		200		4,743
ThromboGenics NV*		137		6,699
Zeltia S.A.*		4,904		9,924
				453,237
Building Products – 0.8%
Asahi Glass Co. Ltd.		5,000		39,216
Assa Abloy AB, Class B		1,756		70,016
Belimo Holding AG		9		20,501
Central Glass Co. Ltd.		9,000		31,783
Cie de St-Gobain		2,169		87,089
Daikin Industries Ltd.		1,100		44,154
Geberit AG*		209		51,094
GWA Group Ltd.		1,512		4,065
Hills Holdings Ltd.		14,048		16,041
James Halstead PLC		912		4,116
Kingspan Group PLC		552		6,674
Lindab International AB		398		3,117
LIXIL Group Corp.		1,100		24,719
Nibe Industrier AB, Class B		1,208		19,744
Nichias Corp.		5,000		30,541

	Shares		Value
Building Products – (continued)
Nichiha Corp.		1,600	$	25,624
Nippon Sheet Glass Co. Ltd.*		49,000		56,339
Nitto Boseki Co. Ltd.		2,000		7,042
Noritz Corp.		1,800		38,158
Rockwool International A/S, Class B		82		10,839
Sankyo Tateyama, Inc.*		4,500		124,130
Sekisui Jushi Corp.		1,000		13,879
Takasago Thermal Engineering Co. Ltd.		400		3,154
TOTO Ltd.		1,000		10,369
Uponor OYJ		1,292		19,146
Wienerberger AG		3,084		38,017
				799,567
Capital Markets – 2.4%
3i Group PLC		3,034		15,517
Aberdeen Asset Management PLC		3,889		27,159
ABG Sundal Collier Holding ASA		12,905		9,415
AGF Management Ltd., Class B		2,200		25,153
Allied Properties HK Ltd.		54,000		8,489
ARA Asset Management Ltd.		15,200		23,386
Ashmore Group PLC		588		3,653
Avanza Bank Holding AB		174		3,837
Azimut Holding SpA		1,299		24,182
Banca Generali SpA		1,368		28,226
Bank Sarasin & Cie AG, Class B*		643		18,412
BinckBank NV		3,474		26,652
Boursorama*		690		5,513
Brederode S.A.		186		6,045
Canaccord Financial, Inc.		4,078		23,312
CI Financial Corp.		785		22,016
Close Brothers Group PLC		2,342		37,872
Credit Suisse Group AG*		8,041		223,152
Daiwa Securities Group, Inc.		9,000		79,735
Deutsche Bank AG		5,088		234,177
Dundee Corp., Class A*		2,342		87,710
EFG International AG*		1,165		15,614
F&C Asset Management PLC		11,846		18,068
Financiere de Tubize S.A.*		179		8,531

See Accompanying Notes to the Financial Statements.

60 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Capital Markets – (continued)
GAM Holding AG*		1,345	$	23,745
Gimv N.V.		148		7,625
GMP Capital, Inc.		600		3,197
Hargreaves Lansdown PLC		1,217		18,553
Henderson Group PLC		2,212		5,681
ICAP PLC		1,207		5,407
Ichiyoshi Securities Co. Ltd.		2,700		39,276
IGM Financial, Inc.		657		29,321
Intermediate Capital Group PLC		20,800		136,744
Investec PLC		3,291		23,306
IOOF Holdings Ltd.		3,394		31,074
Jafco Co. Ltd.		300		14,506
Julius Baer Group Ltd.*		1,046		41,707
Jupiter Fund Management PLC		4,862		25,010
kabu.com Securities Co. Ltd.		2,000		14,639
Macquarie Group Ltd.		1,856		75,504
Man Group PLC		4,673		7,433
Marusan Securities Co. Ltd.		1,200		10,176
Matsui Securities Co. Ltd.		1,300		16,348
Mediobanca SpA		3,062		19,482
MLP AG		523		3,717
Monex Group, Inc.		35		15,773
Nomura Holdings, Inc.		18,900		153,862
Okasan Securities Group, Inc.		3,000		37,635
Paris Orleans S.A.		1,181		30,440
Partners Group Holding AG		110		28,242
Perpetual Ltd.		693		29,638
Ratos AB, Class B		406		3,898
SBI Holdings, Inc./Japan		400		7,745
Schroders PLC		1,174		42,665
Sprott, Inc.		1,700		5,425
Sun Hung Kai & Co. Ltd.		30,000		20,991
SVG Capital PLC*		9,441		58,497
Tetragon Financial Group Ltd.		2,349		25,722
Tullett Prebon PLC		12,241		46,582
UBS AG*		19,976		356,964
Union Financiere de France BQE S.A.		774		17,041
Uranium Participation Corp.*		6,408		30,643
Value Partners Group Ltd.*		6,000		3,672

	Shares		Value
Capital Markets – (continued)
Verwaltungs- und Privat-Bank AG		129	$	10,346
Vontobel Holding AG		180		5,813
				2,459,871
Chemicals – 3.6%
Achilles Corp./Japan		11,000		15,809
ADEKA Corp.		4,700		42,267
Agrium, Inc.		909		83,458
Air Liquide S.A.		1,677		212,517
Air Water, Inc.		1,000		16,169
Akzo Nobel N.V.		1,278		77,135
Arkema S.A.		342		32,077
Asahi Kasei Corp.		9,000		60,425
AZ Electronic Materials S.A.		739		3,275
BASF SE		4,862		454,601
C Uyemura & Co. Ltd.		200		8,172
Canexus Corp.		3,680		34,501
Chr Hansen Holding A/S		237		8,550
Chugoku Marine Paints Ltd.		3,000		15,122
Clariant AG*		2,513		36,791
Croda International PLC		704		27,152
Daicel Corp.		1,000		8,059
Dainichiseika Color & Chemicals Manufacturing Co. Ltd.		4,000		18,643
Daiso Co. Ltd.		2,000		5,872
Denki Kagaku Kogyo KK		2,000		7,309
DIC Corp.		2,000		4,476
DuluxGroup Ltd.		6,454		31,421
Earth Chemical Co. Ltd.		400		14,146
Elementis PLC		7,867		32,263
EMS-Chemie Holding AG		53		15,333
Filtrona PLC		3,783		41,598
Frutarom Industries Ltd.		360		5,322
Fuchs Petrolub AG		89		7,291
Fujimi, Inc.		100		1,338
Givaudan S.A.*		45		57,936
H&R AG		1,125		13,708
Hexpol AB		536		30,182
Hitachi Chemical Co. Ltd.		200		3,131
Incitec Pivot Ltd.		7,743		23,229
Ishihara Sangyo Kaisha Ltd.*		23,000		20,306
Israel Chemicals Ltd.		2,640		31,413

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 61

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Chemicals – (continued)
The Israel Corp. Ltd.*		6	$	3,859
Johnson Matthey PLC		1,063		40,104
JSP Corp.		1,100		16,069
JSR Corp.		500		11,513
K+S AG		947		41,913
Kaneka Corp.		1,000		6,016
Kansai Paint Co. Ltd.		1,000		12,822
Kemira OYJ		222		3,363
Koninklijke DSM N.V.		884		57,026
Koninklijke Ten Cate NV		1,558		37,867
Kuraray Co. Ltd.		2,000		30,366
Kureha Corp.		7,000		24,720
Lanxess AG		441		32,152
Lee & Man Chemical Co. Ltd.		8,000		3,711
Linde AG		992		187,808
LyondellBasell Industries N.V., Class A		1,900		115,330
Methanex Corp.		646		27,424
Mitsubishi Chemical Holdings Corp.		5,500		26,763
Mitsubishi Gas Chemical Co. Inc.		3,000		22,913
Mitsui Chemicals, Inc.		2,000		4,620
Nihon Nohyaku Co. Ltd.		2,000		19,033
Nippon Kayaku Co. Ltd.		1,000		14,413
Nippon Paint Co. Ltd.		1,000		11,857
Nippon Shokubai Co. Ltd.		1,000		9,814
Nippon Soda Co. Ltd.		9,000		41,854
The Nippon Synthetic Chemical Industry Co. Ltd.		2,000		19,197
Nissan Chemical Industries Ltd.		200		2,593
Nitto Denko Corp.		900		59,132
NOF Corp.		9,000		48,414
Novozymes A/S, Class B		1,379		47,674
Nufarm Ltd./Australia		4,745		20,687
Nuplex Industries Ltd.		9,865		28,181
Orica Ltd.		2,178		51,661
Potash Corp. of Saskatchewan, Inc.		4,662		196,519
Sakai Chemical Industry Co. Ltd.		3,000		9,424
Sanyo Chemical Industries Ltd.		3,000		17,709

	Shares		Value
Chemicals – (continued)
Sateri Holdings Ltd.		12,000	$	2,814
Shin-Etsu Chemical Co. Ltd.		2,000		134,688
Shin-Etsu Polymer Co. Ltd.		3,800		14,083
Showa Denko KK		2,000		3,223
Sika AG		11		26,584
Solvay S.A.		271		39,766
Sumitomo Bakelite Co. Ltd.		10,000		40,550
Sumitomo Chemical Co. Ltd.		9,000		30,120
Symrise AG		524		22,383
Syngenta AG		513		219,459
Taiyo Holdings Co. Ltd.		200		6,314
Taiyo Nippon Sanso Corp.		1,000		6,632
Takasago International Corp.		4,000		21,353
Teijin Ltd.		2,000		4,804
Tessenderlo Chemie NV		745		21,088
Tikkurila Oyj		399		8,574
Tokai Carbon Co. Ltd.		10,000		33,775
Tokuyama Corp.		3,000		8,069
Toray Industries, Inc.		9,000		63,197
Tosoh Corp.		2,000		6,591
Toyobo Co. Ltd.		2,000		3,490
Ube Industries Ltd./Japan		2,000		4,045
Umicore S.A.		523		24,237
Victrex PLC		1,424		35,572
Wacker Chemie AG		136		10,403
Yara International ASA		1,010		47,368
Yule Catto & Co. PLC		14,941		46,718
Zeon Corp.		1,000		10,748
				3,702,166
Commercial Banks – 11.3%
The 77 Bank Ltd.		1,000		5,944
The Aichi Bank Ltd.		100		5,718
The Akita Bank Ltd.		9,000		25,038
Aktia OYJ, Class A		2,028		17,379
Alpha Bank AE*		3,501		4,436
The Aomori Bank Ltd.		10,000		29,771
Aozora Bank Ltd.		8,000		25,049
Australia & New Zealand Banking Group Ltd.		14,474		478,388
Banca Carige SpA		16,096		11,714
Banca Monte dei Paschi di Siena SpA*		11,030		3,111

See Accompanying Notes to the Financial Statements.

62 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Commercial Banks – (continued)
Banca Piccolo Credito Valtellinese Scarl		25,653	$	32,130
Banca Popolare dell’Emilia Romagna Scrl		747		6,333
Banca Popolare di Milano Scarl*		5,794		3,873
Banca Popolare di Sondrio SCARL*		804		4,666
Banco Bibao Vizcaya Argentaria S.A.*		28,342		275,388
Banco Bilbao Vizcaya Argentaria S.A.*^		506		4,917
Banco BPI S.A.*		9,348		13,434
Banco Comercial Portugues S.A., Class R*		152,652		21,132
Banco de Sabadell S.A.		15,765		32,819
Banco Espirito Santo S.A.*		3,658		4,191
Banco Popolare SC*		4,982		7,192
Banco Popular Espanol S.A.		22,845		17,800
Banco Santander S.A.*		55,677		403,064
Banco Santander S.A.*^		1,637		11,851
Bank Hapoalim BM*		8,922		41,454
Bank Leumi Le-Israel BM*		9,082		32,237
Bank of East Asia Ltd.		7,540		30,993
Bank of Greece		147		2,616
The Bank of Iwate Ltd.		900		38,713
The Bank of Kyoto Ltd.		1,000		10,512
Bank of Montreal		3,467		217,806
The Bank of Nagoya Ltd.		2,000		9,486
Bank of Nova Scotia		6,158		355,638
The Bank of Okinawa Ltd.		400		19,423
Bank of Queensland Ltd.		528		5,497
Bank of the Ryukyus Ltd.		300		4,432
The Bank of Yokohama Ltd.		9,000		54,697
Bankia S.A.*		16		84
Bankinter S.A.*		1,633		6,020
Bankinter S.A.*^		905		3,336
Banque Cantonale Vaudoise		8		4,431
Barclays PLC		63,586		283,090
Bendigo and Adelaide Bank Ltd.		2,756		31,641
Berner Kantonalbank AG		22		6,140
BNP Paribas S.A.		5,256		293,188
CaixaBank		7,355		27,258
Canadian Imperial Bank of Commerce/Canada		2,171		173,900

	Shares		Value
Commercial Banks – (continued)
Canadian Western Bank		176	$	4,980
The Chiba Bank Ltd.		4,000		31,044
The Chiba Kogyo Bank Ltd.*		1,900		17,243
The Chugoku Bank Ltd.		1,000		17,411
Comdirect Bank AG		411		4,362
Commerzbank AG*		2,008		27,043
Commonwealth Bank of Australia		8,616		656,925
Credit Agricole S.A.*		5,365		49,166
Credito Bergamasco SpA		336		5,644
Credito Emiliano SpA		4,097		23,442
Dah Sing Banking Group Ltd.		22,000		32,374
Dah Sing Financial Holdings Ltd.		7,200		37,806
Danske Bank A/S*		3,711		70,218
DBS Group Holdings Ltd.		10,000		136,078
Dexia S.A.*		47,953		3,161
DNB ASA*		5,330		87,259
The Ehime Bank Ltd.		2,000		5,153
The Eighteenth Bank Ltd.		9,000		23,191
Erste Group Bank AG*		1,128		35,394
Espirito Santo Financial Group S.A.*		5,769		39,855
Eurobank Ergasias S.A.*		7,808		2,018
The Fukui Bank Ltd.		13,000		27,225
Fukuoka Financial Group, Inc.		2,000		10,225
The Governor & Co. of the Bank of Ireland*		117,954		26,281
The Gunma Bank Ltd.		2,000		12,709
The Hachijuni Bank Ltd.		2,000		13,592
Hang Seng Bank Ltd.		4,500		75,265
The Higashi-Nippon Bank Ltd.		8,000		20,285
The Hiroshima Bank Ltd.		2,000		10,533
The Hokuetsu Bank Ltd.		9,000		21,158
Hokuhoku Financial Group, Inc.		2,000		4,661
HSBC Holdings PLC		99,807		1,092,814
Intesa Sanpaolo SpA		57,495		103,764
Israel Discount Bank Ltd., Class A*		3,293		5,526
The Iyo Bank Ltd.		1,000		10,471
The Joyo Bank Ltd.		4,000		24,556
Jyske Bank A/S*		130		5,064
Kansai Urban Banking Corp.		18,000		24,576
KBC Groep N.V.		1,440		56,575
Kiyo Holdings, Inc.		8,000		13,962

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 63

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Commercial Banks – (continued)
Laurentian Bank of Canada		1,650	$	72,522
Liechtensteinische Landesbank AG		607		25,549
Lloyds Banking Group PLC*		227,512		192,382
The Michinoku Bank Ltd.		8,000		19,382
The Mie Bank Ltd.		2,000		4,804
The Minato Bank Ltd.		2,000		3,675
Mitsubishi UFJ Financial Group, Inc.		68,700		467,592
The Miyazaki Bank Ltd.		9,000		26,609
Mizrahi Tefahot Bank Ltd.*		506		5,174
Mizuho Financial Group, Inc.		123,400		272,364
The Musashino Bank Ltd.		300		12,750
The Nanto Bank Ltd.		1,000		4,414
National Australia Bank Ltd.		12,258		432,630
National Bank of Canada		903		68,363
National Bank of Greece S.A.*		2,586		2,165
Natixis		5,282		23,189
The Nishi-Nippon City Bank Ltd.		2,000		6,673
Nordea Bank AB		13,475		161,642
The Oita Bank Ltd.		9,000		35,109
Oversea-Chinese Banking Corp. Ltd.		15,000		132,140
Piraeus Bank S.A.*		59,106		16,520
Raiffeisen Bank International AG		308		10,881
Resona Holdings, Inc.		9,000		48,044
Ringkjoebing Landbobank A/S		102		16,775
Royal Bank of Canada		7,778		469,997
Royal Bank of Scotland Group PLC*		10,134		48,311
Senshu Ikeda Holdings, Inc.		400		2,115
Seven Bank Ltd.		1,000		3,552
The Shiga Bank Ltd.		1,000		7,042
The Shikoku Bank Ltd.		2,000		6,098
The Shimizu Bank Ltd.		200		5,930
Shinsei Bank Ltd.		8,000		22,421
The Shizuoka Bank Ltd.		3,000		36,711
Skandinaviska Enskilda Banken AB, Class A		7,615		78,230
Societe Generale S.A.*		3,987		144,973
Spar Nord Bank A/S*		5,438		35,003
SpareBank 1 SMN		6,516		55,460

	Shares		Value
Commercial Banks – (continued)
Standard Chartered PLC		13,014	$	327,523
Sumitomo Mitsui Financial Group, Inc.		7,200		340,376
Sumitomo Mitsui Trust Holdings, Inc.		18,000		90,360
Suruga Bank Ltd.		1,000		17,678
Svenska Handelsbanken AB, Class A		2,656		120,795
Swedbank AB		5,068		124,877
Sydbank A/S*		1,578		35,997
The Tochigi Bank Ltd.		6,000		24,330
The Toho Bank Ltd.		4,000		12,524
The Tokyo Tomin Bank Ltd.		2,500		34,853
TOMONY Holdings, Inc.		6,600		27,102
The Toronto-Dominion Bank		4,897		402,091
The Towa Bank Ltd.		16,000		18,561
The Tsukuba Bank Ltd.		5,400		26,720
UniCredit SpA*		23,114		120,675
Unione di Banche Italiane SCPA		4,896		20,462
United Overseas Bank Ltd.		7,000		121,341
Valiant Holding*		409		38,349
Westpac Banking Corp.		16,239		569,763
Wing Hang Bank Ltd.		500		5,254
The Yachiyo Bank Ltd.		1,200		44,780
The Yamagata Bank Ltd.		1,000		4,958
Yamaguchi Financial Group, Inc.		1,000		10,851
The Yamanashi Chuo Bank Ltd.		2,000		9,280
Zuger Kantonalbank AG		4		21,465
				11,515,095
Commercial Services & Supplies – 1.1%
Aggreko PLC		1,503		41,686
Babcock International Group PLC		1,776		29,577
Berendsen PLC		3,072		36,983
Bilfinger SE		255		25,584
Black Diamond Group Ltd.		1,100		23,152
Brambles Ltd.		9,326		84,417
Cabcharge Australia Ltd.		692		3,434
Dai Nippon Printing Co. Ltd.		3,000		29,350
Daiseki Co. Ltd.		300		5,744
De La Rue PLC		1,721		24,951
Derichebourg S.A.*		4,118		16,662
Downer EDI Ltd.		890		4,536

See Accompanying Notes to the Financial Statements.

64 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Commercial Services & Supplies – (continued)
Duskin Co. Ltd.		200	$	4,061
Edenred		1,038		34,596
G4S PLC		6,365		30,988
Gategroup Holding AG*		636		12,324
Homeserve PLC		4,681		15,256
Horizon North Logistics, Inc.		842		4,981
Intrum Justitia AB		1,613		33,266
Kaba Holding AG, Class B*		57		22,335
Lassila & Tikanoja OYJ*		204		3,617
Loomis AB, Class B		1,396		27,227
Matsuda Sangyo Co. Ltd.		800		11,588
Mineral Resources Ltd.		367		3,714
Mitie Group PLC		5,833		25,075
Mitsubishi Pencil Co. Ltd.		200		4,236
Moshi Moshi Hotline, Inc.		200		2,961
Newalta Corp.		1,609		22,187
Nissha Printing Co. Ltd.		1,300		20,939
Okamura Corp.		1,000		7,586
Oyo Corp.		1,100		18,034
Park24 Co. Ltd.		700		14,121
PayPoint PLC		1,283		16,264
Pilot Corp.		4		16,302
Progressive Waste Solutions Ltd.		824		18,391
Prosegur Cia de Seguridad S.A.		502		2,806
Regus PLC		34,633		88,293
Rentokil Initial PLC		3,855		5,691
Ritchie Bros Auctioneers, Inc.		166		3,367
RPS Group PLC		1,976		7,670
Salmat Ltd.		3,131		6,598
Sato Holdings Corp.		1,100		23,059
Seche Environnement S.A.		94		3,735
Secom Co. Ltd.		1,000		55,846
Securitas AB, Class B		757		7,426
Serco Group PLC		3,708		35,694
Shanks Group PLC		2,768		3,522
Societe BIC S.A.		209		22,327
Tokyu Community Corp.		200		10,389
Tomra Systems ASA		799		7,494
Toppan Printing Co. Ltd.		3,000		22,852
Transcontinental, Inc., Class A		3,584		46,214
Transfield Services Ltd.		27,136		44,929

	Shares		Value
Commercial Services & Supplies – (continued)
Transpacific Industries Group Ltd.*		16,864	$	16,981
				1,111,018
Communications Equipment – 0.5%
AAC Technologies Holdings, Inc.		3,500		17,070
Aastra Technologies Ltd.		300		5,637
Alcatel-Lucent*		16,600		22,783
Axis Communications AB		894		24,570
Denki Kogyo Co. Ltd.		2,000		9,280
EVS Broadcast Equipment S.A.		86		5,839
Hitachi Kokusai Electric, Inc.		1,000		11,765
Japan Radio Co. Ltd.*		1,000		3,788
Nokia OYJ		20,106		67,436
Pace PLC		5,889		22,758
RADWARE Ltd.*		800		11,992
Research In Motion Ltd.*		2,196		36,023
Sierra Wireless, Inc.*		900		9,968
Spirent Communications PLC		12,043		24,460
Telefonaktiebolaget LM Ericsson, Class A		566		6,864
Telefonaktiebolaget LM Ericsson, Class B		16,075		200,902
TKH Group NV		328		8,908
VTech Holdings Ltd.		1,900		24,238
Wi-Lan, Inc.		1,838		7,273
				521,554
Computers & Peripherals – 0.3%
Bull*		1,662		5,347
Eizo Corp.		500		8,654
Fujitsu Ltd.		10,000		41,988
Gemalto N.V.		407		33,290
Japan Digital Laboratory Co. Ltd.		1,800		22,137
Logitech International S.A.*		3,059		19,494
Melco Holdings, Inc.		1,100		18,136
NEC Corp.		14,000		36,362
Seiko Epson Corp.		900		10,320
Toshiba Corp.		23,000		126,794
Wacom Co. Ltd./Japan		1		4,573
Wincor Nixdorf AG		543		28,607
				355,702

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 65

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Construction & Engineering – 1.5%
Abengoa S.A.		261	$	699
ACS Actividades de Construccion y Servicios S.A.		380		9,782
Aecon Group, Inc.		3,105		38,278
Arcadis N.V.		894		24,758
Ausdrill Ltd.		13,934		21,913
Ausenco Ltd.		2,356		6,774
Balfour Beatty PLC		1,738		5,840
Bird Construction, Inc.		258		3,353
Boart Longyear Ltd.		25,480		25,259
Bouygues S.A.		885		24,724
Cardno Ltd.		3,365		22,740
Carillion PLC		5,329		22,245
Chiyoda Corp.		1,000		10,256
Chudenko Corp.		2,300		23,375
Cie d’Entreprises CFE		354		21,562
Colas S.A.		20		3,006
COMSYS Holdings Corp.		300		3,973
Eiffage S.A.		82		3,634
Elecnor S.A.		2,973		33,826
Ellaktor S.A.*		6,332		17,281
Ferrovial S.A.		2,044		33,860
FLSmidth & Co. A/S		140		8,153
Fomento de Construcciones y Contratas SA		2,880		29,886
Galliford Try PLC		4,115		63,117
Genivar, Inc.		1,072		26,644
Hibiya Engineering Ltd.		1,100		10,773
Hochtief AG*		86		5,975
Impregilo SpA		3,756		19,748
Interserve PLC		7,093		52,195
JGC Corp.		1,000		29,617
Kajima Corp.		6,000		19,156
Keller Group PLC		554		7,411
Kier Group PLC		1,206		21,999
Koninklijke BAM Groep NV		12,808		56,737
Koninklijke Boskalis Westminster NV		750		31,271
Kyudenko Corp.		1,000		4,681
Leighton Holdings Ltd.		1,172		24,320
Lemminkainen OYJ		186		3,699
Macmahon Holdings Ltd.		60,466		11,298

	Shares		Value
Construction & Engineering – (continued)
Maeda Corp.		8,000	$	38,271
Mirait Holdings Corp.		2,800		30,239
Monadelphous Group Ltd.		156		3,389
Morgan Sindall Group PLC		3,143		28,128
NCC AB, Class B		218		5,170
Nippon Densetsu Kogyo Co. Ltd.		3,000		33,662
Nishimatsu Construction Co. Ltd.		14,000		26,732
NRW Holdings Ltd.		12,772		17,235
Obayashi Corp.		2,000		12,299
Okumura Corp.		2,000		8,090
Outotec OYJ		360		5,259
Peab AB		10,549		59,124
Penta-Ocean Construction Co. Ltd.		8,500		21,815
Royal Imtech NV*		174		1,936
Sacyr Vallehermoso S.A.*		11,054		23,026
Sanki Engineering Co. Ltd.		2,000		11,375
Shikun & Binui Ltd.		12,330		25,799
Shimizu Corp.		2,000		8,048
SHO-BOND Holdings Co. Ltd.		200		8,439
Skanska AB, Class B		2,162		36,806
SNC-Lavalin Group, Inc.		900		38,904
SOCAM Development Ltd.		20,000		28,812
Sweco AB, Class B		1,854		22,340
Taihei Dengyo Kaisha Ltd.		1,000		6,088
Taikisha Ltd.		600		13,582
Taisei Corp.		7,000		23,355
Toyo Engineering Corp.		3,000		14,352
Trevi Finanziaria Industriale SpA		574		4,389
UGL Ltd.		334		3,488
United Engineers Ltd.		12,000		30,593
Veidekke ASA		2,458		19,426
Vinci S.A.		2,637		127,105
YIT OYJ		218		4,124
Yokogawa Bridge Holdings Corp.		1,000		10,512
Yurtec Corp.		1,000		3,131
				1,538,861
Construction Materials – 0.5%
Adelaide Brighton Ltd.		932		3,289
Boral Ltd.		4,399		22,832
Buzzi Unicem SpA		811		12,414

See Accompanying Notes to the Financial Statements.

66 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Construction Materials – (continued)
Cementir Holding SpA		1,815	$	5,121
Cimpor Cimentos de Portugal SGPS S.A.		521		2,349
CRH PLC		3,972		85,489
Fletcher Building Ltd.		3,512		26,633
HeidelbergCement AG		747		53,841
Holcim Ltd.*		1,155		90,080
Imerys S.A.		76		4,985
Italcementi SpA		3,175		11,638
Italmobiliare SpA*		778		13,794
James Hardie Industries PLC		2,550		26,841
Lafarge S.A.		974		62,993
Marshalls PLC		1,746		3,458
RHI AG		529		17,502
Sumitomo Osaka Cement Co. Ltd.		3,000		8,993
Taiheiyo Cement Corp.		11,000		28,570
Titan Cement Co. S.A.*		479		8,904
				489,726
Consumer Finance – 0.2%
Acom Co. Ltd.*		80		3,269
AEON Financial Service Co. Ltd.		500		14,993
Aiful Corp.*		3,250		37,068
Credit Saison Co. Ltd.		1,000		29,227
FlexiGroup Ltd./Australia		3,498		15,251
Hong Leong Finance Ltd.		2,000		4,514
International Personal Finance PLC		3,573		28,361
J Trust Co. Ltd.		400		16,384
Jaccs Co. Ltd.		6,000		41,269
Orient Corp.*		4,000		13,838
Provident Financial PLC		858		21,754
				225,928
Containers & Packaging – 0.3%
Amcor Ltd.		7,021		72,080
BillerudKorsnas AB		2,448		24,203
Cascades, Inc.		4,900		23,968
CCL Industries, Inc., Class B		696		43,565
DS Smith PLC		6,384		23,181
Fuji Seal International, Inc.		900		25,343

	Shares		Value
Containers & Packaging – (continued)
Huhtamaki OYJ		318	$	5,962
Rengo Co. Ltd.		2,000		9,671
Rexam PLC		3,952		31,769
RPC Group PLC		3,214		19,899
Smurfit Kappa Group PLC		1,115		16,567
Toyo Seikan Group Holdings Ltd.		400		5,478
Winpak Ltd.		210		3,913
				305,599
Distributors – 0.3%
Breville Group Ltd.		568		4,116
D’ieteren SA/NV		182		8,398
Doshisha Co. Ltd.		1,800		28,383
Headlam Group PLC		560		2,998
Inchcape PLC		1,049		8,180
Jardine Cycle & Carriage Ltd.		1,000		39,540
Li & Fung Ltd.		28,000		36,224
Pacific Brands Ltd.		51,363		45,853
Paltac Corp.		1,500		19,480
Silver base Group Holdings Ltd.		39,000		8,995
Smiths News PLC		9,713		27,136
Uni-Select Inc.		1,505		30,972
				260,275
Diversified Consumer Services – 0.1%
Benesse Holdings, Inc.		400		17,719
EnerCare, Inc.		424		3,963
Invocare Ltd.		2,685		32,526
Navitas Ltd.		2,131		11,967
				66,175
Diversified Financial Services – 1.2%
Ackermans & van Haaren NV		96		8,180
ASX Ltd.		1,028		40,134
Banque Nationale de Belgique		10		36,322
Bolsas y Mercados Espanoles S.A.		1,353		36,746
Challenger Ltd./Australia		1,140		4,970
Davis & Henderson Corp.		1,109		25,954
Deutsche Boerse AG		965		60,305
Eurazeo		74		3,924
Exor SpA		152		4,609

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 67

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Diversified Financial Services – (continued)
Fimalac*		68	$	3,640
First Pacific Co. Ltd./Hong Kong		16,000		22,143
Fuyo General Lease Co. Ltd.		900		40,930
Grenkeleasing AG		54		4,336
Groupe Bruxelles Lambert S.A.		477		36,978
HAL Trust		379		48,968
Henex		68		4,527
Hong Kong Exchanges and Clearing Ltd.		5,500		92,557
IBJ Leasing Co. Ltd.		900		31,598
IG Group Holdings PLC		2,763		23,157
Industrivarden AB, Class C		296		5,533
ING Groep N.V.*		20,691		170,003
Investment AB Kinnevik, Class B		1,181		30,888
Investor AB, Class A		877		25,390
Investor AB, Class B		2,172		64,088
Japan Exchange Group Inc.		100		12,278
Japan Securities Finance Co. Ltd.		4,500		44,256
KBC Ancora*		1,377		26,161
London Stock Exchange Group PLC		1,194		24,920
Lundbergforetagen AB, Class B		678		26,457
Marfin Investment Group Holdings S.A.*		31,167		13,765
Mitsubishi UFJ Lease & Finance Co. Ltd.		5,300		29,871
Onex Corp.		262		13,089
ORIX Corp.		5,500		84,468
Pacific Century Regional Developments Ltd.*		49,000		8,355
Pargesa Holding S.A.		70		4,883
Pohjola Bank PLC, Class A		274		4,667
Public Financial Holdings Ltd.		10,000		5,090
Ricoh Leasing Co. Ltd.		1,100		33,821
Singapore Exchange Ltd.		3,000		18,220
SNS REAAL NV*^		2,857		–
Sofina S.A.		46		4,382
TMX Group Ltd.		425		22,411
Wendel S.A.		76		8,242
				1,211,216

	Shares		Value
Diversified Telecommunication Services – 2.1%
BCE, Inc.		1,380	$	64,743
Belgacom S.A.		812		18,735
Bell Aliant Inc.		118		3,160
Bezeq The Israeli Telecommunication Corp. Ltd.		12,446		18,060
BT Group PLC		40,881		175,738
Cable & Wireless Communications PLC		134,768		88,684
Colt Group S.A.*		20,917		37,439
Deutsche Telekom AG		14,887		176,290
Elisa OYJ		439		8,334
France Telecom S.A.		10,080		107,964
Hellenic Telecommunications Organization SA*		545		4,742
HKT Trust / HKT Ltd.		11,000		11,552
Hutchison Telecommunications Hong Kong Holdings Ltd.		26,000		13,870
Iliad S.A.		105		24,032
Inmarsat PLC		3,160		35,534
Jazztel PLC*		3,250		24,466
Koninklijke KPN N.V.		6,519		13,605
Manitoba Telecom Services, Inc.		700		22,729
Nippon Telegraph & Telephone Corp.		2,400		118,879
PCCW Ltd.		31,000		15,778
Portugal Telecom SGPS S.A.		4,044		21,119
Singapore Telecommunications Ltd.		46,000		146,779
Swisscom AG		101		47,600
TalkTalk Telecom Group PLC		5,820		22,709
TDC A/S		3,956		32,124
Telecom Corp of New Zealand Ltd.		4,251		9,500
Telecom Italia SpA		53,535		45,348
Telefonica Deutschland Holding AG*		679		5,394
Telefonica S.A.		21,287		312,642
Telekom Austria AG		364		2,498
Telenor ASA		3,972		89,416
TeliaSonera AB		11,954		82,345
Telstra Corp. Ltd.		23,204		119,953
TELUS Corp.		2,404		86,638

See Accompanying Notes to the Financial Statements.

68 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Diversified Telecommunication Services – (continued)
Vivendi S.A.		7,065	$	160,209
Ziggo NV		462		16,577
				2,185,185
Electric Utilities – 1.1%
Acciona S.A.		52		3,411
Cheung Kong Infrastructure Holdings Ltd.		3,000		21,764
Chubu Electric Power Co. Inc.		3,600		46,603
The Chugoku Electric Power Co. Inc.		1,300		18,644
CLP Holdings Ltd.		10,000		88,138
Contact Energy Ltd.		4,950		22,421
EDP – Energias de Portugal S.A.		8,003		27,539
Electricite de France S.A.		1,567		35,059
Emera Inc.		900		33,017
Endesa S.A.		208		4,726
Enel SpA		34,913		135,142
Fortis, Inc.		945		32,836
Fortum OYJ		2,170		40,368
Hokkaido Electric Power Co. Inc.*		400		5,071
Hokuriku Electric Power Co.		1,100		16,193
Iberdrola S.A.		22,728		122,555
The Kansai Electric Power Co. Inc.*		3,900		47,564
Kyushu Electric Power Co. Inc.*		1,900		26,234
The Okinawa Electric Power Co. Inc.		700		25,870
Power Assets Holdings Ltd.		7,000		68,371
Public Power Corp. S.A.*		1,519		14,739
Red Electrica Corp. S.A.		488		25,986
Repower AG		33		4,789
Romande Energie Holding S.A.		7		7,535
Shikoku Electric Power Co. Inc.*		1,000		18,119
SP AusNet		3,135		4,084
Spark Infrastructure Group		8,516		15,824
SSE PLC		5,160		125,043
Terna Rete Elettrica Nazionale SpA		7,084		33,193
Tohoku Electric Power Co. Inc.*		2,600		27,812
Tokyo Electric Power Co. Inc.*		7,600		33,549
Verbund AG		146		3,200
				1,135,399

	Shares		Value
Electrical Equipment – 1.2%
ABB Ltd.*		12,306	$	278,854
Alstom S.A.		1,162		47,737
Areva S.A.*		411		6,229
Cosel Co. Ltd.		700		8,041
Daihen Corp.		5,000		15,193
Endo Lighting Corp.		200		8,110
Fuji Electric Co. Ltd.		2,000		6,837
Fujikura Ltd.		4,000		14,988
Furukawa Electric Co. Ltd.		5,000		12,627
Futaba Corp./Chiba		400		5,572
Gamesa Corp. Tecnologica S.A.		9,235		36,173
GS Yuasa Corp.		1,000		4,240
Hitachi Cable Ltd.		12,000		20,819
Huber & Suhner AG		90		4,399
Idec Corp./Japan		2,700		24,059
Legrand S.A.		1,325		61,813
Mersen		831		19,228
Mitsubishi Electric Corp.		10,000		95,267
Nexans S.A.		1,226		56,322
Nidec Corp.		800		54,450
Nippon Signal Co. Ltd.		2,600		20,953
Nissin Electric Co. Ltd.		1,000		4,979
Nitto Kogyo Corp.		1,300		19,338
Nordex SE*		1,750		13,172
Ormat Industries*		985		5,849
Phoenix Mecano AG		18		9,112
Prysmian SpA		882		17,826
Schneider Electric S.A.		2,799		213,663
SGL Carbon SE		568		19,418
Sinfonia Technology Co. Ltd.		3,000		5,112
Sumitomo Electric Industries Ltd.		3,600		47,823
SWCC Showa Holdings Co. Ltd.*		9,000		9,332
Tatsuta Electric Wire and Cable Co. Ltd.		1,000		7,135
Ushio, Inc.		400		4,073
Vacon PLC		308		21,148
Vestas Wind Systems A/S*		3,844		33,349
Zumtobel AG		2,173		24,360
				1,257,600
Electronic Equipment, Instruments & Components – 1.4%
Alps Electric Co. Ltd.		1,200		9,128
Amano Corp.		600		6,412

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 69

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Electronic Equipment, Instruments & Components – (continued)
Anritsu Corp.		1,000	$	14,937
Azbil Corp.		300		6,474
Barco N.V.		594		52,900
Canon Electronics, Inc.		1,000		20,357
Celestica Inc.*		10,701		92,557
Citizen Holdings Co. Ltd.		800		4,722
Dai-ichi Seiko Co. Ltd.		200		2,928
Daiwabo Holdings Co. Ltd.		9,000		17,000
Domino Printing Sciences PLC		2,246		23,316
Elec & Eltek International Co. Ltd.		4,000		9,360
Electrocomponents PLC		7,443		27,849
Enplas Corp.		100		5,811
Evertz Technologies Ltd.		300		4,668
Foxconn International Holdings Ltd.*		5,000		1,933
FUJIFILM Holdings Corp.		2,700		55,380
Halma PLC		895		6,972
Hamamatsu Photonics KK		200		8,223
Hexagon AB, Class B		1,760		50,327
Hirose Electric Co. Ltd.		100		14,372
Hitachi High-Technologies Corp.		200		4,983
Hitachi Ltd.		27,000		172,405
Horiba Ltd.		300		10,841
Hosiden Corp.		3,500		19,977
Hoya Corp.		2,000		39,996
Ibiden Co. Ltd.		700		12,252
Ingenico		64		4,294
Japan Aviation Electronics Industry Ltd.		3,000		25,870
Jenoptik AG		470		5,397
Kaga Electronics Co. Ltd.		400		3,277
Kapsch TrafficCom AG		121		5,950
Keyence Corp.		300		95,165
Koa Corp.		900		9,692
Kudelski S.A.*		266		3,350
Kyocera Corp.		900		91,562
Laird PLC		2,340		7,907
Maruwa Co. Ltd./Aichi		200		6,092
Mitsumi Electric Co. Ltd.*		3,700		21,157
Murata Manufacturing Co. Ltd.		1,000		81,409
Nichicon Corp.		400		4,205

	Shares		Value
Electronic Equipment, Instruments & Components – (continued)
Nihon Dempa Kogyo Co. Ltd.		400	$	3,967
Nippon Ceramic Co. Ltd.		400		6,948
Nippon Electric Glass Co. Ltd.		2,000		10,184
Oki Electric Industry Co. Ltd.*		37,000		71,030
Omron Corp.		1,200		37,881
Orbotech Ltd.*		400		4,100
Oxford Instruments PLC		973		23,321
Premier Farnell PLC		3,472		11,429
Renishaw PLC		146		3,740
Ryosan Co. Ltd.		1,900		34,427
Sanshin Electronics Co. Ltd.		600		3,782
Shimadzu Corp.		1,000		7,309
Spectris PLC		673		22,101
Star Micronics Co. Ltd.		3,100		36,025
Taiyo Yuden Co. Ltd.		800		11,572
TDK Corp.		700		25,583
Topcon Corp.		400		4,464
Toyo Corp./Chuo-ku		700		10,053
Venture Corp. Ltd.		1,000		6,755
Yaskawa Electric Corp.		1,000		12,206
Yokogawa Electric Corp.		400		4,065
				1,412,349
Energy Equipment & Services – 1.1%
Aker Solutions ASA		1,277		17,856
AMEC PLC		1,305		20,575
Archer Ltd.*		12,604		8,254
Bourbon S.A.		668		18,239
BW Offshore Ltd.		19,432		18,362
Calfrac Well Services Ltd.		1,883		47,906
Canadian Energy Services & Technology Corp.		500		6,149
Canyon Services Group, Inc.		2,799		29,191
Cie Generale de Geophysique – Veritas*		722		15,654
DOF ASA*		1,273		5,462
Enerflex Ltd.		2,040		28,191
Ensign Energy Services, Inc.		254		4,283
Ezion Holdings Ltd.		12,000		19,876
Ezra Holdings Ltd.*		12,000		9,304
Farstad Shipping ASA		1,218		25,811
Fred Olsen Energy ASA		56		2,441

See Accompanying Notes to the Financial Statements.

70 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Energy Equipment & Services – (continued)
Fugro N.V.		358	$	20,732
Hunting PLC		2,251		28,273
Japan Drilling Co. Ltd.		100		6,632
John Wood Group PLC		1,494		18,021
Kvaerner ASA		6,987		11,784
Lamprell PLC		8,402		18,896
Miclyn Express Offshore Ltd.		1,766		3,593
Modec, Inc.		100		2,873
Mullen Group Ltd.		180		3,912
Pason Systems, Inc.		1,101		18,882
Petrofac Ltd.		1,280		26,894
Petroleum Geo-Services ASA		542		7,946
Precision Drilling Corp.		446		3,623
Prosafe SE		404		3,884
Saipem SpA		1,407		39,882
Savanna Energy Services Corp.		5,031		35,262
SBM Offshore NV*		1,577		25,407
Schoeller-Bleckmann Oilfield Equipment AG		202		19,777
Seadrill Ltd.		1,929		73,949
Secure Energy Services, Inc.		2,828		36,522
ShawCor Ltd.		274		11,024
Shinko Plantech Co. Ltd.		1,100		8,300
Siem Offshore, Inc.*		4,470		6,002
Songa Offshore SE*		3,377		3,355
Subsea 7 S.A.		1,717		37,042
Technip S.A.		540		58,023
Tecnicas Reunidas S.A.		62		3,006
Tenaris S.A.		2,548		56,570
TGS Nopec Geophysical Co. ASA		758		27,189
Transocean Ltd.*		1,800		92,646
Trican Well Service Ltd.		276		3,611
Trinidad Drilling Ltd.		6,743		46,122
Weatherford International Ltd./Switzerland*		4,600		58,834
WorleyParsons Ltd.		1,667		39,402
				1,135,424
Food & Staples Retailing – 2.1%
Aeon Co. Ltd.		2,900		41,054
Ain Pharmaciez, Inc.		100		4,892

	Shares		Value
Food & Staples Retailing – (continued)
Alimentation Couche Tard, Inc., Class B		559	$	34,017
Axfood AB		88		3,875
Booker Group PLC		8,274		15,324
Carrefour S.A.		3,171		94,065
Casino Guichard Perrachon S.A.		279		30,188
Cawachi Ltd.		700		15,745
Cocokara fine, Inc.		900		34,001
Colruyt S.A.		311		15,714
CREATE SD HOLDINGS Co. Ltd.		700		31,080
Dairy Farm International Holdings Ltd.		900		10,800
Delhaize Group S.A.		433		27,179
Distribuidora Internacional de Alimentacion S.A.		4,666		36,233
Empire Co. Ltd., Class A		90		6,129
FamilyMart Co. Ltd.		200		9,147
George Weston Ltd.		120		9,259
Hakon Invest AB*		928		25,088
Heiwado Co. Ltd.		1,800		32,448
Inageya Co. Ltd.		800		8,311
Itochu-Shokuhin Co. Ltd.		300		11,149
Izumiya Co. Ltd.		1,000		5,010
J Sainsbury PLC		8,930		52,968
The Jean Coutu Group PJC, Inc., Class A		254		4,230
Jeronimo Martins SGPS S.A.		1,775		42,322
Kasumi Co. Ltd.		3,500		25,152
Kato Sangyo Co. Ltd.		1,500		31,829
Kesko OYJ, Class B		112		3,367
Koninklijke Ahold N.V.		5,724		90,407
Lawson, Inc.		300		23,653
Life Corp.		300		4,185
Loblaw Cos. Ltd.		459		19,508
Metcash Ltd.		2,427		10,304
Metro AG		648		20,226
Metro, Inc.		416		28,256
Ministop Co. Ltd.		1,300		22,434
The North West Co. Inc.		1,055		26,662
Okuwa Co. Ltd.		1,000		10,902
Olam International Ltd.		11,000		14,960
Rallye S.A.		1,442		57,091

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 71

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Food & Staples Retailing – (continued)
San-A Co. Ltd.		500	$	24,407
Seven & I Holdings Co. Ltd.		4,300		165,096
Shoppers Drug Mart Corp.		1,116		50,061
Sligro Food Group NV		578		19,051
Sugi Holdings Co. Ltd.		200		7,689
Sundrug Co. Ltd.		200		8,788
Tesco PLC		41,979		239,228
Tsuruha Holdings, Inc.		100		9,732
UNY Group Holdings Co. Ltd.		400		2,846
Valor Co. Ltd.		1,500		28,365
Welcia Holdings Co. Ltd.		300		15,799
Wesfarmers Ltd.		6,238		280,977
WM Morrison Supermarkets PLC		13,143		59,751
Woolworths Ltd.		6,770		255,875
Yaoko Co. Ltd.		300		13,058
Yokohama Reito Co. Ltd.		2,100		18,928
				2,188,815
Food Products – 3.6%
AarhusKarlshamn AB		442		23,216
Adecoagro S.A.*		1,700		12,682
Ajinomoto Co. Inc.		3,000		41,176
Ariake Japan Co. Ltd.		100		2,300
Aryzta AG*		534		33,168
Associated British Foods PLC		1,594		48,005
Austevoll Seafood ASA		5,004		33,116
Australian Agricultural Co. Ltd.*		7,220		8,769
Barry Callebaut AG*		4		3,910
Bonduelle S.C.A.		1,156		29,521
Bongrain S.A.		157		10,639
Calbee Inc.		100		9,896
Campofrio Food Group S.A.*		1,557		10,223
China Fishery Group Ltd.		26,000		8,127
China Modern Dairy Holdings Ltd.*		40,000		13,813
CSM		1,449		32,457
Dairy Crest Group PLC		4,130		29,549
Danone S.A.		3,070		234,795
DE Master Blenders 1753 NV*		2,808		44,573
Dydo Drinco, Inc.		100		4,476
East Asiatic Co. Ltd. A/S*		645		11,292

	Shares		Value
Food Products – (continued)
Ebro Foods S.A.		246	$	5,050
Emmi AG*		14		4,340
Ezaki Glico Co. Ltd.		1,000		11,231
Fujicco Co. Ltd.		1,000		11,508
Glanbia PLC		294		3,934
GMG Global Ltd.		80,000		7,470
Goodman Fielder Ltd.*		36,811		29,614
GrainCorp Ltd., Class A		1,281		17,047
Greencore Group PLC		20,712		34,331
Hokuto Corp.		600		11,568
Itoham Foods, Inc.		2,000		9,198
J-Oil Mills, Inc.		5,000		15,553
Kagome Co. Ltd.		500		9,019
Kameda Seika Co. Ltd.		200		5,242
Kerry Group PLC, Class A		776		45,946
Kewpie Corp.		1,000		15,101
KEY Coffee, Inc.		100		1,574
Kikkoman Corp.		1,000		18,982
KWS Saat AG		39		14,654
Leroey Seafood Group ASA		966		30,203
Lindt & Spruengli AG		4		56,166
Maple Leaf Foods Inc.		300		3,973
Marine Harvest ASA*		16,169		16,851
Marudai Food Co. Ltd.		6,000		19,895
Maruha Nichiro Holdings, Inc.		8,000		16,015
MEIJI Holdings Co. Ltd.		300		13,536
Mewah International Inc.		16,000		5,846
Mitsui Sugar Co. Ltd.		5,000		15,707
Morinaga & Co. Ltd./Japan		5,000		10,728
Morinaga Milk Industry Co. Ltd.		10,000		29,463
Nagatanien Co. Ltd.		1,000		9,003
Nestle S.A.		17,308		1,237,151
New Britain Palm Oil Ltd.		2,217		12,594
Nichirei Corp.		1,000		5,882
Nippon Beet Sugar Manufacturing Co. Ltd.		10,000		18,787
Nippon Flour Mills Co. Ltd.		6,000		27,903
Nippon Meat Packers, Inc.		1,000		15,358
Nippon Suisan Kaisha Ltd.		12,800		24,835
The Nisshin Oillio Group Ltd.		7,000		24,648
Nisshin Seifun Group, Inc.		500		6,457
Nissin Foods Holdings Co. Ltd.		200		8,972
Nutreco N.V.		85		8,076

See Accompanying Notes to the Financial Statements.

72 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Food Products – (continued)
Origin Enterprises PLC		2,793	$	17,491
Orkla ASA		4,347		39,188
Pacific Andes Resources Development Ltd.		29,000		3,179
Petra Foods Ltd.		5,000		16,563
Premier Foods PLC*		11,234		12,764
Raisio PLC, Class V		806		3,454
Riken Vitamin Co. Ltd.		100		2,412
Sakata Seed Corp.		400		5,474
Salmar ASA*		2,125		21,409
Saputo, Inc.		729		37,593
Showa Sangyo Co. Ltd.		4,000		13,264
Sipef S.A.		200		15,726
Suedzucker AG		590		23,810
SunOpta, Inc.*		608		4,413
Super Group Ltd./Singapore		3,000		9,573
Tate & Lyle PLC		2,701		35,501
Tenfu Cayman Holdings Co. Ltd.		6,000		3,247
Toyo Suisan Kaisha Ltd.		1,000		33,980
Unilever N.V.		8,737		372,290
Unilever PLC		7,110		308,299
United International Enterprises		48		8,361
Vilmorin & Cie		35		4,476
Viscofan S.A.		409		21,267
Vitasoy International Holdings Ltd.		18,000		21,802
Wilmar International Ltd.		10,000		27,037
Yakult Honsha Co. Ltd.		400		17,431
Yamazaki Baking Co. Ltd.		1,000		13,079
Yonekyu Corp.		1,000		8,685
				3,636,882
Gas Utilities – 0.5%
APA Group		3,091		20,888
Enagas S.A.		837		22,324
Envestra Ltd.		16,270		17,734
Gas Natural SDG S.A.		1,731		36,286
Hong Kong & China Gas Co. Ltd.		27,000		81,237
Osaka Gas Co. Ltd.		10,000		43,322
Rubis SCA		451		29,007
Shizuoka Gas Co. Ltd.		2,500		19,813

	Shares		Value
Gas Utilities – (continued)
Snam SpA		7,444	$	36,646
Superior Plus Corp.		5,913		76,422
Toho Gas Co. Ltd.		3,000		17,863
Tokyo Gas Co. Ltd.		13,000		74,202
Valener, Inc.		500		8,028
				483,772
Health Care Equipment & Supplies – 0.6%
Ansell Ltd.		352		5,773
BioMerieux		53		5,044
Biosensors International Group Ltd.*		11,000		10,717
Carl Zeiss Meditec AG		288		8,830
Cochlear Ltd.		309		21,164
Coloplast A/S, Class B		470		25,599
DiaSorin SpA		85		3,192
Draegerwerk AG & Co. KGaA		170		19,021
Elekta AB, Class B		1,693		26,063
Essilor International S.A.		1,081		121,768
Fisher & Paykel Healthcare Corp. Ltd.		2,745		6,240
Fukuda Denshi Co. Ltd.		200		7,781
Getinge AB, Class B		1,146		34,540
Given Imaging Ltd.*		500		7,965
GN Store Nord A/S		861		15,743
Hogy Medical Co. Ltd.		200		12,319
Nagaileben Co. Ltd.		500		8,557
Nakanishi, Inc.		100		12,812
Nihon Kohden Corp.		100		3,845
Nobel Biocare Holding AG*		2,009		22,492
Olympus Corp.*		1,100		27,610
Ossur HF		13,908		18,938
Sartorius AG		121		12,997
Sartorius Stedim Biotech		38		5,391
Smith & Nephew PLC		5,133		58,679
Sonova Holding AG*		246		26,799
Sorin SpA*		6,750		18,937
Straumann Holding AG		167		21,914
Sysmex Corp.		300		19,341
Terumo Corp.		1,100		54,656
William Demant Holding A/S*		60		4,806
				649,533

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 73

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Health Care Providers & Services – 0.6%
Alfresa Holdings Corp.		300	$	17,832
Amplifon SpA		544		2,804
As One Corp.		900		21,269
BML, Inc.		200		5,151
Catamaran Corp.*		1,019		58,931
Celesio AG		142		2,813
CML HealthCare, Inc.		2,233		17,161
Ebos Group Ltd.		885		7,364
Extendicare, Inc./US		900		5,038
Fresenius Medical Care AG & Co. KGaA		1,162		80,276
Fresenius SE & Co. KGaA		713		89,509
Medipal Holdings Corp.		1,300		20,406
Message Co. Ltd.		2		5,913
Metlifecare Ltd.		2,740		8,344
Miraca Holdings, Inc.		200		9,978
Nichii Gakkan Co.		2,600		26,451
Oriola-KD OYJ		5,870		18,109
Orpea		206		8,962
Primary Health Care Ltd.		906		4,956
Raffles Medical Group Ltd.		2,000		5,554
Ramsay Health Care Ltd.		632		20,987
Rhoen Klinikum AG		166		3,550
Ryman Healthcare Ltd.		1,245		6,515
Ship Healthcare Holdings, Inc.		200		7,699
Sigma Pharmaceuticals Ltd.		10,630		8,055
Sonic Healthcare Ltd.		1,874		25,795
Suzuken Co. Ltd./Aichi Japan		400		15,563
Toho Holdings Co. Ltd.		300		6,871
United Drug PLC		12,934		60,975
Vital KSK Holdings, Inc.		600		5,420
				578,251
Health Care Technology – 0.0%†
M3, Inc.		2		4,523
Hotels, Restaurants & Leisure – 1.8%
Accor S.A.		741		24,521
Accordia Golf Co. Ltd.		54		61,367
Ainsworth Game Technology Ltd.		1,278		5,054
Aristocrat Leisure Ltd.		922		3,771

	Shares		Value
Hotels, Restaurants & Leisure – (continued)
Atom Corp.		1,200	$	7,047
Autogrill SpA		270		3,497
Betfair Group PLC		805		10,838
Betsson AB*		754		22,073
Bwin.Party Digital Entertainment PLC		34,903		72,576
Cafe de Coral Holdings Ltd.		6,000		19,058
Carnival PLC		874		31,559
Club Mediterranee S.A.*		212		3,606
Colowide Co. Ltd.		1,000		10,030
Compass Group PLC		9,540		125,763
Crown Ltd.		2,027		27,143
Domino’s Pizza Enterprises Ltd.		374		5,090
Domino’s Pizza Group PLC		2,746		27,823
Doutor Nichires Holdings Co. Ltd.		2,700		38,528
Echo Entertainment Group Ltd.		7,053		26,503
Enterprise Inns PLC*		31,019		47,288
Euro Disney SCA*		374		2,396
Flight Centre Ltd.		118		4,675
Fuji Kyuko Co. Ltd.		1,000		9,393
Galaxy Entertainment Group Ltd.*		12,000		53,733
Genting Singapore PLC		29,000		36,143
Great Canadian Gaming Corp.*		504		4,705
Greene King PLC		2,663		30,132
GuocoLeisure Ltd.		13,000		9,236
Hongkong & Shanghai Hotels		20,000		32,523
Hotel Properties Ltd.		3,000		8,403
InterContinental Hotels Group PLC		1,251		36,955
JD Wetherspoon PLC		816		7,461
Kingston Financial Group Ltd.		28,000		2,237
Kisoji Co. Ltd.		200		3,979
Kuoni Reisen Holding AG*		82		25,025
Ladbrokes PLC		7,031		20,726
Lottomatica Group SpA		116		2,961
Marston’s PLC		30,485		68,703
McDonald’s Holdings Co. Japan Ltd.		200		5,837
Melco Crown Entertainment Ltd.*		3,300		26,449

See Accompanying Notes to the Financial Statements.

74 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Hotels, Restaurants & Leisure – (continued)
Melco International Development Ltd.		13,000	$	25,294
Melia Hotels International S.A.		336		2,492
MGM China Holdings Ltd.		7,200		16,978
Millennium & Copthorne Hotels PLC		524		4,612
Mitchells & Butlers PLC*		3,873		20,157
MOS Food Services, Inc.		600		11,974
NagaCorp Ltd.		18,000		14,288
NH Hoteles S.A.*		2,053		7,173
Ohsho Food Service Corp.		800		23,349
OPAP S.A.		526		5,194
Oriental Land Co. Ltd./Japan		300		48,537
Paddy Power PLC		236		19,898
PGM Holdings K K		4		4,291
Plenus Co. Ltd.		1,000		18,140
Rank Group PLC		1,756		4,591
Regal Hotels International Holdings Ltd.		14,000		6,548
Resorttrust, Inc.		300		10,225
The Restaurant Group PLC		3,719		27,894
Rezidor Hotel Group AB*		2,683		12,725
Round One Corp.		700		5,864
Saizeriya Co. Ltd.		500		7,083
Sands China Ltd.		11,600		60,835
Shangri-La Asia Ltd.		12,000		23,194
SJM Holdings Ltd.		12,000		30,245
SKYCITY Entertainment Group Ltd.		1,876		7,178
Sodexo		417		34,861
St Marc Holdings Co. Ltd.		600		29,443
Tabcorp Holdings Ltd.		1,468		5,257
Tatts Group Ltd.		7,149		24,267
Thomas Cook Group PLC*		48,072		96,891
Tim Hortons, Inc.		819		44,441
Tokyo Dome Corp.		2,000		15,440
Tokyotokeiba Co. Ltd.		2,000		10,410
TUI AG*		1,864		19,773
TUI Travel PLC		966		4,725
Unibet Group PLC		617		21,446
WATAMI Co. Ltd.		200		3,649
Whitbread PLC		821		32,648

	Shares		Value
Household Durables – (continued)
William Hill PLC		5,082	$	33,695
Wynn Macau Ltd.*		7,600		23,063
Yomiuri Land Co. Ltd.		1,000		10,266
Yoshinoya Holdings Co. Ltd.		14		16,327
				1,810,168
Household Durables – 1.1%
Alpine Electronics, Inc.		2,400		24,466
Arnest One Corp.		400		9,161
Bang & Olufsen A/S*		222		1,853
Barratt Developments PLC*		6,064		29,371
Bellway PLC		1,990		41,658
Berkeley Group Holdings PLC		872		28,297
Bovis Homes Group PLC		2,513		30,038
Brookfield Residential Properties, Inc.*		700		16,723
Casio Computer Co. Ltd.		400		3,314
Chofu Seisakusho Co. Ltd.		200		4,634
Clarion Co. Ltd.*		3,000		4,250
Dorel Industries, Inc., Class B		1,398		60,459
Ekornes ASA		166		2,667
Electrolux AB		1,082		30,672
Fleetwood Corp. Ltd.		382		3,390
Forbo Holding AG*		15		9,688
Foster Electric Co. Ltd.		1,200		16,372
Fujitsu General Ltd.		1,000		9,763
Funai Electric Co. Ltd.		900		11,152
GUD Holdings Ltd.		2,533		19,168
HAJIME Construction Co. Ltd.		600		39,113
Haseko Corp.*		8,500		12,391
Hunter Douglas NV		110		4,497
Husqvarna AB, Class B		2,585		14,856
Indesit Co. SpA		2,524		19,849
JM AB		4,419		99,669
JVC Kenwood Corp.		6,300		16,298
Man Wah Holdings Ltd.		5,600		5,448
Misawa Homes Co. Ltd.		1,500		26,825
Mitsui Home Co. Ltd.		1,000		6,016
Nexity S.A.		1,623		58,416
Nobia AB		2,870		16,405
Panasonic Corp.*		11,900		86,614
Persimmon PLC*		1,956		32,879
Persimmon PLC*^		1,956		2,283
Pioneer Corp.*		13,800		28,334

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 75

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Household Durables – (continued)
Redrow PLC*		7,585	$	25,252
Rinnai Corp.		100		7,946
SEB S.A.		46		3,338
Sekisui Chemical Co. Ltd.		3,000		37,758
Sekisui House Ltd.		3,000		44,995
Sharp Corp.*		4,000		13,880
Sony Corp.		5,400		89,418
Takamatsu Construction Group Co. Ltd.		300		4,561
Taylor Wimpey PLC		8,780		12,709
Techtronic Industries Co.		7,000		16,723
Token Corp.		390		25,103
TomTom NV*		1,350		6,089
				1,114,761
Household Products – 0.5%
Henkel AG & Co. KGaA		648		50,790
Lion Corp.		1,000		5,841
Pigeon Corp.		300		25,778
PZ Cussons PLC		631		3,920
Reckitt Benckiser Group PLC		3,388		247,624
ST Corp.		400		4,090
Svenska Cellulosa AB, Class A		236		6,464
Svenska Cellulosa AB, Class B		3,297		85,721
Unicharm Corp.		600		38,805
				469,033
Independent Power Producers & Energy Traders – 0.2%
Algonquin Power & Utilities Corp.		2,538		20,085
APR Energy PLC		1,640		21,186
Atlantic Power Corp.		2,160		10,179
Capital Power Corp.		1,350		29,541
Drax Group PLC		2,556		24,406
EDP Renovaveis S.A.*		3,395		17,685
Electric Power Development Co. Ltd.		600		17,136
Enel Green Power SpA		4,443		9,483
Energy World Corp. Ltd.*		17,127		5,689
Infigen Energy Ltd.*		52,096		14,331
Innergex Renewable Energy, Inc.		832		8,420
KSK Power Ventur PLC*		456		2,750

	Shares		Value
Independent Power Producers & Energy Traders – (continued)
Northland Power, Inc.		180	$	3,498
TransAlta Corp.		1,117		16,447
				200,836
Industrial Conglomerates – 1.3%
CIR-Compagnie Industriali Riunite SpA		22,628		26,163
Clal Industries Ltd.		1,000		3,977
Cofide SpA		6,060		3,387
CSR Ltd.		9,902		20,866
DCC PLC		583		21,360
Hong Leong Asia Ltd.		4,000		5,277
Hopewell Holdings Ltd.		3,500		13,530
Hutchison Whampoa Ltd.		12,000		130,351
Indus Holding AG		1,119		36,838
Jardine Matheson Holdings Ltd.		1,200		77,916
Jardine Strategic Holdings Ltd.		1,000		39,000
Keihan Electric Railway Co. Ltd.		2,000		8,603
Keppel Corp. Ltd.		9,000		78,261
Koninklijke Philips Electronics N.V.		4,980		137,681
Nisshinbo Holdings, Inc.		2,000		14,516
NWS Holdings Ltd.		4,000		7,144
Rheinmetall AG		2,097		99,432
Schouw & Co.		735		24,370
SembCorp Industries Ltd.		7,000		28,360
Shun Tak Holdings Ltd.		16,000		8,412
Siemens AG		4,277		447,157
Smiths Group PLC		1,883		36,634
Sonae		18,183		17,692
TOKAI Holdings Corp.		500		1,632
				1,288,559
Insurance – 4.3%
Admiral Group PLC		1,285		25,620
Aegon N.V.		9,677		63,931
Ageas		1,170		42,913
AIA Group Ltd.		55,800		247,701
Allianz SE		2,430		358,976
Amlin PLC		1,087		7,180
AMP Ltd.		16,752		93,903
April		386		6,219

See Accompanying Notes to the Financial Statements.

76 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Insurance – (continued)
Assicurazioni Generali SpA		6,501	$	119,393
Aviva PLC		15,525		73,722
AXA S.A.		9,660		181,039
Baloise Holding AG		307		31,627
Beazley PLC		27,640		96,577
Catlin Group Ltd.		778		6,363
Clal Insurance Enterprises Holdings Ltd.		1,041		17,224
CNP Assurances		307		4,353
The Dai-ichi Life Insurance Co. Ltd.		46		63,279
Delta Lloyd NV		1,011		19,394
E-L Financial Corp. Ltd.		8		4,278
Euler Hermes S.A.		112		10,705
Fairfax Financial Holdings Ltd.		128		51,430
Fondiaria-Sai SpA*		73,331		133,978
Gjensidige Forsikring ASA		688		11,102
Great-West Lifeco, Inc.		1,406		38,244
Grupo Catalana Occidente S.A.		2,385		54,083
Hannover Rueckversicherung SE		254		21,472
Harel Insurance Investments & Financial Services Ltd.		88		4,376
Helvetia Holding AG		12		5,035
Hiscox Ltd.		2,933		25,609
Hiscox Ltd., Class B*^		3,296		2,565
Industrial Alliance Insurance & Financial Services, Inc.		522		19,316
Insurance Australia Group Ltd.		11,439		69,108
Intact Financial Corp.		847		51,703
Jardine Lloyd Thompson Group PLC		258		3,403
Lancashire Holdings Ltd.		416		5,481
Legal & General Group PLC		30,764		81,158
Manulife Financial Corp.		9,929		146,983
Mapfre S.A.		6,907		25,361
Mediolanum SpA		2,092		14,108
Milano Assicurazioni SPA*		37,990		24,903
MS&AD Insurance Group Holdings		2,700		72,316
Muenchener Rueckversicherungs AG		946		189,388
NIB Holdings Ltd.		4,093		9,984

	Shares		Value
Insurance – (continued)
NKSJ Holdings, Inc.		1,900	$	48,139
Old Mutual PLC		25,875		82,557
Phoenix Group Holdings		7,922		78,233
Power Corp of Canada		2,098		56,588
Power Financial Corp.		1,082		32,013
Prudential PLC		13,402		230,490
QBE Insurance Group Ltd.		6,735		93,473
Resolution Ltd.		6,445		26,472
RSA Insurance Group PLC		22,621		39,186
Sampo OYJ, Class A		2,496		99,709
Schweizerische National-Versicherungs-Gesellschaft AG, Class V		677		32,321
SCOR SE		946		28,742
Societa Cattolica di Assicurazioni SCRL*		2,496		49,065
Sony Financial Holdings, Inc.		400		5,646
St James’s Place PLC		1,985		17,115
Standard Life PLC		14,565		84,827
Storebrand ASA*		680		3,095
Sun Life Financial, Inc.		3,251		91,856
Suncorp Group Ltd.		7,282		98,117
Swiss Life Holding AG*		156		24,686
Swiss Re AG*		1,901		151,331
T&D Holdings, Inc.		2,800		32,539
Tokio Marine Holdings, Inc.		3,800		120,542
Topdanmark A/S*		225		5,777
Tower Ltd.*		13,848		20,433
Tryg A/S		70		6,068
Unipol Gruppo Finanziario SpA*		10,424		35,732
Vienna Insurance Group AG Wiener Versicherung Gruppe		108		5,730
Zurich Insurance Group AG*		801		223,844
				4,359,829
Internet & Catalog Retail – 0.2%
ASKUL Corp.		200		3,550
ASOS PLC*		379		18,876
Belluna Co. Ltd.		2,000		19,608
Home Retail Group PLC		16,191		39,261
N Brown Group PLC		2,897		20,110
Nissen Holdings Co. Ltd.		600		2,217

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 77

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Internet & Catalog Retail – (continued)
Ocado Group PLC*		6,379	$	16,878
Rakuten, Inc.		4,100		43,732
Senshukai Co. Ltd.		1,400		12,849
Takkt AG		489		8,168
Wotif.com Holdings Ltd.		712		3,777
				189,026
Internet Software & Services – 0.2%
carsales.com Ltd.		610		6,123
Dena Co. Ltd.		500		14,265
GMO internet, Inc.		600		7,860
Gree, Inc.		200		2,564
Gurunavi, Inc.		900		13,332
Internet Initiative Japan, Inc.		200		8,049
Kakaku.com, Inc.		200		5,166
Moneysupermarket.com Group PLC		5,134		16,037
Open Text Corp.*		367		24,019
Opera Software ASA		512		3,486
Telecity Group PLC		1,380		19,814
United Internet AG		248		6,807
Yahoo Japan Corp.		72		36,033
				163,555
IT Services – 0.6%
Alten S.A.		688		24,817
Altran Technologies S.A.*		740		5,834
Amadeus IT Holding S.A., Class A		1,746		51,598
Atea ASA*		4,025		43,172
AtoS		253		17,628
Cap Gemini S.A.		854		39,323
CGI Group, Inc., Class A*		1,154		36,598
Computacenter PLC		5,274		36,757
Computershare Ltd.		2,721		28,048
Digital Garage, Inc.		3		10,995
Evry ASA*		1,954		2,817
GFI Informatique SA/France		1,712		7,313
Groupe Steria SCA		1,090		16,109
Indra Sistemas S.A.		5,221		70,279
Iress Ltd.		1,067		9,260
IT Holdings Corp.		500		7,515

	Shares		Value
IT Services – (continued)
Itochu Techno-Solutions Corp.		100	$	4,753
NEC Fielding Ltd.		1,500		19,803
NEC Networks & System Integration Corp.		1,200		26,314
NET One Systems Co. Ltd.		800		7,005
Nihon Unisys Ltd.		2,700		23,228
Nomura Research Institute Ltd.		1,000		30,130
NTT Data Corp.		8		25,295
Obic Co. Ltd.		10		2,637
Ordina NV*		4,122		6,793
Otsuka Corp.		100		10,338
SCSK Corp.		400		8,923
Sopra Group S.A.		258		19,882
Tieto OYJ		219		4,695
Transcosmos, Inc.		1,500		20,942
Wirecard AG		693		18,611
Xchanging PLC		3,750		7,821
				645,233
Leisure Equipment & Products – 0.2%
Amer Sports Oyj		262		4,463
Beneteau S.A.*		374		3,920
Fields Corp.		1,000		20,275
Mars Engineering Corp.		600		13,403
Mizuno Corp.		1,000		4,271
Namco Bandai Holdings, Inc.		1,000		18,222
Nikon Corp.		1,800		39,138
Sankyo Co. Ltd.		200		9,116
Sega Sammy Holdings, Inc.		1,200		31,549
Shimano, Inc.		400		34,781
Tamron Co. Ltd.		200		4,381
Tomy Co. Ltd.		3,700		18,460
Trigano S.A.*		295		3,742
Yamaha Corp.		400		4,291
				210,012
Life Sciences Tools & Services – 0.1%
EPS Corp./Japan		4		6,336
Eurofins Scientific*		46		10,007
Evotec AG*		2,572		9,227
Gerresheimer AG		532		30,409
Lonza Group AG*		324		22,583
NORDION INC		392		2,744

See Accompanying Notes to the Financial Statements.

78 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Life Sciences Tools & Services – (continued)
QIAGEN N.V.*		956	$	18,962
Tecan Group AG*		217		20,206
				120,474
Machinery – 3.3%
Aalberts Industries NV		1,737		38,965
Aida Engineering Ltd.		2,900		23,966
Alfa Laval AB		1,909		41,789
Amada Co. Ltd.		1,000		8,007
Andritz AG		344		22,441
Asahi Diamond Industrial Co. Ltd.		400		4,193
Atlas Copco AB, Class A		3,672		96,776
Atlas Copco AB, Class B		2,160		51,288
ATS Automation Tooling Systems, Inc.*		784		7,927
Bando Chemical Industries Ltd.		7,000		21,558
Bobst Group AG*		255		8,235
Bodycote PLC		2,890		23,277
Bradken Ltd.		9,417		50,245
Bucher Industries AG		24		5,792
Cargotec Oyj, Class B		613		18,273
CKD Corp.		3,300		24,087
Construcciones y Auxiliar de Ferrocarriles S.A.		58		22,940
Daifuku Co. Ltd.		4,500		39,775
Deutz AG*		3,730		20,202
Duerr AG		633		72,088
Duro Felguera S.A.		3,908		27,874
Ebara Corp.		2,000		8,377
Faiveley Transport S.A.		70		4,235
FANUC Corp.		1,000		150,909
Fenner PLC		3,867		21,161
Fiat Industrial SpA		4,717		53,296
Fuji Machine Manufacturing Co. Ltd.		3,800		33,042
Fujitec Co. Ltd.		1,000		10,820
Furukawa Co. Ltd.		18,000		23,098
GEA Group AG		821		27,802
Georg Fischer AG*		210		91,385
Gildemeister AG		2,511		56,659
Glory Ltd.		200		5,501

	Shares		Value
Machinery – (continued)
Heidelberger Druckmaschinen AG*		10,044	$	22,048
Hino Motors Ltd.		1,000		15,265
Hitachi Construction Machinery Co. Ltd.		1,100		26,108
Hitachi Koki Co. Ltd.		600		5,205
Hitachi Zosen Corp.		7,500		12,473
Hoshizaki Electric Co. Ltd.		100		3,331
IHI Corp.		8,000		29,812
IMI PLC		1,658		31,973
Invensys PLC		3,448		20,645
Iseki & Co. Ltd.		2,000		7,268
The Japan Steel Works Ltd.		1,000		5,071
JTEKT Corp.		600		6,104
Kawasaki Heavy Industries Ltd.		9,000		28,642
Kitz Corp.		4,700		27,116
Komatsu Ltd.		4,800		131,026
Komori Corp.		2,700		33,428
Kone OYJ, Class B		820		72,487
Konecranes OYJ		90		3,268
Krones AG		347		24,160
KSB AG		17		10,579
Kubota Corp.		5,000		71,707
Makino Milling Machine Co. Ltd.		6,000		35,602
Makita Corp.		600		36,526
MAN SE*		263		29,490
Max Co. Ltd.		1,000		11,405
Meidensha Corp.		1,000		2,987
Melrose Industries PLC		8,865		33,680
Metka S.A.		1,677		25,492
Metso OYJ		669		27,510
Meyer Burger Technology AG*		847		5,179
Minebea Co. Ltd.		1,000		3,193
Mitsubishi Heavy Industries Ltd.		18,000		123,991
Mitsuboshi Belting Co. Ltd.		3,000		16,107
Mitsui Engineering & Shipbuilding Co. Ltd.		7,000		12,935
Morgan Advanced Materials PLC		4,509		18,352
Mori Seiki Co. Ltd.		2,000		25,090
Nabtesco Corp.		200		4,414
Nachi-Fujikoshi Corp.		9,000		40,099

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 79

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Machinery – (continued)
NGK Insulators Ltd.		1,000	$	12,073
Nippon Sharyo Ltd.		5,000		25,819
Nippon Thompson Co. Ltd.		5,000		24,946
Nitta Corp.		1,600		35,840
NKT Holding A/S		209		7,724
Noritake Co. Ltd.		1,000		2,700
NSK Ltd.		4,000		32,358
NTN Corp.		1,000		2,546
OC Oerlikon Corp. AG*		302		3,495
Oiles Corp.		200		4,022
OKUMA Corp.		2,000		15,625
Organo Corp.		3,000		17,031
Palfinger AG		794		23,553
Pfeiffer Vacuum Technology AG		164		19,944
Rieter Holding AG*		18		3,007
Rotork PLC		229		10,368
Ryobi Ltd.		10,000		23,406
Sandvik AB		5,427		77,006
Scania AB, Class A		1,821		37,443
Scania AB, Class B		1,794		38,218
Schindler Holding AG		326		48,728
SembCorp Marine Ltd.		7,000		24,496
Semperit AG Holding*		82		3,211
Senior PLC		6,886		27,329
Shima Seiki Manufacturing Ltd.		900		19,476
Shinmaywa Industries Ltd.		1,000		8,131
Singamas Container Holdings Ltd.		76,000		18,607
Sintokogio Ltd.		2,500		22,636
SKF AB, Class B		2,352		54,793
SMC CORP NPV		300		60,086
Spirax-Sarco Engineering PLC		168		6,859
Sulzer AG		72		12,293
Sumitomo Heavy Industries Ltd.		4,000		17,739
Tadano Ltd.		1,000		12,524
THK Co. Ltd.		900		18,913
Tocalo Co. Ltd.		1,100		16,092
Torishima Pump Manufacturing Co. Ltd.		600		4,872
Toromont Industries Ltd.		196		4,326
Toshiba Machine Co. Ltd.		3,000		18,325
Trelleborg AB, Class B		604		8,967

	Shares		Value
Machinery – (continued)
Tsubakimoto Chain Co.		9,000	$	48,137
Tsugami Corp.		1,000		5,133
Vallourec S.A.		506		24,346
Volvo AB, Class A		2,386		32,971
Volvo AB, Class B		7,605		105,384
Vossloh AG		205		22,433
Wacker Neuson SE		676		9,937
Wartsila OYJ Abp		947		46,533
The Weir Group PLC		1,234		42,330
Westport Innovations Inc.*		92		2,875
Yangzijiang Shipbuilding Holdings Ltd.		4,000		3,085
Zardoya Otis S.A.		332		4,644
				3,329,086
Marine – 0.3%
AP Moeller – Maersk A/S, Class A		2		13,687
AP Moeller – Maersk A/S, Class B		7		49,861
Cie Maritime Belge S.A.		327		6,458
D/S Norden A/S		137		4,240
Dfds A/S		449		27,750
Golden Ocean Group Ltd.*		15,271		14,722
Iino Kaiun Kaisha Ltd.		4,300		29,885
Irish Continental Group PLC		157		4,285
Kawasaki Kisen Kaisha Ltd.		2,000		4,394
Kuehne + Nagel International AG		246		28,176
Mermaid Marine Australia Ltd.		6,477		25,953
Mitsui OSK Lines Ltd.*		3,000		12,473
Neptune Orient Lines Ltd./Singapore*		11,000		9,780
Nippon Yusen KK		12,000		31,290
NS United Kaiun Kaisha Ltd.*		3,000		5,574
Orient Overseas International Ltd.		1,000		5,940
Pacific Basin Shipping Ltd.		33,000		18,838
Seaspan Corp.		500		10,965
SITC International Holdings Co. Ltd.		55,000		20,198
Wilh Wilhelmsen Holding ASA, Class A		789		21,928

See Accompanying Notes to the Financial Statements.

80 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Marine – (continued)
Wilh Wilhelmsen Holding ASA, Class B		231	$	6,259
				352,656
Media – 1.9%
Aimia, Inc.		395		6,244
Amalgamated Holdings Ltd.		2,564		22,836
Antena 3 de Television S.A.		1,298		7,906
APN News & Media Ltd.		34,463		15,025
Arnoldo Mondadori Editore SpA*		1,942		2,586
Astral Media, Inc., Class A		405		19,730
Avex Group Holdings, Inc.		1,800		51,426
Axel Springer AG		92		3,881
British Sky Broadcasting Group PLC		5,877		77,200
Cineplex, Inc.		114		3,881
Cogeco Cable, Inc.		200		8,916
Cogeco, Inc.		410		17,548
Constantin Medien AG*		9,138		18,638
Corus Entertainment, Inc., Class B		202		4,968
CTS Eventim AG		561		21,689
CyberAgent, Inc.		1		1,958
Daiichikosho Co. Ltd.		300		8,928
Daily Mail & General Trust PLC, Class A		1,538		16,469
Dentsu, Inc.		900		31,275
Euromoney Institutional Investor PLC		242		3,691
Eutelsat Communications S.A.		705		25,481
Fairfax Media Ltd.		124,074		83,717
Fuji Media Holdings, Inc.		12		26,055
GFK SE		323		18,452
Gruppo Editoriale L’Espresso SpA		2,528		2,645
Hakuhodo DY Holdings, Inc.		190		15,663
Havas S.A.		4,401		26,928
Highlight Communications AG*		717		3,979
Imax Corp.*		1,152		29,491
Informa PLC		3,125		23,249
IPSOS		558		18,723

	Shares		Value
Media – (continued)
ITV PLC		18,945	$	37,123
JCDecaux S.A.		530		14,583
Jupiter Telecommunications Co. Ltd.		8		10,077
Kabel Deutschland Holding AG		433		41,200
Kadokawa Group Holdings, Inc.		300		9,409
Lagardere SCA		685		25,486
Mecom Group PLC		9,155		6,091
Mediaset Espana Comunicacion S.A.*		430		3,379
Mediaset SpA		1,482		3,834
Metropole Television S.A.		553		9,267
Modern Times Group AB, Class B		96		4,111
Mood Media Corp.*		4,100		3,791
Nippon Television Holdings, Inc.		500		8,834
NRJ Group		658		4,980
PagesJaunes Groupe*		5,685		11,992
Pearson PLC		4,339		79,080
Perform Group PLC*		1,932		15,576
Promotora de Informaciones S.A., Class A*		5,988		1,776
ProSiebenSat.1 Media AG		641		24,575
Publicis Groupe S.A.		964		67,131
PubliGroupe AG*		46		6,685
Quebecor, Inc., Class B		98		4,569
RCS MediaGroup SpA*		2,613		2,537
REA Group Ltd.		407		13,144
Reed Elsevier N.V.		3,907		63,460
Reed Elsevier PLC		6,194		72,495
Rightmove PLC		187		5,591
RTL Group S.A.		22		1,569
Sanoma OYJ		1,100		8,962
Schibsted ASA		498		21,669
SES		1,729		54,047
Seven West Media Ltd.		33,581		69,718
Shaw Communications, Inc., Class B		2,205		50,289
Singapore Press Holdings Ltd.		11,000		39,833
Sky Deutschland AG*		2,233		12,821
Societe d’Edition de Canal +		2,611		18,279
Societe Television Francaise 1		5,851		61,966

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 81

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Media – (continued)
Southern Cross Media Group Ltd.		25,410	$	41,016
Tamedia AG		141		15,482
Technicolor S.A.*		15,707		65,231
Telegraaf Media Groep NV*		508		6,001
Telenet Group Holding NV		159		8,594
Television Broadcasts Ltd.		1,300		9,791
Ten Network Holdings Ltd.*		13,086		4,211
Thomson Reuters Corp.		2,018		67,711
Toei Co. Ltd.		5,000		37,111
Toho Co. Ltd./Tokyo		900		20,031
Torstar Corp., Class B		3,376		22,756
UBM PLC		561		6,391
Village Roadshow Ltd.		4,186		22,595
Wolters Kluwer N.V.		1,503		33,290
WPP PLC		6,663		110,340
Zenrin Co. Ltd.		200		2,583
Zon Multimedia Servicos de Telecomunicacoes e Multimedia SGPS SA		1,382		6,213
				1,988,454
Metals & Mining – 4.8%
Acerinox S.A.		352		3,795
African Minerals Ltd.*		4,519		15,385
Agnico Eagle Mines Ltd.		967		31,264
Aichi Steel Corp.		5,000		20,429
Alacer Gold Corp.		1,864		5,597
Alamos Gold, Inc.		255		3,567
Alumina Ltd.*		24,234		24,276
AMAG Austria Metall AG(a)		766		23,682
AMG Advanced Metallurgical Group NV*		610		5,622
Anglo American PLC		7,524		183,267
Antofagasta Aberdeen Asset Management PLC		2,133		29,795
APERAM		402		4,941
Aquarius Platinum Ltd.*		3,920		2,360
ArcelorMittal		4,799		58,791
Argonaut Gold, Inc.*		2,700		17,126
Arrium Ltd.		73,119		64,516
Asahi Holdings, Inc.		1,300		26,318
Asanko Gold, Inc.*		1,481		3,755

	Shares		Value
Metals & Mining – (continued)
Atlas Iron Ltd.		15,301	$	13,262
AuRico Gold, Inc.		527		2,714
Aurizon Mines Ltd.*		1,674		7,190
Aurubis AG		72		4,529
B2Gold Corp.*		616		1,549
Banro Corp.*		1,800		2,309
Barrick Gold Corp.		5,535		109,286
Beadell Resources Ltd.*		5,446		3,986
BHP Billiton Ltd.		17,488		593,617
BHP Billiton PLC		10,883		303,365
BlueScope Steel Ltd.*		5,703		29,304
Boliden AB		1,560		24,726
Capstone Mining Corp.*		2,814		5,707
Centamin PLC*		57,377		36,908
Centerra Gold, Inc.		234		979
Colossus Minerals, Inc.*		584		1,335
Continental Gold Ltd.*		3,730		18,467
Copper Mountain Mining Corp.*		5,106		10,254
Cudeco Ltd.*		2,694		10,543
Daido Steel Co. Ltd.		1,000		5,441
Detour Gold Corp.*		297		3,579
Discovery Metals Ltd.*^		2,575		909
Dominion Diamond Corp.*		1,740		27,626
Dowa Holdings Co. Ltd.		1,000		7,166
Dundee Precious Metals, Inc.*		2,105		13,519
Eldorado Gold Corp.		4,221		33,446
Endeavour Mining Corp.*		3,600		3,901
Endeavour Silver Corp.*		900		4,706
Eurasian Natural Resources Corp. PLC		582		2,486
Evolution Mining Ltd.*		25,525		25,834
Evraz PLC		2,482		5,988
Ferrexpo PLC		13,086		36,213
First Majestic Silver Corp.*		227		2,803
First Quantum Minerals Ltd.		3,216		56,240
Fortescue Metals Group Ltd.		8,190		29,756
Fortuna Silver Mines, Inc.*		3,300		10,302
Franco-Nevada Corp.		875		38,154
Fresnillo PLC		903		16,191
Furukawa-Sky Aluminum Corp.		2,000		6,180
Gabriel Resources Ltd.*		2,500		4,524
Gindalbie Metals Ltd.*		18,250		3,410
Glencore International PLC		20,782		102,518

See Accompanying Notes to the Financial Statements.

82 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Metals & Mining – (continued)
Godo Steel Ltd.		7,000	$	11,498
Goldcorp, Inc.		4,537		134,506
Golden Star Resources Ltd.*		1,340		1,452
Grange Resources Ltd.		17,176		2,942
G-Resources Group Ltd.*		255,000		11,993
Guyana Goldfields, Inc.*		1,900		3,400
Highland Gold Mining Ltd.		5,221		6,846
Hitachi Metals Ltd.		1,000		10,338
Hochschild Mining PLC		458		1,771
Hoganas AB, Class B		699		33,421
HudBay Minerals, Inc.		2,002		15,923
IAMGOLD Corp.		3,442		18,513
Iluka Resources Ltd.		3,249		30,185
Imdex Ltd.		10,252		10,482
Imperial Metals Corp.*		1,440		17,852
Independence Group NL		2,157		7,389
International Minerals Corp.		786		2,305
Ivanplats Ltd., Class A*		4,900		14,615
JFE Holdings, Inc.		2,700		58,429
Katanga Mining Ltd.*		27,000		18,387
Kazakhmys PLC		402		2,167
Kenmare Resources PLC*		50,347		20,742
Kingsgate Consolidated Ltd.		7,542		16,911
Kinross Gold Corp.		6,374		34,790
Kirkland Lake Gold, Inc.*		240		806
Kobe Steel Ltd.*		13,000		16,949
Kyoei Steel Ltd.		1,500		28,642
Labrador Iron Ore Royalty Corp.		132		4,332
Lake Shore Gold Corp.*		35,166		14,334
LionGold Corp. Ltd.*		6,000		5,578
Lonmin PLC*		8,497		35,575
Lundin Mining Corp.*		1,358		5,346
Lynas Corp. Ltd.*		35,137		18,419
MAG Silver Corp.*		244		1,865
Major Drilling Group International		4,564		34,167
Medusa Mining Ltd.		1,347		4,572
Midas Holdings Ltd.		10,000		4,019
Mineral Deposits Ltd.*		562		1,750
Mirabela Nickel Ltd.*		5,300		770
Mitsubishi Materials Corp.		3,000		8,593

	Shares		Value
Metals & Mining – (continued)
Mitsubishi Steel Manufacturing Co. Ltd.		4,000	$	8,582
Mitsui Mining & Smelting Co. Ltd.		2,000		4,496
Mongolian Mining Corp.*		76,500		22,672
Mount Gibson Iron Ltd.		36,993		19,008
Mytilineos Holdings S.A.*		3,810		23,609
Neturen Co. Ltd.		800		6,389
Nevsun Resources Ltd.		3,783		14,179
New Gold, Inc.*		2,306		18,524
New World Resources PLC, Class A		5,229		12,615
Newcrest Mining Ltd.		4,304		75,103
Newmont Canada FN Holdings ULC		200		6,637
Nippon Coke & Engineering Co. Ltd.		23,000		29,751
Nippon Denko Co. Ltd.		2,000		6,981
Nippon Light Metal Holdings Co. Ltd.		22,700		26,799
Nippon Steel & Sumitomo Metal Corp.		39,205		104,241
Nittetsu Mining Co. Ltd.		2,000		9,670
Norsk Hydro ASA		5,619		26,353
Novagold Resources, Inc.*		4,500		11,095
NV Bekaert S.A.		1,169		37,683
Nyrstar*		7,950		38,676
OceanaGold Corp.*		7,784		16,870
OSAKA Titanium Technologies Co.		200		3,977
Osisko Mining Corp.*		871		3,680
Outokumpu OYJ*		2,896		2,014
OZ Minerals Ltd.		695		3,102
Pacific Metals Co. Ltd.		7,000		35,140
Pan American Silver Corp.		463		6,099
PanAust Ltd.		960		2,312
Perseus Mining Ltd.*		3,823		5,377
Petra Diamonds Ltd.*		2,635		4,511
Petropavlovsk PLC		9,757		22,019
Polymetal International PLC		418		4,525
Polyus Gold International Ltd.*		1,692		5,346
Premier Gold Mines Ltd.*		4,194		8,798
Pretium Resources, Inc.*		601		4,439
Primero Mining Corp.*		500		2,958

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 83

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Metals & Mining – (continued)
Rainy River Resources Ltd.*		522	$	1,204
Randgold Resources Ltd.		522		41,109
Rautaruukki OYJ		747		4,810
Regis Resources Ltd.*		2,671		10,453
Resolute Mining Ltd.		18,461		18,301
Rio Alto Mining Ltd.*		1,500		5,518
Rio Tinto Ltd.		2,394		138,668
Rio Tinto PLC		7,273		330,422
Romarco Minerals, Inc.*		8,974		3,926
Rubicon Minerals Corp.*		2,843		4,946
Sabina Gold & Silver Corp.*		880		1,050
Salzgitter AG		80		3,135
San Gold Corp.*		9,500		1,842
Sandfire Resources NL*		2,338		13,615
Sanyo Special Steel Co. Ltd.		6,000		24,330
Schmolz + Bickenbach AG*		1,787		5,252
Seabridge Gold, Inc.*		190		2,161
SEMAFO, Inc.		2,344		4,451
Sherritt International Corp.		16,427		76,921
Silver Lake Resources Ltd.*		6,632		7,229
Silver Standard Resources, Inc.*		1,414		10,164
Silver Wheaton Corp.		1,964		48,092
Silvercorp Metals, Inc.		1,332		3,893
Sims Metal Management Ltd.		396		3,971
SSAB AB, Class A		451		3,292
St Barbara Ltd.*		27,460		17,103
Sumitomo Light Metal Industries Ltd.		27,000		27,995
Sumitomo Metal Mining Co. Ltd.		4,000		55,723
Sundance Resources Ltd.*		21,665		2,361
Tahoe Resources, Inc.*		754		13,118
Talvivaara Mining Co. PLC*		79,905		17,411
Tanzanian Royalty Exploration Corp.*		596		1,784
Taseko Mines Ltd.*		1,158		2,729
Teck Resources Ltd., Class B		3,026		80,625
Teranga Gold Corp.*		4,200		3,675
Thompson Creek Metals Co. Inc.*		1,270		3,800
ThyssenKrupp AG*		2,145		38,842
Toho Titanium Co. Ltd.		1,100		9,441
Toho Zinc Co. Ltd.		7,000		26,157

	Shares		Value
Metals & Mining – (continued)
Tokyo Steel Manufacturing Co. Ltd.		5,700	$	23,231
Topy Industries Ltd.		13,000		30,295
Torex Gold Resources, Inc.*		11,529		16,047
Toyo Kohan Co. Ltd.		1,000		3,295
Tubos Reunidos S.A.		4,517		9,767
Turquoise Hill Resources Ltd.*		1,138		8,033
Vedanta Resources PLC		1,197		22,524
Viohalco Hellenic Copper and Aluminum Industry S.A.*		1,200		7,388
Voestalpine AG		912		28,502
Western Areas Ltd.		924		2,647
Xstrata PLC		11,441		171,568
Yamana Gold, Inc.		4,224		52,367
Yamato Kogyo Co. Ltd.		200		6,601
Yodogawa Steel Works Ltd.		10,000		37,778
				4,941,774
Multiline Retail – 0.6%
Canadian Tire Corp. Ltd., Class A		371		27,368
The Daiei Inc.*		7,950		31,176
David Jones Ltd.		8,847		27,367
Debenhams PLC		13,842		17,924
Dollarama, Inc.		350		25,680
Don Quijote Co. Ltd.		200		10,902
Fuji Co. Ltd./Ehime		400		7,338
H2O Retailing Corp.		1,000		11,149
Harvey Norman Holdings Ltd.		5,395		16,801
Isetan Mitsukoshi Holdings Ltd.		2,400		38,214
Izumi Co. Ltd.		100		2,699
J Front Retailing Co. Ltd.		2,000		16,795
Lifestyle International Holdings Ltd.		4,000		8,834
Marks & Spencer Group PLC		7,704		48,993
Marui Group Co. Ltd.		800		9,280
Matsuya Co. Ltd.*		600		11,802
Mothercare PLC*		1,247		6,152
Myer Holdings Ltd.		31,969		106,525
Next PLC		730		49,526
PPR		387		85,232
Ryohin Keikaku Co. Ltd.		100		9,445
Sears Canada, Inc.		800		7,437

See Accompanying Notes to the Financial Statements.

84 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Multiline Retail – (continued)
Seria Co. Ltd.		200	$	4,887
Takashimaya Co. Ltd.		2,000		23,612
				605,138
Multi-Utilities – 1.1%
A2A SpA		65,745		51,747
ACEA SpA		2,972		20,356
AGL Energy Ltd.		3,260		53,705
Atco Ltd./Canada, Class I		290		27,819
Canadian Utilities Ltd., Class A		396		32,645
Centrica PLC		26,022		150,257
DUET Group		3,118		7,962
E.ON AG		9,883		179,289
GDF Suez		7,093		152,428
Hera SpA		2,854		5,813
Iren SpA		36,341		37,132
Just Energy Group, Inc.		2,637		17,722
National Grid PLC		18,832		240,197
REN – Redes Energeticas Nacionais SGPS S.A.		7,502		22,887
RWE AG		2,761		99,383
Veolia Environnement S.A.		1,740		24,007
				1,123,349
Office Electronics – 0.4%
Brother Industries Ltd.		500		5,718
Canon, Inc.		6,400		229,628
Konica Minolta, Inc.		1,500		10,610
Neopost S.A.		1,927		126,888
Ricoh Co. Ltd.		3,000		33,446
Riso Kagaku Corp.		900		17,231
				423,521
Oil, Gas & Consumable Fuels – 6.8%
Advantage Oil & Gas Ltd.*		928		3,681
Afren PLC*		9,620		20,078
Alliance Oil Co. Ltd.*		5,562		44,337
AltaGas Ltd.		249		9,293
Angle Energy, Inc.*		2,300		7,043
AOC Holdings, Inc.		800		2,809
Aquila Resources Ltd.*		2,895		5,560
ARC Resources Ltd.		1,758		49,217

	Shares		Value
Oil, Gas & Consumable Fuels – (continued)
Athabasca Oil Corp.*		1,958	$	14,191
Aurora Oil & Gas Ltd.*		674		2,134
Avner Oil Exploration LLP*		32,412		22,901
AWE Ltd.*		5,104		6,835
Bankers Petroleum Ltd.*		6,843		17,144
Baytex Energy Corp.		699		27,665
Beach Energy Ltd.		2,222		3,137
BG Group PLC		18,280		308,551
Birchcliff Energy Ltd.*		2,682		21,065
BlackPearl Resources, Inc.*		6,413		14,027
Bonavista Energy Corp.		536		8,499
Bonheur ASA		689		15,379
Bonterra Energy Corp.		200		9,830
BowLeven PLC*		6,058		7,425
BP PLC		102,540		744,343
Brightoil Petroleum Holdings Ltd.*		128,000		24,410
Bumi PLC*^		3,583		14,460
Buru Energy Ltd.*		5,822		11,241
Cairn Energy PLC*		1,237		5,556
Caltex Australia Ltd.		948		21,197
Cameco Corp.		1,935		37,782
Canacol Energy Ltd.*		3,200		7,922
Canadian Natural Resources Ltd.		5,345		157,026
Canadian Oil Sands Ltd.		2,546		50,092
Cenovus Energy, Inc.		4,186		125,474
China Aviation Oil Singapore Corp. Ltd.		4,000		3,345
Coalspur Mines Ltd.*		2,592		1,224
Coastal Energy Co.*		134		2,572
Cosmo Oil Co. Ltd.*		2,000		4,763
Crescent Point Energy Corp.		1,990		76,130
Crew Energy, Inc.*		883		6,136
Delek Group Ltd.		19		5,000
Denison Mines Corp.*		1,978		2,458
Det Norske Oljeselskap ASA*		745		10,579
DNO International ASA*		5,536		9,683
Dragon Oil PLC		542		5,274
Enbridge Income Fund Holdings Inc.		337		8,309
Enbridge, Inc.		4,079		194,410
Encana Corp.		4,152		76,654

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 85

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Oil, Gas & Consumable Fuels – (continued)
Energy Resources of Australia Ltd.*		1,430	$	1,529
Enerplus Corp.		2,214		31,300
ENI SpA		14,099		337,560
EnQuest PLC*		35,849		71,920
ERG SpA		434		4,160
Esso SA Francaise		52		3,255
Etablissements Maurel et Prom		4,790		81,560
Exmar NV		1,330		12,695
Freehold Royalties Ltd.		1,301		31,715
Frontline Ltd./Bermuda*		1,600		2,912
Galp Energia SGPS S.A.		2,060		33,053
Ganger Rolf ASA		908		20,030
Genel Energy PLC*		1,199		16,609
Gibson Energy, Inc.		242		6,316
Golar LNG Ltd.		100		3,342
Gulf Keystone Petroleum Ltd.*		6,208		13,141
Heritage Oil PLC*		882		2,196
Hoegh LNG Holdings Ltd.*		387		3,092
Husky Energy, Inc.		1,649		47,740
Idemitsu Kosan Co. Ltd.		100		8,449
Imperial Oil Ltd.		1,778		70,848
Inpex Corp.		11		53,075
Isramco Negev 2 LP*		34,999		6,124
Ithaca Energy, Inc.*		15,003		24,611
Itochu Enex Co. Ltd.		3,600		19,846
Ivanhoe Energy, Inc.*		2,667		3,473
Japan Petroleum Exploration Co.		200		7,915
JKX Oil & Gas PLC*		2,004		2,113
JX Holdings, Inc.		12,000		65,045
Kanto Natural Gas Development Ltd.		1,000		6,745
Karoon Gas Australia Ltd.*		3,013		13,074
Keyera Corp.		387		24,212
Legacy Oil + Gas, Inc.*		2,898		15,328
Linc Energy Ltd.*		5,177		10,318
Lundin Petroleum AB*		1,386		33,231
MEG Energy Corp.*		668		19,140
Mongolia Energy Corp. Ltd.*		56,000		2,345
Motor Oil Hellas Corinth Refineries S.A.		397		4,386
Neste Oil OYJ		268		4,180

	Shares		Value
Oil, Gas & Consumable Fuels – (continued)
New Hope Corp. Ltd.		2,558	$	9,931
Niko Resources Ltd.		400		2,649
Nippon Gas Co. Ltd.		200		2,486
NuVista Energy Ltd.*		2,413		17,560
Oil Search Ltd.		5,646		43,546
OMV AG		605		28,456
Ophir Energy PLC*		2,659		16,839
Origin Energy Ltd.		6,176		78,983
Pacific Rubiales Energy Corp.		2,790		59,081
Paladin Energy Ltd.*		18,665		14,628
Paramount Resources Ltd., Class A*		80		2,867
Parex Resources, Inc.*		6,212		27,791
Parkland Fuel Corp.		1,251		20,708
Pembina Pipeline Corp.		1,569		51,585
Pengrowth Energy Corp.		1,642		8,391
Penn West Petroleum Ltd.		2,737		25,306
PetroBakken Energy Ltd.		2,019		17,262
Petrobank Energy & Resources Ltd.*		814		550
Petrominerales Ltd.		4,725		26,118
Peyto Exploration & Development Corp.		1,036		29,869
Premier Oil PLC*		1,543		8,955
Repsol S.A.		4,367		102,483
Roc Oil Co. Ltd.*		17,561		8,294
Rockhopper Exploration PLC*		2,350		5,002
Royal Dutch Shell PLC, Class A		20,449		697,644
Royal Dutch Shell PLC, Class B		13,988		490,499
San-Ai Oil Co. Ltd.		2,000		9,198
Santos Ltd.		5,664		72,612
Saras SpA*		2,042		2,722
Senex Energy Ltd.*		27,229		19,362
Showa Shell Sekiyu KK		600		4,811
Sinanen Co. Ltd.		2,000		8,192
Soco International PLC*		3,799		22,409
Statoil ASA		6,149		150,279
Suncor Energy, Inc.		8,381		261,716
Sunshine Oilsands Ltd.*		47,629		11,661
Surge Energy, Inc.*		700		2,123
Talisman Energy, Inc.		5,787		69,500
TonenGeneral Sekiyu KK		1,000		10,102
Total Gabon		57		34,943

See Accompanying Notes to the Financial Statements.

86 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Oil, Gas & Consumable Fuels – (continued)
Total S.A.		11,645	$	587,550
Tourmaline Oil Corp.*		685		27,220
TransCanada Corp.		3,935		195,371
TransGlobe Energy Corp.*		708		5,617
Trilogy Energy Corp.		106		3,104
Tullow Oil PLC		4,996		77,836
Uranium One, Inc.*		3,100		8,630
Veresen, Inc.		445		5,964
Vermilion Energy, Inc.		452		23,232
Washington H Soul Pattinson & Co. Ltd.		264		3,985
Whitecap Resources, Inc.		1,980		20,354
Whitehaven Coal Ltd.		810		1,640
Woodside Petroleum Ltd.		3,539		137,983
				6,921,023
Paper & Forest Products – 0.2%
Ahlstrom Oyj		885		13,418
Canfor Corp.*		300		6,275
Canfor Pulp Products, Inc.		900		8,473
Daiken Corp.		2,000		5,461
Daio Paper Corp.		1,000		5,995
Ence Energia y Celulosa S.A		6,645		17,522
Holmen AB, Class B		194		5,422
Metsa Board OYJ		1,156		3,597
Mitsubishi Paper Mills Ltd.*		9,000		8,870
Mondi PLC		2,115		28,030
Norbord Inc.*		514		17,170
Oji Holdings Corp.		3,000		10,687
Semapa-Sociedade de Investimento e Gestao		3,270		30,954
Stella-Jones, Inc.		257		20,811
Stora Enso Oyj, Class R		3,252		22,616
Sumitomo Forestry Co. Ltd.		500		5,954
UPM-Kymmene Oyj		2,575		26,955
West Fraser Timber Co. Ltd.		65		5,684
				243,894
Personal Products – 0.5%
Aderans Co. Ltd.		500		8,351
Atrium Innovations, Inc.*		1,700		20,941
Beiersdorf AG		513		46,485

	Shares		Value
Personal Products – (continued)
Dr Ci:Labo Co. Ltd.		1	$	3,040
Fancl Corp.		400		4,369
Kao Corp.		2,700		93,409
Kobayashi Pharmaceutical Co. Ltd.		100		5,461
Kose Corp.		200		5,221
L’Oreal S.A.*		1,217		217,248
Mandom Corp.		200		7,320
Milbon Co. Ltd.		200		7,587
Oriflame Cosmetics S.A.		2,451		88,867
Shiseido Co. Ltd.		1,800		25,759
				534,058
Pharmaceuticals – 5.9%
Acrux Ltd.		918		3,850
ALK-Abello A/S		82		6,047
Almirall SA		1,064		14,084
Astellas Pharma, Inc.		2,400		139,698
AstraZeneca PLC		6,221		323,633
Bayer AG		4,375		456,941
BTG PLC*		5,034		27,085
Chugai Pharmaceutical Co. Ltd.		1,400		34,881
Daiichi Sankyo Co. Ltd.		3,600		70,403
Dainippon Sumitomo Pharma Co. Ltd.		1,000		18,376
Eisai Co. Ltd.		1,400		63,885
Faes Farma S.A.		4,090		11,189
Fuso Pharmaceutical Industries Ltd.		2,000		8,480
Galenica AG		15		9,850
GlaxoSmithKline PLC		25,903		669,438
H Lundbeck A/S		500		10,009
Haw Par Corp. Ltd.		1,000		6,301
Hikma Pharmaceuticals PLC		312		4,744
Hisamitsu Pharmaceutical Co. Inc.		300		17,647
Kyowa Hakko Kirin Co. Ltd.		1,000		12,268
Meda AB, Class A		1,228		14,683
Merck KGaA		360		54,867
Mitsubishi Tanabe Pharma Corp.		1,700		25,846
Nichi-iko Pharmaceutical Co. Ltd.		800		19,357
Nippon Shinyaku Co. Ltd.		1,000		15,532
Novartis AG		12,084		898,219

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 87

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Pharmaceuticals – (continued)
Novo Nordisk A/S, Class B		2,154	$	378,239
Ono Pharmaceutical Co. Ltd.		400		26,363
Orion OYJ, Class B		611		17,561
Otsuka Holdings Co. Ltd.		1,900		68,463
Paladin Labs, Inc.*		100		4,991
Recordati SpA		2,678		27,645
Roche Holding AG		3,911		978,375
Rohto Pharmaceutical Co. Ltd.		1,000		14,044
Sanofi		6,337		695,278
Santen Pharmaceutical Co. Ltd.		400		20,039
Sawai Pharmaceutical Co. Ltd.		100		12,915
Seikagaku Corp.		300		4,096
Shionogi & Co. Ltd.		1,400		34,465
Shire PLC		3,000		93,477
Stada Arzneimittel AG		1,001		40,581
Taisho Pharmaceutical Holdings Co. Ltd.		100		7,412
Takeda Pharmaceutical Co. Ltd.		4,500		247,151
Teva Pharmaceutical Industries Ltd.		5,124		200,613
Towa Pharmaceutical Co. Ltd.		100		4,958
Tsumura & Co.		200		6,519
UCB S.A.*		622		36,804
The United Laboratories International Holdings Ltd.*		18,000		6,749
Valeant Pharmaceuticals International, Inc.*		1,515		115,223
Virbac S.A.		82		16,757
ZERIA Pharmaceutical Co. Ltd.		1,000		15,389
				6,011,420
Professional Services – 0.8%
Adecco S.A.*		615		32,923
ALS Ltd./Queensland		1,657		16,839
Brunel International NV		60		2,544
Bureau Veritas S.A.		281		34,472
Capita PLC		3,477		48,840
DKSH Holding AG		54		4,703
Experian PLC		5,635		99,280
Hays PLC		25,650		37,287
Intertek Group PLC		777		40,004
McMillan Shakespeare Ltd.		342		5,418

	Shares		Value
Professional Services – (continued)
Meitec Corp.		700	$	18,016
Michael Page International PLC		5,375		31,170
Randstad Holding N.V.		640		26,676
SAI Global Ltd.		4,588		16,812
Seek Ltd.		1,978		22,956
SGS S.A.		28		67,728
Stantec, Inc.		78		3,341
Sthree PLC		578		3,018
Teleperformance S.A.		2,934		129,275
Temp Holdings Co. Ltd.		1,400		30,397
USG People NV		3,457		27,059
WS Atkins PLC		5,410		75,865
				774,623
Real Estate Investment Trusts (REITs) – 2.1%
Abacus Property Group		2,180		5,295
Advance Residence Investment Corp.		6		14,358
Allied Properties Real Estate Investment Trust		122		4,183
Altarea		270		50,192
ANF Immobilier		366		11,098
Ascendas Real Estate Investment Trust		10,000		22,328
Ascott Residence Trust		9,000		10,267
Befimmo SCA Sicafi		387		26,848
Beni Stabili SpA		24,897		17,561
Big Yellow Group PLC		2,896		18,187
Boardwalk Real Estate Investment Trust		307		20,104
British Land Co. PLC		4,295		39,741
Brookfield Canada Office Properties		200		5,953
BWP Trust		7,931		19,923
Cache Logistics Trust		7,000		8,042
Calloway Real Estate Investment Trust		200		6,007
Canadian Real Estate Investment Trust		100		4,739
CapitaCommercial Trust		16,000		22,214
CapitaRetail China Trust		9,000		12,313
CDL Hospitality Trusts		4,000		6,495
CFS Retail Property Trust Group		5,170		11,807

See Accompanying Notes to the Financial Statements.

88 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Real Estate Investment Trusts (REITs) – (continued)
Charter Hall Group		4,649	$	20,558
Charter Hall Retail REIT		6,150		27,387
Chartwell Retirement Residences		346		3,925
Cofinimmo		162		19,532
Corio NV		534		24,771
Cromwell Property Group		28,661		31,239
Daiwa Office Investment Corp.		2		9,517
Daiwahouse Residential Investment Corp.		2		8,521
Derwent London PLC		416		14,950
Dexus Property Group		24,122		28,921
Dundee Real Estate Investment Trust, Class A		200		7,359
Eurocommercial Properties NV		739		30,223
Far East Hospitality Trust		9,000		8,257
Federation Centres Ltd.		3,426		9,247
Fonciere des Murs		2,576		58,754
Fonciere Des Regions		50		3,982
Fortune Real Estate Investment Trust		21,000		19,483
Frasers Centrepoint Trust		10,000		18,268
Frontier Real Estate Investment Corp.		1		10,225
Fukuoka REIT Co.		2		16,918
Gecina S.A.		121		14,566
Global One Real Estate Investment Corp.		1		6,755
Goodman Group		9,309		50,345
Goodman Property Trust		27,812		26,960
GPT Group		8,875		37,772
Granite Real Estate Investment Trust		132		5,243
Great Portland Estates PLC		2,954		24,459
H&R Real Estate Investment Trust		214		5,266
Hammerson PLC		2,772		22,413
Hankyu Reit, Inc.		1		6,611
ICADE		114		10,521
Immobiliare Grande Distribuzione		4,058		4,387
Industrial & Infrastructure Fund Investment Corp.		1		10,625

	Shares		Value
Real Estate Investment Trusts (REITs) – (continued)
InnVest Real Estate Investment Trust		1,100	$	5,468
Intu Properties PLC		1,295		6,907
Investa Office Fund		1,366		4,651
Japan Excellent, Inc.		1		6,817
Japan Hotel REIT Investment Corp.		35		14,803
Japan Logistics Fund, Inc.		1		10,820
Japan Prime Realty Investment Corp.		3		11,026
Japan Real Estate Investment Corp.		3		40,222
Japan Rental Housing Investments, Inc.		12		9,387
Japan Retail Fund Investment Corp.		10		23,714
Kenedix Realty Investment Corp.		3		14,090
Keppel REIT		1,800		2,207
Kiwi Income Property Trust		2,741		2,763
Klepierre		655		27,806
Land Securities Group PLC		3,476		47,257
The Link REIT		12,000		67,959
Lippo Malls Indonesia Retail Trust		12,000		5,115
Londonmetric Property PLC		13,999		24,947
Mapletree Commercial Trust		4,000		4,758
Mapletree Industrial Trust		5,070		6,463
Mapletree Logistics Trust		5,067		5,389
Mercialys S.A.		257		5,741
MID Reit, Inc.		7		18,670
Mirvac Group		17,643		32,416
Morguard Real Estate Investment Trust		2,025		36,862
Mori Hills REIT Investment Corp.		1		6,950
Mori Trust Sogo Reit, Inc.		1		9,722
Nieuwe Steen Investments NV		3,231		24,144
Nippon Accommodations Fund, Inc.		1		7,751
Nippon Building Fund, Inc.		4		57,571
Nomura Real Estate Office Fund, Inc.		1		6,385
Nomura Real Estate Residential Fund, Inc.		3		18,571
Orix JREIT, Inc.		5		6,755

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 89

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Real Estate Investment Trusts (REITs) – (continued)
Parkway Life Real Estate Investment Trust		9,000	$	19,510
Premier Investment Corp.		4		18,540
Regal Real Estate Investment Trust		56,000		18,473
RioCan Real Estate Investment Trust		730		21,417
Segro PLC		1,477		6,124
Sekisui House SI Investment Co.		2		10,215
Shaftesbury PLC		2,325		21,983
Societe Immobiliere de Location pour l’Industrie et le Commerce		171		20,157
Starhill Global REIT		29,000		22,722
Stockland		10,917		43,856
Suntec Real Estate Investment Trust		21,000		33,163
Tokyu REIT, Inc.		3		19,095
Top REIT, Inc.		2		10,718
Unibail-Rodamco SE		487		127,449
United Urban Investment Corp.		13		21,420
Vastned Retail N.V.		534		23,863
Warehouses De Pauw SCA		196		12,533
Wereldhave N.V.		363		26,360
Westfield Group		11,341		137,150
Westfield Retail Trust		13,563		46,461
Workspace Group PLC		750		4,377
				2,175,308
Real Estate Management & Development – 2.9%
Aeon Mall Co. Ltd.		200		6,437
Africa Israel Investments Ltd.*		5,484		13,285
Allreal Holding AG*		27		3,956
Alony Hetz Properties & Investments Ltd.		5,931		38,861
Amot Investments Ltd.		2,453		6,900
Argosy Property Ltd.		6,525		5,849
Ascendas India Trust		16,000		10,652
Atrium European Real Estate Ltd.		1,234		7,373
Atrium Ljungberg AB, Class B		1,034		14,384
Brookfield Asset Management, Inc., Class A		2,854		110,347

	Shares		Value
Real Estate Management & Development – (continued)
Brookfield Office Properties, Inc.		1,253	$	23,108
Bukit Sembawang Estates Ltd.		9,000		52,101
CA Immobilien Anlagen AG*		1,815		25,544
Capital & Counties Properties PLC		3,771		18,077
CapitaLand Ltd.		11,000		33,402
CapitaMalls Asia Ltd.		10,000		17,050
Castellum AB		1,191		17,847
Cheung Kong Holdings Ltd.		8,000		120,403
City Developments Ltd.		2,000		18,284
Citycon OYJ		7,131		23,128
CLS Holdings PLC*		280		3,994
Conwert Immobilien Invest SE		573		6,492
Daejan Holdings PLC		137		8,359
Daibiru Corp.		400		5,576
Daikyo, Inc.		2,000		7,720
Daito Trust Construction Co. Ltd.		400		38,764
Daiwa House Industry Co. Ltd.		3,000		67,817
Deutsche Euroshop AG		475		20,375
Deutsche Wohnen AG		1,101		19,436
Dolphin Capital Investors Ltd.*		10,829		5,393
Emperor International Holdings		54,000		15,099
Fabege AB		2,513		27,175
Fastighets AB Balder, Class B*		3,710		26,823
First Capital Realty, Inc.		300		5,804
FirstService Corp./Canada*		304		10,073
FKP Property Group		8,879		15,208
GAGFAH S.A.*		641		8,282
Gazit-Globe Ltd.		475		6,329
Global Logistic Properties Ltd.		9,000		20,168
Goldcrest Co. Ltd.		1,000		32,902
Grainger PLC		10,741		22,736
Great Eagle Holdings Ltd.		15,000		63,591
GSW Immobilien AG		538		21,612
Hang Lung Group Ltd.		4,000		23,555
Hang Lung Properties Ltd.		13,000		50,589
Heiwa Real Estate Co. Ltd.		300		7,607
Henderson Land Development Co. Ltd.		4,000		28,967
HKR International Ltd.		39,200		19,599
Ho Bee Investment Ltd.		8,000		13,965
Hongkong Land Holdings Ltd.		6,000		43,560
Hufvudstaden AB, Class A		283		3,703

See Accompanying Notes to the Financial Statements.

90 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Real Estate Management & Development – (continued)
Hulic Co. Ltd.		1,600	$	17,772
Hysan Development Co. Ltd.		2,000		9,909
Iida Home Max		1,000		19,146
IMMOFINANZ AG*		2,814		11,520
IVG Immobilien AG*		3,867		3,253
K Wah International Holdings Ltd.		55,000		30,049
Keppel Land Ltd.		2,000		6,593
Kerry Properties Ltd.		4,500		20,353
Klovern AB		5,855		26,502
Kowloon Development Co. Ltd.		17,000		22,519
Kungsleden AB		7,390		51,830
Lend Lease Group		2,550		28,535
Leopalace21 Corp.*		9,900		54,882
Midland Holdings Ltd.		4,000		1,845
Mitsubishi Estate Co. Ltd.		7,000		227,441
Mitsui Fudosan Co. Ltd.		4,000		135,920
Mobimo Holding AG*		135		30,373
Morguard Corp.		379		44,688
New World Development Co. Ltd.		27,000		47,107
Nitsba Holdings 1995 Ltd.*		1,947		22,651
Nomura Real Estate Holdings, Inc.		200		5,369
Norwegian Property ASA		13,388		18,813
NTT Urban Development Corp.		8		11,826
Peet Ltd.*		5,644		8,261
Polytec Asset Holdings Ltd.		95,000		12,119
Precinct Properties New Zealand Ltd.		22,735		20,966
PSP Swiss Property AG*		373		35,033
Relo Holdings, Inc.		900		50,539
Savills PLC		2,611		23,651
Sino Land Co. Ltd.		20,165		33,155
Songbird Estates PLC*		12,519		27,278
Sponda OYJ		980		5,233
ST Modwen Properties PLC		3,576		14,883
Sumitomo Realty & Development Co. Ltd.		2,000		94,446
Sun Hung Kai Properties Ltd.		9,000		130,119
Swire Pacific Ltd.		5,000		12,048
Swire Pacific Ltd., Class A		4,500		57,202

	Shares		Value
Real Estate Management & Development – (continued)
Swire Properties Ltd.		5,400	$	19,274
Swiss Prime Site AG*		272		22,326
TOC Co. Ltd.		400		3,146
Tokyo Tatemono Co. Ltd.		3,000		27,749
Tokyu Land Corp.		2,000		24,536
Tokyu Livable, Inc.		400		9,810
Unite Group PLC		3,471		18,789
UOL Group Ltd.		2,000		11,578
Wallenstam AB, Class B		1,505		21,390
Wharf Holdings Ltd.		9,000		80,310
Wheelock & Co. Ltd.		4,000		22,266
Wihlborgs Fastigheter AB		1,229		20,315
Wing Tai Holdings Ltd.		29,000		51,330
Ying Li International Real Estate Ltd.*		24,000		9,938
				2,934,847
Road & Rail – 1.5%
Asciano Ltd.		5,427		30,421
Aurizon Holdings Ltd.		10,532		45,371
Brockman Mining Ltd.*		140,000		8,118
Canadian National Railway Co.		2,340		229,452
Canadian Pacific Railway Ltd.		936		116,841
Central Japan Railway Co.		900		108,562
ComfortDelGro Corp. Ltd.		13,000		20,951
DSV A/S		1,163		29,307
East Japan Railway Co.		1,800		151,894
Firstgroup PLC		26,038		85,549
Go-Ahead Group PLC		2,162		52,156
Hankyu Hanshin Holdings, Inc.		6,000		38,805
KEIKYU CORP		2,000		22,133
Keio Corp.		3,000		25,808
Keisei Electric Railway Co. Ltd.		1,000		10,574
Kintetsu Corp.		9,000		45,550
Maruzen Showa Unyu Co. Ltd.		2,000		7,166
MTR Corp. Ltd.		6,500		26,802
Nagoya Railroad Co. Ltd.		2,000		6,201
Nankai Electric Railway Co. Ltd.		2,000		8,028
National Express Group PLC		23,851		71,088
Nippon Express Co. Ltd.		6,000		31,229
Nippon Konpo Unyu Soko Co. Ltd.		2,900		44,776
Nishi-Nippon Railroad Co. Ltd.		1,000		4,096

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 91

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Road & Rail – (continued)
Odakyu Electric Railway Co. Ltd.		4,000	$	48,167
Sankyu, Inc.		2,000		8,931
Senko Co. Ltd.		5,000		27,102
Sixt AG		1,408		29,454
SMRT Corp. Ltd.		8,000		9,613
Sotetsu Holdings, Inc.		1,000		3,891
Stagecoach Group PLC		834		3,991
Tobu Railway Co. Ltd.		4,000		23,242
Tokyu Corp.		8,000		63,484
TransForce, Inc.		200		3,953
Transport International Holdings Ltd.		4,000		9,020
West Japan Railway Co.		900		43,517
				1,495,243
Semiconductors & Semiconductor Equipment – 0.7%
Advantest Corp.		1,000		14,968
Aixtron SE NA		1,414		20,190
AMS AG		167		15,586
ARM Holdings PLC		7,327		113,581
ASM International NV		1,198		40,015
ASM Pacific Technology Ltd.		400		4,123
ASML Holding NV		2,067		153,834
CSR PLC		4,039		30,991
Dainippon Screen Manufacturing Co. Ltd.		1,000		5,154
Dialog Semiconductor PLC*		974		11,583
Disco Corp.		100		6,457
EZchip Semiconductor Ltd.*		500		11,405
Imagination Technologies Group PLC*		3,889		25,749
Infineon Technologies AG		6,005		47,462
Kontron AG		3,452		18,746
Megachips Corp.		200		3,028
Mellanox Technologies Ltd.*		100		5,098
Micronas Semiconductor Holding AG*		997		7,030
Mimasu Semiconductor Industry Co. Ltd.		500		5,061
Nordic Semiconductor ASA*		868		2,639
Nuflare Technology, Inc.		1		7,782
Renewable Energy Corp. ASA*		74,459		20,642

	Shares		Value
Semiconductors & Semiconductor Equipment – (continued)
Rohm Co. Ltd.		300	$	10,579
Sanken Electric Co. Ltd.		5,000		23,406
Shinko Electric Industries Co. Ltd.		600		6,098
Silex Systems Ltd.*		720		2,033
SMA Solar Technology AG		212		5,255
SOITEC*		884		3,205
Solarworld AG		1,426		1,316
STATS ChipPAC Ltd.*		126,000		42,455
STMicroelectronics N.V.		3,135		27,283
Sumco Corp.		600		6,301
Tokyo Electron Ltd.		900		46,104
Tokyo Seimitsu Co. Ltd.		800		17,583
Ulvac, Inc.*		300		2,347
Wolfson Microelectronics PLC*		714		2,281
				767,370
Software – 1.0%
Allot Communications Ltd.*		300		3,396
Aveva Group PLC		618		21,353
Computer Modelling Group Ltd.		400		8,017
Constellation Software, Inc./Canada		180		24,606
Dassault Systemes S.A.		354		43,218
DTS Corp.		1,100		18,441
Dwango Co. Ltd.		1		5,051
Fidessa Group PLC		987		27,574
Fuji Soft, Inc.		900		24,041
GungHo Online Entertainment, Inc.*		6		56,791
Konami Corp.		200		4,562
MacDonald Dettwiler & Associates Ltd.		250		18,087
Micro Focus International PLC		2,883		30,041
Nexon Co. Ltd.		300		3,640
NICE Systems Ltd.*		442		15,504
Nintendo Co. Ltd.		600		66,523
NSD Co. Ltd.		2,300		26,138
Oracle Corp. Japan		200		8,572
Playtech Ltd.		2,533		24,167
The Sage Group PLC		7,291		38,299
SAP AG		4,834		384,364
SimCorp A/S		71		20,779
Software AG		367		12,844

See Accompanying Notes to the Financial Statements.

92 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Software – (continued)
Tecmo Koei Holdings Co. Ltd.		1,200	$	10,828
Temenos Group AG*		945		22,380
Trend Micro, Inc.		700		19,618
UBISOFT Entertainment*		4,683		52,294
Xero Ltd.*		600		7,669
				998,797
Specialty Retail – 1.7%
Alpen Co. Ltd.		1,400		29,247
AOKI Holdings, Inc.		100		3,085
Aoyama Trading Co. Ltd.		500		14,952
ARB Corp. Ltd.		1,725		23,278
Automotive Holdings Group Ltd.		7,428		31,382
Baoxin Auto Group Ltd.*		33,000		28,788
Bic Camera, Inc.		54		23,699
BMTC Group, Inc., Class A		244		3,639
Carpetright PLC*		268		2,619
Carphone Warehouse Group PLC		2,040		7,461
Charles Voegele Holding AG*		170		2,370
Chiyoda Co. Ltd.		200		5,776
Chow Sang Sang Holdings International Ltd.		7,000		18,942
Chow Tai Fook Jewellery Group Ltd.		2,800		3,767
Clas Ohlson AB, Class B		2,118		28,548
Darty PLC		6,542		4,989
Delek Automotive Systems Ltd.		1,942		20,859
Delticom AG		112		5,508
Dixons Retail PLC*		72,217		39,452
Dufry AG*		55		7,336
Dunelm Group PLC		394		5,182
EDION Corp.		4,600		21,534
Emperor Watch & Jewellery Ltd.		180,000		18,323
Esprit Holdings Ltd.		12,600		17,665
Fast Retailing Co. Ltd.		300		109,948
Fielmann AG		70		6,761
Folli Follie Group*		230		4,815
Geo Holdings Corp.		21		25,094
Giordano International Ltd.		24,000		23,998
Gulliver International Co. Ltd.		3,100		24,887
Halfords Group PLC		3,757		20,162

	Shares		Value
Specialty Retail – (continued)
Hennes & Mauritz AB, Class B		4,923	$	174,389
Honeys Co. Ltd.		400		5,178
Howden Joinery Group PLC		9,300		35,998
Inditex S.A.		1,181		158,895
IT Ltd.		14,000		5,123
JB Hi-Fi Ltd.		5,545		92,096
Jin Co. Ltd.*		200		11,826
Joshin Denki Co. Ltd.		2,000		17,924
JUMBO S.A.*		5,205		49,065
Kathmandu Holdings Ltd.		10,721		20,693
Keiyo Co. Ltd.		800		4,049
Kingfisher PLC		12,421		60,529
Kohnan Shoji Co. Ltd.		2,800		34,407
K’s Holdings Corp.		200		7,042
Leon’s Furniture Ltd.		900		11,954
L’Occitane International S.A.		1,000		2,899
Luk Fook Holdings International Ltd.		18,000		51,027
Megane TOP Co. Ltd.		1,500		21,605
Mekonomen AB		674		21,293
Nafco Co. Ltd.		600		12,744
NEC Mobiling Ltd.		400		22,872
Nishimatsuya Chain Co. Ltd.		400		3,963
Nitori Holdings Co. Ltd.		150		11,303
Pal Co. Ltd.		600		19,988
Point, Inc.		310		15,085
Praktiker AG*		2,466		3,605
Premier Investments Ltd.		550		4,938
Reitmans Canada Ltd., Class A		370		3,255
RONA, Inc.		6,734		70,296
SA SA International Holdings Ltd.		14,000		14,576
Sanrio Co. Ltd.		100		5,015
Shimamura Co. Ltd.		100		12,637
Sports Direct International PLC*		3,304		23,974
Super Retail Group Ltd.		315		4,303
SuperGroup PLC*		681		7,340
T-Gaia Corp.		1,200		12,960
Trinity Ltd.		24,000		9,463
United Arrows Ltd.		200		7,761
USS Co. Ltd.		160		20,515
Valora Holding AG		228		44,866
WH Smith PLC		2,359		27,151

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 93

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Specialty Retail – (continued)
Xebio Co. Ltd.		1,500	$	35,325
Yamada Denki Co. Ltd.		590		28,437
				1,792,430
Textiles, Apparel & Luxury Goods – 1.3%
Adidas AG		1,099		114,899
Asics Corp.		900		16,233
Bijou Brigitte AG		254		25,434
Billabong International Ltd.*		17,977		8,864
Brunello Cucinelli SpA*		187		4,009
Burberry Group PLC		2,343		48,719
China Outfitters Holdings Ltd.		24,000		4,020
Christian Dior S.A.		271		47,287
Cie Financiere Richemont S.A.		2,809		227,091
Geox SpA		2,499		7,578
Gerry Weber International AG		393		17,256
Gildan Activewear, Inc.		761		30,649
Gunze Ltd.		2,000		5,215
Hermes International		83		28,024
Hugo Boss AG		192		22,367
The Japan Wool Textile Co. Ltd.		3,000		25,901
Kurabo Industries Ltd.		9,000		16,908
Luxottica Group SpA		857		44,664
LVMH Moet Hennessy Louis Vuitton S.A.		1,407		243,931
Mulberry Group PLC		152		2,106
Onward Holdings Co. Ltd.		1,000		9,352
Pacific Textile Holdings Ltd.		25,000		30,861
Pandora A/S		930		28,418
Puma SE*		10		3,101
Samsonite International S.A.		6,900		16,982
Sanyo Shokai Ltd.		6,000		18,232
Seiko Holdings Corp.		7,000		41,033
Seiren Co. Ltd.		500		3,331
Stella International Holdings Ltd.		1,500		4,417
The Swatch Group AG		163		93,436
Swatch Group AG (The)		190		19,103
Texwinca Holdings Ltd.		36,000		42,028
Tod’s SpA		29		4,213
TSI Holdings Co Ltd.		400		2,952
Unitika Ltd.*		42,000		27,595

	Shares		Value
Textiles, Apparel & Luxury Goods – (continued)
Yue Yuen Industrial Holdings Ltd.		6,000	$	20,759
				1,306,968
Thrifts & Mortgage Finance – 0.1%
Aareal Bank AG*		2,639		63,496
First National Financial Corp.		172		3,179
Home Capital Group, Inc.		70		4,023
Paragon Group of Cos. PLC		6,392		31,079
				101,777
Tobacco – 0.9%
British American Tobacco PLC		9,840		546,132
Imperial Tobacco Group PLC		5,257		188,186
Japan Tobacco, Inc.		4,900		185,366
Swedish Match AB		990		34,381
				954,065
Trading Companies & Distributors – 1.3%
Ashtead Group PLC		3,116		28,492
BayWa AG		72		3,626
Brenntag AG		272		46,421
Bunzl PLC		1,701		33,861
Cramo OYJ		2,338		30,824
Emeco Holdings Ltd.		28,794		13,749
Finning International, Inc.		991		21,419
Grafton Group PLC		6,078		42,318
Hanwa Co. Ltd.		10,000		37,676
Inaba Denki Sangyo Co. Ltd.		200		5,897
Inabata & Co. Ltd.		2,800		21,932
Indutrade AB		108		3,771
ITOCHU Corp.		8,200		101,437
Kamei Corp.		1,000		10,122
Kanematsu Corp.*		27,000		37,419
Kloeckner & Co. SE*		5,545		66,906
Kuroda Electric Co. Ltd.		1,700		22,548
Marubeni Corp.		9,000		64,398
MISUMI Group, Inc.		700		21,350
Mitsubishi Corp.		7,500		134,586
Mitsui & Co. Ltd.		9,300		127,743
MonotaRO Co. Ltd.		400		10,171
Nichiden Corp.		300		7,080
Noble Group Ltd.		11,000		10,047
Ramirent OYJ		2,223		22,040

See Accompanying Notes to the Financial Statements.

94 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Trading Companies & Distributors – (continued)
Rexel S.A.		212	$	4,669
Richelieu Hardware Ltd.		424		16,714
Russel Metals, Inc.		142		3,847
Seven Group Holdings Ltd.		1,044		10,068
SIG PLC		11,924		30,083
Sojitz Corp.		3,000		4,712
Solar A/S, Class B		461		23,152
Sumikin Bussan Corp.		6,000		19,649
Sumitomo Corp.		6,300		78,645
Tat Hong Holdings Ltd.		20,000		24,195
Toyota Tsusho Corp.		900		25,048
Travis Perkins PLC		1,036		23,122
Trusco Nakayama Corp.		1,200		24,774
Wajax Corp.		200		6,856
Wolseley PLC		1,495		74,063
Yamazen Corp.		2,700		17,185
Yuasa Trading Co. Ltd.		11,000		23,262
				1,335,877
Transportation Infrastructure – 0.5%
Abertis Infraestructuras S.A.		2,108		39,409
Aeroports de Paris		62		5,618
Ansaldo STS SpA		819		8,460
Atlantia SpA		1,603		28,679
Auckland International Airport Ltd.		9,106		24,216
Australian Infrastructure Fund		1,446		4,728
Autostrada Torino-Milano SpA*		2,084		24,865
BBA Aviation PLC		12,763		49,840
China Resources and Transportation Group Ltd.*		200,000		7,603
Flughafen Wien AG*		104		6,454
Flughafen Zuerich AG		16		7,789
Fraport AG Frankfurt Airport Services Worldwide		68		4,068
Gemina SpA*		6,809		13,026
Groupe Eurotunnel S.A.		2,703		22,654
Hamburger Hafen und Logistik AG		216		4,653
Hutchison Port Holdings Trust, Class U		28,000		23,240
Japan Airport Terminal Co. Ltd.		500		7,720

	Shares		Value
Transportation Infrastructure – (continued)
Kamigumi Co. Ltd.		1,000	$	9,362
Kobenhavns Lufthavne		50		20,504
Koninklijke Vopak N.V.		273		15,138
Mitsubishi Logistics Corp.		1,000		17,873
Mitsui-Soko Co. Ltd.		2,000		13,613
Nissin Corp.		4,000		11,744
Qube Holdings Ltd.		4,795		8,711
SATS Ltd.		2,000		5,115
The Sumitomo Warehouse Co. Ltd.		9,000		64,490
Sydney Airport		1,178		4,231
Transurban Group		7,679		54,364
Westshore Terminals Investment Corp.		134		3,863
				512,030
Water Utilities – 0.2%
Athens Water Supply & Sewage Co. SA (The)		926		6,947
Hyflux Ltd.		15,000		16,685
Kurita Water Industries Ltd.		200		4,104
Pennon Group PLC		2,517		26,854
Severn Trent PLC		1,227		34,776
Sound Global Ltd.		11,000		5,001
Suez Environnement Co.		1,717		24,686
United Utilities Group PLC		3,475		40,050
				159,103
Wireless Telecommunication Services – 1.5%
Freenet AG		1,294		32,261
KDDI Corp.		2,800		134,524
Mobistar S.A.		1,584		37,820
NTT DOCOMO, Inc.		87		143,794
Okinawa Cellular Telephone Co.		600		16,908
Rogers Communications, Inc., Class B		2,368		116,981
SmarTone Telecommunications Holdings Ltd.		6,000		10,685
Softbank Corp.		5,141		254,649
Sonaecom – SGPS S.A.		2,864		6,713
StarHub Ltd.		2,000		7,681

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 95

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Wireless Telecommunication Services – (continued)
Tele2 AB, Class B		1,665	$	28,577
Vodafone Group PLC		261,090		797,279
				1,587,872
Total Common Stocks (Cost $94,305,389)				100,743,142
PREFERRED STOCKS – 0.4%
Aerospace & Defense – 0.0%†
Rolls-Royce Holdings PLC*^		1,184,645		1,844
Automobiles – 0.3%
Porsche Automobil Holding SE		837		65,647
Volkswagen AG		783		158,872
				224,519
Diversified Telecommunication Services – 0.0%†
Telecom Italia SpA		29,601		20,606
Household Products – 0.1%
Henkel AG & Co. KGaA		918		86,657
Insurance – 0.0%†
Unipol Gruppo Finanziario SpA*		18,393		56,064
Machinery – 0.0%†
KSB AG		48		27,212
Total Preferred Stocks (Cost $403,002)				416,902

	No. of Rights		Value
RIGHTS – 0.0%†
Africa Israel Investments Ltd., expiring 05/07/13 at 750 ILS*^		119	$	392
Bankia S.A., expiring 05/14/13 at 1.35 EUR*		16		26
Faes Farma S.A., expiring 05/03/13*		4,090		448
Koninklijke KPN N.V., expiring 05/14/13 at 1.06 EUR*		6,519		8,767
Total Rights (Cost $14,329)				9,633
Total Investment Securities (Cost $94,722,720) – 99.0%				101,169,677
Other assets less liabilities – 1.0%				1,052,818
NET ASSETS – 100.0%			$	102,222,495

* Non-income producing security.

^ Security fair valued in accordance with procedures adopted by the Board of Trustees. At April 30, 2013, the value of these securities amounted to $42,557 or 0.04% of net assets.

(a) 144A security – Certain conditions for public sale may exist.

† Amount represents less than 0.05%.

Percentages shown are based on Net Assets.

Abbreviation:

REIT – Real Estate Investment Trust

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	9,151,872
Aggregate gross unrealized depreciation		(2,704,915	)
Net unrealized appreciation	$	6,446,957
Federal income tax cost of investments	$	94,722,720

See Accompanying Notes to the Financial Statements.

96 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund (cont.)

Futures Contracts Purchased

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund had the following open long futures contracts as of April 30, 2013:

	Number of Contracts		Expiration Date		Notional Amount at Value		Unrealized Appreciation
E-mini MSCI EAFE Futures Contracts		13		06/21/13	$	1,131,520	$	43,955

Cash collateral in the amount of $94,133 was pledged to cover margin requirements for open futures contracts as of April 30, 2013.

Forward Foreign Currency Contracts

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund had the following outstanding contracts as of April 30, 2013:

Contracts to Deliver	Counterparty		In Exchange For		Delivery Date		Unrealized Appreciation
EUR 30,864		Citibank N.A.		USD40,000		06/19/13	$	704

FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index invested, as a percentage of net assets, in the following countries as of April 30, 2013:

Australia	7.8	%
Austria	0.4
Belgium	1.1
Canada	9.5
Denmark	1.1
Finland	0.7
France	7.3
Germany	6.6
Greece	0.2
Hong Kong	3.0
Ireland	0.5
Israel	0.6
Italy	2.2
Japan	22.5
Netherlands	2.2
New Zealand	0.3
Norway	1.1
Portugal	0.3
Singapore	1.9
Spain	2.3
Sweden	3.0
Switzerland	6.5
United Kingdom	17.9
Other 1	1.0
	100.0	%

¹  Includes any non-equity securities and net other assets (liabilities).

^†  Amount represents less than 0.05%.

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 97

Schedule of Investments

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund

April 30, 2013 (Unaudited)

	Shares		Value
COMMON STOCKS – 90.1%
Aerospace & Defense – 0.2%
Aselsan Elektronik Sanayi Ve Ticaret AS		1,645	$	9,768
AviChina Industry & Technology Co. Ltd., Class H		104,000		50,254
Embraer S.A.		10,500		91,583
Korea Aerospace Industries Ltd.		440		11,187
S&T Dynamics Co. Ltd.		3,580		42,747
				205,539
Air Freight & Logistics – 0.1%
Hanjin Transportation Co. Ltd.		1,180		24,269
Hyundai Glovis Co. Ltd.		280		47,035
Kerry TJ Logistics Co. Ltd.		8,000		10,707
POS Malaysia BHD		17,600		25,164
Sinotrans Ltd., Class H		256,000		54,759
				161,934
Airlines – 0.7%
Aeroflot – Russian Airlines OJSC		35,601		61,975
Air China Ltd., Class H		42,000		33,987
AirAsia BHD		33,900		32,647
Asiana Airlines, Inc.*		1,670		7,931
Cebu Air, Inc.		6,550		12,962
China Airlines Ltd.*		32,000		12,198
China Eastern Airlines Corp. Ltd., Class H*		258,000		103,391
China Southern Airlines Co. Ltd., Class H		268,000		140,896
Eva Airways Corp.*		26,000		14,492
Garuda Indonesia Persero Tbk PT*		117,000		7,581
Grupo Aeromexico SAB de CV*		11,400		16,392
Korean Air Lines Co. Ltd.*		1,090		34,938
Latam Airlines Group S.A.		4,375		90,283
Malaysian Airline System BHD*		9,400		2,101

	Shares		Value
Airlines – (continued)
Thai Airways International PCL		138,700	$	139,409
Turk Hava Yollari*		10,610		44,133
				755,316
Auto Components – 0.8%
Autometal S.A.		1,400		14,690
Cheng Shin Rubber Industry Co. Ltd.		29,000		98,167
Dae Won Kang Up Co. Ltd.		820		6,098
Depo Auto Parts Ind Co. Ltd.		3,000		8,031
Gajah Tunggal Tbk PT		56,500		16,853
Global & Yuasa Battery Co. Ltd.		420		20,746
Halla Visteon Climate Control Corp.		700		18,909
Hyundai Mobis		1,311		297,603
Hyundai Wia Corp.		255		32,879
Kenda Rubber Industrial Co. Ltd.		4,000		7,970
Kumho Tire Co., Inc.*		1,110		11,944
Mahle-Metal Leve SA Industria e Comercio		1,700		23,364
Mando Corp.		258		19,679
Minth Group Ltd.		32,000		57,233
Nan Kang Rubber Tire Co. Ltd.		4,000		4,723
Nexen Tire Corp.		650		8,499
SL Corp.		1,830		24,343
Sri Trang Agro-Industry PCL		11,300		6,006
Sungwoo Hitech Co. Ltd.		4,623		64,226
Tianneng Power International Ltd.		104,000		65,799
Tong Yang Industry Co. Ltd.		16,000		16,725
Tupy S.A.		2,300		25,421
Xingda International Holdings Ltd.		137,000		52,430
				902,338
Automobiles – 2.1%
Astra International Tbk PT		410,500		310,329
Brilliance China Automotive Holdings Ltd.*		42,000		51,414

See Accompanying Notes to the Financial Statements.

98 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Automobiles – (continued)
Byd Co. Ltd., Class H*		7,000	$	24,985
China Motor Corp.		4,000		3,897
Dongfeng Motor Group Co. Ltd., Class H		50,000		74,479
DRB-Hicom Bhd		7,100		5,857
Ford Otomotiv Sanayi AS		144		1,999
Geely Automobile Holdings Ltd.		45,000		22,614
Ghabbour Auto		2,371		9,065
Great Wall Motor Co. Ltd., Class H		21,000		91,056
Guangzhou Automobile Group Co. Ltd., Class H		46,000		37,935
Hyundai Motor Co.		3,049		552,325
Jiangling Motors Corp. Ltd., Class B		5,600		14,280
Kia Motors Corp.		5,250		261,237
Mahindra & Mahindra Ltd. (GDR)		18,127		308,884
Sanyang Industry Co. Ltd.*		107,000		105,506
Ssangyong Motor Co.		620		3,389
TAN Chong Motor Holdings BHD		5,600		9,994
Tata Motors Ltd. (ADR)		13,576		373,883
Tofas Turk Otomobil Fabrikasi AS		1,311		9,138
UMW Holdings Bhd		4,200		19,740
Yulon Motor Co. Ltd.		21,000		36,006
				2,328,012
Beverages – 1.2%
Anadolu Efes Biracilik Ve Malt Sanayii AS		4,709		78,245
Arca Continental SAB de CV		6,700		54,767
Carlsberg Brewery Malaysia Bhd		3,200		15,713
Cia Cervecerias Unidas S.A.		1,918		33,153
Cia de Bebidas das Americas		2,900		119,060
Coca-Cola Femsa SAB de CV		4,700		75,840
Coca-Cola Icecek AS		1,394		38,864
Distell Group Ltd.		563		7,941
Fomento Economico Mexicano SAB de CV		36,500		413,442

	Shares		Value
Beverages – (continued)
Fraser & Neave Holdings Bhd		3,000	$	17,985
Grupo Modelo SAB de CV		11,100		100,823
Guinness Anchor Bhd		2,000		12,135
Hey Song Corp.		19,000		25,141
Hite Jinro Co. Ltd.		320		9,371
Kingway Brewery Holdings Ltd.		42,000		16,723
Lotte Chilsung Beverage Co. Ltd.		21		32,779
Thai Beverage PCL		130,000		63,857
Tibet 5100 Water Resources Holdings Ltd.		67,000		23,914
Tsingtao Brewery Co. Ltd., Class H		4,000		26,828
Vina Concha y Toro S.A.		29,051		56,746
Yantai Changyu Pioneer Wine Co. Ltd., Class B		13,100		59,739
				1,283,066
Biotechnology – 0.1%
Green Cross Corp.		113		15,494
Medigen Biotechnology Corp.*		4,000		22,567
Medipost Co. Ltd.*		318		24,284
Medy-Tox, Inc.		188		20,587
PharmaEngine, Inc.*		1,000		5,218
RNL BIO Co. Ltd.*		3,090		499
Seegene, Inc.*		324		19,329
				107,978
Building Products – 0.1%
China Liansu Group Holdings Ltd.		14,000		7,974
KCC Corp.		55		16,331
LG Hausys Ltd.		257		22,986
Sung Kwang Bend Co. Ltd.		734		15,762
Taiwan Glass Industry Corp.		15,000		15,248
Trakya Cam Sanayi AS*		8,025		13,558
Yuanda China Holdings Ltd.		394,000		36,046
				127,905

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 99

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Capital Markets – 1.1%
Administradora de Fondos de Pensiones Provida S.A.		2,438	$	16,857
AFP Habitat S.A.		4,879		9,706
Brait SE*		14,677		59,901
Capital Securities Corp.		29,000		10,269
CETIP SA – Mercados Organizados		3,000		35,439
China Bills Finance Corp.		45,000		17,840
China Everbright Ltd.		16,000		25,441
Citadel Capital SAE*		40,421		19,877
CITIC Securities Co. Ltd., Class H		17,000		38,554
Coronation Fund Managers Ltd.		38,917		232,660
Daewoo Securities Co. Ltd.*		3,150		31,177
Daishin Securities Co. Ltd.*		6,090		51,649
Egyptian Financial Group-Hermes Holding*		6,618		9,496
Egyptian Kuwaiti Holding Co. SAE		15,281		17,879
Guotai Junan International Holdings Ltd.		28,000		11,798
Haitong Securities Co. Ltd., Class H*		17,600		25,627
Hanwha Investment & Securities Co. Ltd.*		8,060		29,201
HMC Investment Securities Co. Ltd.*		900		10,052
Hyundai Securities Co. Ltd.		1,340		9,308
Investec Ltd.		3,049		21,850
Jih Sun Financial Holdings Co. Ltd.		167,000		49,966
KIWOOM Securities Co. Ltd.*		188		11,523
Korea Investment Holdings Co. Ltd.*		740		31,110
Masterlink Securities Corp.		132,000		41,194
Meritz Securities Co. Ltd.*		26,670		34,509
Mirae Asset Securities Co. Ltd.*		470		19,631
NH Investment & Securities Co. Ltd.*		5,640		24,889
OSK Holdings BHD		25,200		13,252

	Shares		Value
Capital Markets – (continued)
Pioneers Holding*		9,974	$	5,768
President Securities Corp.*		27,000		16,239
Samsung Securities Co. Ltd.*		1,008		46,313
Shinyoung Securities Co. Ltd.*		860		27,917
SK Securities Co. Ltd.*		15,060		13,388
Sociedad de Inversiones Oro Blanco S.A.		482,526		5,936
TONGYANG Securities, Inc.*		15,110		54,126
Waterland Financial Holdings Co. Ltd.		12,000		4,229
Woori Investment & Securities Co. Ltd.*		2,690		27,601
Yuanta Financial Holding Co. Ltd.		141,000		71,666
				1,183,838
Chemicals – 3.2%
Acron JSC		798		31,675
Aeci Ltd.		16,286		182,035
African Oxygen Ltd.		23,385		53,891
Asia Plastic Recycling Holding Ltd.		2,000		5,361
Asia Polymer Corp.		16,000		12,063
Barito Pacific Tbk PT*		146,000		6,082
Batu Kawan BHD		2,700		16,169
Boryszew S.A.*		59,640		8,494
Capro Corp.		3,600		33,342
Cheil Industries, Inc.		905		77,985
China BlueChemical Ltd., Class H		102,000		62,168
China Lumena New Materials Corp.		448,000		97,559
China Manmade Fibers Corp.*		73,000		29,064
China Petrochemical Development Corp.		38,700		20,916
China Steel Chemical Corp.		5,000		24,312
China Synthetic Rubber Corp.		24,000		25,861
Ciech S.A.*		1,667		11,555
Dongyue Group		170,000		95,070
Eternal Chemical Co. Ltd.		20,000		17,247

See Accompanying Notes to the Financial Statements.

100 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Chemicals – (continued)
Everlight Chemical Industrial Corp.		25,000	$	17,662
Foosung Co. Ltd.*		2,860		11,751
Formosa Chemicals & Fibre Corp.		58,000		135,802
Formosa Plastics Corp.		74,000		179,534
Formosan Rubber Group, Inc.		16,000		12,876
Fufeng Group Ltd.		110,400		39,690
Grand Pacific Petrochemical		129,000		65,785
Grupa Azoty S.A.		1,618		31,171
Gubre Fabrikalari TAS*		2,002		17,637
Hanwha Chemical Corp.		1,230		18,261
Hanwha Corp.		610		17,281
Ho Tung Chemical Corp.*		51,000		24,971
Honbridge Holdings Ltd.*		68,000		10,865
Huabao International Holdings Ltd.		44,000		20,184
Huchems Fine Chemical Corp.		1,480		30,909
Hyosung Corp.		372		18,713
Indorama Ventures PCL		48,400		38,753
Kolon Industries, Inc.		367		16,995
Korea Petrochemical Ind Co. Ltd.*		234		9,073
Kumho Petro chemical Co. Ltd.		262		22,672
LCY Chemical Corp.		13,000		15,395
LG Chem Ltd.		846		199,728
Lotte Chemical Corp.		659		97,237
Mexichem SAB de CV		20,300		103,432
Namhae Chemical Corp.		780		5,050
Nan Ya Plastics Corp.		85,000		169,355
Nizhnekamskneftekhim OAO		46,019		38,190
OCI Co. Ltd.		315		40,473
OCI Materials Co. Ltd.		904		26,103
Omnia Holdings Ltd.		7,374		129,462
Oriental Union Chemical Corp.		18,000		19,853
Petkim Petrokimya Holding AS		8,463		14,723
Petronas Chemicals Group Bhd		51,200		109,889

	Shares		Value
Chemicals – (continued)
Phosagro OAO (GDR)		2,766	$	39,111
PTT Global Chemical PCL		38,300		95,261
Samsung Fine Chemicals Co. Ltd.		405		19,638
San Fang Chemical Industry Co. Ltd.		11,000		10,008
Shinkong Synthetic Fibers Corp.		212,000		66,519
Sidi Kerir Petrochemicals Co.		5,418		9,634
Sinofert Holdings Ltd.		316,000		68,407
Sinopec Shanghai Petrochemical Co. Ltd., Class H		342,000		117,664
SK Chemicals Co. Ltd.		279		11,844
SKC Co. Ltd.		300		9,044
Solar Applied Materials Technology Co.		58,000		64,953
Soulbrain Co. Ltd.		434		18,108
Synthos S.A.		8,925		13,305
Taekwang Industrial Co. Ltd.		57		52,275
Taiwan Fertilizer Co. Ltd.		21,000		50,237
Taiwan Prosperity Chemical Corp.		18,000		20,005
TSRC Corp.		11,000		21,730
Unipetrol AS*		3,917		34,438
UPC Technology Corp.		131,000		68,581
Uralkali OJSC		5,939		43,307
Uralkali OJSC (GDR)		3,864		139,838
USI Corp.		16,000		11,223
Yingde Gases Group Co. Ltd.		13,500		12,994
Yip’s Chemical Holdings Ltd.		44,000		47,909
				3,566,357
Commercial Banks – 12.4%
ABSA Group Ltd.		5,337		87,752
Agricultural Bank of China Ltd., Class H		391,000		186,920
Akbank TAS		4,040		21,220
Akbank TAS (ADR)		14,748		154,559
Albaraka Turk Katilim Bankasi AS*		10,234		11,070
Alliance Financial Group Bhd		9,700		14,219
Asya Katilim Bankasi AS*		10,171		12,306
Attijariwafa Bank		889		35,259

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 101

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Commercial Banks – (continued)
Axis Bank Ltd. (GDR)		13,042	$	367,524
Banco de Bogota S.A.		953		32,877
Banco de Chile*		223,028		34,722
Banco de Credito e Inversiones		489		35,055
Banco do Brasil S.A.		11,300		142,416
Banco Santander Brasil S.A.		15,400		113,141
Banco Santander Chile		1,016,953		67,833
Bancolombia S.A.		4,690		77,046
Bangkok Bank PCL		26,600		204,825
Bank BPH S.A.*		89		1,373
Bank Central Asia Tbk PT		245,500		271,445
Bank Danamon Indonesia Tbk PT*		76,000		50,419
Bank Handlowy w Warszawie S.A.		231		6,872
Bank Mandiri Persero Tbk PT		192,500		207,894
Bank Millennium S.A.*		4,152		6,347
Bank Negara Indonesia Persero Tbk PT		201,500		111,916
Bank of Ayudhya PCL		47,000		52,445
Bank of China Ltd., Class H		1,451,000		678,701
Bank of Communications Co. Ltd., Class H		129,000		102,560
Bank of the Philippine Islands		12,160		30,370
Bank Pan Indonesia Tbk PT*		119,500		9,833
Bank Pekao S.A.		1,976		94,749
Bank Pembangunan Daerah Jawa Barat Dan Banten Tbk PT		265,500		33,315
Bank Rakyat Indonesia Persero Tbk PT		222,000		214,636
Bank St. Petersburg OJSC		15,038		18,845
Bank Tabungan Negara Persero Tbk PT		94,500		14,482
Bank Tabungan Pensiunan Nasional Tbk PT*		63,000		34,343
Bank Zachodni WBK S.A.		24		1,998
Banque Centrale Populaire		1,585		35,091
Banque Marocaine du Commerce Exterieur		1,770		40,653
Banregio Grupo Financiero SAB de CV*		19,200		105,661

	Shares		Value
Commercial Banks – (continued)
BDO Unibank, Inc.*		25,460	$	56,722
BIMB Holdings Bhd		13,100		15,113
BOC Hong Kong Holdings Ltd.		68,000		233,951
BRE Bank S.A.*		121		13,235
BS Financial Group, Inc.		3,580		47,135
Capitec Bank Holdings Ltd.		453		11,020
Chang Hwa Commercial Bank		69,000		39,396
China Banking Corp.		8,710		14,622
China Citic Bank Corp. Ltd., Class H		140,000		78,834
China Construction Bank Corp., Class H		1,391,000		1,165,052
China Development Financial Holding Corp.*		295,000		81,567
China Merchants Bank Co. Ltd., Class H		74,500		158,780
China Minsheng Banking Corp. Ltd., Class H		98,500		126,542
Chinatrust Financial Holding Co. Ltd.		221,168		134,146
Chongqing Rural Commercial Bank, Class H		135,000		73,409
CIMB Group Holdings Bhd		91,000		231,500
Commercial International Bank Egypt SAE		12,749		56,241
Corpbanca S.A.		1,697,750		23,225
Credicorp Ltd.		1,200		180,708
Credit Immobilier et Hotelier		1,501		40,863
DGB Financial Group, Inc.		2,320		32,442
E.Sun Financial Holding Co. Ltd.		67,000		40,411
Entie Commercial Bank		8,000		4,541
Far Eastern International Bank		21,000		8,574
First Financial Holding Co. Ltd.		91,000		55,965
Getin Holding S.A.		47,211		33,321
Getin Noble Bank S.A.*		16,961		8,428
Grupo Aval Acciones y Valores		3,748		2,596
Grupo Financiero Banorte SAB de CV, Class O		34,400		258,921

See Accompanying Notes to the Financial Statements.

102 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Commercial Banks – (continued)
Grupo Financiero Inbursa SAB de CV, Class O		32,200	$	93,290
Hana Financial Group, Inc.		5,250		167,802
HDFC Bank Ltd. (ADR)		11,723		497,524
Hong Leong Bank Bhd		6,600		31,368
Hong Leong Financial Group Bhd		2,600		13,246
Hua Nan Financial Holdings Co. Ltd.		65,000		37,773
ICICI Bank Ltd. (ADR)		8,614		403,307
Industrial & Commercial Bank of China Ltd., Class H		1,267,000		891,403
Industrial Bank of Korea		4,280		48,968
ING Bank Slaski S.A.*		279		7,956
Itausa – Investimentos Itau S.A.		8,800		63,816
Kasikornbank PCL		35,300		254,978
KB Financial Group, Inc.		7,010		229,147
Kiatnakin Bank PCL		12,000		28,825
King’s Town Bank*		64,000		58,552
Komercni Banka AS		380		72,724
Krung Thai Bank PCL		100,300		84,751
Malayan Banking Bhd		69,800		220,699
Mega Financial Holding Co. Ltd.		152,000		117,173
Metropolitan Bank & Trust		1,600		4,840
Nedbank Group Ltd.		3,619		76,809
OTP Bank PLC		5,236		108,956
Philippine National Bank*		16,560		46,268
Powszechna Kasa Oszczednosci Bank Polski S.A.		14,155		147,394
Public Bank Bhd		30,700		165,684
RHB Capital Bhd		5,800		16,166
Rizal Commercial Banking Corp.		9,930		17,853
Sberbank of Russia		121,640		389,366
Sberbank of Russia (ADR)		19,496		250,719
Security Bank Corp.		690		3,306
Sekerbank TAS*		55,989		64,310
Shinhan Financial Group Co. Ltd.		8,060		278,840
Siam Commercial Bank PCL		34,400		218,003

	Shares		Value
Commercial Banks – (continued)
SinoPac Financial Holdings Co. Ltd.		127,000	$	63,474
Sociedad Matriz Banco de Chile, Class B		100,318		39,574
Standard Bank Group Ltd.		21,864		272,862
State Bank of India (GDR)		3,656		308,932
Ta Chong Bank Ltd.*		61,000		21,290
Taichung Commercial Bank		29,000		10,514
Taishin Financial Holding Co. Ltd.		133,000		57,685
Taiwan Business Bank*		42,000		12,908
Taiwan Cooperative Financial Holding		69,000		39,630
Thanachart Capital PCL		28,100		45,716
Tisco Financial Group PCL		17,200		32,232
TMB Bank PCL		597,500		55,780
Turkiye Garanti Bankasi AS (ADR)		42,387		237,791
Turkiye Halk Bankasi AS		10,542		114,916
Turkiye Is Bankasi, Class C		28,587		110,302
Turkiye Sinai Kalkinma Bankasi AS		9,360		13,465
Turkiye Vakiflar Bankasi Tao, Class D		14,771		52,711
Union Bank Of Taiwan*		23,000		8,768
VTB Bank OJSC*		9,853,214		15,686
VTB Bank OJSC (GDR)*		32,047		100,948
Woori Finance Holdings Co. Ltd.		6,770		73,153
Yapi ve Kredi Bankasi AS		14,240		44,146
				13,794,251
Commercial Services & Supplies – 0.2%
Blue Label Telecoms Ltd.		68,656		58,930
China Everbright International Ltd.		42,000		32,418
Fursys, Inc.		220		5,334
Ipek Dogal Enerji Kaynaklari Ve Uretim AS*		5,416		15,281
KEPCO Plant Service & Engineering Co. Ltd.		223		11,521
Multiplus S.A.		800		13,195
S-1 Corp.		261		14,741
Taiwan Secom Co. Ltd.		5,000		12,131

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 103

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Commercial Services & Supplies – (continued)
Taiwan Sogo Shin Kong SEC		12,000	$	15,187
Valid Solucoes e Servicos de Seguranca em Meios de Pagamento e Identificacao S.A.		2,400		44,543
				223,281
Communications Equipment – 0.5%
Accton Technology Corp.		69,000		41,851
Alpha Networks, Inc.		22,000		14,313
BYD Electronic International Co. Ltd.		119,500		63,287
China Wireless Technologies Ltd.		60,000		23,967
Comba Telecom Systems Holdings Ltd.		45,500		15,537
Compal Communications, Inc.*		15,000		19,391
CyberTAN Technology, Inc.		16,000		11,927
D-Link Corp.		28,000		16,366
Gemtek Technology Corp.*		45,000		59,010
HTC Corp.		14,000		142,789
Netas Telekomunikasyon AS		907		5,437
Senao International Co. Ltd.		1,000		3,131
TCL Communication Technology Holdings Ltd.		77,000		30,956
Unizyx Holding Corp.		30,000		14,333
Wistron NeWeb Corp.		13,000		21,122
Zinwell Corp.		45,000		37,586
ZTE Corp., Class H		34,600		58,316
				579,319
Computers & Peripherals – 1.1%
Acer, Inc.*		44,000		35,558
Advantech Co. Ltd.		5,000		23,889
ASROCK, Inc.		2,000		7,217
Asustek Computer, Inc.		13,000		151,311
Catcher Technology Co. Ltd.		11,000		55,723
Chicony Electronics Co. Ltd.		9,000		26,410
Clevo Co.		7,322		14,043
CMC Magnetics Corp.*		425,000		76,325
Compal Electronics, Inc.		83,000		53,717

	Shares		Value
Computers & Peripherals – (continued)
Elitegroup Computer Systems Co. Ltd.		31,000	$	12,658
Foxconn Technology Co. Ltd.		14,000		36,954
Getac Technology Corp.		60,000		28,768
Gigabyte Technology Co. Ltd.		80,000		76,172
ICP Electronics, Inc.		10,000		12,910
Inventec Corp.		39,000		15,594
JCY International Bhd		32,900		5,353
Lenovo Group Ltd.		118,000		107,804
LITE-ON IT Corp.		16,000		17,593
Lite-On Technology Corp.		37,000		66,573
Micro-Star International Co. Ltd.		109,000		50,969
Mitac International Corp.		69,000		24,432
Pegatron Corp.*		29,000		47,462
Primax Electronics Ltd.		28,000		27,324
Qisda Corp.*		92,000		22,476
Quanta Computer, Inc.		45,000		93,013
Ritek Corp.*		426,000		56,729
Simplo Technology Co. Ltd.		5,000		21,263
TPV Technology Ltd.		128,000		33,152
Wistron Corp.		45,000		45,668
				1,247,060
Construction & Engineering – 2.2%
Aveng Ltd.		61,447		201,804
BES Engineering Corp.		112,000		31,765
Besalco S.A.		5,929		10,626
Budimex S.A.		496		12,119
CH Karnchang PCL*		14,500		13,586
China Communications Construction Co. Ltd., Class H		90,000		86,166
China Railway Construction Corp. Ltd., Class H		63,000		63,563
China Railway Group Ltd., Class H		140,000		73,783
China State Construction International Holdings Ltd.		26,000		37,858
Chung Hsin Electric & Machinery Manufacturing Corp.		8,000		4,581

See Accompanying Notes to the Financial Statements.

104 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Construction & Engineering – (continued)
Continental Holdings Corp.		28,000	$	10,674
Cosco International Holdings Ltd.		94,000		39,850
CTCI Corp.		7,000		13,994
Daelim Industrial Co. Ltd.		611		42,719
Daewoo Engineering & Construction Co. Ltd.*		760		5,217
Dialog Group BHD		19,500		15,190
Doosan Heavy Industries & Construction Co. Ltd.		912		33,911
Empresas ICA SAB de CV*		29,800		81,875
Gamuda Bhd		48,600		65,013
Grana y Montero SAA		9,604		41,599
Group Five Ltd./South Africa		15,001		56,781
GS Engineering & Construction Corp.		779		21,397
HKC Holdings Ltd.		135,000		4,523
Hyundai Development Co.		940		19,290
Hyundai Engineering & Construction Co. Ltd.		1,432		75,156
IJM Corp. Bhd		27,400		49,081
Impulsora del Desarrollo y El Empleo en America Latina SAB de CV*		23,900		57,860
Inovisi Infracom Tbk PT*		19,500		12,736
Interchina Holdings Co.*		200,000		11,210
Italian-Thai Development PCL*		270,800		77,503
KEPCO Engineering & Construction Co., Inc.		146		11,613
Kumho Industrial Co. Ltd.*		451		4,136
Larsen & Toubro Ltd. (GDR)		10,795		304,419
Malaysia Marine and Heavy Engineering Holdings Bhd		4,700		5,886
Malaysian Resources Corp. Bhd*		117,800		54,593
Metallurgical Corp of China Ltd., Class H*		552,000		112,383
Mostotrest		1,840		8,939
Mudajaya Group Bhd		10,400		8,340
Murray & Roberts Holdings Ltd.*		67,370		164,780

	Shares		Value
Construction & Engineering – (continued)
Orascom Construction Industries* ^		1,797	$	60,493
Promotora y Operadora de Infraestructura SAB de CV*		8,000		71,290
Raubex Group Ltd.		18,170		37,686
Salfacorp S.A.*		17,267		32,227
Samsung Engineering Co. Ltd.		588		47,251
Sino Thai Engineering & Construction PCL		51,771		49,390
Taeyoung Engineering & Construction Co. Ltd.		2,920		16,121
Tekfen Holding AS		1,046		4,059
United Integrated Services Co. Ltd.		22,000		22,103
WCT Bhd		30,905		24,379
Wijaya Karya Persero Tbk PT		88,000		21,723
Wilson Bayly Holmes-Ovcon Ltd.		7,337		126,199
				2,459,440
Construction Materials – 1.5%
Adana Cimento Sanayii TAS, Class A		4,775		11,981
Akcansa Cimento AS		569		3,426
Alexandria Portland Cement Co.*		2,436		4,518
Anhui Conch Cement Co. Ltd., Class H		23,000		83,280
Asia Cement China Holdings Corp.		73,500		40,725
Asia Cement Corp.		43,000		54,566
BBMG Corp., Class H		184,500		148,112
Cementos Argos S.A.*		8,156		36,399
Cementos Pacasmayo SAA		15,269		42,743
Cemex SAB de CV*		198,744		223,977
Chia Hsin Cement Corp.		31,000		13,655
China National Building Material Co. Ltd., Class H		56,000		66,098
China Resources Cement Holdings Ltd.		24,000		13,824
China Shanshui Cement Group Ltd.		29,000		16,405

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 105

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Construction Materials – (continued)
Cimsa Cimento Sanayi VE Tica		2,081	$	12,358
Corp. Moctezuma SAB de CV		1,600		4,975
CSG Holding Co. Ltd., Class B		46,700		33,458
Goldsun Development & Construction Co. Ltd.		65,000		25,879
Grupo Argos S.A.		5,566		61,933
Hanil Cement Co. Ltd.		275		12,710
Holcim Indonesia Tbk PT		21,500		8,071
Holcim Maroc S.A.		75		13,310
Holcim Philippines, Inc.		10,100		3,421
Huaxin Cement Co. Ltd., Class B		25,700		44,281
Indocement Tunggal Prakarsa Tbk PT		24,000		65,168
Konya Cimento Sanayii AS		54		10,207
Lafarge Malayan Cement Bhd		6,900		22,497
Magnesita Refratarios S.A.		10,500		37,757
Mardin Cimento Sanayii ve Ticaret AS		8,926		28,767
Misr Beni Suef Cement Co.		1,438		9,396
Nuh Cimento Sanayi AS		2,332		14,173
PPC Ltd.		11,849		43,281
Semen Indonesia Persero Tbk PT		55,000		104,088
Siam Cement PCL		7,600		123,775
Siam City Cement PCL		2,100		34,917
Taiwan Cement Corp.		64,000		85,010
TCC International Holdings Ltd.		180,000		51,259
TPI Polene PCL		40,600		20,750
Union Andina de Cementos SAA		29,879		44,307
Universal Cement Corp.		24,000		14,760
West China Cement Ltd.		128,000		22,431
				1,712,648
Consumer Finance – 0.1%
Aeon Thana Sinsap Thailand PCL		5,200		19,400

	Shares		Value
Consumer Finance – (continued)
Compartamos SAB de CV		38,800	$	64,472
Samsung Card Co. Ltd.		890		34,144
Taiwan Acceptance Corp.		7,000		18,145
				136,161
Containers & Packaging – 0.2%
AMVIG Holdings Ltd.		80,000		30,926
Anadolu Cam Sanayii AS*		8,127		12,552
Cheng Loong Corp.		91,000		40,702
CPMC Holdings Ltd.		21,000		16,507
Great China Metal Industry		9,000		10,628
Greatview Aseptic Packaging Co. Ltd.		19,000		11,360
Lock & Lock Co. Ltd.		1,290		33,090
Nampak Ltd.		11,661		42,815
Taiwan Hon Chuan Enterprise Co. Ltd.		21,000		58,349
				256,929
Distribution/Wholesale – 0.0%†
Berli Jucker PCL		5,600		14,072
Distributors – 0.1%
Dah Chong Hong Holdings Ltd.		8,000		7,370
Dogus Otomotiv Servis ve Ticaret AS		7,928		50,615
Imperial Holdings Ltd.		3,287		72,712
Test-Rite International Co. Ltd.		14,000		10,579
				141,276
Diversified Consumer Services – 0.3%
Abril Educacao S.A.		2,200		47,499
Anhanguera Educacional Participacoes S.A.		2,000		36,009
Estacio Participacoes S.A.*		4,200		99,691
Kroton Educacional S.A.		5,200		72,662
Lung Yen Life Service Corp.		5,000		17,535
MegaStudy Co. Ltd.		696		47,399
				320,795
Diversified Financial Services – 1.7%
African Bank Investments Ltd.		13,847		43,919
AMMB Holdings Bhd		45,000		99,096

See Accompanying Notes to the Financial Statements.

106 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Diversified Financial Services – (continued)
Ayala Corp.		3,810	$	59,335
BM&FBovespa S.A.		38,400		266,563
Bolsa Mexicana de Valores SAB de CV		15,400		42,032
Bursa Malaysia Bhd		10,900		25,615
Chailease Holding Co. Ltd.*		21,000		63,188
Corp. Financiera Colombiana S.A.*		2,952		56,994
Far East Horizon Ltd.		42,000		28,575
FirstRand Ltd.		61,367		213,019
Fubon Financial Holding Co. Ltd.		124,000		177,101
Grupo de Inversiones Suramericana S.A.		4,629		97,590
Grupo Security S.A.		48,535		19,455
GT Capital Holdings, Inc.		820		15,759
Haci Omer Sabanci Holding AS		19,262		119,753
Hankook Tire Worldwide Co. Ltd.		2,760		50,123
Inmuebles Carso SAB de CV*		50,600		50,364
Intercorp Financial Services, Inc.		346		12,183
Inversiones La Construccion S.A.		355		6,798
JSE Ltd.		13,404		114,456
Metro Pacific Investments Corp.		336,600		49,803
Multi-Purpose Holdings BHD		12,300		14,230
PSG Group Ltd.		1,633		11,999
Remgro Ltd.		9,981		201,089
RMB Holdings Ltd.		17,264		76,553
Warsaw Stock Exchange		2,646		31,656
				1,947,248
Diversified Telecommunication Services – 1.4%
Asia Pacific Telecom Co. Ltd.*		46,899		22,312
China Communications Services Corp. Ltd., Class H		140,000		102,466

	Shares		Value
Diversified Telecommunication Services – (continued)
China Telecom Corp. Ltd., Class H		268,000	$	136,752
China Unicom Hong Kong Ltd.		86,000		123,449
Chunghwa Telecom Co. Ltd.		72,000		228,843
CITIC Telecom International Holdings Ltd.		55,000		19,986
Empresa de Telecomunicaciones de Bogota*		65,376		14,159
Jasmine International PCL		123,600		34,743
KT Corp.		510		16,694
LG Uplus Corp.*		4,490		42,401
Magyar Telekom Telecommunications PLC		7,627		14,075
Maroc Telecom S.A.		1,157		15,307
Netia S.A.*		16,764		22,284
Oi S.A.		4,400		12,807
Rostelecom OJSC		6,727		25,346
Rostelecom OJSC (ADR)*		3,648		81,350
SK Broadband Co. Ltd.*		2,669		12,675
Tata Communications Ltd. (ADR)		16,843		142,155
Telecom Egypt Co.		6,056		11,030
Telefonica Czech Republic AS		2,233		32,303
Telekom Malaysia Bhd		18,500		33,565
Telekomunikacja Polska S.A.		14,539		32,395
Telekomunikasi Indonesia Persero Tbk PT		179,500		216,009
Telkom SA SOC Ltd.*		43,976		62,666
Thaicom PCL		18,800		21,939
Time dotCom Bhd*		29,600		38,624
True Corp. PCL*		63,300		18,224
Turk Telekomunikasyon AS		7,919		37,532
XL Axiata Tbk PT*		38,500		20,195
				1,592,286
Electric Utilities – 1.2%
Celsia S.A. ESP		9,615		27,747
Centrais Eletricas Brasileiras S.A.		4,900		13,258
CEZ AS		4,114		119,215

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 107

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Electric Utilities – (continued)
Cia Energetica de Minas Gerais		600	$	7,574
Cia General de Electricidad S.A.		3,148		19,028
Cia Paranaense de Energia		200		2,821
CPFL Energia S.A.		6,500		69,600
E.CL S.A.		5,868		12,234
EDP – Energias do Brasil S.A.		6,500		39,692
Enea S.A.		1,303		5,361
Enersis S.A.		304,116		114,487
Equatorial Energia S.A.*		3,929		41,638
Federal Grid Co. Unified Energy System JSC*		5,113,295		19,982
Federal Hydrogenerating Co. JSC		449,938		8,091
Federal Hydrogenerating Co. JSC (ADR)		29,268		50,341
First Philippine Holdings Corp.		32,300		83,967
Inter Rao Ues OAO*		18,300,000		7,617
Interconexion Electrica SA ESP		7,855		36,131
Interregional Distribution Grid Co. Centre JSC		2,621,080		34,708
Interregional Distribution Network Co. Center and Privolzhya OJSC		6,582,498		29,657
Isagen SA ESP*		7,495		10,425
Korea Electric Power Corp.*		4,830		138,808
Light S.A.		700		6,991
Luz del Sur SAA		3,265		11,672
Manila Electric Co.		4,860		44,160
Moscow United Electric Grid Co. JSC		291,414		12,712
PGE S.A.		14,576		75,705
Russian Grids OAO*		438,121		19,060
Tauron Polska Energia S.A.		25,436		33,893
Tenaga Nasional Bhd		53,100		137,004
TGK-1 OAO*		147,176,075		30,089
Transmissora Alianca de Energia Eletrica S.A.		2,700		31,152

	Shares		Value
Electric Utilities – (continued)
Volga Territorial Generating Co.*		150,274	$	8,008
				1,302,828
Electrical Equipment – 0.5%
AcBel Polytech, Inc.		16,000		14,015
China Electric Manufacturing Corp.		12,000		6,892
China High Speed Transmission Equipment Group Co. Ltd.*		173,000		83,595
Dongfang Electric Corp. Ltd., Class H		26,200		36,799
Dynapack International Technology Corp.		7,000		24,312
ElSwedy Electric Co.		2,938		8,300
Harbin Electric Co. Ltd., Class H		108,000		82,803
LS Corp.		526		38,687
LS Industrial Systems Co. Ltd.		484		27,336
Shanghai Electric Group Co. Ltd., Class H		132,000		46,264
Shihlin Electric & Engineering Corp.		16,000		19,274
Silitech Technology Corp.		7,000		12,903
Taihan Electric Wire Co. Ltd.*		8,413		19,709
Teco Electric and Machinery Co. Ltd.		33,000		31,030
Walsin Lihwa Corp.*		76,000		23,563
Zhuzhou CSR Times Electric Co. Ltd., Class H		25,000		69,099
				544,581
Electronic Equipment, Instruments & Components – 2.8%
3S Korea Co. Ltd.*		2,265		14,890
Acme Electronics Corp.		5,000		6,370
Anxin-China Holdings Ltd.		124,000		26,044
AU Optronics Corp.*		148,000		67,952
Aurora Corp./Taiwan		10,000		18,264
AV Tech Corp./Taiwan		2,000		6,303
CalComp Electronics Thailand PCL		251,200		30,812
Cando Corp./Taiwan*		88,398		57,510

See Accompanying Notes to the Financial Statements.

108 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Electronic Equipment, Instruments & Components – (continued)
Career Technology MFG. Co. Ltd.		12,000	$	14,557
Cheng Uei Precision Industry Co. Ltd.		6,000		11,954
Chimei Materials Technology Corp.		23,000		27,316
Chin-Poon Industrial Co.		16,000		20,846
Chroma ATE, Inc.		18,000		38,608
Chunghwa Picture Tubes Ltd.*		647,000		42,093
Compeq Manufacturing Co.		44,000		16,400
Coretronic Corp.		110,000		87,405
DataTec Ltd.		29,516		165,942
Delta Electronics Thailand PCL		23,900		30,944
Delta Electronics, Inc.		34,000		163,018
Digital China Holdings Ltd.		17,000		21,424
E Ink Holdings, Inc.		19,000		14,099
Entire Technology Co. Ltd.		7,000		7,970
Everlight Electronics Co. Ltd.		53,000		85,304
FLEXium Interconnect, Inc.		3,000		9,921
G Tech Optoelectronics Corp.		10,000		21,856
Hana Microelectronics PCL		16,500		13,942
HannStar Display Corp.*		136,000		37,097
HannsTouch Solution, Inc.*		36,000		11,625
Hi Sun Technology China Ltd.*		108,000		12,525
Hollysys Automation Technologies Ltd.*		2,000		24,080
Holy Stone Enterprise Co. Ltd.		52,000		48,895
Hon Hai Precision Industry Co. Ltd.		190,000		490,580
Iljin Materials Co. Ltd.*		570		5,512
Innolux Corp.*		155,000		96,901
Interflex Co. Ltd.*		416		17,527
ITEQ Corp.		16,000		18,027
Jentech Precision Industrial Co. Ltd.		4,000		7,888
Ju Teng International Holdings Ltd.		128,000		83,293

	Shares		Value
Electronic Equipment, Instruments & Components – (continued)
Kingboard Chemical Holdings Ltd.		13,500	$	36,705
Kingboard Laminates Holdings Ltd.		158,500		71,074
Largan Precision Co. Ltd.		2,000		54,622
LG Display Co. Ltd.*		4,450		121,018
LG Innotek Co. Ltd.*		168		13,577
Lotes Co. Ltd.		5,000		13,452
MIN AIK Technology Co. Ltd.		7,000		19,806
Nan Ya Printed Circuit Board Corp.		3,000		3,436
Pan-International Industrial		20,000		15,790
Partron Co. Ltd.		2,591		54,826
Samsung Electro-Mechanics Co. Ltd.		1,138		101,782
Samsung SDI Co. Ltd.		632		73,742
SFA Engineering Corp.		597		34,694
Synnex Technology International Corp.		22,000		37,198
Taiflex Scientific Co. Ltd.		9,000		11,146
Taiwan PCB Techvest Co. Ltd.		10,000		14,553
Test Research, Inc.		10,000		16,502
Tong Hsing Electronic Industries Ltd.		7,000		30,835
TPK Holding Co. Ltd.		5,000		101,484
Tripod Technology Corp.		7,000		15,892
Truly International Holdings		168,000		89,622
TXC Corp.		16,000		24,939
Unimicron Technology Corp.		17,000		17,915
Wah Lee Industrial Corp.		12,000		18,094
Wasion Group Holdings Ltd.		74,000		41,574
Wintek Corp.*		33,000		16,941
WPG Holdings Ltd.		29,000		34,933
WT Microelectronics Co. Ltd.		46,000		54,866
Yageo Corp.*		115,000		36,395
Young Fast Optoelectronics Co. Ltd.		7,000		12,595
Zhen Ding Technology Holding Ltd.		3,000		7,329
				3,073,031

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 109

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Energy Equipment & Services – 0.2%
Bumi Armada Bhd		19,800	$	25,966
China Oilfield Services Ltd., Class H		26,000		51,259
Honghua Group Ltd.		47,000		22,893
Maridive & Oil Services SAE*		10,086		11,095
OSX Brasil S.A.*		11,400		17,503
Sapurakencana Petroleum Bhd*		49,000		51,214
TMK OAO		2,648		7,032
TMK OAO (GDR)		1,530		19,339
Wah Seong Corp. Bhd		27,447		14,705
				221,006
Food & Staples Retailing – 2.2%
Almacenes Exito S.A.		4,327		70,893
Big C Supercenter PCL		7,600		59,816
BIM Birlesik Magazalar AS		2,145		110,034
Bizim Toptan Satis Magazalari AS		1,764		29,704
Brazil Pharma S.A.		6,300		39,668
Cencosud S.A.*		26,315		148,436
China Resources Enterprise Ltd.		20,000		68,551
Clicks Group Ltd.		5,927		37,743
Controladora Comercial Mexicana SAB de CV		23,400		89,911
Corporativo Fragua SAB de CV		5,695		110,090
CP ALL PCL		99,300		148,865
DIXY Group OJSC*		2,469		31,795
Dongsuh Co., Inc.		1,766		43,938
E-Mart Co. Ltd.		462		90,193
Emperia Holding S.A.		2,022		35,153
Eurocash S.A.		1,185		21,341
Grupo Comercial Chedraui SA de CV		9,800		37,308
Lianhua Supermarket Holdings Co. Ltd., Class H		65,000		39,449
Magnit OJSC		907		194,509
Massmart Holdings Ltd.		3,235		66,988
Migros Ticaret AS*		852		11,045

	Shares		Value
Food & Staples Retailing – (continued)
Organizacion Soriana SAB de CV, Class B		4,100	$	16,863
Pick n Pay Stores Ltd.		6,869		32,501
Pick’n Pay Holdings Ltd.		53,008		104,748
President Chain Store Corp.		8,000		49,336
Puregold Price Club, Inc.		12,100		11,730
Raia Drogasil S.A.		4,400		47,290
Shoprite Holdings Ltd.		8,911		168,738
Siam Makro PCL		2,400		61,656
The Spar Group Ltd.		5,022		66,253
Sun Art Retail Group Ltd.		42,000		58,666
Taiwan TEA Corp.		35,000		21,347
Wal-Mart de Mexico SAB de CV		101,000		320,034
Wumart Stores, Inc., Class H		26,000		45,563
				2,490,155
Food Products – 3.3%
Alicorp S.A.A.		7,823		29,297
Asian Citrus Holdings Ltd.		130,423		57,345
AVI Ltd.		5,722		34,399
Binggrae Co. Ltd.		321		39,932
Biostime International Holdings Ltd.		2,500		14,400
BRF S.A.		12,800		317,775
Charoen Pokphand Foods PCL		73,800		79,835
Charoen Pokphand Indonesia Tbk PT		159,500		82,846
Cherkizovo Group OJSC*		3,506		57,738
China Agri-Industries Holdings Ltd.		37,705		18,511
China Foods Ltd.		14,000		7,144
China Huiyuan Juice Group Ltd.*		30,000		13,491
China Mengniu Dairy Co. Ltd.		24,000		67,572
China Ocean Resources Co. Ltd.*		6,840		19,285
China Yurun Food Group Ltd.*		218,000		129,779
CJ CheilJedang Corp.		174		51,506
CP Pokphand Co. Ltd.		54,000		5,775
Daesang Corp.		1,070		41,292

See Accompanying Notes to the Financial Statements.

110 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Food Products – (continued)
Dongwon Industries Co. Ltd.		58	$	19,960
Dutch Lady Milk Industries BHD		1,600		24,359
Felda Global Ventures Holdings Bhd		21,300		32,344
Genting Plantations Bhd		4,200		11,817
Global Bio-Chem Technology Group Co. Ltd.		324,000		27,972
Great Wall Enterprise Co. Ltd.		22,000		18,450
Gruma SAB de CV, Class B*		10,900		54,058
Grupo Bimbo SAB de CV		33,900		110,289
Grupo Herdez SAB de CV		1,200		4,363
Grupo Nutresa S.A.		2,359		32,501
Hap Seng Plantations Holdings Bhd		13,700		12,203
IJM Plantations Bhd		16,500		16,107
Illovo Sugar Ltd.		9,834		37,979
Indofood CBP Sukses Makmur Tbk PT		13,000		15,310
Indofood Sukses Makmur Tbk PT		98,500		74,464
Industrias Bachoco SAB de CV		5,900		16,705
IOI Corp. Bhd		59,100		97,707
Japfa Comfeed Indonesia Tbk PT		277,500		55,086
JBS S.A.		12,800		40,394
Juhayna Food Industries		8,202		9,806
Kernel Holding S.A.*		1,000		18,135
Khon Kaen Sugar Industry PCL		47,400		20,187
Kuala Lumpur Kepong Bhd		10,000		70,863
Kulim Malaysia BHD		10,300		12,120
Lien Hwa Industrial Corp.		26,000		17,928
Lotte Confectionery Co. Ltd.		11		19,177
Lotte Food Co. Ltd.		40		31,962
M Dias Branco S.A.		600		26,851
Marfrig Alimentos S.A.*		5,800		19,783
Mayora Indah Tbk PT		8,500		26,272
MSM Malaysia Holdings Bhd		4,900		8,053

	Shares		Value
Food Products – (continued)
Namchow Chemical Industrial Ltd.		11,000	$	11,611
Namyang Dairy Products Co. Ltd.		78		82,512
Nestle Malaysia Bhd		700		14,219
NongShim Co. Ltd.		52		15,841
Orion Corp.		66		69,817
Ottogi Corp.		154		66,421
People’s Food Holdings Ltd.		34,000		36,163
Perusahaan Perkebunan London Sumatra Indonesia Tbk PT		32,500		5,081
Pioneer Foods Ltd.		26,849		231,653
PPB Group Bhd		9,400		39,546
PT Astra Agro Lestari, Tbk		4,000		7,282
QL Resources Bhd		18,100		17,788
Rainbow Chicken Ltd.		33,286		57,068
Salim Ivomas Pratama Tbk PT		82,500		6,788
Samyang Holdings Corp.		512		43,515
Sao Martinho S.A.		2,500		35,184
Sarawak Oil Palms Bhd		9,200		17,024
Shenguan Holdings Group Ltd.		20,000		10,154
SLC Agricola S.A.		2,400		21,161
Standard Foods Corp.		5,000		17,112
Tereos Internacional S.A.		44,500		71,885
Thai Union Frozen Products PCL		19,400		37,346
Tiger Brands Ltd.		2,989		92,877
Tingyi Cayman Islands Holding Corp.		36,000		99,503
Tongaat Hulett Ltd.		3,364		48,874
TSH Resources Bhd		20,700		14,628
Ulker Biskuvi Sanayi AS		1,236		10,579
Uni-President China Holdings Ltd.		20,000		21,751
Uni-President Enterprises Corp.		76,000		149,620
United Plantations BHD		1,700		15,589
Universal Robina Corp.		15,480		44,717
Want Want China Holdings Ltd.		112,000		177,512
Wei Chuan Foods Corp.		18,000		28,056

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 111

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Food Products – (continued)
Yashili International Holdings Ltd.		53,000	$	20,010
				3,690,014
Gas Utilities – 0.6%
China Gas Holdings Ltd.		58,000		57,173
China Oil and Gas Group Ltd.*		200,000		36,595
China Resources Gas Group Ltd.		14,000		39,237
E1 Corp.		371		27,320
ENN Energy Holdings Ltd.		14,000		80,999
Gas Malaysia Bhd		20,300		19,416
Gasco S.A.		4,780		48,155
Great Taipei Gas Co. Ltd.		20,000		14,808
Korea District Heating Corp.		443		43,041
Korea Gas Corp.		382		24,523
Perusahaan Gas Negara Persero Tbk PT		190,500		122,461
Petronas Gas BHD		9,400		60,926
Samchully Co. Ltd.		367		43,988
Towngas China Co. Ltd.		8,000		7,690
				626,332
Health Care Equipment & Supplies – 0.2%
Chabio & Diostech Co. Ltd.*		3,449		40,086
Golden Meditech Holdings Ltd.		60,000		7,036
Hartalega Holdings Bhd		4,700		8,095
Microport Scientific Corp.		22,000		14,004
Pihsiang Machinery Manufacturing Co. Ltd.*		6,000		6,689
Shandong Weigao Group Medical Polymer Co. Ltd., Class H		28,000		26,879
St Shine Optical Co. Ltd.		2,000		42,017
Top Glove Corp. Bhd		21,000		43,622
				188,428
Health Care Providers & Services – 0.7%
Bangkok Dusit Medical Services PCL		10,300		59,308
Banmedica S.A.		9,029		23,935

	Shares		Value
Health Care Providers & Services – (continued)
Bumrungrad Hospital PCL		12,200	$	34,189
Cruz Blanca Salud S.A.*		25,243		28,910
Diagnosticos da America S.A.		4,400		24,228
Fleury S.A.		900		8,575
IHH Healthcare Bhd*		61,400		75,678
KPJ Healthcare Bhd		21,400		42,694
Life Healthcare Group Holdings Ltd.		21,738		91,745
Mediclinic International Ltd.		9,788		70,884
Netcare Ltd.		27,354		62,124
Odontoprev S.A.		6,400		31,944
Qualicorp S.A.*		2,100		20,449
Selcuk Ecza Deposu Ticaret ve Sanayi A.S.		11,704		13,705
Shanghai Pharmaceuticals Holding Co. Ltd., Class H		44,400		91,425
Sinopharm Group Co. Ltd., Class H		18,400		54,650
				734,443
Hotels Restaurants & Leisure – 0.0%†
Central Plaza Hotel PCL*		22,100		28,049
Wowprime Corp.*		1,000		14,113
				42,162
Hotels, Restaurants & Leisure – 0.8%
Ajisen China Holdings Ltd.		28,000		20,205
Alsea SAB de CV*		21,300		64,654
The Ambassador Hotel		14,000		13,615
AmRest Holdings SE*		553		14,177
Berjaya Sports Toto Bhd		9,666		13,343
Bloomberry Resorts Corp.*		160,500		46,793
Central Plaza Hotel PCL*		1,600		2,031
China Travel International Inv HK		136,000		27,689
Formosa International Hotels Corp.		1,000		10,911
Genting Bhd		35,900		123,895
Genting Malaysia Bhd		55,800		68,959
Gourmet Master Co. Ltd.		1,000		5,574
Grand Korea Leisure Co. Ltd.		590		18,322
Hana Tour Service, Inc.		514		33,137
Hotel Shilla Co. Ltd.		587		31,021
Jollibee Foods Corp.		6,240		19,481

See Accompanying Notes to the Financial Statements.

112 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Hotels, Restaurants & Leisure – (continued)
Kangwon Land, Inc.		1,890	$	53,458
Minor International PCL		40,600		34,029
Orbis S.A.		1,130		12,571
Paradise Co. Ltd.		908		18,839
REXLot Holdings Ltd.		400,000		32,987
Sun International Ltd./South Africa		16,842		204,544
TA Enterprise Bhd		73,700		12,233
Tsogo Sun Holdings Ltd.		1,488		4,224
				886,692
Household Durables – 1.1%
AmTRAN Technology Co. Ltd.		115,000		94,106
Arcelik AS		4,176		32,482
Brookfield Incorporacoes S.A.*		46,200		50,833
Consorcio ARA SAB de CV*		124,200		40,867
Corp. GEO SAB de CV*		78,300		27,116
Coway Co. Ltd.		1,050		53,201
Cyrela Brazil Realty SA Empreendimentos e Participacoes*		4,700		42,475
Desarrolladora Homex SAB de CV*		36,000		29,199
Even Construtora e Incorporadora S.A.		15,300		71,775
Ez Tec Empreendimentos e Participacoes S.A.		700		9,582
Gafisa S.A.*		66,200		132,433
Goldin Properties Holdings Ltd.*		18,000		10,298
Haier Electronics Group Co. Ltd.*		14,000		25,003
Helbor Empreendimentos S.A.		6,110		30,252
LG Electronics, Inc.		1,954		156,313
MRV Engenharia e Participacoes S.A.		6,200		26,698
PDG Realty SA Empreendimentos e Participacoes		23,700		26,788
PIK Group (GDR)*		13,669		27,051

	Shares		Value
Household Durables – (continued)
Rossi Residencial S.A.*		42,100	$	70,956
Sanyo Electric Taiwan Co. Ltd.		7,000		8,444
Skyworth Digital Holdings Ltd.		29,812		24,547
Steinhoff International Holdings Ltd.*		18,760		50,020
Tatung Co. Ltd.*		304,000		76,742
TCL Multimedia Technology Holdings Ltd.		70,000		63,230
Tecnisa S.A.*		4,100		18,413
Urbi Desarrollos Urbanos SAB de CV*		96,800		14,333
Welling Holding Ltd.		140,000		31,389
				1,244,546
Household Products – 0.3%
Kimberly-Clark de Mexico SAB de CV, Class A		27,500		96,187
LG Household & Health Care Ltd.		177		99,485
NVC Lighting Holdings Ltd.		74,000		18,117
Unilever Indonesia Tbk PT		25,000		67,498
Vinda International Holdings Ltd.		29,000		37,891
				319,178
Independent Power Producers & Energy Traders – 1.6%
Aboitiz Power Corp.		81,900		74,219
AES Gener S.A.		79,917		57,967
AES Tiete S.A.		1,300		11,983
Akenerji Elektrik Uretim AS*		46,194		43,014
China Datang Corp. Renewable Power Co. Ltd., Class H		465,000		108,452
China Longyuan Power Group Corp., Class H		68,000		62,299
China Power International Development Ltd.		149,000		53,759
China Power New Energy Development Co. Ltd.*		920,000		52,161
China Resources Power Holdings Co. Ltd.		44,000		144,009
Colbun S.A.		224,671		69,093

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 113

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Independent Power Producers & Energy Traders – (continued)
Datang International Power Generation Co. Ltd., Class H		486,000	$	214,174
Edegel SAA		22,666		21,693
Electricity Generating PCL		7,900		41,317
Empresa Nacional de Electricidad S.A./Chile		78,677		139,333
Energy Development Corp.		188,400		29,798
First Gen Corp.*		49,900		27,338
Glow Energy PCL		12,300		32,269
Huadian Power International Co., Class H*		264,000		144,917
Huaneng Power International, Inc., Class H		86,000		99,402
Huaneng Renewables Corp. Ltd., Class H*		420,000		141,793
MPX Energia S.A.*		2,800		11,945
Ratchaburi Electricity Generating Holding PCL		22,500		45,422
Taiwan Cogeneration Corp.		53,000		35,469
Tractebel Energia S.A.		4,600		81,808
Zhejiang Southeast Electric Power Co., Class B		34,800		28,919
				1,772,553
Industrial Conglomerates – 1.6%
Aboitiz Equity Ventures, Inc.		31,500		43,622
Akfen Holding AS*		3,148		9,549
Alarko Holding AS		10,923		33,011
Alfa SAB de CV, Class A		48,900		113,394
Alliance Global Group, Inc.		79,000		45,488
Allied Electronics Corp. Ltd.		6,251		14,545
Antarchile S.A.		8,345		132,741
Beijing Enterprises Holdings Ltd.		10,500		78,541
Berjaya Corp. Bhd		156,100		26,679
Berli Jucker PCL		200		503
Bidvest Group Ltd.		4,815		125,092
Boustead Holdings Bhd		17,400		29,281
Citic Pacific Ltd.		29,000		35,089
CJ Corp.		258		33,852

	Shares		Value
Industrial Conglomerates – (continued)
DMCI Holdings, Inc.		10,480	$	14,526
Dogan Sirketler Grubu Holding AS*		10,842		7,315
Doosan Corp.		127		14,184
Enka Insaat ve Sanayi AS		4,257		13,150
Far Eastern New Century Corp.		50,000		53,792
Grupo Carso SAB de CV		10,900		62,056
HAP Seng Consolidated Bhd		14,300		7,990
Hosken Consolidated Investments Ltd.		2,125		26,709
JG Summit Holdings, Inc.		46,600		53,778
KAP Industrial Holdings Ltd.		100,277		33,156
KOC Holding AS		11,075		67,002
LG Corp.		1,630		97,093
MMC Corp. Bhd		7,700		6,454
Quinenco S.A.		4,676		15,322
Reunert Ltd.		2,853		24,771
Samsung Techwin Co. Ltd.		800		49,759
San Miguel Corp.		8,160		23,988
Shanghai Industrial Holdings Ltd.		8,000		25,359
Sigdo Koppers S.A.		15,440		40,573
Sime Darby Bhd		48,300		149,861
SK Holdings Co. Ltd.		485		69,802
SM Investments Corp.		3,800		105,709
Tianjin Development Hldgs Ltd.*		46,000		30,704
Turkiye Sise ve Cam Fabrikalari AS		7,608		12,896
Yazicilar Holding AS, Class A		823		9,820
				1,737,156
Insurance – 2.2%
Anadolu Hayat Emeklilik AS		2,200		7,115
Bangkok Insurance PCL		900		11,928
Bangkok Life Assurance PCL		2,900		7,485
Brasil Insurance Participacoes e Administracao S.A.		2,500		26,557
Cathay Financial Holding Co. Ltd.		128,000		172,188
China Life Insurance Co. Ltd.*		43,000		43,638
China Life Insurance Co. Ltd., Class H		142,000		387,908

See Accompanying Notes to the Financial Statements.

114 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Insurance – (continued)
China Pacific Insurance Group Co. Ltd., Class H		46,400	$	166,812
China Taiping Insurance Holdings Co. Ltd.*		17,000		28,959
Discovery Ltd.		4,942		44,972
Dongbu Insurance Co. Ltd.		890		35,922
Hanwha General Insurance Co. Ltd.*		3,160		14,777
Hanwha Life Insurance Co. Ltd.*		2,440		14,844
Hyundai Marine & Fire Insurance Co. Ltd.		1,280		36,030
Korean Reinsurance Co.		1,290		12,651
Liberty Holdings Ltd.		661		8,794
LIG Insurance Co. Ltd.		700		14,397
Long Bon International Co. Ltd.*		47,000		39,894
LPI Capital Bhd		5,200		23,586
Mercuries Life Insurance Co. Ltd.*		22,000		11,927
Meritz Fire & Marine Insurance Co. Ltd.		1,700		18,446
MMI Holdings Ltd./South Africa		15,461		39,417
New China Life Insurance Co. Ltd., Class H		11,300		42,008
PICC Property & Casualty Co. Ltd., Class H		50,000		64,170
Ping An Insurance Group Co. of China Ltd., Class H		35,500		281,096
Porto Seguro S.A.		1,300		16,137
Powszechny Zaklad Ubezpieczen S.A.		1,048		144,452
RMI Holdings		11,764		30,712
Samsung Fire & Marine Insurance Co. Ltd.		658		135,328
Samsung Life Insurance Co. Ltd.		1,132		111,525
Sanlam Ltd.		31,463		161,091
Santam Ltd.		299		5,865
Shin Kong Financial Holding Co. Ltd.*		127,000		40,107
Sinar Mas Multiartha Tbk PT		65,000		30,586

	Shares		Value
Insurance – (continued)
Sul America S.A.		12,739	$	95,248
Taiwan Life Insurance Co. Ltd.*		57,000		43,071
Thai Reinsurance PCL*		140,300		26,530
Tongyang Life Insurance*		780		6,990
Yapi Kredi Sigorta AS*		1,972		19,352
				2,422,515
Internet & Catalog Retail – 0.1%
B2W Cia Global Do Varejo*		3,600		20,453
CJ O Shopping Co. Ltd.		51		15,157
GS Home Shopping, Inc.		170		35,133
Hyundai Home Shopping Network Corp.		35		4,831
Interpark Corp.		805		6,432
				82,006
Internet Software & Services – 1.0%
Ahnlab, Inc.		161		8,508
Daou Technology, Inc.		3,220		58,623
Daum Communications Corp.		362		29,583
NHN Corp.		783		210,449
PChome Online, Inc.		2,000		9,047
SINA Corp./China*		1,300		73,216
SK Communications Co. Ltd.*		1,014		7,504
Sohu.com, Inc.*		1,700		87,448
Tencent Holdings Ltd.		19,400		665,449
				1,149,827
IT Services – 0.6%
Cielo S.A.		6,240		164,590
Infosys Ltd. (ADR)		8,676		362,136
Nan Hai Corp. Ltd.*		3,700,000		15,257
Posco ICT Co. Ltd.		2,226		15,160
SK C&C Co. Ltd.		423		35,490
Sonda S.A.		4,521		15,629
Systex Corp.*		26,000		31,540
Travelsky Technology Ltd., Class H		55,000		34,939
				674,741
Leisure Equipment & Products – 0.1%
Ability Enterprise Co. Ltd.		19,000		17,383
Asia Optical Co., Inc.*		38,000		35,989

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 115

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Leisure Equipment & Products – (continued)
Genius Electronic Optical Co. Ltd.		3,178	$	19,114
Giant Manufacturing Co. Ltd.		5,000		29,988
Johnson Health Tech Co. Ltd.		3,000		8,030
Merida Industry Co. Ltd.		4,000		24,397
Young Optics, Inc.		3,000		7,319
				142,220
Machinery – 1.0%
Airtac International Group		4,000		21,212
China Automation Group Ltd.		93,000		20,851
China International Marine Containers Group Co. Ltd., Class H*		8,000		12,782
China National Materials Co. Ltd., Class H		178,000		44,038
China Rongsheng Heavy Industries Group Holdings Ltd.		67,000		9,756
CIMC Enric Holdings Ltd.		20,000		21,648
CSBC Corp. Taiwan		58,000		38,127
CSR Corp. Ltd., Class H		33,000		21,729
Daewoo Shipbuilding & Marine Engineering Co. Ltd.		1,730		41,549
Doosan Engine Co. Ltd.*		1,330		10,422
Doosan Infracore Co. Ltd.*		2,130		25,240
Famur S.A.*		4,152		6,045
Haitian International Holdings Ltd.		9,000		15,401
Hanjin Heavy Industries & Construction Co. Ltd.*		8,444		61,108
Hiwin Technologies Corp.		3,000		21,144
Hyundai Heavy Industries Co. Ltd.		778		141,994
Hyundai Mipo Dockyard		222		21,771
Iochpe-Maxion S.A.		3,300		40,683
King Slide Works Co. Ltd.		3,000		23,889
Kopex S.A.*		2,360		8,291
Lonking Holdings Ltd.		300,000		56,825
Marcopolo S.A.		2,000		12,603
Rechi Precision Co. Ltd.		11,000		10,977

	Shares		Value
Machinery – (continued)
Samsung Heavy Industries Co. Ltd.		3,030	$	96,433
Sany Heavy Equipment International Holdings Co. Ltd.		14,000		5,610
Shanghai Zhenhua Heavy Industries Co. Ltd., Class B		89,000		31,951
Shin Zu Shing Co. Ltd.		6,000		15,350
Sinotruk Hong Kong Ltd.		11,000		6,123
STX Corp. Co. Ltd.		5,950		17,640
STX Engine Co. Ltd.*		3,370		14,306
STX Offshore & Shipbuilding Co. Ltd.*		8,900		34,386
Sung Jin Geotec Co. Ltd.*		260		2,550
Taewoong Co. Ltd.*		286		6,726
TK Corp.*		799		15,961
Turk Traktor ve Ziraat Makineleri AS		125		4,722
United Tractors Tbk PT		31,500		57,508
WEG S.A.		3,500		46,352
Weichai Power Co. Ltd., Class H		9,000		31,370
Yungtay Engineering Co. Ltd.		6,000		14,333
Zoomlion Heavy Industry Science and Technology Co. Ltd., Class H		22,200		22,227
				1,111,633
Marine – 0.8%
China COSCO Holdings Co. Ltd., Class H*		388,500		164,199
China Shipping Container Lines Co. Ltd., Class H*		190,000		45,293
China Shipping Development Co. Ltd., Class H		72,000		30,894
Chinese Maritime Transport Ltd.		8,000		9,623
Cia Sud Americana de Vapores S.A.*		915,546		81,554
Evergreen Marine Corp. Taiwan Ltd.*		23,000		13,444
Far Eastern Shipping Co.*		41,502		8,310
First Steamship Co. Ltd.		52,034		38,701
Grindrod Ltd.		60,156		125,905

See Accompanying Notes to the Financial Statements.

116 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Marine – (continued)
Hanjin Shipping Co. Ltd.*		1,800	$	13,468
Hyundai Merchant Marine Co. Ltd.*		538		5,007
Malaysian Bulk Carriers Bhd		25,400		12,356
MISC Bhd*		19,100		27,371
Precious Shipping PCL		15,700		9,522
Shih Wei Navigation Co. Ltd.		6,484		4,757
Sincere Navigation Corp.		13,000		12,136
Sinotrans Shipping Ltd.		68,500		16,770
STX Pan Ocean Co. Ltd.*		15,960		48,983
Taiwan Navigation Co. Ltd.		26,000		20,043
Thoresen Thai Agencies PCL*		22,780		13,893
Trada Maritime Tbk PT*		402,000		59,954
Trencor Ltd.		21,411		151,434
Wan Hai Lines Ltd.*		13,000		7,268
Wisdom Marine Lines Co. Ltd.		6,000		8,071
Yang Ming Marine Transport Corp.*		5,000		2,245
				931,201
Media – 1.4%
Astro Malaysia Holdings Bhd		78,900		76,501
BEC World PCL		21,300		48,624
Bhakti Investama Tbk PT		373,500		18,824
Caxton and CTP Publishers and Printers Ltd.		50,328		97,491
Central European Media Enterprises Ltd., Class A*		2,679		9,912
Cheil Worldwide, Inc.*		1,710		42,234
CJ CGV Co. Ltd.		650		33,229
CJ E&M Corp.*		1,074		36,278
Cyfrowy Polsat S.A.*		3,780		20,003
Daekyo Co. Ltd.		2,380		16,900
Dogan Yayin Holding AS*		23,314		11,440
Fenerbahce Futbol AS		67		1,509
Global Mediacom Tbk PT		89,500		20,022
Grupo Televisa SAB		46,200		233,877
Indosiar Karya Media Tbk PT* ^		129,000		16,983
KT Skylife Co. Ltd.		520		20,091
Major Cineplex Group PCL		20,200		15,279

	Shares		Value
Media – (continued)
Media Nusantara Citra Tbk PT		62,000	$	19,928
Media Prima Bhd		48,600		38,177
Naspers Ltd., Class N		7,366		492,439
Phoenix Satellite Television Holdings Ltd.		20,000		7,603
SBS Media Holdings Co. Ltd.		3,440		18,991
SM Entertainment Co.*		324		12,459
Star Publications Malaysia Bhd		43,300		34,583
Surya Citra Media Tbk PT^		36,000		10,368
TV Azteca SAB de CV		69,900		51,692
TVN S.A.		9,685		26,668
VGI Global Media PCL		14,800		66,058
VODone Ltd.		224,000		16,741
				1,514,904
Metals & Mining – 4.7%
African Rainbow Minerals Ltd.		1,707		33,614
Aluminum Corp of China Ltd., Class H*		62,000		23,408
Aneka Tambang Persero Tbk PT		151,500		21,504
Angang Steel Co. Ltd., Class H*		52,000		30,621
Anglo American Platinum Ltd.*		1,281		48,544
AngloGold Ashanti Ltd.		7,539		140,500
ArcelorMittal South Africa Ltd.*		3,433		8,787
Assore Ltd.		643		20,903
Atlas Consolidated Mining & Development		43,500		21,930
Borneo Lumbung Energi & Metal Tbk PT*		854,000		39,527
Bradespar S.A.		700		7,747
Bumi Resources Minerals Tbk PT*		500,000		17,228
CAP S.A.		1,597		50,298
Chiho-Tiande Group Ltd.		20,000		9,406
China Hongqiao Group Ltd.		12,500		7,232
China Metal Products		13,000		17,223

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 117

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Metals & Mining – (continued)
China Metal Recycling Holdings Ltd.^		51,000	$	61,971
China Molybdenum Co. Ltd., Class H		68,000		26,287
China Nonferrous Mining Corp. Ltd.*		140,000		48,708
China Precious Metal Resources Holdings Co. Ltd.*		222,000		38,046
China Rare Earth Holdings Ltd.		218,000		33,990
China Steel Corp.		202,000		177,961
China Vanadium Titano –Magnetite Mining Co. Ltd.		172,000		41,224
China Zhongwang Holdings Ltd.*		26,800		8,944
Chun Yuan Steel		91,000		34,535
Chung Hung Steel Corp.*		159,000		44,286
Cia de Minas Buenaventura S.A. (ADR)		3,400		68,068
Cia Minera Milpo SAA		31,483		20,246
Cia Siderurgica Nacional S.A.		13,100		51,954
Dongkuk Steel Mill Co. Ltd.		7,020		73,304
Eregli Demir ve Celik Fabrikalari TAS		15,542		17,765
Ezz Steel		5,211		6,914
Feng Hsin Iron & Steel Co.		7,000		12,571
Fosun International Ltd.		21,000		14,937
G J Steel PCL*		591,100		2,618
Gerdau S.A.		400		2,741
Gloria Material Technology Corp.		21,000		16,259
Gold Fields Ltd.		14,912		106,033
Grupa Kety S.A.		669		29,855
Grupo Mexico SAB de CV		68,800		246,697
Grupo Simec SAB de CV*		4,800		22,123
Harmony Gold Mining Co. Ltd.		7,837		37,691
Hunan Nonferrous Metal Corp. Ltd., Class H		252,000		72,412
Hyundai Hysco Co. Ltd.		700		19,577
Hyundai Steel Co.		1,058		73,204

	Shares		Value
Metals & Mining – (continued)
Impala Platinum Holdings Ltd.		10,507	$	143,245
Industrias CH SAB de CV*		2,800		22,531
Industrias Penoles SAB de CV		2,345		98,369
Inner Mongolia Eerduosi Resourses Co. Ltd., Class B		72,300		68,468
Izmir Demir Celik Sanayi AS*		4,467		7,373
Jastrzebska Spolka Weglowa S.A.		888		23,468
Jiangxi Copper Co. Ltd., Class H		22,000		42,636
Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS, Class A		14,483		21,400
Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS, Class D		78,086		87,950
KGHM Polska Miedz S.A.		2,734		128,066
KISWIRE Ltd.		770		25,660
Korea Zinc Co. Ltd.		169		48,415
Koza Altin Isletmeleri AS		761		15,191
Koza Anadolu Metal Madencilik Isletmeleri AS*		7,132		17,736
Krakatau Steel Persero Tbk PT		141,000		7,976
Kumba Iron Ore Ltd.		1,600		84,303
Lepanto Consolidated Mining*		291,000		6,787
Maanshan Iron & Steel, Class H*		242,000		59,560
Magnitogorsk Iron & Steel Works (GDR)		8,406		25,302
Managem		17		2,767
Mechel (ADR)		3,380		13,790
Metalurgica Gerdau S.A.		400		3,241
Minera Frisco SAB de CV*		13,000		55,565
Minsur S.A.		41,671		25,852
MMC Norilsk Nickel OJSC		214		35,664
MMC Norilsk Nickel OJSC (ADR)		7,127		109,186
MMG Ltd.*		28,000		8,407
MMX Mineracao e Metalicos S.A.*		9,123		10,677
Molibdenos y Metales S.A.		633		11,210
Nickel Asia Corp.		36,700		20,775

See Accompanying Notes to the Financial Statements.

118 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Metals & Mining – (continued)
North Mining Shares Co. Ltd., Class C*		460,000	$	22,524
Northam Platinum Ltd.*		35,540		131,716
Novolipetsk Steel OJSC		22,400		37,410
Palabora Mining Co. Ltd.*		2,358		27,958
Paranapanema S.A.*		32,400		93,983
Philex Mining Corp.		55,700		22,329
Polyus Gold OJSC		184		5,747
Poongsan Corp.		1,560		37,750
POSCO		1,242		354,116
POSCO Chemtech Co. Ltd.		137		15,264
Raspadskaya OAO*		8,723		12,838
Royal Bafokeng Platinum Ltd.*		8,532		51,530
Sahaviriya Steel Industries PCL*		2,232,500		44,117
Seah Besteel Corp.		2,110		57,765
SeAH Steel Corp.		359		36,673
Severstal OAO (GDR)		6,998		59,168
Shougang Concord International Enterprises Co. Ltd.*		678,000		34,946
Shougang Fushan Resources Group Ltd.		64,000		24,988
Sociedad Minera Cerro Verde S.A.A.*		451		10,508
Sociedad Minera el Brocal S.A.		2,500		23,265
Southern Copper Corp.		3,200		106,656
Stalprodukt S.A.*		224		11,379
Sterlite Industries India Ltd. (ADR)		22,943		165,878
STP & I PCL		3,900		12,424
TA Chen Stainless Pipe		31,000		15,336
Timah Persero Tbk PT		125,000		18,257
Ton Yi Industrial Corp.		5,000		3,702
Tung Ho Steel Enterprise Corp.		12,000		11,710
United Co. RUSAL PLC*		50,200		25,033
Usinas Siderurgicas de Minas Gerais S.A.*		1,800		9,056
Vale Indonesia Tbk PT		47,000		13,777

	Shares		Value
Metals & Mining – (continued)
Vale S.A.		25,100	$	428,690
Volcan Cia Minera SAA		32,809		21,099
VSMPO-AVISMA Corp.		37		6,787
Winsway Coking Coal Holding Ltd.		274,000		25,774
Yieh Phui Enterprise Co. Ltd.		54,000		15,022
Yieh United Steel Corp.*		108,115		32,128
Young Poong Corp.		4		5,811
Zhaojin Mining Industry Co. Ltd., Class H		47,500		52,760
Zijin Mining Group Co. Ltd., Class H		94,000		27,738
				5,254,575
Multiline Retail – 0.9%
Aeon Co. M Bhd		2,700		12,868
El Puerto de Liverpool SAB de CV		4,500		56,847
Empresas La Polar S.A.*		161,732		64,864
Far Eastern Department Stores Co. Ltd.		11,000		9,728
Golden Eagle Retail Group Ltd.		12,000		21,122
Grupo Famsa SAB de CV, Class A*		16,200		32,209
Hyundai Department Store Co. Ltd.		279		40,534
Hyundai Greenfood Co. Ltd.		930		14,989
Intime Department Store Group Co. Ltd.		18,500		21,931
Lojas Americanas S.A.		1,800		14,458
Lojas Renner S.A.		2,200		83,577
Lotte Shopping Co. Ltd.		216		80,610
Magazine Luiza S.A.		3,300		11,801
Maoye International Holdings Ltd.		81,000		17,326
Marisa Lojas S.A.		700		10,618
Matahari Putra Prima Tbk PT		88,500		18,114
Mercuries & Associates Ltd.		12,000		9,433
Mitra Adiperkasa Tbk PT		37,000		31,396
New World Department Store China Ltd.		29,000		14,947
Parkson Holdings Bhd		11,900		16,506
Parkson Retail Group Ltd.		18,500		10,012

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 119

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Multiline Retail – (continued)
PCD Stores Group Ltd.		438,000	$	66,034
Ramayana Lestari Sentosa Tbk PT		145,000		21,476
Ripley Corp. S.A.		9,695		10,075
SACI Falabella		9,367		106,981
Shinsegae Co. Ltd.		106		22,763
Springland International Holdings Ltd.		35,000		18,220
Woolworths Holdings Ltd.		14,805		115,277
				954,716
Multi-Utilities – 0.1%
YTL Corp. Bhd		84,400		45,494
YTL Power International Bhd		67,700		33,600
Zespol Elektrocieplowni Wroclawskich Kogeneracja S.A.		509		7,452
				86,546
Office Electronics – 0.1%
Kinpo Electronics		213,000		50,594
Sindoh Co. Ltd.		550		38,455
				89,049
Oil, Gas & Consumable Fuels – 7.2%
Adaro Energy Tbk PT		265,500		33,589
Bangchak Petroleum PCL		10,400		12,845
Banpu PCL		2,200		25,560
Berau Coal Energy Tbk PT		166,500		3,511
Bumi Resources Tbk PT		289,000		19,916
China Coal Energy Co. Ltd., Class H		66,000		50,772
China Petroleum & Chemical Corp., Class H		364,000		398,211
China Shenhua Energy Co. Ltd., Class H		59,500		210,457
CNOOC Ltd.		336,000		626,921
Cosan Ltd., Class A		2,800		58,100
Cosan S.A. Industria e Comercio		2,100		49,572
Ecopetrol S.A.		85,414		205,329
Empresas COPEC S.A.		6,003		85,939

	Shares		Value
Oil, Gas & Consumable Fuels – (continued)
Energi Mega Persada Tbk PT*		1,414,000	$	19,779
Energy Earth PCL		24,800		6,337
Esso Thailand PCL		170,300		55,993
Exxaro Resources Ltd.		2,058		32,243
Formosa Petrochemical Corp.		18,000		48,977
Garda Tujuh Buana Tbk PT*		55,000		17,819
Gazprom Neft OAO (ADR)		1,859		37,924
Gazprom OAO		58,706		235,393
Gazprom OAO (ADR)		73,857		586,055
Grupa Lotos S.A.*		1,462		17,570
GS Holdings		1,035		51,125
Harum Energy Tbk PT		6,500		2,774
Hidili Industry International Development Ltd.		169,000		38,109
HRT Participacoes em Petroleo S.A.*		13,300		29,400
Indika Energy Tbk PT		93,000		10,713
Indo Tambangraya Megah Tbk PT		7,000		26,459
Inner Mongolia Yitai Coal Co. Ltd., Class B		11,400		59,394
IRPC PCL		237,300		33,149
Kunlun Energy Co. Ltd.		58,000		113,450
Lubelski Wegiel Bogdanka S.A.		785		29,069
Lukoil OAO		2,804		178,632
Lukoil OAO (ADR)		6,705		425,097
Medco Energi Internasional Tbk PT		177,000		34,772
MIE Holdings Corp.		60,000		13,839
MOL Hungarian Oil and Gas PLC		700		49,641
NovaTek OAO		17,922		169,180
OGX Petroleo e Gas Participacoes S.A.*		25,500		25,761
PetroChina Co. Ltd., Class H		388,000		493,462
Petroleo Brasileiro S.A.		58,200		557,113
Petron Corp.		23,300		8,718
Petronas Dagangan BHD		4,400		34,159
Philex Petroleum Corp.*		22,300		14,574
Polski Koncern Naftowy Orlen S.A.*		6,036		93,610

See Accompanying Notes to the Financial Statements.

120 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Oil, Gas & Consumable Fuels – (continued)
Polskie Gornictwo Naftowe i Gazownictwo S.A.*		30,059	$	50,803
PTT Exploration & Production PCL		20,090		105,413
PTT PCL		15,500		172,164
QGEP Participacoes S.A.		4,300		24,624
Reliance Industries Ltd. (GDR)(a)		19,510		574,960
Resource Alam Indonesia Tbk PT		65,500		14,148
Rosneft OAO		7,631		52,836
Rosneft OAO (GDR)		16,544		113,078
SAMIR*		614		19,772
Sasol Ltd.		10,731		463,329
Semirara Mining Corp.		2,170		15,816
Shell Refining Co. Federation of Malaya Bhd		8,500		23,607
Sinopec Kantons Holdings Ltd.		14,000		12,682
SK Gas Co. Ltd.		528		37,396
SK Innovation Co. Ltd.		1,177		160,311
S-Oil Corp.		737		59,225
Surgutneftegas OAO		37,487		32,387
Surgutneftegas OAO (ADR)		24,362		187,602
Tambang Batubara Bukit Asam Persero Tbk PT		14,500		22,744
Tatneft OAO		8,311		53,478
Tatneft OAO (ADR)		3,003		113,483
Thai Oil PCL		15,200		34,181
TNK-BP Holding		8,570		12,732
Tupras Turkiye Petrol Rafinerileri AS		2,208		61,557
Turcas Petrol AS		4,033		7,803
Ultrapar Participacoes S.A.		6,300		167,622
United Energy Group Ltd.*		74,000		11,442
Yanchang Petroleum International Ltd.*		260,000		15,076
Yanzhou Coal Mining Co. Ltd., Class H		42,000		43,729
				7,995,012

	Shares		Value
Paper & Forest Products – 0.7%
Duratex S.A.		7,150	$	53,746
Empresas CMPC S.A.		21,301		78,608
Fibria Celulose S.A.*		5,400		57,470
Hansol Paper Co.		5,890		78,619
Indah Kiat Pulp & Paper Corp. Tbk PT*		557,500		49,887
Jaya Tiasa Holdings BHD		17,600		11,222
Lee & Man Paper Manufacturing Ltd.		27,000		20,074
Masisa S.A.		346,292		31,581
Mondi Ltd.		17,325		231,356
Nine Dragons Paper Holdings Ltd.		29,000		25,149
Sappi Ltd.*		13,275		39,903
Shandong Chenming Paper Holdings Ltd., Class B		47,300		21,942
Shandong Chenming Paper Holdings Ltd., Class H		22,500		8,727
Shihlin Paper Corp.*		8,000		11,900
Ta Ann Holdings Bhd		11,100		12,733
YFY, Inc.		212,000		103,802
				836,719
Personal Products – 0.4%
Able C&C Co. Ltd.		546		29,796
Amorepacific Corp.		63		51,485
AMOREPACIFIC Group		57		21,634
BaWang International Group Holding Ltd.*		116,000		6,726
Cosmax, Inc.		530		26,661
Hengan International Group Co. Ltd.		14,000		144,680
Hypermarcas S.A.*		6,700		53,546
Jinchuan Group International Resources Co. Ltd.*		63,000		11,609
Microbio Co. Ltd.		19,000		21,761
Natura Cosmeticos S.A.		3,100		77,737
Real Nutriceutical Group Ltd.		127,000		33,711
				479,346
Pharmaceuticals – 1.2%
Adcock Ingram Holdings Ltd.		23,881		162,177
Aspen Pharmacare Holdings Ltd.*		4,965		107,731

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 121

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Pharmaceuticals – (continued)
Bukwang Pharmaceutical Co. Ltd.		1,072	$	16,012
Celltrion, Inc.		1,146		32,883
CFR Pharmaceuticals S.A.		12,516		3,225
China Medical System Holdings Ltd.		49,000		48,049
China Shineway Pharmaceutical Group Ltd.		19,000		33,786
Chong Kun Dang Pharm Corp.		430		23,934
CSPC Pharmaceutical Group Ltd.*		126,000		60,722
Daewoong Pharmaceutical Co. Ltd.		230		15,350
Dong-A Socio Holdings Co. Ltd.		39		4,427
Dr Reddy’s Laboratories Ltd. (ADR)		5,903		223,606
EIS Eczacibasi Ilac ve Sinai ve Finansal Yatirimlar Sanayi ve Ticaret AS		9,354		13,352
Genomma Lab Internacional SAB de CV, Class B*		14,700		31,706
Green Cross Holdings Corp.		1,140		17,701
Hanmi Pharm Co. Ltd.*		336		49,578
Ilyang Pharmaceutical Co. Ltd.*		610		20,494
Kalbe Farma Tbk PT		371,000		53,041
Komipharm International Co. Ltd.*		1,365		10,275
LG Life Sciences Ltd.*		661		32,951
Lijun International Pharmaceutical Holding Ltd.		74,000		22,980
Pharmstandard OJSC*		149		9,866
Pharmstandard OJSC (GDR)*		1,321		27,622
Ranbaxy Laboratories Ltd. (GDR)*		15,978		133,896
Richter Gedeon Nyrt		228		33,810
ScinoPharm Taiwan Ltd.		5,000		11,622
Sihuan Pharmaceutical Holdings Group Ltd.		33,000		18,497

	Shares		Value
Pharmaceuticals – (continued)
Sino Biopharmaceutical		52,000	$	35,848
TTY Biopharm Co. Ltd.		9,000		29,825
Yuhan Corp.		166		31,653
YungShin Global Holding Corp.		12,000		16,753
				1,333,372
Real Estate Investment Trusts (REITs) – 0.6%
Akmerkez Gayrimenkul Yatirim Ortakligi AS		1,462		15,081
Capital Property Fund		20,303		26,672
CapitaMalls Malaysia Trust		50,700		31,328
Cathay No. 1 REIT		22,000		14,991
Cathay No. 2 REIT		34,000		20,553
Emlak Konut Gayrimenkul Yatirim Ortakligi AS*		11,564		19,795
Fibra Uno Administracion SA de CV		24,300		93,269
Fountainhead Property Trust		175,818		185,558
Fubon No. 1 REIT		37,000		23,545
Fubon No. 2 REIT		34,000		17,247
IGB Real Estate Investment Trust		33,800		15,109
Is Gayrimenkul Yatirim Ortakligi AS		18,055		15,805
Pavilion Real Estate Investment Trust		22,500		11,832
SA Corporate Real Estate Fund Nominees Pty Ltd.		184,109		89,775
Shin Kong No.1 REIT		53,000		27,890
Sinpas Gayrimenkul Yatirim Ortakligi AS		35,728		27,691
Sunway Real Estate Investment Trust		39,400		20,720
Torunlar Gayrimenkul Yatirim Ortakligi AS		5,945		14,022
Yuexiu Real Estate Investment Trust		85,000		47,644
				718,527
Real Estate Management & Development – 4.3%
Acucap Properties Ltd.		25,753		150,348
Agile Property Holdings Ltd.		18,000		23,287
Agung Podomoro Land Tbk PT		295,500		14,437

See Accompanying Notes to the Financial Statements.

122 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Real Estate Management & Development – (continued)
Alam Sutera Realty Tbk PT		798,000	$	86,182
Aliansce Shopping Centers S.A.		6,300		71,176
Alliances Developpement Immobilier S.A.		189		10,740
Amata Corp. PCL		20,700		16,221
Amer Group Holding		54,880		4,432
Ayala Land, Inc.		103,000		81,204
Bakrieland Development Tbk PT*		2,052,500		10,978
Bangkokland PCL		354,000		24,846
Belle Corp.*		244,200		38,445
BR Malls Participacoes S.A.*		8,400		99,145
BR Properties S.A.		4,600		51,027
Bumi Serpong Damai PT		84,000		14,947
C C Land Holdings Ltd.		210,000		70,626
Cathay Real Estate Development Co. Ltd.		23,000		13,794
Central Pattana PCL		20,800		70,869
China Merchants Property Development Co. Ltd., Class B		19,200		59,377
China Overseas Grand Oceans Group Ltd.		7,000		11,004
China Overseas Land & Investment Ltd.		74,000		225,988
China Properties Group Ltd.*		15,000		3,730
China Resources Land Ltd.		42,000		127,181
China SCE Property Holdings Ltd.		154,000		38,695
China South City Holdings Ltd.		344,000		58,511
China Vanke Co. Ltd., Class B		22,300		45,171
Chong Hong Construction Co.		6,000		20,737
Cie Generale Immobiliere		286		18,965
Ciputra Development Tbk PT		612,500		86,938
Country Garden Holdings Co. Ltd.*		110,000		62,366
Cyrela Commercial Properties SA Empreendimentos e Participacoes*		1,600		18,749

	Shares		Value
Real Estate Management & Development – (continued)
Douja Promotion Groupe Addoha S.A.		1,857	$	12,101
Echo Investment S.A.*		18,210		32,852
Evergrande Real Estate Group Ltd.		128,000		52,285
Fantasia Holdings Group Co. Ltd.		352,500		54,960
Farglory Land Development Co. Ltd.		7,000		13,330
Filinvest Land, Inc.		411,000		20,370
Franshion Properties China Ltd.		30,000		10,244
Globe Trade Centre S.A.*		14,767		36,596
Glorious Property Holdings Ltd.*		433,000		67,512
Grand Canal Land PCL*		149,300		19,025
Greentown China Holdings Ltd.		29,000		56,351
Growthpoint Properties Ltd.		36,364		119,386
Guangzhou R&F Properties Co. Ltd., Class H		143,200		259,069
Hemaraj Land and Development PCL		249,700		36,583
Highwealth Construction Corp.		7,000		15,631
Hopson Development Holdings Ltd.*		16,000		26,678
Huaku Development Co. Ltd.		21,000		60,342
Huang Hsiang Construction Co.		4,000		10,640
Hung Poo Real Estate Development Corp.		9,000		10,048
Hung Sheng Construction Co. Ltd.		86,000		71,103
Hyprop Investments Ltd.		1,358		11,974
IGB Corp. Bhd		13,500		10,472
Iguatemi Empresa de Shopping Centers S.A.		1,100		13,154
IJM Land Bhd		21,600		18,317
JHSF Participacoes S.A.		2,400		8,750
Kaisa Group Holdings Ltd.*		277,000		86,734
Kindom Construction Co.		69,000		74,233
King’s Town Construction Co. Ltd.		9,000		9,347

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 123

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Real Estate Management & Development – (continued)
KLCC Property Holdings Bhd^		4,800	$	11,438
KrisAssets Holdings Bhd^		17,100		393
KWG Property Holding Ltd.		18,000		12,432
Land and Houses PCL		315,500		140,819
Lippo Karawaci Tbk PT		421,500		58,527
Longfor Properties Co. Ltd.		24,000		40,079
LPS Brasil Consultoria de Imoveis S.A.		4,800		49,452
LSR Group (GDR)		5,482		23,847
Mah Sing Group Bhd		27,066		20,194
Medinet Nasr Housing*		2,721		9,108
Megaworld Corp.		189,000		19,056
Mingfa Group International Co. Ltd.		36,000		11,087
Minmetals Land Ltd.		210,000		30,036
Multiplan Empreendimentos Imobiliarios S.A.		2,100		59,980
New World China Land Ltd.		20,000		8,788
Pakuwon Jati Tbk PT		229,500		9,560
Palm Hills Developments SAE*		25,781		8,031
Parque Arauco S.A.		24,597		63,535
Poly Property Group Co. Ltd.*		63,000		43,918
Powerlong Real Estate Holdings Ltd.		237,000		56,802
Prince Housing & Development Corp.		30,000		21,449
Quality Houses PCL		401,800		57,772
Radium Life Tech Co. Ltd.		46,000		38,344
Renhe Commercial Holdings Co. Ltd.*		646,000		40,788
Resilient Property Income Fund Ltd.		8,861		58,499
Robinsons Land Corp.		7,200		4,496
Ruentex Development Co. Ltd.		7,000		13,710
Sao Carlos Empreendimentos e Participacoes S.A.		700		16,244
Sentul City Tbk PT*		1,819,000		53,321
Shanghai Industrial Urban Development Group Ltd.*		76,000		15,375

	Shares		Value
Real Estate Management & Development – (continued)
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., Class B		25,800	$	35,449
Shenzhen Investment Ltd.		328,000		137,361
Shimao Property Holdings Ltd.		24,500		52,785
Shining Building Business Co. Ltd.*		27,000		20,402
Shui On Land Ltd.		63,500		21,110
Silver Grant International		294,000		47,355
Sinolink Worldwide Holdings Ltd.*		252,000		19,808
Sino-Ocean Land Holdings Ltd.		65,000		42,883
Sinyi Realty Co.		7,000		12,453
SM Development Corp.		81,500		16,831
SM Prime Holdings, Inc.		147,200		71,526
Soho China Ltd.		52,500		45,325
Sonae Sierra Brasil S.A.		2,100		28,998
SP Setia Bhd		14,300		16,121
Summarecon Agung Tbk PT		156,500		41,851
Sunac China Holdings Ltd.		40,000		32,266
Sunway Bhd		46,600		44,417
Supalai PCL		55,400		38,695
Talaat Moustafa Group*		12,909		7,353
Tomson Group Ltd.		22,000		5,981
UEM Land Holdings Bhd*		25,000		20,624
UOA Development Bhd		69,700		50,628
Vista Land & Lifescapes, Inc.		68,000		10,854
Yuexiu Property Co. Ltd.		168,000		49,790
Yuzhou Properties Co.		134,000		34,188
Zall Development Group Ltd.		40,000		13,349
				4,763,686
Road & Rail – 0.2%
All America Latina Logistica S.A.		8,000		40,490
CJ Korea Express Co. Ltd.*		140		13,475
Evergreen International Storage & Transport Corp.		30,000		19,569
Guangshen Railway Co. Ltd., Class H		224,000		112,857
JSL S.A.		3,100		24,806

See Accompanying Notes to the Financial Statements.

124 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Road & Rail – (continued)
Localiza Rent a Car S.A.		2,400	$	42,671
Tegma Gestao Logistica		1,500		20,165
				274,033
Semiconductors & Semiconductor Equipment – 6.4%
A-DATA Technology Co. Ltd.		10,000		19,789
Advanced Semiconductor Engineering, Inc.		108,000		93,135
ALI Corp.		14,000		14,967
Ardentec Corp.		25,000		16,900
Chipbond Technology Corp.		7,000		17,789
Dongbu HiTek Co. Ltd.*		2,680		14,528
Duksan Hi-Metal Co. Ltd.*		767		19,013
Elan Microelectronics Corp.		21,000		55,859
Epistar Corp.		18,000		31,716
Faraday Technology Corp.		21,000		23,340
Forhouse Corp.		25,000		12,198
Formosa Epitaxy, Inc.*		16,000		11,385
GCL-Poly Energy Holdings Ltd.		176,000		35,606
GemVax & Kael Co. Ltd.*		1,261		43,281
Genesis Photonics, Inc.*		14,000		9,677
Giga Solar Materials Corp.		1,000		8,437
Gintech Energy Corp.*		46,000		44,968
Global Mixed Mode Technology, Inc.		5,000		15,587
Global Unichip Corp.		4,000		12,158
Greatek Electronics, Inc.		14,000		11,409
Holtek Semiconductor, Inc.		8,000		9,705
Iljin Display Co. Ltd.		890		17,658
Inotera Memories, Inc.*		37,000		14,543
King Yuan Electronics Co. Ltd.		170,000		120,968
Kinsus Interconnect Technology Corp.		4,000		13,960
Lextar Electronics Corp.*		15,000		16,570
Macronix International		66,000		17,980
MediaTek, Inc.		22,000		268,365
Melfas, Inc.		877		14,692
Motech Industries, Inc.*		46,000		48,086
MStar Semiconductor, Inc.		4,000		34,156
Neo Solar Power Corp.*		74,000		51,152

	Shares		Value
Semiconductors & Semiconductor Equipment – (continued)
Novatek Microelectronics Corp.		10,000	$	48,794
OptoTech Corp.		36,000		14,638
Parade Technologies Ltd.		1,000		9,284
Phison Electronics Corp.		2,000		15,756
Pixart Imaging, Inc.		8,000		17,457
Powertech Technology, Inc.		13,000		23,258
Radiant Opto-Electronics Corp.		8,000		32,529
Realtek Semiconductor Corp.		7,000		20,161
Regent Manner International Holdings Ltd.		115,000		21,487
Richtek Technology Corp.		3,000		16,519
Samsung Electronics Co. Ltd.		2,143		2,957,741
Semiconductor Manufacturing International Corp.*		3,529,000		254,650
Seoul Semiconductor Co. Ltd.		570		15,424
Silicon Integrated Systems Corp.*		38,000		12,593
Siliconware Precision Industries Co.		57,000		67,600
Sino-American Silicon Products, Inc.		73,000		100,798
SK Hynix, Inc.*		9,930		269,597
Sonix Technology Co. Ltd.		9,000		12,824
Taiwan Semiconductor Manufacturing Co. Ltd.		473,000		1,754,998
Taiwan Surface Mounting Technology Co. Ltd.		30,000		50,115
Transcend Information, Inc.		3,000		10,369
United Microelectronics Corp.		221,000		84,245
Unity Opto Technology Co. Ltd.*		15,000		14,104
Vanguard International Semiconductor Corp.		12,000		13,073
Via Technologies, Inc.*		14,000		9,606
Visual Photonics Epitaxy Co. Ltd.		13,000		15,726
Win Semiconductors Corp.		35,000		41,568
Winbond Electronics Corp.*		229,000		63,628
Wonik IPS Co. Ltd.*		1,799		10,471
				7,118,590

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 125

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Software – 0.3%
AsiaInfo-Linkage, Inc.*		3,000	$	34,440
Asseco Poland S.A.		1,542		20,917
Com2uSCorp*		318		14,784
Cyberlink Corp.		4,000		13,134
Gamevil, Inc.*		198		18,878
Golfzon Co. Ltd.		95		5,745
International Games System Co. Ltd.		4,000		11,141
Kingdee International Software Group Co. Ltd.*		82,000		13,525
Kingsoft Corp. Ltd.		33,000		37,972
NCSoft Corp.		336		50,646
Neowiz Games Corp.*		474		7,489
Totvs S.A.		2,400		45,155
WeMade Entertainment Co. Ltd.*		251		12,900
				286,726
Specialty Retail – 0.8%
Ace Hardware Indonesia Tbk PT		367,500		37,043
Belle International Holdings Ltd.		89,000		145,187
China Yongda Automobiles Services Holdings Ltd.*		16,500		18,030
China ZhengTong Auto Services Holdings Ltd.*		20,000		12,396
Cia Hering		2,300		46,874
The Foschini Group Ltd.		3,867		49,508
GOME Electrical Appliances Holding Ltd.*		197,000		19,800
Grupo Elektra SAB DE CV		1,185		51,116
Hengdeli Holdings Ltd.		100,000		29,121
Home Product Center PCL		100,567		51,397
Hotai Motor Co. Ltd.		4,000		35,714
Indomobil Sukses Internasional Tbk PT		18,500		10,085
JD Group Ltd./South Africa		21,175		77,935
Kolao Holdings		715		19,477
Lewis Group Ltd.		13,466		88,450
LOTTE Himart Co. Ltd.		83		5,886
M Video OJSC		2,549		20,332

	Shares		Value
Specialty Retail – (continued)
Mr Price Group Ltd.		4,520	$	64,904
National Petroleum Co. Ltd.		5,000		4,871
Pou Sheng International Holdings Ltd.*		87,000		5,045
Seobu T&D*		453		9,296
Shinsegae International Co. Ltd.		150		10,624
Siam Global House PCL		12,700		9,693
Truworths International Ltd.		8,472		84,122
Tsann Kuen Enterprise Co. Ltd.		6,000		10,348
Zhongsheng Group Holdings Ltd.		8,000		11,113
				928,367
Textiles, Apparel & Luxury Goods – 0.9%
361 Degrees International Ltd.		132,000		35,719
Aksa Akrilik Kimya Sanayii		7,428		21,868
Anta Sports Products Ltd.		17,000		14,239
Arezzo Industria e Comercio S.A.		2,400		50,605
Billion Industrial Holdings Ltd.		53,500		35,503
Bosideng International Holdings Ltd.		42,000		11,040
China Dongxiang Group Co.		142,000		24,336
China Lilang Ltd.		25,000		15,366
Daphne International Holdings Ltd.		16,000		16,658
Eclat Textile Co. Ltd.		2,000		12,063
Feng TAY Enterprise Co. Ltd.		16,000		26,376
Fila Korea Ltd.		701		45,384
Formosa Taffeta Co. Ltd.		12,000		11,406
FORUS S.A.		3,750		26,206
Grendene S.A.		1,800		20,525
Guararapes Confeccoes S.A.		200		10,423
Handsome Co. Ltd.		560		16,755
Hansae Co. Ltd.		620		10,302
Lealea Enterprise Co. Ltd.		129,000		45,241
LG Fashion Corp.		1,290		36,956
Li Ning Co. Ltd.*		42,000		23,163
Li Peng Enterprise Co. Ltd.*		76,000		28,714
LPP S.A.		13		26,333
Makalot Industrial Co. Ltd.		7,000		29,649

See Accompanying Notes to the Financial Statements.

126 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Textiles, Apparel & Luxury Goods – (continued)
NG2 S.A.		1,309	$	30,244
Nien Hsing Textile Co. Ltd.		10,000		7,861
Peak Sport Products Co. Ltd.		147,000		26,329
Ports Design Ltd.		64,500		50,449
Pou Chen Corp.		47,000		55,421
Restoque Comercio e Confeccoes de Roupas S.A.		4,800		21,629
Ruentex Industries Ltd.		6,000		14,353
Shenzhou International Group Holdings Ltd.		8,000		23,194
Shinkong Textile Co. Ltd.		10,000		12,944
Tainan Spinning Co. Ltd.		64,000		31,445
Woongjin Chemical Co. Ltd.* ^		33,420		26,978
XTEP International Holdings		26,500		11,098
Youngone Corp.		360		14,383
Youngone Holdings Co. Ltd.		992		70,799
				991,957
Thrifts & Mortgage Finance – 0.0%†
Malaysia Building Society		19,400		17,535
Tobacco – 0.3%
British American Tobacco Malaysia Bhd		2,100		43,705
Gudang Garam Tbk PT		10,500		53,350
JT International Bhd		4,700		9,917
KT&G Corp.		2,058		148,188
Philip Morris CR AS		15		8,565
Souza Cruz S.A.		6,300		96,887
				360,612
Trading Companies & Distributors – 0.3%
AKR Corporindo Tbk PT		20,000		10,594
Barloworld Ltd.		3,829		40,070
CITIC Resources Holdings Ltd.*		476,000		60,109
Daewoo International Corp.		730		25,619
Hexindo Adiperkasa Tbk PT		8,000		3,991
Hyundai Corp.		1,760		41,391
iMarketKorea, Inc.		780		18,698
LG International Corp.		570		18,374

	Shares		Value
Trading Companies & Distributors – (continued)
Mills Estruturas e Servicos de Engenharia S.A.		1,300	$	21,377
Samsung C&T Corp.		2,313		123,914
SK Networks Co. Ltd.		3,140		20,814
				384,951
Transportation Infrastructure – 1.2%
Airports of Thailand PCL		7,200		35,448
Anhui Expressway Co., Class H		78,000		43,218
Arteris S.A.		1,700		18,841
Bangkok Expressway PCL		25,700		35,026
Beijing Capital International Airport Co. Ltd., Class H		98,000		67,938
CCR S.A.		15,700		153,663
China Merchants Holdings International Co. Ltd.		20,000		63,268
COSCO Pacific Ltd.		28,000		37,090
EcoRodovias Infraestrutura e Logistica S.A.		1,300		11,261
Grupo Aeroportuario del Centro Norte Sab de CV*		11,100		42,404
Grupo Aeroportuario del Pacifico SAB de CV, Class B		11,400		65,953
Grupo Aeroportuario del Sureste SAB de CV, Class B		3,200		39,669
Hopewell Highway Infrastructure Ltd.		6,500		3,208
International Container Terminal Services, Inc.		13,500		30,175
Jasa Marga Persero Tbk PT		17,000		11,715
Jiangsu Expressway Co. Ltd., Class H		52,000		56,954
LLX Logistica S.A.*		14,800		14,508
Malaysia Airports Holdings Bhd		9,500		18,797
NCB Holdings Bhd		16,500		24,838
Novorossiysk Commercial Sea Port PJSC (GDR)		3,728		25,723
OHL Mexico SAB de CV*		27,300		84,393
Road King Infrastructure Ltd.		36,000		34,095
Santos Brasil Participacoes S.A.		800		12,455

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 127

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Transportation Infrastructure – (continued)
Shenzhen Expressway Co. Ltd., Class H		100,000	$	41,105
Shenzhen International Holdings Ltd.		1,397,500		181,877
Taiwan High Speed Rail Corp.*		52,447		9,774
TAV Havalimanlari Holding AS		2,502		17,648
Tianjin Port Development Holdings Ltd.		302,000		43,195
Yuexiu Transport Infrastructure Ltd.		94,000		48,086
Zhejiang Expressway Co. Ltd., Class H		84,000		66,026
				1,338,351
Water Utilities – 0.2%
Aguas Andinas S.A., Class A		45,003		35,792
Beijing Enterprises Water Group Ltd.		46,000		13,929
Cia de Saneamento Basico do Estado de Sao Paulo		6,300		88,758
Cia de Saneamento de Minas Gerais-COPASA		600		13,834
Guangdong Investment Ltd.		28,000		27,096
Inversiones Aguas Metropolitanas S.A.		7,326		15,536
Manila Water Co., Inc.		10,500		10,191
Thai Tap Water Supply PCL		42,200		15,097
				220,233
Wireless Telecommunication Services – 3.7%
Advanced Info Service PCL		20,200		185,826
Allied Technologies Ltd.		8,151		29,047
Almendral S.A.		111,086		16,080
America Movil SAB de CV		761,500		814,958
Axiata Group Bhd		52,600		117,043
China Mobile Ltd.		114,000		1,247,880
DiGi.Com Bhd		67,700		103,247
Egyptian Co. for Mobile Services SAE*		182		3,516

	Shares		Value
Wireless Telecommunication Services – (continued)
ENTEL Chile S.A.		3,402	$	65,515
Far EasTone Telecommunications Co. Ltd.		31,000		75,525
Globe Telecom, Inc.		490		17,024
Indosat Tbk PT		17,000		10,491
Maxis Bhd		44,400		98,650
Mobile Telesystems OJSC		18,817		166,519
MTN Group Ltd.		33,248		598,822
Orascom Telecom Holding SAE*		46,336		31,206
Orascom Telecom Media And Technology Holding SAE		441,109		31,170
Philippine Long Distance Telephone Co.		655		48,473
Shin Corp. PCL		17,500		51,427
Sistema JSFC		21,348		18,270
Sistema JSFC (GDR)		2,108		40,200
SK Telecom Co. Ltd.		258		45,331
Taiwan Mobile Co. Ltd.		31,000		112,920
Tim Participacoes S.A.*		15,400		64,388
Tower Bersama Infrastructure Tbk PT*		12,000		6,974
Turkcell Iletisim Hizmetleri AS*		15,269		94,503
Vodacom Group Ltd.		7,001		82,002
				4,177,007
Total Common Stocks (Cost $99,128,438)				100,559,111
PREFERRED STOCKS - 5.5%
Airlines – 0.0%†
Gol Linhas Aereas Inteligentes S.A.*		6,400		39,434
Automobiles – 0.1%
Hyundai Motor Co.		1,441		105,399
Beverages – 0.7%
Cia de Bebidas das Americas		14,900		623,721
Coca-Cola Embonor S.A., Class B		11,178		34,850

See Accompanying Notes to the Financial Statements.

128 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
PREFERRED STOCKS – (continued)
Beverages – (continued)
Embotelladora Andina S.A., Class A		6,892	$	36,543
Embotelladora Andina S.A., Class B		6,473		43,931
				739,045
Capital Markets – 0.0%†
Daishin Securities Co. Ltd.*		4,660		25,261
Chemicals – 0.1%
Braskem S.A.*		2,400		20,873
LG Chem Ltd.		96		8,386
Nizhnekamskneftekhim OAO		28,942		20,986
Sociedad Quimica y Minera de Chile S.A., Class B		1,948		96,346
				146,591
Commercial Banks – 1.6%
Banco Bradesco S.A.		41,750		686,542
Banco do Estado do Rio Grande do Sul S.A.		3,000		25,266
Banco Industrial e Comercial S.A.		12,700		35,886
Bank St. Petersburg OJSC		11,230		13,891
Grupo Aval Acciones y Valores		11,333		7,943
Itau Unibanco Holding S.A.		46,800		785,500
Itausa – Investimentos Itau S.A.		54,900		271,823
				1,826,851
Containers & Packaging – 0.1%
Klabin S.A.		11,000		73,663
Diversified Financial Services – 0.1%
Grupo de Inversiones Suramericana S.A.		2,484		52,260
Diversified Telecommunication Services – 0.1%
Axtel SAB de CV*		109,700		36,366
Oi S.A.		14,800		36,269
Rostelecom OJSC		2,956		7,884
Telefonica Brasil S.A.		5,200		138,147
				218,666

	Shares		Value
Electric Utilities – 0.2%
Centrais Eletricas Brasileiras S.A.		3,900	$	20,266
Centrais Eletricas de Santa Catarina S.A.		3,000		35,934
Cia de Transmissao de Energia Eletrica Paulista		500		8,760
Cia Energetica de Minas Gerais		8,800		112,096
Cia Energetica do Ceara		900		21,520
Cia Paranaense de Energia		2,200		39,126
Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A.		14,800		60,843
				298,545
Food & Staples Retailing – 0.1%
Cia Brasileira de Distribuicao Grupo Pao de Acucar		2,300		126,371
Household Durables – 0.0%†
LG Electronics, Inc.		80		1,987
Independent Power Producers & Energy Traders – 0.1%
AES Tiete S.A.		1,600		16,228
Cia Energetica de Sao Paulo		4,500		47,599
				63,827
Industrial Conglomerates – 0.1%
Allied Electronics Corp. Ltd.		33,245		70,543
Insurance – 0.0%†
Samsung Fire & Marine Insurance Co. Ltd.		15		1,207
Machinery – 0.1%
Marcopolo S.A.		2,900		19,304
Randon Participacoes S.A.		6,700		43,728
				63,032
Metals & Mining – 0.9%
Bradespar S.A.		4,400		55,850
Gerdau S.A.		15,900		124,449
Metalurgica Gerdau S.A.		5,100		50,783

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 129

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

	Shares		Value
PREFERRED STOCKS – (continued)
Metals & Mining – (continued)
Usinas Siderurgicas de Minas Gerais S.A.*		7,100	$	35,154
Vale S.A.		39,200		636,963
				903,199
Multiline Retail – 0.1%
Lojas Americanas S.A.		9,000		78,590
Oil, Gas & Consumable Fuels – 0.8%
AK Transneft OAO		27		54,775
Petroleo Brasileiro S.A.		82,400		822,970
Surgutneftegas OAO		37,411		26,531
TNK-BP Holding		3,911		4,687
				908,963
Paper & Forest Products – 0.0%†
Suzano Papel e Celulose S.A.*		10,600		38,806
Personal Products – 0.0%†
Amorepacific Corp.		24		6,527
Semiconductors & Semiconductor Equipment – 0.3%
Samsung Electronics Co. Ltd.		372		294,209
Textiles, Apparel & Luxury Goods – 0.0%†
Alpargatas S.A.		1,540		10,267
Cia de Tecidos do Norte de Minas – Coteminas*		9,894		19,051
				29,318
Total Preferred Stocks (Cost $6,182,641)				6,112,294
	No. of Rights
Rights – 0.0%†
Cia Brasileira de Distribuicao Grupo Pao de Acucar, expiring 05/21/13 at 101.41 BRL*		2		6
Green Cross Corp., expiring 05/31/13 at 119,500.00 KRW* ^		8		229

	No. of Rights		Value
Rights – (continued)
Polimex-Mostostal S.A., expiring 11/29/12 at 0.52 PLN* ^		4,668	$	—
Shui On Land Ltd., expiring 05/13/13 at 1.84 HKD*		21,166		2,236
Tisco Financial Group PCL, expiring 06/25/13 at 24.00 THB* ^		1,720		1,817
Total Rights (Cost $–)				4,288
	No. of Warrants
Warrants – 0.0%†
Mah Sing Group Bhd, expiring 03/12/13 at 2.38 MYR*		4,059		540
Thoresen Thai Agencies PCL, expiring 02/28/13 at 17.00 THB* ^		5,040		1,245
WCT Bhd, expiring 12/11/17 at 2.25 MYR*		2,140		243
Total Warrants (Cost $–)				2,028
Total Investment Securities (Cost $105,311,079) – 95.6%				106,677,721
Other assets less liabilities – 4.4%				4,898,811
Net Assets – 100.0%			$	111,576,532

* Non-income producing security.

^(a)  144A security – Certain conditions for public sale may exist.

^ Security fair valued in accordance with procedures adopted by the Board of Trustees. At April 30, 2013, the value of these securities amounted to $191,915 or 0.17% of net assets.

^†  Amount represents less than 0.05%.

Percentages shown are based on Net Assets.

Abbreviations:

ADR – American Depositary Receipt

GDR – Global Depositary Receipt

REIT – Real Estate Investment Trust

See Accompanying Notes to the Financial Statements.

130 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	6,001,944
Aggregate gross unrealized depreciation		(4,685,665	)
Net unrealized appreciation	$	1,316,279
Federal income tax cost of investments	$	105,361,442

Futures Contracts Purchased

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund had the following open long futures contracts as of April 30, 2013:

	Number of Contracts		Expiration Date		Notional Amount at Value		Unrealized Appreciation
MSCI Emerging Markets Mini Index Futures Contracts		15		06/21/13	$	779,925	$	19,727
SGX S&P CNX Nifty Index Futures Contracts		356		05/30/13		4,217,532		48,825
							$	68,552

Cash collateral in the amount of $419,954 was pledged to cover margin requirements for open futures contracts as of April 30, 2013.

Forward Foreign Currency Contracts

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund had the following outstanding contracts as of April 30, 2013:

Contracts to Deliver	Counterparty		In Exchange For		Delivery Date		Unrealized Appreciation
INR 27,680,000		Morgan Stanley		USD 500,000		06/19/13	$	8,945
INR 176,088,000		UBS AG		USD 3,190,000		06/19/13		47,681
INR 17,946,500		UBS AG		USD 325,000		06/19/13		4,977
							$	61,603

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 131

FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund (cont.)

FlexShares^® Morningstar Emerging Markets Factor Tilt Index invested, as a percentage of net assets, in the following countries as of April 30, 2013:

Brazil	10.3	%
Chile	2.1
China	19.8
Colombia	0.7
Czech Republic	0.2
Egypt	0.3
Hungary	0.2
India	3.7
Indonesia	3.1
Malaysia	3.5
Mexico	4.6
Morocco	0.2
Peru	0.6
Philippines	1.3
Poland	1.3
Russia	4.3
South Africa	8.5
South Korea	12.9
Taiwan	12.3
Thailand	3.6
Turkey	2.1
Other1	4.4
	100.0	%

¹  Includes any non-equity securities and net other assets (liabilities).

See Accompanying Notes to the Financial Statements.

132 FLEXSHARES SEMIANNUAL REPORT

Schedule of Investments

FlexShares^® Quality Dividend Index Fund

April 30, 2013 (Unaudited)

	Shares		Value
COMMON STOCKS – 99.9%
Aerospace & Defense – 4.5%
The Boeing Co.		14,856	$	1,357,987
Exelis, Inc.		31,560		352,525
Lockheed Martin Corp.		5,664		561,246
Northrop Grumman Corp.		5,880		445,351
Raytheon Co.		7,368		452,248
				3,169,357
Air Freight & Logistics – 0.8%
United Parcel Service, Inc., Class B		6,216		533,581
Automobiles – 1.4%
Ford Motor Co.		73,704		1,010,482
Beverages – 0.8%
Dr Pepper Snapple Group, Inc.		8,544		417,204
PepsiCo, Inc.		1,992		164,280
				581,484
Capital Markets – 1.8%
Ameriprise Financial, Inc.		5,568		414,983
Apollo Investment Corp.		8,736		76,964
Ares Capital Corp.		4,632		84,117
Federated Investors, Inc., Class B		13,752		315,746
Waddell & Reed Financial, Inc., Class A		8,065		345,747
				1,237,557
Chemicals – 3.1%
The Dow Chemical Co.		10,368		351,579
E.I. du Pont de Nemours & Co.		19,368		1,055,749
Huntsman Corp.		19,584		369,354
Kronos Worldwide, Inc.		3,888		68,740
The Scotts Miracle-Gro Co., Class A		7,325		332,189
				2,177,611
Commercial Banks – 4.9%
Bank of Hawaii Corp.		6,938		330,873
BB&T Corp.		14,448		444,565
Cullen/Frost Bankers, Inc.		5,496		332,014
FirstMerit Corp.		7,056		120,869
FNB Corp./PA		6,600		75,174

	Shares		Value
Commercial Banks – (continued)
National Penn Bancshares, Inc.		7,035	$	68,873
Trustmark Corp.		3,024		74,239
Valley National Bancorp		7,272		65,375
Wells Fargo & Co.		50,904		1,933,334
				3,445,316
Commercial Services & Supplies – 2.7%
Avery Dennison Corp.		8,568		355,143
Deluxe Corp.		8,400		320,376
Healthcare Services Group, Inc.		13,824		308,137
Pitney Bowes, Inc.		25,128		343,500
R.R. Donnelley & Sons Co.		33,361		410,674
Waste Management, Inc.		3,912		160,314
				1,898,144
Communications Equipment – 1.3%
Cisco Systems, Inc.		37,392		782,241
Harris Corp.		1,680		77,616
Motorola Solutions, Inc.		1,210		69,212
				929,069
Computers & Peripherals – 4.1%
Apple, Inc.		3,192		1,413,258
Dell, Inc.		12,514		167,688
Diebold, Inc.		11,136		326,173
Lexmark International, Inc., Class A		14,472		438,646
Seagate Technology PLC		11,040		405,168
Western Digital Corp.		2,575		142,346
				2,893,279
Consumer Finance – 0.6%
SLM Corp.		18,984		392,020
Containers & Packaging – 1.0%
Greif, Inc., Class A		6,528		314,454
Packaging Corp of America		8,544		406,352
				720,806
Distributors – 0.6%
Genuine Parts Co.		5,424		414,014

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 133

FlexShares^® Quality Dividend Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Diversified Consumer Services – 0.6%
H&R Block, Inc.		14,352	$	398,124
Diversified Financial Services – 2.0%
Bank of America Corp.		17,352		213,603
Citigroup, Inc.		4,680		218,369
JPMorgan Chase & Co.		9,336		457,557
The McGraw-Hill Cos., Inc.		6,768		366,217
NYSE Euronext		2,787		108,163
				1,363,909
Diversified Telecommunication Services – 5.7%
AT&T, Inc.		32,760		1,227,190
CenturyLink, Inc.		5,357		201,262
Frontier Communications Corp.		19,824		82,468
Verizon Communications, Inc.		46,344		2,498,405
				4,009,325
Electric Utilities – 2.2%
American Electric Power Co., Inc.		9,936		511,008
Entergy Corp.		1,824		129,924
FirstEnergy Corp.		3,624		168,878
Hawaiian Electric Industries, Inc.		12,336		349,109
Portland General Electric Co.		5,472		176,472
PPL Corp.		5,264		175,712
				1,511,103
Electrical Equipment – 0.6%
Emerson Electric Co.		6,336		351,712
Rockwell Automation, Inc.		408		34,590
				386,302
Electronic Equipment, Instruments & Components – 0.1%
Molex, Inc.		2,880		79,402
Energy Equipment & Services – 1.0%
Diamond Offshore Drilling, Inc.		4,680		323,388
RPC, Inc.		19,998		264,773
Schlumberger Ltd.		1,344		100,034
				688,195
Food & Staples Retailing – 1.5%
Safeway, Inc.		17,136		385,902
Sysco Corp.		12,600		439,236

	Shares		Value
Food & Staples Retailing – (continued)
Wal-Mart Stores, Inc.		2,883	$	224,067
				1,049,205
Gas Utilities – 0.6%
AGL Resources, Inc.		8,808		386,231
Health Care Providers & Services – 0.8%
Cardinal Health, Inc.		5,887		260,323
Owens & Minor, Inc.		8,592		279,842
				540,165
Hotels, Restaurants & Leisure – 1.8%
Brinker International, Inc.		10,608		412,651
Cracker Barrel Old Country Store, Inc.		4,464		369,351
Six Flags Entertainment Corp.		1,176		85,695
Wynn Resorts Ltd.		3,048		418,491
				1,286,188
Household Durables – 0.7%
Garmin Ltd.		2,328		81,666
Leggett & Platt, Inc.		2,688		86,661
Tupperware Brands Corp.		4,392		352,678
				521,005
Household Products – 0.5%
Kimberly-Clark Corp.		3,408		351,672
Insurance – 4.2%
Aflac, Inc.		9,720		529,157
American National Insurance Co.		847		79,643
Arthur J Gallagher & Co.		2,430		103,154
Cincinnati Financial Corp.		2,064		100,950
Erie Indemnity Co., Class A		4,610		366,818
Fidelity National Financial, Inc., Class A		5,208		139,835
The Hanover Insurance Group, Inc.		7,872		396,985
Mercury General Corp.		1,824		83,375
PartnerRe Ltd.		4,032		380,379
Principal Financial Group, Inc.		11,472		414,139
Validus Holdings Ltd.		9,648		372,509
				2,966,944

See Accompanying Notes to the Financial Statements.

134 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Quality Dividend Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Internet Software & Services – 0.1%
IAC/InterActiveCorp		1,272	$	59,873
IT Services – 5.4%
Accenture PLC, Class A		15,576		1,268,510
Automatic Data Processing, Inc.		4,157		279,932
Booz Allen Hamilton Holding Corp.		24,960		379,143
Broadridge Financial Solutions, Inc.		14,880		374,678
International Business Machines Corp.		2,808		568,732
Paychex, Inc.		3,293		119,898
SAIC, Inc.		27,912		417,005
Visa, Inc., Class A		120		20,215
The Western Union Co.		25,464		377,122
				3,805,235
Leisure Equipment & Products – 0.3%
Hasbro, Inc.		2,050		97,108
Mattel, Inc.		3,048		139,172
				236,280
Machinery – 0.1%
Harsco Corp.		2,928		63,918
Media – 1.0%
Cablevision Systems Corp., Class A		3,216		47,790
Comcast Corp., Class A		2,976		122,909
Gannett Co., Inc.		16,896		340,623
Meredith Corp.		1,728		67,081
Regal Entertainment Group, Class A		4,706		84,426
				662,829
Metals & Mining – 0.6%
Commercial Metals Co.		19,681		287,736
Nucor Corp.		2,736		119,345
				407,081
Multiline Retail – 0.5%
Kohl’s Corp.		7,968		374,974
Multi-Utilities – 4.1%
Ameren Corp.		10,776		390,630
Avista Corp.		12,504		350,737
CenterPoint Energy, Inc.		17,592		434,170

	Shares		Value
Multi-Utilities – (continued)
Consolidated Edison, Inc.		3,432	$	218,447
DTE Energy Co.		3,624		264,117
Public Service Enterprise Group, Inc.		12,408		454,257
TECO Energy, Inc.		19,882		380,343
Vectren Corp.		10,752		403,845
				2,896,546
Office Electronics – 0.2%
Xerox Corp.		13,826		118,627
Oil, Gas & Consumable Fuels – 11.0%
Chevron Corp.		22,344		2,726,192
ConocoPhillips		9,984		603,533
CVR Energy, Inc.		5,952		293,255
Exxon Mobil Corp.		35,904		3,195,097
Marathon Petroleum Corp.		2,695		211,180
Spectra Energy Corp.		5,688		179,343
The Williams Cos., Inc.		12,888		491,419
				7,700,019
Personal Products – 0.5%
Herbalife Ltd.		8,760		347,860
Pharmaceuticals – 7.8%
Bristol-Myers Squibb Co.		14,184		563,389
Eli Lilly & Co.		9,000		498,420
Johnson & Johnson		7,200		613,656
Merck & Co., Inc.		20,400		958,800
Pfizer, Inc.		89,976		2,615,602
Questcor Pharmaceuticals, Inc.		4,872		149,765
Warner Chilcott PLC, Class A		3,583		51,524
				5,451,156
Real Estate Investment Trusts (REITs) – 6.5%
Alexander’s, Inc.		720		221,753
Annaly Capital Management, Inc.		8,424		134,279
ARMOUR Residential REIT, Inc.		11,568		75,076
CBL & Associates Properties, Inc.		3,240		78,214
Digital Realty Trust, Inc.		1,512		106,626
EPR Properties		1,560		88,202
Equity Residential		2,592		150,491
The Geo Group, Inc.		2,136		79,993
HCP, Inc.		3,768		200,834
Highwoods Properties, Inc.		2,136		87,640

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 135

FlexShares^® Quality Dividend Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Real Estate Investment Trusts (REITs) – (continued)
Hospitality Properties Trust		3,072	$	90,348
Lexington Realty Trust		29,952		383,685
Liberty Property Trust		2,136		91,827
Mack-Cali Realty Corp.		2,640		73,313
Medical Properties Trust, Inc.		5,568		89,589
MFA Financial, Inc.		8,448		78,313
National Health Investors, Inc.		5,234		346,700
National Retail Properties, Inc.		2,304		91,423
Newcastle Investment Corp.		29,760		337,181
Omega Healthcare Investors, Inc.		3,000		98,610
Piedmont Office Realty Trust, Inc., Class A		3,960		81,259
Plum Creek Timber Co., Inc.		7,536		388,405
Realty Income Corp.		2,016		102,756
Senior Housing Properties Trust		3,288		93,478
Simon Property Group, Inc.		5,664		1,008,588
				4,578,583
Road & Rail – 0.5%
Landstar System, Inc.		6,024		329,272
Semiconductors & Semiconductor Equipment – 0.8%
Applied Materials, Inc.		10,872		157,753
Cypress Semiconductor Corp.*		6,819		68,804
KLA-Tencor Corp.		1,872		101,556
Linear Technology Corp.		2,712		98,988
Marvell Technology Group Ltd.		4,536		48,807
Microchip Technology, Inc.		2,712		98,771
				574,679
Software – 2.9%
CA, Inc.		14,592		393,546
Microsoft Corp.		43,152		1,428,331
Oracle Corp.		6,624		217,135
				2,039,012
Specialty Retail – 3.0%
American Eagle Outfitters, Inc.		15,894		309,138
Best Buy Co., Inc.		20,208		525,206
GameStop Corp., Class A		13,440		469,056
Guess?, Inc.		11,814		327,011

	Shares		Value
Specialty Retail – (continued)
The Home Depot, Inc.		1,368	$	100,343
Staples, Inc.		25,128		332,695
				2,063,449
Thrifts & Mortgage Finance – 0.2%
New York Community Bancorp, Inc.		6,533		88,522
People’s United Financial, Inc.		6,264		82,434
				170,956
Tobacco – 4.5%
Altria Group, Inc.		41,952		1,531,668
Lorillard, Inc.		3,360		144,110
Philip Morris International, Inc.		13,512		1,291,612
Reynolds American, Inc.		3,006		142,545
Vector Group Ltd.		4,152		67,719
				3,177,654
Total Common Stocks (Cost $66,059,070)				69,998,493
Total Investment Securities (Cost $66,059,070) – 99.9%				69,998,493
Other assets less liabilities – 0.1%				82,547
Net Assets – 100.0%			$	70,081,040

* Non-income producing security.

Percentages shown are based on Net Assets.

Abbreviation:

REIT – Real Estate Investment Trust

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	4,119,509
Aggregate gross unrealized depreciation		(178,356	)
Net unrealized appreciation	$	3,941,153
Federal income tax cost of investments	$	66,057,340

See Accompanying Notes to the Financial Statements.

136 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Quality Dividend Index Fund (cont.)

Futures Contracts Purchased

FlexShares^® Quality Dividend Index Fund had the following open long futures contracts as of April 30, 2013:

	Number of Contracts		Expiration Date		Notional Amount at Value		Unrealized Appreciation
E-Mini S&P 500® Futures Contract		1		06/21/13	$	79,610	$	2,094

Cash collateral in the amount of $7,755 was pledged to cover margin requirements for open futures contracts as of April 30, 2013.

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 137

Schedule of Investments

FlexShares^® Quality Dividend Dynamic Index Fund

April 30, 2013 (Unaudited)

	Shares		Value
COMMON STOCKS – 100.0%
Aerospace & Defense – 2.9%
Exelis, Inc.		2,610	$	29,154
General Dynamics Corp.		214		15,827
Lockheed Martin Corp.		484		47,959
Northrop Grumman Corp.		494		37,416
Raytheon Co.		618		37,933
				168,289
Air Freight & Logistics – 0.8%
United Parcel Service, Inc., Class B		518		44,465
Auto Components – 1.1%
Autoliv, Inc.		112		8,559
Cooper Tire & Rubber Co.		1,066		26,533
Dana Holding Corp.		1,714		29,566
				64,658
Automobiles – 1.4%
Ford Motor Co.		6,140		84,179
Beverages – 0.8%
Dr Pepper Snapple Group, Inc.		710		34,669
PepsiCo, Inc.		166		13,690
				48,359
Capital Markets – 3.0%
Ameriprise Financial, Inc.		484		36,073
Apollo Investment Corp.		706		6,220
Ares Capital Corp.		358		6,501
BlackRock, Inc.		96		25,584
Federated Investors, Inc., Class B		1,190		27,322
Invesco Ltd.		1,174		37,263
Janus Capital Group, Inc.		636		5,673
Waddell & Reed Financial, Inc., Class A		682		29,237
				173,873
Chemicals – 2.9%
The Dow Chemical Co.		864		29,298
E.I. du Pont de Nemours & Co.		1,614		87,979
Huntsman Corp.		1,626		30,667
Kronos Worldwide, Inc.		324		5,728

	Shares		Value
Chemicals – (continued)
Olin Corp.		258	$	6,236
RPM International, Inc.		220		7,128
				167,036
Commercial Banks – 5.0%
Bank of Hawaii Corp.		382		18,218
Fifth Third Bancorp		2,002		34,094
FirstMerit Corp.		582		9,970
FNB Corp./PA		496		5,649
Valley National Bancorp		570		5,124
Wells Fargo & Co.		5,692		216,182
				289,237
Commercial Services & Supplies – 2.4%
Avery Dennison Corp.		748		31,004
Deluxe Corp.		740		28,224
KAR Auction Services, Inc.		258		5,771
Pitney Bowes, Inc.		2,134		29,172
R.R. Donnelley & Sons Co.		2,778		34,197
Waste Management, Inc.		312		12,786
				141,154
Communications Equipment – 1.2%
Cisco Systems, Inc.		3,118		65,229
Harris Corp.		140		6,468
				71,697
Computers & Peripherals – 5.0%
Apple, Inc.		266		117,771
Dell, Inc.		2,544		34,090
Diebold, Inc.		936		27,415
Hewlett-Packard Co.		1,426		29,376
Lexmark International, Inc., Class A		1,206		36,554
Seagate Technology PLC		938		34,425
Western Digital Corp.		240		13,267
				292,898
Consumer Finance – 0.6%
SLM Corp.		1,574		32,503
Containers & Packaging – 1.2%
Greif, Inc., Class A		574		27,649

See Accompanying Notes to the Financial Statements.

138 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Quality Dividend Dynamic Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Containers & Packaging – (continued)
Packaging Corp of America		716	$	34,053
Sonoco Products Co.		194		6,798
				68,500
Diversified Financial Services – 1.7%
Bank of America Corp.		1,456		17,923
Citigroup, Inc.		392		18,291
JPMorgan Chase & Co.		1,062		52,049
NYSE Euronext		264		10,246
				98,509
Diversified Telecommunication Services – 5.8%
AT&T, Inc.		2,756		103,240
CenturyLink, Inc.		464		17,432
Frontier Communications Corp.		1,652		6,872
Verizon Communications, Inc.		3,902		210,357
				337,901
Electric Utilities – 2.6%
American Electric Power Co., Inc.		830		42,687
Entergy Corp.		160		11,397
FirstEnergy Corp.		290		13,514
Hawaiian Electric Industries, Inc.		1,038		29,375
PPL Corp.		466		15,555
The Southern Co.		638		30,771
UIL Holdings Corp.		160		6,662
				149,961
Electrical Equipment – 1.7%
Emerson Electric Co.		1,278		70,942
Rockwell Automation, Inc.		358		30,351
				101,293
Electronic Equipment, Instruments & Components – 0.8%
Jabil Circuit, Inc.		1,454		25,881
Molex, Inc.		224		6,176
TE Connectivity Ltd.		292		12,717
				44,774
Energy Equipment & Services – 1.0%
Diamond Offshore Drilling, Inc.		400		27,640
RPC, Inc.		1,520		20,125

	Shares		Value
Energy Equipment & Services – (continued)
Schlumberger Ltd.		114	$	8,485
				56,250
Food & Staples Retailing – 1.2%
Safeway, Inc.		916		20,628
Sysco Corp.		832		29,004
Wal-Mart Stores, Inc.		246		19,119
				68,751
Gas Utilities – 0.5%
AGL Resources, Inc.		728		31,923
Health Care Equipment & Supplies – 0.2%
Medtronic, Inc.		270		12,604
Health Care Providers & Services – 0.5%
Cardinal Health, Inc.		458		20,253
Coventry Health Care, Inc.		174		8,621
				28,874
Hotels, Restaurants & Leisure – 1.2%
Royal Caribbean Cruises Ltd.		186		6,795
Six Flags Entertainment Corp.		98		7,141
Starwood Hotels & Resorts Worldwide, Inc.		156		10,065
Wyndham Worldwide Corp.		142		8,531
Wynn Resorts Ltd.		258		35,424
				67,956
Household Durables – 1.4%
Garmin Ltd.		164		5,753
Leggett & Platt, Inc.		222		7,157
Newell Rubbermaid, Inc.		322		8,481
Tupperware Brands Corp.		366		29,390
Whirlpool Corp.		270		30,856
				81,637
Insurance – 3.4%
Aflac, Inc.		826		44,968
American National Insurance Co.		76		7,146
CNA Financial Corp.		930		31,350
Hartford Financial Services Group, Inc.		364		10,225
Lincoln National Corp.		262		8,911

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 139

FlexShares^® Quality Dividend Dynamic Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Insurance – (continued)
Mercury General Corp.		148	$	6,765
Principal Financial Group, Inc.		992		35,811
Protective Life Corp.		888		33,797
Prudential Financial, Inc.		348		21,026
				199,999
Internet & Catalog Retail – 0.4%
HSN, Inc.		472		24,818
IT Services – 2.7%
Broadridge Financial Solutions, Inc.		1,244		31,324
International Business Machines Corp.		238		48,204
Paychex, Inc.		258		9,394
SAIC, Inc.		2,330		34,810
Visa, Inc., Class A		10		1,685
The Western Union Co.		2,170		32,138
				157,555
Leisure Equipment & Products – 0.3%
Hasbro, Inc.		166		7,863
Mattel, Inc.		244		11,141
				19,004
Machinery – 0.8%
Caterpillar, Inc.		478		40,472
Harsco Corp.		274		5,982
				46,454
Media – 1.0%
Cablevision Systems Corp., Class A		420		6,241
Comcast Corp., Class A		242		9,995
Gannett Co., Inc.		1,438		28,990
Meredith Corp.		168		6,522
Regal Entertainment Group, Class A		462		8,288
				60,036
Metals & Mining – 1.1%
Commercial Metals Co.		1,694		24,766
Nucor Corp.		222		9,684
Steel Dynamics, Inc.		1,820		27,373
				61,823

	Shares		Value
Multiline Retail – 0.3%
Macy’s, Inc.		438	$	19,535
Multi-Utilities – 3.8%
Ameren Corp.		934		33,858
Avista Corp.		1,108		31,079
CenterPoint Energy, Inc.		1,508		37,218
DTE Energy Co.		122		8,891
Integrys Energy Group, Inc.		118		7,264
Public Service Enterprise Group, Inc.		1,056		38,660
TECO Energy, Inc.		1,722		32,942
Vectren Corp.		882		33,128
				223,040
Office Electronics – 0.2%
Xerox Corp.		1,282		11,000
Oil, Gas & Consumable Fuels – 9.9%
Chevron Corp.		1,878		229,135
ConocoPhillips		852		51,503
CVR Energy, Inc.		494		24,339
Exxon Mobil Corp.		1,274		113,373
Marathon Petroleum Corp.		590		46,232
Occidental Petroleum Corp.		596		53,199
Spectra Energy Corp.		452		14,252
Teekay Corp.		166		5,910
The Williams Cos., Inc.		1,074		40,952
				578,895
Paper & Forest Products – 0.7%
Domtar Corp.		370		25,719
International Paper Co.		288		13,530
				39,249
Personal Products – 0.5%
Herbalife Ltd.		728		28,909
Pharmaceuticals – 7.9%
Bristol-Myers Squibb Co.		1,220		48,458
Eli Lilly & Co.		750		41,535
Johnson & Johnson		736		62,729
Merck & Co., Inc.		1,700		79,900
Pfizer, Inc.		7,574		220,176
Warner Chilcott PLC, Class A		496		7,133
				459,931

See Accompanying Notes to the Financial Statements.

140 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Quality Dividend Dynamic Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Real Estate Investment Trusts (REITs) – 6.6%
Annaly Capital Management, Inc.		676	$	10,775
ARMOUR Residential REIT, Inc.		812		5,270
Camden Property Trust		106		7,668
CBL & Associates Properties, Inc.		270		6,518
Digital Realty Trust, Inc.		136		9,591
EPR Properties		122		6,898
Equity Residential		222		12,889
The Geo Group, Inc.		180		6,741
HCP, Inc.		342		18,229
Highwoods Properties, Inc.		178		7,303
Home Properties, Inc.		102		6,575
Hospitality Properties Trust		256		7,529
Kimco Realty Corp.		386		9,179
LaSalle Hotel Properties		232		6,016
Lexington Realty Trust		2,616		33,511
Liberty Property Trust		178		7,652
The Macerich Co.		130		9,106
Mack-Cali Realty Corp.		220		6,109
Medical Properties Trust, Inc.		464		7,466
MFA Financial, Inc.		704		6,526
National Health Investors, Inc.		138		9,141
National Retail Properties, Inc.		192		7,619
Newcastle Investment Corp.		2,556		28,959
Omega Healthcare Investors, Inc.		250		8,218
Realty Income Corp.		166		8,461
Regency Centers Corp.		134		7,539
Senior Housing Properties Trust		274		7,790
Simon Property Group, Inc.		526		93,665
Vornado Realty Trust		120		10,507
Washington Real Estate Investment Trust		218		6,226
Weingarten Realty Investors		218		7,427
				387,103
Road & Rail – 0.5%
Landstar System, Inc.		506		27,658
Semiconductors & Semiconductor Equipment – 2.1%
Applied Materials, Inc.		874		12,682
Cypress Semiconductor Corp.*		540		5,449
KLA-Tencor Corp.		162		8,788
Linear Technology Corp.		792		28,908

	Shares		Value
Semiconductors & Semiconductor Equipment – (continued)
Marvell Technology Group Ltd.		2,684	$	28,880
Microchip Technology, Inc.		226		8,231
Texas Instruments, Inc.		816		29,547
				122,485
Software – 2.9%
CA, Inc.		1,254		33,820
Microsoft Corp.		3,626		120,021
Oracle Corp.		554		18,160
				172,001
Specialty Retail – 3.1%
Best Buy Co., Inc.		1,704		44,287
GameStop Corp., Class A		1,116		38,948
Guess?, Inc.		998		27,625
The Home Depot, Inc.		120		8,802
L Brands, Inc.		698		35,186
Staples, Inc.		2,148		28,440
				183,288
Textiles, Apparel & Luxury Goods – 0.1%
Coach, Inc.		88		5,180
Thrifts & Mortgage Finance – 0.2%
New York Community Bancorp, Inc.		520		7,046
People’s United Financial, Inc.		514		6,764
				13,810
Tobacco – 4.6%
Altria Group, Inc.		3,536		129,099
Lorillard, Inc.		280		12,009
Philip Morris International, Inc.		1,138		108,782
Reynolds American, Inc.		260		12,329
Vector Group Ltd.		346		5,643
				267,862
Total Common Stocks (Cost $5,483,239)				5,836,916
Total Investment Securities (Cost $5,483,239) – 100.0%				5,836,916
Other assets less liabilities – 0.0%†				1,038
Net Assets – 100.0%			$	5,837,954

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 141

FlexShares^® Quality Dividend Dynamic Index Fund (cont.)

* Non-income producing security.

^†  Amount represents less than 0.05%

Percentages shown are based on Net Assets.

Abbreviation:

REIT – Real Estate Investment Trust

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	362,269
Aggregate gross unrealized depreciation		(8,360	)
Net unrealized appreciation	$	353,909
Federal income tax cost of investments	$	5,483,007

See Accompanying Notes to the Financial Statements.

142 FLEXSHARES SEMIANNUAL REPORT

Schedule of Investments

FlexShares^® Quality Dividend Defensive Index Fund

April 30, 2013 (Unaudited)

	Shares		Value
COMMON STOCKS – 100.0%
Aerospace & Defense – 2.7%
Exelis, Inc.		6,445	$	71,991
L-3 Communications Holdings, Inc.		195		15,844
Lockheed Martin Corp.		1,175		116,431
Northrop Grumman Corp.		1,225		92,781
Raytheon Co.		1,530		93,911
				390,958
Air Freight & Logistics – 2.0%
C.H. Robinson Worldwide, Inc.		455		27,022
United Parcel Service, Inc., Class B		3,100		266,104
				293,126
Automobiles – 1.1%
Ford Motor Co.		11,655		159,790
Beverages – 1.9%
Dr Pepper Snapple Group, Inc.		1,750		85,452
PepsiCo, Inc.		2,225		183,496
				268,948
Capital Markets – 0.7%
Apollo Investment Corp.		1,810		15,946
Ares Capital Corp.		900		16,344
Federated Investors, Inc., Class B		2,820		64,747
				97,037
Chemicals – 2.3%
The Dow Chemical Co.		1,560		52,899
E.I. du Pont de Nemours & Co.		3,970		216,405
The Scotts Miracle-Gro Co., Class A		1,545		70,066
				339,370
Commercial Banks – 2.8%
Bank of Hawaii Corp.		1,410		67,243
BB&T Corp.		2,980		91,695
Cullen/Frost Bankers, Inc.		1,150		69,471
FirstMerit Corp.		1,460		25,010
FNB Corp./PA		1,280		14,579
National Penn Bancshares, Inc.		1,525		14,930
Trustmark Corp.		590		14,484
Valley National Bancorp		1,430		12,856

	Shares		Value
Commercial Banks – (continued)
Wells Fargo & Co.		2,360	$	89,633
				399,901
Commercial Services & Supplies – 2.1%
Covanta Holding Corp.		785		15,700
Healthcare Services Group, Inc.		2,825		62,969
Iron Mountain, Inc.		495		18,741
KAR Auction Services, Inc.		645		14,429
Pitney Bowes, Inc.		5,145		70,332
R.R. Donnelley & Sons Co.		6,875		84,631
Waste Management, Inc.		785		32,169
				298,971
Communications Equipment – 1.2%
Cisco Systems, Inc.		7,695		160,979
Harris Corp.		380		17,556
				178,535
Computers & Peripherals – 3.7%
Apple, Inc.		655		290,001
Diebold, Inc.		2,305		67,513
Lexmark International, Inc., Class A		2,970		90,021
Seagate Technology PLC		2,265		83,126
				530,661
Consumer Finance – 0.6%
SLM Corp.		3,950		81,568
Containers & Packaging – 1.7%
Bemis Co., Inc.		1,890		74,371
Greif, Inc., Class A		1,350		65,030
Packaging Corp of America		1,760		83,706
Sonoco Products Co.		500		17,520
				240,627
Distributors – 0.6%
Genuine Parts Co.		1,115		85,108
Diversified Consumer Services – 0.6%
H&R Block, Inc.		2,940		81,556
Diversified Financial Services – 1.9%
Bank of America Corp.		3,630		44,685
Citigroup, Inc.		980		45,727

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 143

FlexShares^® Quality Dividend Defensive Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Diversified Financial Services – (continued)
JPMorgan Chase & Co.		1,895	$	92,874
The McGraw-Hill Cos., Inc.		1,425		77,107
NYSE Euronext		555		21,539
				281,932
Diversified Telecommunication Services – 5.7%
AT&T, Inc.		6,755		253,042
CenturyLink, Inc.		1,120		42,078
Frontier Communications Corp.		4,110		17,098
Verizon Communications, Inc.		9,555		515,110
				827,328
Electric Utilities – 1.9%
American Electric Power Co., Inc.		2,055		105,689
Entergy Corp.		370		26,355
FirstEnergy Corp.		740		34,484
Hawaiian Electric Industries, Inc.		2,525		71,457
PPL Corp.		1,155		38,554
				276,539
Electrical Equipment – 0.5%
Emerson Electric Co.		1,335		74,106
Energy Equipment & Services –0.9%
Diamond Offshore Drilling, Inc.		965		66,681
RPC, Inc.		3,265		43,229
Schlumberger Ltd.		285		21,213
				131,123
Food & Staples Retailing – 5.1%
The Kroger Co.		2,855		98,155
Safeway, Inc.		3,550		79,946
Sysco Corp.		2,590		90,287
Wal-Mart Stores, Inc.		6,030		468,652
				737,040
Food Products – 1.0%
Campbell Soup Co.		630		29,238
ConAgra Foods, Inc.		860		30,418
General Mills, Inc.		1,135		57,227
Kellogg Co.		345		22,439
				139,322

	Shares		Value
Gas Utilities – 0.5%
AGL Resources, Inc.		1,800	$	78,930
Health Care Providers & Services – 0.7%
Cardinal Health, Inc.		750		33,165
Owens & Minor, Inc.		2,165		70,514
				103,679
Hotels, Restaurants & Leisure –1.3%
Brinker International, Inc.		2,170		84,413
Cracker Barrel Old Country Store, Inc.		1,030		85,222
Six Flags Entertainment Corp.		245		17,853
				187,488
Household Durables – 0.7%
Garmin Ltd.		445		15,611
Leggett & Platt, Inc.		560		18,054
Tupperware Brands Corp.		905		72,671
				106,336
Household Products – 0.6%
The Clorox Co.		260		22,425
Kimberly-Clark Corp.		695		71,717
				94,142
Insurance – 5.3%
American National Insurance Co.		175		16,455
Arthur J Gallagher & Co.		565		23,984
Cincinnati Financial Corp.		430		21,031
Erie Indemnity Co., Class A		955		75,989
Fidelity National Financial, Inc., Class A		2,815		75,583
The Hanover Insurance Group, Inc.		1,625		81,949
Marsh & McLennan Cos., Inc.		2,305		87,613
Mercury General Corp.		375		17,141
PartnerRe Ltd.		840		79,246
The Travelers Cos., Inc.		1,625		138,791
Validus Holdings Ltd.		1,990		76,834
Willis Group Holdings PLC		1,985		78,765
				773,381
Internet Software & Services – 0.5%
IAC/InterActiveCorp		1,685		79,313

See Accompanying Notes to the Financial Statements.

144 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Quality Dividend Defensive Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
IT Services – 5.9%
Accenture PLC, Class A		3,205	$	261,015
Automatic Data Processing, Inc.		865		58,249
Booz Allen Hamilton Holding Corp.		5,165		78,456
Broadridge Financial Solutions, Inc.		3,075		77,428
Fidelity National Information Services, Inc.		600		25,230
International Business Machines Corp.		780		157,981
Paychex, Inc.		685		24,941
SAIC, Inc.		5,765		86,129
Visa, Inc., Class A		25		4,212
The Western Union Co.		5,260		77,901
				851,542
Leisure Equipment & Products – 0.3%
Hasbro, Inc.		440		20,843
Mattel, Inc.		615		28,081
				48,924
Media – 1.3%
Cablevision Systems Corp., Class A		1,045		15,529
Comcast Corp., Class A		605		24,986
Gannett Co., Inc.		3,505		70,661
Meredith Corp.		350		13,587
Regal Entertainment Group, Class A		1,085		19,465
Time Warner Cable, Inc.		540		50,701
				194,929
Metals & Mining – 0.2%
Nucor Corp.		560		24,427
Multiline Retail – 0.5%
Kohl’s Corp.		1,645		77,414
Multi-Utilities – 4.3%
Ameren Corp.		2,235		81,019
Avista Corp.		2,620		73,491
CenterPoint Energy, Inc.		1,665		41,092
Consolidated Edison, Inc.		1,450		92,292
PG&E Corp.		1,755		85,012
Public Service Enterprise Group, Inc.		2,595		95,003
TECO Energy, Inc.		4,135		79,103
Vectren Corp.		2,135		80,191
				627,203

	Shares		Value
Oil, Gas & Consumable Fuels – 10.9%
Chevron Corp.		4,595	$	560,636
ConocoPhillips		2,090		126,341
CVR Energy, Inc.		1,215		59,863
Exxon Mobil Corp.		7,700		685,223
Spectra Energy Corp.		1,180		37,205
Teekay Corp.		415		14,774
The Williams Cos., Inc.		2,700		102,951
				1,586,993
Pharmaceuticals – 7.7%
Bristol-Myers Squibb Co.		2,970		117,968
Eli Lilly & Co.		1,865		103,284
Johnson & Johnson		1,485		126,567
Merck & Co., Inc.		4,190		196,930
Pfizer, Inc.		18,520		538,376
Questcor Pharmaceuticals, Inc.		740		22,748
Warner Chilcott PLC, Class A		1,200		17,256
				1,123,129
Real Estate Investment Trusts (REITs) – 6.4%
Alexander’s, Inc.		205		63,138
Annaly Capital Management, Inc.		1,780		28,373
ARMOUR Residential REIT, Inc.		2,300		14,927
Digital Realty Trust, Inc.		315		22,214
EastGroup Properties, Inc.		255		16,083
EPR Properties		310		17,527
Equity Residential		545		31,643
The Geo Group, Inc.		450		16,852
HCP, Inc.		810		43,173
Highwoods Properties, Inc.		445		18,258
Home Properties, Inc.		250		16,115
Hospitality Properties Trust		590		17,352
Lexington Realty Trust		6,185		79,230
Liberty Property Trust		445		19,131
Mack-Cali Realty Corp.		550		15,274
Medical Properties Trust, Inc.		1,070		17,216
MFA Financial, Inc.		1,765		16,361
Mid-America Apartment Communities, Inc.		230		15,808
National Health Investors, Inc.		1,055		69,883
National Retail Properties, Inc.		480		19,046
Newcastle Investment Corp.		6,080		68,886

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 145

FlexShares^® Quality Dividend Defensive Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Real Estate Investment Trusts (REITs) – (continued)
Omega Healthcare Investors, Inc.		580	$	19,065
Piedmont Office Realty Trust, Inc., Class A		825		16,929
Plum Creek Timber Co., Inc.		1,540		79,372
Rayonier, Inc.		1,330		79,029
Realty Income Corp.		420		21,407
Senior Housing Properties Trust		685		19,475
Simon Property Group, Inc.		190		33,833
Washington Real Estate Investment Trust		545		15,565
Weingarten Realty Investors		530		18,057
				929,222
Road & Rail – 0.5%
Landstar System, Inc.		1,250		68,325
Semiconductors & Semiconductor Equipment – 0.7%
Cypress Semiconductor Corp.*		1,455		14,681
Linear Technology Corp.		1,935		70,628
Microchip Technology, Inc.		520		18,938
Texas Instruments, Inc.		90		3,259
				107,506
Software – 2.9%
CA, Inc.		2,960		79,831
Microsoft Corp.		8,905		294,755
Oracle Corp.		1,370		44,909
				419,495
Specialty Retail – 3.1%
American Eagle Outfitters, Inc.		3,310		64,379
Best Buy Co., Inc.		4,145		107,729
GameStop Corp., Class A		2,755		96,150
The Home Depot, Inc.		305		22,372
L Brands, Inc.		1,725		86,957
Staples, Inc.		5,175		68,517
				446,104
Thrifts & Mortgage Finance – 0.2%
New York Community Bancorp, Inc.		1,400		18,970
People’s United Financial, Inc.		1,310		17,240
				36,210

	Shares		Value
Tobacco – 4.5%
Altria Group, Inc.		8,640	$	315,446
Lorillard, Inc.		695		29,809
Philip Morris International, Inc.		2,775		265,262
Reynolds American, Inc.		620		29,400
Vector Group Ltd.		870		14,190
				654,107
Total Common Stocks (Cost $13,747,421)				14,532,345
Total Investment Securities (Cost $13,747,421) – 100.0%				14,532,345
Other assets less liabilities – 0.0%†				3,697
Net Assets – 100.0%			$	14,536,042

* Non-income producing security.

^†  Amount represents less than 0.05%.

Percentages shown are based on Net Assets.

Abbreviation:

REIT – Real Estate Investment Trust

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	834,289
Aggregate gross unrealized depreciation		(48,816	)
Net unrealized appreciation	$	785,473
Federal income tax cost of investments	$	13,746,872

See Accompanying Notes to the Financial Statements.

146 FLEXSHARES SEMIANNUAL REPORT

Schedule of Investments

FlexShares^® International Quality Dividend Index Fund

April 30, 2013 (Unaudited)

	Shares		Value
COMMON STOCKS – 96.5%
Aerospace & Defense – 0.7%
BAE Systems PLC		2,883	$	16,849
Air Freight & Logistics – 0.3%
Deutsche Post AG		322		7,650
Auto Components – 1.2%
Cie Generale des Etablissements Michelin		64		5,411
Nokian Renkaat OYJ		268		11,632
Valeo S.A.		232		13,489
				30,532
Automobiles – 2.4%
Bayerische Motoren Werke AG		46		3,201
Daihatsu Motor Co. Ltd.		1,000		19,834
Ford Otomotiv Sanayi AS		1,137		15,786
Nissan Motor Co. Ltd.		900		9,387
Tofas Turk Otomobil Fabrikasi AS		2,012		14,023
				62,231
Building Products – 0.8%
Asahi Glass Co. Ltd.		2,000		15,686
Cie de St-Gobain		140		5,621
				21,307
Capital Markets – 1.6%
AFP Habitat S.A.		6,695		13,319
ICAP PLC		2,430		10,885
IGM Financial, Inc.		300		13,388
Macquarie Korea Infrastructure Fund		470		2,979
				40,571
Chemicals – 3.3%
BASF SE		283		26,461
Formosa Chemicals & Fibre Corp.		2,000		4,683
Hitachi Chemical Co. Ltd.		100		1,566
Israel Chemicals Ltd.		1,006		11,970
LyondellBasell Industries N.V., Class A		116		7,041
Mitsubishi Chemical Holdings Corp.		1,000		4,866
Nitto Denko Corp.		200		13,140
Sumitomo Chemical Co. Ltd.		1,000		3,347

	Shares		Value
Chemicals – (continued)
Synthos S.A.		6,924	$	10,322
TSRC Corp.		1,000		1,975
				85,371
Commercial Banks – 11.9%
Aozora Bank Ltd.		4,000		12,524
Australia & New Zealand Banking Group Ltd.		829		27,400
Bank of China Ltd., Class H		56,000		26,194
Bank of Montreal		238		14,952
Canadian Imperial Bank of Commerce/Canada		300		24,030
Commonwealth Bank of Australia		1,157		88,215
HSBC Holdings PLC		1,618		17,716
Industrial & Commercial Bank of China Ltd., Class H		18,000		12,664
Malayan Banking Bhd		1,600		5,059
Mizuho Financial Group, Inc.		8,400		18,540
National Australia Bank Ltd.		744		26,259
Royal Bank of Canada		16		967
Westpac Banking Corp.		859		30,139
				304,659
Communications Equipment – 0.9%
HTC Corp.		1,000		10,199
VTech Holdings Ltd.		1,100		14,033
				24,232
Computers & Peripherals – 0.8%
Chicony Electronics Co. Ltd.		1,000		2,934
Compal Electronics, Inc.		18,000		11,649
Quanta Computer, Inc.		2,000		4,134
Wistron Corp.		3,000		3,045
				21,762
Construction & Engineering – 2.0%
Bouygues S.A.		487		13,605
Eiffage S.A.		295		13,072
Ferrovial S.A.		851		14,097
Koninklijke Boskalis Westminster NV		73		3,044
Vinci S.A.		174		8,387
				52,205

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 147

FlexShares^® International Quality Dividend Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Construction Materials – 0.3%
Asia Cement Corp.		3,000	$	3,807
Taiwan Cement Corp.		3,000		3,985
				7,792
Consumer Finance – 0.6%
Provident Financial PLC		570		14,452
Distributors – 0.2%
Li & Fung Ltd.		4,000		5,175
Diversified Financial Services – 0.5%
African Bank Investments Ltd.		3,854		12,224
Diversified Telecommunication Services – 5.3%
Belgacom S.A.		477		11,005
Bell Aliant Inc.		100		2,678
Bezeq The Israeli Telecommunication Corp. Ltd.		9,967		14,463
Elisa OYJ		618		11,733
France Telecom S.A.		678		7,262
Magyar Telekom Telecommunications PLC		1,630		3,008
TDC A/S		1,736		14,097
Telecom Corp of New Zealand Ltd.		7,040		15,732
Telecom Egypt Co.		1,323		2,410
Telecom Italia SpA		4,218		3,573
Telefonica Czech Republic AS		802		11,602
Telekomunikacja Polska S.A.		3,259		7,262
TeliaSonera AB		831		5,724
Turk Telekomunikasyon AS		3,192		15,128
Vivendi S.A.		486		11,021
				136,698
Electric Utilities – 1.9%
Centrais Eletricas Brasileiras S.A.		800		2,165
CEZ AS		104		3,014
EDP – Energias de Portugal S.A.		4,244		14,604
Electricite de France S.A.		161		3,602
Fortum OYJ		304		5,655
Light S.A.		300		2,996
PGE S.A.		2,515		13,062
Terna Rete Elettrica Nazionale SpA		829		3,884
				48,982

	Shares		Value
Electronic Equipment, Instruments & Components – 0.5%
Hoya Corp.		700	$	13,999
Food & Staples Retailing – 2.8%
Koninklijke Ahold N.V.		853		13,473
Lawson, Inc.		200		15,768
Metcash Ltd.		785		3,333
Metro AG		104		3,246
Seven & I Holdings Co. Ltd.		600		23,036
Wesfarmers Ltd.		278		12,530
				71,386
Food Products – 2.0%
Nestle S.A.		299		21,372
Orkla ASA		1,569		14,145
PT Astra Agro Lestari, Tbk		6,500		11,833
Ulker Biskuvi Sanayi AS		447		3,826
				51,176
Gas Utilities – 1.2%
Enagas S.A.		549		14,642
Gas Natural SDG S.A.		172		3,606
Snam SpA		2,713		13,356
				31,604
Hotels, Restaurants & Leisure – 1.4%
Berjaya Sports Toto Bhd		9,400		12,976
Lottomatica Group SpA		107		2,731
Sands China Ltd.		800		4,196
Tatts Group Ltd.		3,858		13,096
TUI Travel PLC		597		2,920
				35,919
Household Durables – 0.2%
Husqvarna AB, Class A		409		2,361
Husqvarna AB, Class B		460		2,643
				5,004
Household Products – 0.0%†
Svenska Cellulosa AB, Class A		19		520
Independent Power Producers & Energy Traders – 1.1%
AES Tiete S.A.		1,400		12,904
Tractebel Energia S.A.		800		14,228
				27,132

See Accompanying Notes to the Financial Statements.

148 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® International Quality Dividend Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Industrial Conglomerates – 0.1%
Boustead Holdings Bhd		1,800	$	3,029
Insurance – 7.8%
Aegon N.V.		613		4,050
Allianz SE		164		24,227
AXA S.A.		1,345		25,207
Baloise Holding AG		37		3,812
CNP Assurances		165		2,340
Euler Hermes S.A.		145		13,860
Gjensidige Forsikring ASA		807		13,022
Great-West Lifeco, Inc.		119		3,237
Legal & General Group PLC		6,153		16,232
Mapfre S.A.		843		3,095
Mediolanum SpA		1,039		7,007
Muenchener Rueckversicherungs AG		137		27,427
Power Financial Corp.		500		14,793
RSA Insurance Group PLC		7,529		13,042
SCOR SE		118		3,585
Standard Life PLC		898		5,230
Sun Life Financial, Inc.		219		6,188
Zurich Insurance Group AG*		55		15,370
				201,724
Leisure Equipment & Products – 0.5%
Sankyo Co. Ltd.		300		13,674
Machinery – 1.5%
Hino Motors Ltd.		1,000		15,265
Metso OYJ		289		11,884
Zardoya Otis S.A.		897		12,548
				39,697
Media – 0.3%
ProSiebenSat.1 Media AG		96		3,680
Wolters Kluwer N.V.		174		3,854
				7,534
Metals & Mining – 3.2%
BHP Billiton Ltd.		154		5,227
Boliden AB		179		2,837
China Hongqiao Group Ltd.		5,000		2,893
Cia Siderurgica Nacional S.A.		700		2,776
Eregli Demir ve Celik Fabrikalari TAS		11,174		12,773

	Shares		Value
Metals & Mining – (continued)
Iluka Resources Ltd.		1,225	$	11,381
Jastrzebska Spolka Weglowa S.A.		428		11,311
KGHM Polska Miedz S.A.		235		11,008
Kumba Iron Ore Ltd.		207		10,907
Shougang Fushan Resources Group Ltd.		28,000		10,932
Voestalpine AG		23		719
				82,764
Multiline Retail – 0.2%
Marks & Spencer Group PLC		699		4,445
Multi-Utilities – 1.2%
E.ON AG		661		11,991
RWE AG		540		18,748
				30,739
Office Electronics – 0.6%
Canon, Inc.		400		14,352
Oil, Gas & Consumable Fuels – 10.8%
ARC Resources Ltd.		142		3,975
Baytex Energy Corp.		300		11,874
BP PLC		953		6,918
Canadian Oil Sands Ltd.		700		13,772
Encana Corp.		300		5,539
ENI S.p.A.		1,928		46,160
Gazprom OAO (ADR)		3,990		31,661
Harum Energy Tbk PT		21,000		8,964
Indo Tambangraya Megah Tbk PT		3,000		11,340
Penn West Petroleum Ltd.		300		2,774
Royal Dutch Shell PLC, Class A		167		5,697
Royal Dutch Shell PLC, Class B		1,181		41,413
Surgutneftegas OAO (ADR)		1,745		12,040
Total S.A.		1,321		66,651
Tupras Turkiye Petrol Rafinerileri AS		116		3,234
Vermilion Energy, Inc.		100		5,140
				277,152
Paper & Forest Products – 0.2%
Stora Enso Oyj, Class R		425		2,956
UPM-Kymmene Oyj		267		2,795
				5,751

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 149

FlexShares^® International Quality Dividend Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Personal Products – 0.6%
Shiseido Co. Ltd.		1,000	$	14,311
Pharmaceuticals – 7.5%
AstraZeneca PLC		935		48,641
Eisai Co. Ltd.		300		13,689
GlaxoSmithKline PLC		2,231		57,658
Novartis AG		157		11,670
Ono Pharmaceutical Co. Ltd.		300		19,772
Orion OYJ, Class B		407		11,698
Roche Holding AG		49		12,259
Sanofi		149		16,348
				191,735
Professional Services – 0.6%
Adecco S.A.*		227		12,152
Randstad Holding N.V.		68		2,834
				14,986
Real Estate Investment Trusts (REITs) – 2.5%
Calloway Real Estate Investment Trust		500		15,017
CapitaCommercial Trust		10,000		13,884
Fonciere Des Regions		36		2,867
Gecina S.A.		27		3,250
Klepierre		82		3,481
RioCan Real Estate Investment Trust		100		2,934
Stockland		3,559		14,297
Westfield Retail Trust		2,174		7,447
				63,177
Real Estate Management & Development – 2.7%
Daito Trust Construction Co. Ltd.		200		19,382
Evergrande Real Estate Group Ltd.		26,000		10,621
Guangzhou R&F Properties Co. Ltd., Class H		8,000		14,473
KWG Property Holding Ltd.		19,500		13,468
Redefine Properties Ltd.		2,862		3,441
Swiss Prime Site AG*		98		8,044
				69,429
Semiconductors & Semiconductor Equipment – 1.2%
Radiant Opto-Electronics Corp.		4,000		16,265
Samsung Electronics Co. Ltd.		8		11,041

	Shares		Value
Semiconductors & Semiconductor Equipment – (continued)
STMicroelectronics N.V.		360	$	3,133
				30,439
Software – 0.1%
Trend Micro, Inc.		100		2,803
Specialty Retail – 0.2%
Esprit Holdings Ltd.		2,400		3,365
Hennes & Mauritz AB, Class B		37		1,310
				4,675
Textiles, Apparel & Luxury Goods – 1.2%
Anta Sports Products Ltd.		13,000		10,888
Bosideng International Holdings Ltd.		10,000		2,629
Grendene S.A.		1,500		17,104
				30,621
Tobacco – 4.3%
British American Tobacco Malaysia Bhd		300		6,243
British American Tobacco PLC		1,424		79,034
Imperial Tobacco Group PLC		367		13,138
Japan Tobacco, Inc.		300		11,349
				109,764
Trading Companies & Distributors – 1.0%
Marubeni Corp.		1,000		7,155
Rexel S.A.		125		2,753
Sumitomo Corp.		1,200		14,980
				24,888
Transportation Infrastructure – 2.6%
Abertis Infraestructuras S.A.		647		12,096
Atlantia SpA		722		12,917
Hopewell Highway Infrastructure Ltd.		5,000		2,468
Hutchison Port Holdings Trust, Class U		16,000		13,280
Jiangsu Expressway Co. Ltd., Class H		12,000		13,143
Sydney Airport		3,918		14,072
				67,976
Water Utilities – 0.1%
Suez Environnement Co.		238		3,422
Wireless Telecommunication Services – 1.6%
Egyptian Co. for Mobile Services SAE*		125		2,415
Tele2 AB, Class B		202		3,467

See Accompanying Notes to the Financial Statements.

150 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® International Quality Dividend Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Wireless Telecommunication Services – (continued)
Vodacom Group Ltd.		1,018	$	11,924
Vodafone Group PLC		7,869		24,029
				41,835
Total Common Stocks (Cost $2,433,484)				2,480,354
PREFERRED STOCKS – 2.9%
Auto Components – 0.5%
Pirelli & C. SpA		1,515		12,624
Capital Markets – 0.6%
Korea Investment Holdings Co. Ltd.*		1,120		15,407
Diversified Telecommunication Services – 0.1%
Telecom Italia SpA		4,114		2,864
Electric Utilities – 0.1%
Centrais Eletricas Brasileiras S.A.		500		2,598
Independent Power Producers & Energy Traders – 0.5%
AES Tiete S.A.		1,200		12,171
Industrial Conglomerates – 0.6%
Doosan Corp.		350		15,477

	Shares		Value
Oil, Gas & Consumable Fuels – 0.5%
SK Innovation Co. Ltd.		251	$	13,059
Total Preferred Stocks (Cost $69,463)				74,200
Total Investment Securities (Cost $2,502,947) – 99.4%				2,554,554
Other assets less liabilities – 0.6%				14,237
Net Assets – 100.0%			$	2,568,791

* Non-income producing security.

^†  Amount represents less than 0.05%.

Percentages shown are based on Net Assets.

Abbreviations:

ADR – American Depositary Receipt

REIT – Real Estate Investment Trust

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	78,026
Aggregate gross unrealized depreciation		(26,419	)
Net unrealized appreciation	$	51,607
Federal income tax cost of investments	$	2,502,947

Futures Contracts Purchased

FlexShares^® International Quality Dividend Index Fund had the following open long futures contracts as of April 30, 2013:

	Number of Contracts		Expiration Date		Notional Amount at Value		Unrealized Appreciation
SGX S&P CNX Nifty Index Futures Contract		1		05/30/13	$	11,847	$	140

Cash collateral in the amount of $1,607 was pledged to cover margin requirements for open futures contracts as of April 30, 2013.

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 151

FlexShares^® International Quality Dividend Index Fund (cont.)

FlexShares^® International Quality Dividend Index Fund invested, as a percentage of net assets, in the following countries as of April 30, 2013:

Australia	9.9	%
Austria	0.0	†
Belgium	0.4
Brazil	2.6
Canada	5.5
Chile	0.5
China	4.7
Czech Republic	0.6
Denmark	0.5
Egypt	0.2
Finland	2.3
France	8.9
Germany	4.9
Hong Kong	1.0
Hungary	0.1
Indonesia	1.3
Israel	1.0
Italy	4.1
Japan	11.6
Malaysia	1.1
Netherlands	1.3
New Zealand	0.6
Norway	1.1
Poland	2.1
Portugal	0.6
Russia	1.7
Singapore	1.1
South Africa	1.5
South Korea	2.3
Spain	2.3
Sweden	0.7
Switzerland	3.3
Taiwan	2.4
Turkey	2.5
United Kingdom	14.7
Other1	0.6
	100.0	%

¹  Includes any non-equity securities and net other assets (liabilities).

^†  Amount represents less than 0.05%.

See Accompanying Notes to the Financial Statements.

152 FLEXSHARES SEMIANNUAL REPORT

Schedule of Investments

FlexShares^® International Quality Dividend Dynamic Index Fund

April 30, 2013 (Unaudited)

	Shares		Value
COMMON STOCKS – 95.6%
Aerospace & Defense – 0.8%
BAE Systems PLC		3,042	$	17,778
Bombardier, Inc., Class B		800		3,182
				20,960
Air Freight & Logistics – 0.1%
Toll Holdings Ltd.		533		3,154
Auto Components – 2.6%
Aisin Seiki Co. Ltd.		100		3,608
Cie Generale des Etablissements Michelin		67		5,665
Continental AG*		115		13,670
GKN PLC		856		3,661
Magna International, Inc.		100		6,025
Nokian Renkaat OYJ		277		12,022
Pirelli & C. SpA		243		2,526
Toyota Industries Corp.		100		4,086
Valeo S.A.		240		13,954
				65,217
Automobiles – 0.9%
Bayerische Motoren Werke AG		171		14,722
Nissan Motor Co. Ltd.		900		9,387
				24,109
Beverages – 0.2%
Asahi Group Holdings Ltd.		200		4,977
Biotechnology – 0.4%
Actelion Ltd.*		153		9,363
Building Products – 0.8%
Asahi Glass Co. Ltd.		2,000		15,686
Cie de St-Gobain		148		5,943
				21,629
Capital Markets – 1.6%
Ashmore Group PLC		2,345		14,570
ICAP PLC		2,445		10,952
Macquarie Group Ltd.		119		4,841
Schroders PLC		328		9,444
				39,807

	Shares		Value
Chemicals – 2.9%
BASF SE		570	$	53,296
Formosa Chemicals & Fibre Corp.		1,000		2,341
Formosa Plastics Corp.		2,000		4,852
Synthos S.A.		7,026		10,474
TSRC Corp.		1,000		1,975
				72,938
Commercial Banks – 14.3%
Agricultural Bank of China Ltd., Class H		8,000		3,824
Australia & New Zealand Banking Group Ltd.		848		28,028
Bank of China Ltd., Class H		56,000		26,194
China Citic Bank Corp. Ltd., Class H		16,000		9,009
China Construction Bank Corp., Class H		37,000		30,990
China Merchants Bank Co. Ltd., Class H		6,000		12,788
Commonwealth Bank of Australia		1,180		89,969
HSBC Holdings PLC		1,596		17,475
Industrial & Commercial Bank of China Ltd., Class H		49,000		34,474
Industrial Bank of Korea		260		2,975
Malayan Banking Bhd		1,700		5,375
National Australia Bank Ltd.		740		26,117
Nordea Bank AB		1,953		23,428
Raiffeisen Bank International AG		65		2,296
Sberbank of Russia (ADR)		929		11,947
Societe Generale S.A.*		257		9,345
Westpac Banking Corp.		858		30,104
				364,338
Communications Equipment – 1.3%
HTC Corp.		2,000		20,399
VTech Holdings Ltd.		1,100		14,032
				34,431
Computers & Peripherals – 0.2%
Quanta Computer, Inc.		1,000		2,067
Wistron Corp.		2,000		2,030
				4,097
Construction & Engineering – 2.3%
Bouygues S.A.		203		5,671

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 153

FlexShares^® International Quality Dividend Dynamic Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Construction & Engineering – (continued)
Ferrovial S.A.		856	$	14,180
JGC Corp.		1,000		29,617
Vinci S.A.		171		8,243
				57,711
Construction Materials – 0.5%
Asia Cement Corp.		3,000		3,807
CRH PLC		274		5,897
Taiwan Cement Corp.		2,000		2,657
				12,361
Distributors – 0.1%
Inchcape PLC		389		3,033
Diversified Financial Services – 1.9%
Eurazeo		50		2,651
Industrivarden AB, Class A		654		12,852
Industrivarden AB, Class C		684		12,786
ORIX Corp.		400		6,143
Wendel S.A.		118		12,797
				47,229
Diversified Telecommunication Services – 3.7%
Belgacom S.A.		485		11,190
Bezeq The Israeli Telecommunication Corp. Ltd.		10,029		14,553
Elisa OYJ		620		11,771
France Telecom S.A.		689		7,380
Magyar Telekom Telecommunications PLC		1,555		2,869
Nippon Telegraph & Telephone Corp.		200		9,907
TDC A/S		1,767		14,349
Telecom Egypt Co.		1,352		2,462
TeliaSonera AB		859		5,917
Turk Telekomunikasyon AS		3,211		15,218
				95,616
Electric Utilities – 1.9%
CEZ AS		371		10,751
EDP – Energias de Portugal S.A.		4,434		15,257
Electricite de France S.A.		163		3,647
Light S.A.		300		2,996

	Shares		Value
Electric Utilities – (continued)
PGE S.A.		2,533	$	13,156
Terna Rete Elettrica Nazionale SpA		788		3,692
				49,499
Electrical Equipment – 0.6%
Schneider Electric S.A.		197		15,038
Electronic Equipment, Instruments & Components – 1.4%
Hexagon AB, Class B		74		2,116
Hitachi Ltd.		2,000		12,771
Hoya Corp.		700		13,999
Omron Corp.		100		3,157
Unimicron Technology Corp.		3,000		3,161
				35,204
Food & Staples Retailing – 2.5%
Koninklijke Ahold N.V.		914		14,436
Metcash Ltd.		785		3,333
Metro AG		100		3,121
Seven & I Holdings Co. Ltd.		600		23,037
Wesfarmers Ltd.		462		20,813
				64,740
Food Products – 1.5%
MEIJI Holdings Co. Ltd.		100		4,512
Nestle S.A.		302		21,587
Nisshin Seifun Group, Inc.		500		6,457
Nissin Foods Holdings Co. Ltd.		100		4,486
				37,042
Gas Utilities – 0.5%
Snam SpA		2,808		13,824
Hotels, Restaurants & Leisure – 2.0%
Accor S.A.		361		11,946
Berjaya Sports Toto Bhd		8,800		12,148
InterContinental Hotels Group PLC		468		13,825
Tatts Group Ltd.		3,935		13,357
				51,276
Household Durables – 0.1%
Husqvarna AB, Class A		424		2,447
Independent Power Producers & Energy Traders – 0.5%
AES Tiete S.A.		1,400		12,904

See Accompanying Notes to the Financial Statements.

154 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® International Quality Dividend Dynamic Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Industrial Conglomerates – 1.2%
Far Eastern New Century Corp.		3,000	$	3,227
Shanghai Industrial Holdings Ltd.		1,000		3,170
Siemens AG		237		24,778
				31,175
Insurance – 7.9%
Aegon N.V.		631		4,169
Allianz SE		157		23,193
AXA S.A.		1,303		24,420
Baloise Holding AG		38		3,915
CNP Assurances		173		2,453
Euler Hermes S.A.		111		10,610
Legal & General Group PLC		6,167		16,269
Manulife Financial Corp.		700		10,362
Muenchener Rueckversicherungs AG		136		27,227
Old Mutual PLC		4,815		15,363
Prudential PLC		1,901		32,694
RSA Insurance Group PLC		7,589		13,146
SCOR SE		118		3,585
Zurich Insurance Group AG*		55		15,370
				202,776
IT Services – 0.6%
NTT Data Corp.		5		15,809
Leisure Equipment & Products – 0.2%
Sankyo Co. Ltd.		100		4,558
Machinery – 4.7%
FANUC Corp.		200		30,182
Hitachi Construction Machinery Co. Ltd.		100		2,373
IMI PLC		747		14,405
Komatsu Ltd.		400		10,919
Metso OYJ		299		12,295
Sandvik AB		895		12,699
Scania AB, Class B		165		3,515
SKF AB		478		11,180
SKF AB, Class B		552		12,860
Volvo AB, Class A		226		3,123
Volvo AB, Class B		523		7,247
				120,798

	Shares		Value
Media – 0.7%
Informa PLC		450	$	3,348
ProSiebenSat.1 Media AG		93		3,565
UBM PLC		251		2,860
WPP PLC		476		7,883
				17,656
Metals & Mining – 6.6%
BHP Billiton Ltd.		163		5,533
BHP Billiton PLC		691		19,262
Boliden AB		188		2,980
China Hongqiao Group Ltd.		5,000		2,893
Cia Siderurgica Nacional S.A.		600		2,379
Eramet		20		2,139
Eregli Demir ve Celik Fabrikalari TAS		11,277		12,890
First Quantum Minerals Ltd.		900		15,739
Grupo Mexico SAB de CV		3,800		13,626
Jastrzebska Spolka Weglowa S.A.		428		11,311
Jiangxi Copper Co. Ltd., Class H		5,000		9,690
Kazakhmys PLC		1,107		5,966
KGHM Polska Miedz S.A.		236		11,055
Kumba Iron Ore Ltd.		207		10,907
Rio Tinto PLC		425		19,308
Teck Resources Ltd., Class A		100		2,832
Teck Resources Ltd., Class B		200		5,329
Voestalpine AG		86		2,688
Xstrata PLC		782		11,727
				168,254
Multi-Utilities – 1.2%
E.ON AG		672		12,191
RWE AG		547		18,990
				31,181
Oil, Gas & Consumable Fuels – 10.8%
Baytex Energy Corp.		300		11,874
BP PLC		1,000		7,259
Cameco Corp.		200		3,905
Canadian Natural Resources Ltd.		800		23,502
Canadian Oil Sands Ltd.		700		13,772
ENI S.p.A.		1,935		46,328
Gazprom OAO (ADR)		4,027		31,954
Indo Tambangraya Megah Tbk PT		3,000		11,340
JX Holdings, Inc.		800		4,336

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 155

FlexShares^® International Quality Dividend Dynamic Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Oil, Gas & Consumable Fuels – (continued)
Penn West Petroleum Ltd.		300	$	2,774
Royal Dutch Shell PLC, Class A		179		6,107
Royal Dutch Shell PLC, Class B		1,243		43,587
Suncor Energy, Inc.		1,200		37,473
Surgutneftegas OAO (ADR)		1,745		12,040
Talisman Energy, Inc.		400		4,804
Tatneft OAO (ADR)		340		12,849
Total S.A.		66		3,330
				277,234
Paper & Forest Products – 0.2%
Stora Enso Oyj, Class R		450		3,130
UPM-Kymmene Oyj		280		2,931
				6,061
Personal Products – 1.1%
Kao Corp.		400		13,838
Shiseido Co. Ltd.		1,000		14,311
				28,149
Pharmaceuticals – 5.5%
AstraZeneca PLC		931		48,433
Bayer AG		24		2,507
Eisai Co. Ltd.		300		13,690
GlaxoSmithKline PLC		194		5,014
Mitsubishi Tanabe Pharma Corp.		200		3,041
Novartis AG		164		12,190
Ono Pharmaceutical Co. Ltd.		300		19,772
Orion OYJ, Class B		416		11,956
Roche Holding AG		50		12,509
Sanofi		48		5,266
Taisho Pharmaceutical Holdings Co. Ltd.		100		7,412
				141,790
Professional Services – 0.6%
Adecco S.A.*		233		12,473
Randstad Holding N.V.		73		3,043
				15,516
Real Estate Investment Trusts (REITs) – 0.4%
Fonciere Des Regions		36		2,867

	Shares		Value
Real Estate Investment Trusts (REITs) – (continued)
Gecina S.A.		27	$	3,250
Klepierre		82		3,481
				9,598
Real Estate Management & Development – 1.2%
Evergrande Real Estate Group Ltd.		26,000		10,620
Guangzhou R&F Properties Co. Ltd., Class H		3,600		6,513
KWG Property Holding Ltd.		19,500		13,468
				30,601
Semiconductors & Semiconductor Equipment – 1.2%
Radiant Opto-Electronics Corp.		4,000		16,265
Samsung Electronics Co. Ltd.		8		11,041
Siliconware Precision Industries Co.		3,000		3,558
				30,864
Textiles, Apparel & Luxury Goods – 0.1%
Bosideng International Holdings Ltd.		8,000		2,103
Tobacco – 3.2%
British American Tobacco PLC		1,469		81,531
Trading Companies & Distributors – 1.1%
Finning International, Inc.		100		2,162
Marubeni Corp.		1,000		7,155
Rexel S.A.		129		2,841
Sumitomo Corp.		1,200		14,980
				27,138
Transportation Infrastructure – 0.7%
COSCO Pacific Ltd.		2,000		2,649
Hopewell Highway Infrastructure Ltd.		5,000		2,468
Hutchison Port Holdings Trust, Class U		16,000		13,280
				18,397
Wireless Telecommunication Services – 0.8%
NTT DOCOMO, Inc.		1		1,653
Vodacom Group Ltd.		1,024		11,994
Vodafone Group PLC		2,253		6,880
				20,527
Total Common Stocks (Cost $2,410,605)				2,444,660

See Accompanying Notes to the Financial Statements.

156 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® International Quality Dividend Dynamic Index Fund (cont.)

	Shares		Value
PREFERRED STOCKS – 3.9%
Auto Components – 0.5%
Pirelli & C. SpA		1,562	$	13,015
Automobiles – 0.6%
Hyundai Motor Co.		234		14,746
Capital Markets – 1.1%
Korea Investment Holdings Co. Ltd.*		1,120		15,407
Woori Investment & Securities Co. Ltd.*		2,850		11,852
				27,259
Diversified Telecommunication Services – 0.1%
Telecom Italia SpA		4,355		3,032
Independent Power Producers & Energy Traders – 0.5%
AES Tiete S.A.		1,200		12,171
Industrial Conglomerates – 0.6%
Doosan Corp.		360		15,919
Oil, Gas & Consumable Fuels – 0.5%
SK Innovation Co. Ltd.		251		13,060
Total Preferred Stocks (Cost $93,155)				99,202
Total Investment Securities (Cost $2,503,760) – 99.5%				2,543,862
Other assets less liabilities – 0.5%				12,861
Net Assets – 100.0%			$	2,556,723

* Non-income producing security.

Percentages shown are based on Net Assets.

Abbreviations:

ADR – American Depositary Receipt

REIT – Real Estate Investment Trust

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	71,468
Aggregate gross unrealized depreciation		(31,366	)
Net unrealized appreciation	$	40,102
Federal income tax cost of investments	$	2,503,760

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 157

FlexShares^® International Quality Dividend Dynamic Index Fund (cont.)

FlexShares^® International Quality Dividend Dynamic Index Fund invested, as a percentage of net assets, in the following countries as of April 30, 2013:

Australia	8.8	%
Austria	0.2
Belgium	0.4
Brazil	1.2
Canada	5.6
China	6.7
Czech Republic	0.4
Denmark	0.6
Egypt	0.1
Finland	2.1
France	6.5
Germany	7.7
Hong Kong	0.6
Hungary	0.1
Indonesia	0.4
Ireland	0.2
Israel	0.6
Italy	3.2
Japan	12.4
Malaysia	0.7
Mexico	0.5
Netherlands	0.9
Poland	1.8
Portugal	0.6
Russia	2.7
Singapore	0.5
South Africa	0.9
South Korea	3.3
Spain	0.6
Sweden	4.4
Switzerland	3.4
Taiwan	2.6
Turkey	1.1
United Kingdom	17.7
Other1	0.5
	100.0	%

¹  Includes any non-equity securities and net other assets (liabilities).

See Accompanying Notes to the Financial Statements.

158 FLEXSHARES SEMIANNUAL REPORT

Schedule of Investments

FlexShares^® International Quality Dividend Defensive Index Fund

April 30, 2013 (Unaudited)

	Shares		Value
COMMON STOCKS – 96.4%
Aerospace & Defense – 0.6%
BAE Systems PLC		2,857	$	16,697
Air Freight & Logistics – 0.3%
Deutsche Post AG		319		7,579
Automobiles – 2.0%
Bayerische Motoren Werke AG		45		3,131
Daihatsu Motor Co. Ltd.		1,000		19,834
Ford Otomotiv Sanayi AS		1,123		15,592
Tofas Turk Otomobil Fabrikasi AS		1,988		13,856
				52,413
Building Products – 0.6%
Asahi Glass Co. Ltd.		2,000		15,686
Capital Markets – 1.6%
AFP Habitat S.A.		6,636		13,202
ICAP PLC		2,402		10,759
IGM Financial, Inc.		300		13,389
Macquarie Korea Infrastructure Fund		470		2,979
				40,329
Chemicals – 1.5%
BASF SE		7		654
Huabao International Holdings Ltd.		14,000		6,422
Israel Chemicals Ltd.		993		11,816
Mitsubishi Chemical Holdings Corp.		1,000		4,866
Sumitomo Chemical Co. Ltd.		1,000		3,347
Synthos S.A.		6,855		10,219
TSRC Corp.		1,000		1,975
				39,299
Commercial Banks – 11.8%
Aozora Bank Ltd.		4,000		12,524
Australia & New Zealand Banking Group Ltd.		358		11,833
Bank of Montreal		230		14,449
Bank of Nova Scotia		300		17,326
Canadian Imperial Bank of Commerce/Canada		300		24,030
Commonwealth Bank of Australia		1,147		87,453
HSBC Holdings PLC		1,602		17,541

	Shares		Value
Commercial Banks – (continued)
Malayan Banking Bhd		1,600	$	5,059
Mizuho Financial Group, Inc.		8,300		18,320
National Australia Bank Ltd.		740		26,117
National Bank of Canada		200		15,141
Sumitomo Mitsui Financial Group, Inc.		500		23,637
Westpac Banking Corp.		856		30,034
				303,464
Communications Equipment – 0.9%
HTC Corp.		1,000		10,199
VTech Holdings Ltd.		1,100		14,033
				24,232
Computers & Peripherals – 1.4%
Asustek Computer, Inc.		1,000		11,639
Chicony Electronics Co. Ltd.		1,000		2,934
Compal Electronics, Inc.		18,000		11,649
Lite-On Technology Corp.		2,000		3,599
Quanta Computer, Inc.		2,000		4,134
Wistron Corp.		2,000		2,030
				35,985
Construction & Engineering – 2.6%
Bouygues S.A.		483		13,494
Eiffage S.A.		293		12,983
Ferrovial S.A.		844		13,981
Obayashi Corp.		1,000		6,149
Taisei Corp.		5,000		16,682
Vinci S.A.		49		2,362
				65,651
Construction Materials – 0.8%
Asia Cement Corp.		3,000		3,807
Fletcher Building Ltd.		465		3,526
PPC Ltd.		3,424		12,507
				19,840
Consumer Finance – 0.6%
Provident Financial PLC		565		14,325
Distributors – 0.1%
Li & Fung Ltd.		2,000		2,587

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 159

FlexShares^® International Quality Dividend Defensive Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Diversified Financial Services – 0.6%
African Bank Investments Ltd.		3,820	$	12,116
Chailease Holding Co. Ltd.*		1,000		3,009
				15,125
Diversified Telecommunication Services – 5.4%
BCE, Inc.		100		4,692
Belgacom S.A.		473		10,913
Bell Aliant Inc.		100		2,678
Bezeq The Israeli Telecommunication Corp. Ltd.		9,880		14,337
Elisa OYJ		612		11,619
France Telecom S.A.		672		7,198
Magyar Telekom Telecommunications PLC		1,616		2,982
TalkTalk Telecom Group PLC		734		2,864
TDC A/S		1,721		13,975
Telecom Corp of New Zealand Ltd.		6,978		15,594
Telecom Egypt Co.		1,313		2,391
Telecom Italia SpA		4,251		3,601
Telefonica Czech Republic AS		795		11,500
Telstra Corp. Ltd.		1,568		8,106
Turk Telekomunikasyon AS		3,164		14,996
Vivendi S.A.		481		10,907
				138,353
Electric Utilities – 3.0%
Centrais Eletricas Brasileiras S.A.		800		2,165
Chubu Electric Power Co. Inc.		300		3,884
The Chugoku Electric Power Co. Inc.		200		2,868
Cia Energetica de Minas Gerais		1,200		15,148
EDP—Energias de Portugal S.A.		4,215		14,504
Electricite de France S.A.		160		3,580
Fortum OYJ		701		13,040
The Kansai Electric Power Co. Inc.*		400		4,878
Light S.A.		300		2,996
PGE S.A.		2,493		12,948
				76,011
Food & Staples Retailing – 1.5%
Lawson, Inc.		200		15,769
Metcash Ltd.		779		3,307
Metro AG		103		3,215

	Shares		Value
Food & Staples Retailing – (continued)
Shoppers Drug Mart Corp.		300	$	13,457
Wesfarmers Ltd.		82		3,705
				39,453
Food Products – 2.7%
Nestle S.A.		296		21,158
Orkla ASA		1,556		14,027
Ulker Biskuvi Sanayi AS		440		3,766
Unilever N.V.		685		29,188
				68,139
Gas Utilities – 0.5%
Gas Natural SDG S.A.		26		545
Snam SpA		2,692		13,253
				13,798
Hotels, Restaurants & Leisure – 1.9%
Berjaya Sports Toto Bhd		9,400		12,976
Grand Korea Leisure Co. Ltd.		490		15,217
Lottomatica Group SpA		108		2,757
Sands China Ltd.		800		4,195
Tatts Group Ltd.		3,801		12,902
				48,047
Household Durables – 0.1%
Arcelik AS		458		3,562
Independent Power Producers & Energy Traders – 1.0%
AES Tiete S.A.		1,300		11,982
Tractebel Energia S.A.		800		14,228
				26,210
Industrial Conglomerates – 0.1%
Boustead Holdings Bhd		1,800		3,029
Insurance – 7.7%
Admiral Group PLC		664		13,239
Allianz SE		4		591
AXA S.A.		1,077		20,184
Baloise Holding AG		37		3,812
CNP Assurances		164		2,325
Euler Hermes S.A.		143		13,669
Gjensidige Forsikring ASA		800		12,909
Great-West Lifeco, Inc.		100		2,720

See Accompanying Notes to the Financial Statements.

160 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® International Quality Dividend Defensive Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Insurance – (continued)
Intact Financial Corp.		100	$	6,104
Mapfre S.A.		856		3,143
Mediolanum SpA		1,563		10,540
Muenchener Rueckversicherungs AG		130		26,026
Power Financial Corp.		500		14,793
Powszechny Zaklad Ubezpieczen S.A.		104		14,335
RSA Insurance Group PLC		7,450		12,905
Sampo OYJ, Class A		386		15,420
SCOR SE		117		3,555
Sun Life Financial, Inc.		200		5,651
Zurich Insurance Group AG*		55		15,370
				197,291
Leisure Equipment & Products – 0.5%
Sankyo Co. Ltd.		300		13,674
Machinery – 0.5%
Metso OYJ		22		905
Zardoya Otis S.A.		892		12,477
				13,382
Media – 0.8%
ProSiebenSat.1 Media AG		94		3,604
Reed Elsevier N.V.		228		3,703
Shaw Communications, Inc., Class B		600		13,684
				20,991
Metals & Mining – 2.8%
Barrick Gold Corp.		200		3,949
BHP Billiton Ltd.		153		5,194
China Hongqiao Group Ltd.		5,000		2,893
Cia Siderurgica Nacional S.A.		700		2,776
Eregli Demir ve Celik Fabrikalari TAS		10,700		12,231
Iluka Resources Ltd.		1,214		11,279
KGHM Polska Miedz S.A.		233		10,914
Kumba Iron Ore Ltd.		205		10,801
Shougang Fushan Resources Group Ltd.		28,000		10,932
				70,969
Multiline Retail – 0.0%†
Marks & Spencer Group PLC		132		839

	Shares		Value
Multi-Utilities – 1.2%
E.ON AG		657	$	11,919
RWE AG		536		18,610
				30,529
Office Electronics – 0.6%
Canon, Inc.		400		14,352
Oil, Gas & Consumable Fuels – 11.2%
ARC Resources Ltd.		100		2,800
Baytex Energy Corp.		300		11,874
BP PLC		943		6,845
Canadian Oil Sands Ltd.		700		13,772
ENI S.p.A.		1,892		45,299
Gazprom OAO (ADR)		3,960		31,423
Harum Energy Tbk PT		21,000		8,964
Indo Tambangraya Megah Tbk PT		3,000		11,340
Keyera Corp.		100		6,256
Penn West Petroleum Ltd.		300		2,774
Royal Dutch Shell PLC, Class A		164		5,595
Royal Dutch Shell PLC, Class B		803		28,158
Surgutneftegas OAO (ADR)		1,725		11,902
Total S.A.		1,550		78,205
TransCanada Corp.		300		14,895
Tupras Turkiye Petrol Rafinerileri AS		113		3,150
Vermilion Energy, Inc.		100		5,140
				288,392
Paper & Forest Products – 0.4%
Oji Holdings Corp.		1,000		3,562
Stora Enso OYJ, Class A		264		2,161
Stora Enso Oyj, Class R		422		2,935
UPM-Kymmene Oyj		264		2,764
				11,422
Personal Products – 0.6%
Shiseido Co. Ltd.		1,000		14,311
Pharmaceuticals – 9.1%
Astellas Pharma, Inc.		300		17,462
AstraZeneca PLC		925		48,121
Dainippon Sumitomo Pharma Co. Ltd.		200		3,675
Eisai Co. Ltd.		300		13,690
GlaxoSmithKline PLC		3,476		89,834
Novartis AG		156		11,596

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 161

FlexShares^® International Quality Dividend Defensive Index Fund (cont.)

	Shares		Value
COMMON STOCKS – (continued)
Pharmaceuticals – (continued)
Orion OYJ, Class B		404	$	11,611
Roche Holding AG		85		21,265
Sanofi		141		15,470
				232,724
Real Estate Investment Trusts (REITs) – 3.0%
Boardwalk Real Estate Investment Trust		200		13,097
Calloway Real Estate Investment Trust		450		13,515
CapitaCommercial Trust		3,000		4,165
Dexus Property Group		2,940		3,525
Fonciere Des Regions		36		2,867
Gecina S.A.		27		3,250
Mirvac Group		2,032		3,733
RioCan Real Estate Investment Trust		100		2,934
Stockland		3,513		14,113
Westfield Retail Trust		4,252		14,566
				75,765
Real Estate Management & Development – 2.0%
Daito Trust Construction Co. Ltd.		200		19,382
Evergrande Real Estate Group Ltd.		26,000		10,620
First Capital Realty, Inc.		200		3,870
Redefine Properties Ltd.		2,838		3,412
Swiss Prime Site AG*		163		13,379
				50,663
Semiconductors & Semiconductor Equipment – 1.2%
Radiant Opto-Electronics Corp.		4,000		16,265
Samsung Electronics Co. Ltd.		8		11,041
STMicroelectronics N.V.		357		3,107
				30,413
Software – 0.2%
Konami Corp.		200		4,562
Specialty Retail – 1.1%
Esprit Holdings Ltd.		2,400		3,365
Hennes & Mauritz AB, Class B		693		24,548
				27,913
Textiles, Apparel & Luxury Goods – 1.1%
Anta Sports Products Ltd.		13,000		10,888
Bosideng International Holdings Ltd.		10,000		2,629

	Shares		Value
Textiles, Apparel & Luxury Goods – (continued)
Grendene S.A.		1,400	$	15,964
				29,481
Tobacco – 4.1%
British American Tobacco Malaysia Bhd		700		14,568
British American Tobacco PLC		923		51,228
Imperial Tobacco Group PLC		361		12,923
Japan Tobacco, Inc.		700		26,481
				105,200
Trading Companies & Distributors – 0.6%
Sumitomo Corp.		1,200		14,980
Transportation Infrastructure – 2.6%
Atlantia SpA		719		12,863
Hopewell Highway Infrastructure Ltd.		5,000		2,468
Hutchison Port Holdings Trust, Class U		16,000		13,280
Jiangsu Expressway Co. Ltd., Class H		12,000		13,143
SIA Engineering Co. Ltd.		3,000		12,325
Sydney Airport		3,867		13,889
				67,968
Water Utilities – 0.1%
Suez Environnement Co.		238		3,422
Wireless Telecommunication Services – 3.4%
Advanced Info Service PCL		1,900		17,479
Egyptian Co. for Mobile Services SAE*		90		1,739
Shin Corp. PCL		5,500		16,163
Tele2 AB, Class B		198		3,398
Vodacom Group Ltd.		1,009		11,818
Vodafone Group PLC		11,624		35,496
				86,093
Total Common Stocks (Cost $2,429,097)				2,475,150
PREFERRED STOCKS – 3.0%
Auto Components – 0.5%
Pirelli & C. SpA		1,501		12,507
Capital Markets – 0.5%
Korea Investment Holdings Co. Ltd.*		920		12,656

See Accompanying Notes to the Financial Statements.

162 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® International Quality Dividend Defensive Index Fund (cont.)

	Shares		Value
PREFERRED STOCKS – (continued)
Commercial Banks – 0.1%
Banco Santander Brasil S.A.		46,200	$	3,235
Diversified Telecommunication Services – 0.1%
Telecom Italia SpA		4,159		2,895
Electric Utilities – 0.2%
Centrais Eletricas Brasileiras S.A.		500		2,598
Cia Energetica de Minas Gerais		200		2,547
				5,145
Independent Power Producers & Energy Traders – 0.9%
AES Tiete S.A.		1,200		12,171
Cia Energetica de Sao Paulo		1,000		10,578
				22,749
Industrial Conglomerates – 0.6%
Doosan Corp.		350		15,477
Oil, Gas & Consumable Fuels – 0.1%
SK Innovation Co. Ltd.		41		2,133
Total Preferred Stocks (Cost $73,047)				76,797
Total Investment Securities (Cost $2,502,144) – 99.4%				2,551,947
Other assets less liabilities – 0.6%				14,681
Net Assets – 100.0%			$	2,566,628

* Non-income producing security.

^†  Amount represents less than 0.05%.

Percentages shown are based on Net Assets.

Abbreviations:

ADR – American Depositary Receipt

REIT – Real Estate Investment Trust

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	77,714
Aggregate gross unrealized depreciation		(27,911	)
Net unrealized appreciation	$	49,803
Federal income tax cost of investments	$	2,502,144

Futures Contracts Purchased

FlexShares^® International Quality Dividend Defensive Index Fund had the following open long futures contracts as of April 30, 2013:

	Number of Contracts		Expiration Date		Notional Amount at Value		Unrealized Appreciation
SGX S&P CNX Nifty Index Futures Contract		1		05/30/13	$	11,847	$	140

Cash collateral in the amount of $1,607 was pledged to cover margin requirements for open futures contracts as of April 30, 2013.

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 163

FlexShares^® International Quality Dividend Defensive Index Fund (cont.)

FlexShares^® International Quality Dividend Defensive Index invested, as a percentage of net assets, in the following countries as of April 30, 2013:

Australia	9.7	%
Belgium	0.4
Brazil	3.8
Canada	9.5
Chile	0.5
China	2.3
Czech Republic	0.4
Denmark	0.5
Egypt	0.2
Finland	2.4
France	7.7
Germany	2.9
Hong Kong	0.9
Hungary	0.1
Indonesia	0.8
Israel	1.0
Italy	4.0
Japan	11.5
Malaysia	1.4
Netherlands	1.3
New Zealand	0.7
Norway	1.0
Poland	1.9
Portugal	0.6
Russia	1.7
Singapore	1.2
South Africa	2.0
South Korea	2.3
Spain	1.2
Sweden	1.1
Switzerland	3.4
Taiwan	2.8
Thailand	1.3
Turkey	2.6
United Kingdom	14.3
Other1	0.6
	100.0	%

¹  Includes any non-equity securities and net other assets (liabilities)

See Accompanying Notes to the Financial Statements.

164 FLEXSHARES SEMIANNUAL REPORT

Schedule of Investments

FlexShares^® Ready Access Variable Income Fund

April 30, 2013 (Unaudited)

	Principal Amount		Value
Asset-Backed Securities – 4.0%
Ally Auto Receivables Trust, Class A2 0.45%, due 07/15/15	$	100,000	$	100,070
American Express Credit Account Master Trust 0.59%, due 05/15/18		100,000		100,267
Hyundai Auto Receivables Trust, Class A2 0.40%, due 08/17/15		100,000		100,029
Total Asset-Backed Securities (Cost $299,974)				300,366
CORPORATE BONDS – 84.9%
Aerospace & Defense – 2.7%
United Technologies Corp. 1.20%, due 06/01/15		200,000		203,157
Automobile – 10.7%
Daimler Finance North America LLC 1.06%, due 04/10/14(a) (b)		500,000		502,201
Volkswagen International Finance N.V. 0.89%, due 04/01/14(a) (b)		200,000		200,816
0.89%, due 11/20/14(a) (b)		100,000		100,456
				803,473
Banks – 24.1%
Bank of Nova Scotia 0.68%, due 03/15/16(b)		300,000		300,983
BNP Paribas S.A. 1.18%, due 01/10/14(b)		300,000		301,236
Credit Suisse 1.24%, due 01/14/14(b)		250,000		251,506
ING Bank N.V. 1.23%, due 03/07/16(a) (b)		200,000		200,029
Morgan Stanley 1.54%, due 02/25/16(b)		200,000		201,242
Rabobank Nederland 0.76%, due 03/18/16(b)		250,000		250,678
Royal Bank of Canada 0.80%, due 10/30/15		100,000		100,472
0.65%, due 03/08/16(b)		200,000		200,537
				1,806,683

	Principal Amount		Value
Beverages – 4.8%
Anheuser-Busch InBev Worldwide, Inc. 0.83%, due 01/27/14(b)	$	355,000	$	356,703
Commercial Banks – 4.0%
The Bank of New York Mellon Corp. 0.51%, due 10/23/15(b)		100,000		100,193
The Goldman Sachs Group, Inc. 1.29%, due 11/21/14(b)		100,000		100,733
1.60%, due 11/23/15		100,000		101,418
				302,344
Consumer Finance – 1.3%
Caterpillar Financial Services Corp. 0.70%, due 11/06/15		100,000		100,209
Diversified Financial Services – 8.1%
General Electric Capital Corp. 0.88%, due 12/11/15(b)		100,000		100,922
0.88%, due 01/08/16(b)		100,000		100,711
JPMorgan Chase & Co. 1.88%, due 03/20/15		200,000		204,624
1.18%, due 01/25/18(b)		100,000		100,813
PACCAR Financial Corp. 0.70%, due 11/16/15		100,000		100,236
				607,306
Diversified Telecommunication Services – 4.0%
AT&T, Inc. 0.68%, due 02/12/16(b)		300,000		301,075
Electric Utilities – 2.6%
Alabama Power Co. 0.55%, due 10/15/15		100,000		100,107
Georgia Power Co. 0.63%, due 11/15/15		100,000		100,098
				200,205
Food – 4.0%
General Mills, Inc. 0.58%, due 01/29/16(b)		300,000		300,367
Health Care Providers & Services – 2.7%
UnitedHealth Group, Inc. 0.85%, due 10/15/15		200,000		201,526

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 165

FlexShares^® Ready Access Variable Income Fund (cont.)

	Principal Amount		Value
CORPORATE BONDS – (continued)
Internet & Catalog Retail – 1.3%
Amazon.com, Inc. 0.65%, due 11/27/15	$	100,000	$	100,035
IT Services – 4.0%
International Business Machines Corp. 0.55%, due 02/06/15		300,000		300,756
Oil, Gas & Consumable Fuels – 4.0%
BP Capital Markets PLC 0.70%, due 11/06/15		100,000		100,035
Marathon Oil Corp. 0.90%, due 11/01/15		100,000		100,281
Total Capital Canada Ltd. 0.66%, due 01/15/16(b)		100,000		100,663
				300,979
Pharmaceuticals – 1.3%
McKesson Corp. 0.95%, due 12/04/15		100,000		100,547
Tobacco – 1.3%
Reynolds American, Inc. 1.05%, due 10/30/15		100,000		100,182
Wireless Telecommunication Services – 4.0%
Vodafone Group PLC 0.68%, due 02/19/16(b)		300,000		300,418
Total Corporate Bonds (Cost $6,367,197)				6,385,965
Municipal Bonds – 1.3%
County of Orange CA 0.58%, due 08/01/13		100,000		100,005
Total Municipal Bonds (Cost $100,000)				100,005
Certificate of Deposit – 4.0%
Svenska Handelsbanken AB 1.08%, due 07/17/14		300,000		300,827
Total Certificate of Deposit (Cost $301,245)				300,827

	Principal Amount		Value
Commercial Paper – 4.0%
Ford Motor Credit Co LLC 0.00%, due 05/30/13	$	300,000	$	299,784
Total Commercial Paper (Cost $299,771)				299,784
Repurchase Agreements(c) – 1.3%
RBS Securities, Inc., dated 04/30/13, repurchase price $100,001 0.50%, 05/01/13		100,000		100,000
Total Repurchase Agreements (Cost $100,000)				100,000
Total Investment Securities (Cost $7,468,187) – 99.5%				7,486,947
Other assets less liabilities – 0.5%				37,423
NET ASSETS – 100.0%			$	7,524,370

^(a)  144A security – Certain conditions for public sale may exist.

^(b)  Variable/Floating Rate Security – Interest rate changes on these instruments are based on changes in a designated rate. The rates shown are those in effect on April 30, 2013.

^(c)  The nature and terms of the collateral received for the repurchase agreements are as follows:

Name	Fair Market Value		Coupon Rate			Maturity Date
Federal Home Loan Banks	$	105,441		0.5	%		11/20/15

As of April 30, 2013, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

Aggregate gross unrealized appreciation	$	19,378
Aggregate gross unrealized depreciation		(618	)
Net unrealized appreciation	$	18,760
Federal income tax cost of investments	$	7,468,187

See Accompanying Notes to the Financial Statements.

166 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Ready Access Variable Income Fund (cont.)

FlexShares^® Ready Access Variable Income invested, as a percentage of net assets, in the following countries as of April 30, 2013:

Canada	9.3	%
France	4.0
Netherlands	10.0
Sweden	4.0
Switzerland	3.4
United Kingdom	5.3
United States	63.5
Other1	0.5
	100.0	%

¹  Includes any non-fixed income securities and net other assets (liabilities).

See Accompanying Notes to the Financial Statements.

FLEXSHARES SEMIANNUAL REPORT 167

Notes to the Financial Statements April 30, 2013 (Unaudited)

1. Organization

FlexShares^® Trust (the “Trust”), a Maryland statutory trust, was formed on May 13, 2010, originally named NT ETF Trust and renamed FlexShares^® Trust as of April 12, 2011. The Trust is registered as an open-end management investment company under the Investment Company Act of 1940 (the “1940 Act”), as amended. The Trust consists of thirteen operational exchange-traded funds as of April 30, 2013 (each a “Fund” and collectively the “Funds”). The FlexShares^® Morningstar Global Upstream Natural Resources Index Fund, FlexShares^® iBoxx 3-Year Target Duration TIPS Index Fund, FlexShares^® iBoxx 5-Year Target Duration TIPS Index Fund, and FlexShares^® Ready Access Variable Income Fund are non-diversified series of the Trust, pursuant to the 1940 Act. The FlexShares^® Morningstar US Market Factor Tilt Index Fund, FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund, FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares^® Quality Dividend Index Fund, FlexShares^® Quality Dividend Dynamic Index Fund, FlexShares^® Quality Dividend Defensive Index Fund, FlexShares^® International Quality Dividend Index Fund, FlexShares^® International Quality Dividend Dynamic Index Fund, and the FlexShares^® International Quality Dividend Defensive Index Fund are diversified series of the Trust, pursuant to the 1940 Act.

The FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund and FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund commenced investment operations on September 25, 2012. The FlexShares^® Ready Access Variable Income Fund commenced operations on October 9, 2012. The FlexShares^® Quality Dividend Index Fund, FlexShares^® Quality Dividend Dynamic Index Fund, FlexShares^® Quality Dividend Defensive Index Fund commenced investment operations on December 14, 2012. FlexShares^® International Quality Dividend Index Fund, FlexShares^® International Quality Dividend Dynamic Index Fund, and FlexShares^® International Quality Dividend Defensive Index Fund commenced operations on April 12, 2013.

Each Fund, except the FlexShares^® Ready Access Variable Income Fund, seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of a specified benchmark index (each an

“Underlying Index”). The FlexShares^® Ready Access Variable Income Fund is actively managed and does not seek to replicate the performance of a specified index. The Fund seeks maximum current income consistent with the preservation of capital and liquidity. Each Fund, except the FlexShares^® Ready Access Variable Income Fund, is referred to herein as an “Index Fund.” Each Fund is managed by Northern Trust Investments, Inc. (“NTI” or “Investment Adviser”), an indirect subsidiary of Northern Trust Corporation.

2. Significant Accounting Policies

The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Investment Valuation

Each Fund’s Net Asset Value (“NAV”) is determined daily as of the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading, based on prices at the time of closing provided that any U.S. fixed-income assets may be valued as of the announced closing time for trading in fixed-income instruments on any day that the Securities Industry and Financial Markets Association announces an early closing time. The NAV is calculated by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares outstanding.

The investments of the Funds are valued at fair value pursuant to the pricing policy and procedures approved by the Board of Trustees of the Trust (the “Board”). The Funds’ investments are valued using market quotations when available. When market quotations are not readily available, are deemed unreliable, or do not reflect material events occurring between the close of local markets and the time of valuation, the Funds value securities at fair value as determined

168 FLEXSHARES SEMIANNUAL REPORT

Notes to the Financial Statements (cont.)

in good faith in accordance with the Funds’ fair value pricing procedures as approved by the Board. Such circumstances include periods when trading in a security is suspended, the exchange or market on which a security trades closes early, the trading volume in a security is limited, corporate actions and announcements take place, or regulatory news affecting an issuer is released, such as government approvals. Additionally, the Trust, in its discretion, may make adjustments to the prices of securities held by a Fund if an event occurs after the publication of market values normally used by a Fund but before the time as of which the Fund calculates its NAV, depending on the nature and significance of the event, consistent with applicable regulatory guidance and the Trust’s fair value procedures. Other events that can trigger fair valuing of foreign securities include, for example, significant fluctuations in general market indicators, government actions, or natural disasters.

The use of fair valuation involves the risk that the values used by the Funds to price their investments may be higher or lower than the values used by other investment companies and investors to price the same investments. Fair value pricing involves subjective judgments and it is possible that a fair value determination for a portfolio security may be materially different than the value that could be realized upon the sale of such security. In addition, fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by an Index Fund’s Underlying Index. This difference may adversely affect an Index Fund’s ability to track its Underlying Index. The portfolio securities of the FlexShares^® Morningstar Global Upstream Natural Resources Index Fund, FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund, FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares^® International Quality Dividend Index Fund, FlexShares^® International Quality Dividend Dynamic Index Fund, and FlexShares^® International Quality Dividend Defensive Index Fund are primarily listed on foreign exchanges and their value may change on days when shareholders will not be able to purchase or sell Fund shares.

Security prices are generally provided by independent pricing services. Portfolio securities listed or traded on domestic securities exchanges or the NASDAQ/NMS, including

dollar-dominated foreign securities or American Depositary Receipts (“ADRs”), are valued at the closing price on the exchange or system where the security is principally traded. The closing price for securities traded on the NASDAQ/NMS is the Nasdaq Official Closing Price (“NOCP”). If there have been no sales for that day on the exchange or system where the security is principally traded, then the value is determined with reference to the last sale price, or the NOCP, if applicable, on any other exchange or system. If there have been no sales of the security for that day on any exchange or system, the security is valued at fair value pursuant to the Trust’s fair value procedures.

Securities that are traded regularly in the over-the-counter market (other than the NASDAQ/NMS), including securities listed on exchanges but primarily traded over-the-counter, are valued on the basis of the mean between the bid and asked quotes based upon quotes furnished by primary market makers for those securities. Securities that may be traded over-the-counter include equity securities, fixed-income securities, non-exchange-listed foreign securities, and certain derivative instruments. Fixed-income securities, however, may be valued on the basis of evaluated prices provided by independent pricing services when such prices are believed to reflect the fair market value of such securities. Such prices may be determined by taking into account securities prices, yields, maturities, call features, ratings, prepayment speeds, credit risks, cash flows, institutional size trading in similar groups of securities and developments related to specific securities. Fixed-income securities maturing within a relatively short period, less than 60 days, are valued at amortized cost, which according to NTI approximates fair value.

Foreign securities are generally priced at the closing price or last sales price reported on the foreign exchange on which they are principally traded. If there have been no sales of the security for that day, the security will be valued at fair value pursuant to the Trust’s fair value procedures. Spot and forward foreign currency exchange contracts generally are valued using an independent pricing service. The value of assets determined in foreign currencies is converted into U.S. dollars using exchange rates deemed appropriate by NTI as investment adviser. Any use of a different rate from the rates used by an index provider to an Index Fund may adversely affect the Index Fund’s ability to track its Underlying Index.

FLEXSHARES SEMIANNUAL REPORT 169

Notes to the Financial Statements (cont.)

Exchange-traded financial futures and options are valued at the settlement price as established by the exchange on which they are traded. Over-the-counter options are valued at broker-provided bid prices, as are swaps. The foregoing prices may be obtained from one or more independent pricing services or, as needed or applicable, independent broker-dealers. If there was no sale on that day, and for non-exchange traded derivatives, the contract is valued at fair value pursuant to the Trust’s fair value procedures.

Various inputs are used in determining the value of each Fund’s investments. These inputs are summarized in three levels listed below:

• Level 1—Quoted prices in active markets for identical assets on the measurement date.

• Level 2—Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

• Level 3—Significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For example, short-term debt securities may be valued at amortized cost. Generally, amortized cost approximates the current fair value of a security, but since the valuation is not obtained from a quoted price in an active market, such securities are reflected as Level 2.

The following is a summary of the valuations as of April 30, 2013 for each Fund based upon the three levels defined above. During the period ended April 30, 2013, there were four Level 3 securities. All the transfers in and out of the levels during the period are assumed to be transferred on the last day of the period at their current value. During the period ended April 30, 2013, FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund had securities transferred from Level 1 to Level 2 with an aggregated market value of $104,454, or 0.10% of the net assets of the Fund, due to the securities being fair valued in accordance with the Trust’s fair value pricing procedures. Please refer to the Schedules of Investments to view equity and debt securities segregated by industry type where applicable.

	Level 1 — Quoted Prices			Level 2 — Other Significant Observable Inputs			Level 3 — Significant Unobservable Inputs		Total
FlexShares® Morningstar Global Upstream Natural Resources Index Fund
Investments
Common Stocks*	$	2,268,099,926		$	—		$	—	$	2,268,099,926
Total Investments	$	2,268,099,926		$	—		$	—	$	2,268,099,926
Other Financial Instruments
Assets
Futures Contracts	$	155,861		$	—		$	—	$	155,861
Forward Foreign Currency Contracts		—			85,098			—		85,098
Liabilities
Futures Contracts		(122,962	)		—			—		(122,962	)
Forward Foreign Currency Contracts		—			(162,273	)		—		(162,273	)
Total Other Financial Instruments	$	32,899		$	(77,175	)	$	—	$	(44,276	)

170 FLEXSHARES SEMIANNUAL REPORT

Notes to the Financial Statements (cont.)

	Level 1 — Quoted Prices		Level 2 — Other Significant Observable Inputs		Level 3 — Significant Unobservable Inputs		Total
FlexShares® iBoxx 3-Year Target Duration TIPS Index Fund
Investments
U.S. Treasury Obligations	$	—	$	1,537,191,103	$	—	$	1,537,191,103
Total Investments	$	—	$	1,537,191,103	$	—	$	1,537,191,103
FlexShares® iBoxx 5-Year Target Duration TIPS Index Fund
Investments
U.S. Treasury Obligations	$	—	$	517,909,320	$	—	$	517,909,320
Total Investments	$	—	$	517,909,320	$	—	$	517,909,320
FlexShares® Morningstar US Market Factor Tilt Index Fund
Investments
Common Stocks	$	281,449,141	$	—	$	—	$	281,449,141
U.S. Treasury Obligations		—		204,928		—		204,928
Total Investments	$	281,449,141	$	204,928	$	—	$	281,654,069
Other Financial Instruments
Assets
Futures Contracts	$	50,802	$	—	$	—	$	50,802
Total Other Financial Instruments	$	50,802	$	—	$	—	$	50,802
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund
Investments
Common Stocks
Commercial Banks	$	11,494,991	$	20,104	$	—	$	11,515,095
Household Durables		1,112,478		2,283		—		1,114,761
Insurance		4,357,264		2,565		—		4,359,829
Metals & Mining		—		—		909		909
Oil, Gas & Consumable Fuels		6,906,563		—		14,460		6,921,023
Other*		76,831,525		—		—		76,831,525
Preferred Stocks
Aerospace & Defense		—		1,844		—		1,844
Other*		415,058		—		—		415,058
Rights		9,241		392		—		9,633
Total Investments	$	101,127,120	$	27,188	$	15,369	$	101,169,677
Other Financial Instruments
Assets
Futures Contracts	$	43,955	$	—	$	—	$	43,955
Forward Foreign Currency Contracts		—		704		—		704
Total Other Financial Instruments	$	43,955	$	704	$	—	$	44,659

FLEXSHARES SEMIANNUAL REPORT 171

Notes to the Financial Statements (cont.)

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:

Balance as of 10/31/12	$	—
Total gain or loss (realized/unrealized included in earnings)		(10,351	)
Purchases (Sales)		25,720
Transfer into Level 3		—
Transfer out of Level 3		—
Balance as of 4/30/2013	$	15,369
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at 4/30/2013	$	(10,350	)

Common Stock	Fair Value at 4/30/2013		Valuation Techniques	Unobservable Inputs
Bumi PLC	$	14,460	Market Transaction and Analysis	Discovery Price set at Halt
Discovery Metals Ltd.		909	Market Transaction and Analysis	Discovery Price set at Halt

	Level 1 — Quoted Prices		Level 2 — Other Significant Observable Inputs		Level 3 — Significant Unobservable Inputs		Total
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund
Investments
Common Stocks
Construction & Engineering	$	2,398,947	$	60,493	$	—	$	2,459,440
Media		1,487,553		27,351		—		1,514,904
Metals & Mining		5,192,604		—		61,971		5,254,575
Real Estate Management & Development		4,725,270		26,978		11,438		4,763,686
Textiles, Apparel & Luxury Goods		991,564		393				991,957
Other*		85,574,549		—		—		85,574,549
Preferred Stocks		6,112,294		—		—		6,112,294
Rights		2,242		2,046		—		4,288
Warrants		783		1,245		—		2,028
Total Investments	$	106,485,806	$	118,506	$	73,409	$	106,677,721
Other Financial Instruments
Assets
Futures Contracts	$	68,552	$	—	$	—	$	68,552
Forward Foreign Currency Contracts		—		61,603		—		61,603
Total Other Financial Instruments	$	68,552	$	61,603	$	—	$	130,155

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:

Balance as of 10/31/12	$	2,873
Total gain or loss (realized/unrealized included in earnings)		7,873
Purchases (Sales)		61,336
Transfer into Level 31		4,200
Transfer out of Level 32		(2,873	)
Balance as of 4/30/2013	$	73,409
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at 4/30/2013	$	7,873

172 FLEXSHARES SEMIANNUAL REPORT

Notes to the Financial Statements (cont.)

Common Stock	Fair Value at 4/30/2013		Valuation Techniques		Unobservable Inputs
China Metal Recycling Holdings Ltd.	$	61,971		Market Transaction and Analysis	Discovery Price set at Halt
KLCC Property Holdings Bhd		11,438		Market Transaction and Analysis	Discovery Price set at Halt

	Level 1 — Quoted Prices		Level 2 — Other Significant Observable Inputs		Level 3 — Significant Unobservable Inputs		Total
FlexShares® Quality Dividend Index Fund
Investments
Common Stocks*	$	69,998,493	$	—	$	—	$	69,998,493
Total Investments	$	69,998,493	$	—	$	—	$	69,998,493
Other Financial Instruments
Assets
Futures Contracts	$	2,094	$	—	$	—	$	2,094
Total Other Financial Instruments	$	2,094	$	—	$	—	$	2,094
FlexShares® Quality Dividend Dynamic Index Fund
Investments
Common Stocks*	$	5,836,916	$	—	$	—	$	5,836,916
Total Investments	$	5,836,916	$	—	$	—	$	5,836,916
FlexShares® Quality Dividend Defensive Index Fund
Investments
Common Stocks*	$	14,532,345	$	—	$	—	$	14,532,345
Total Investments	$	14,532,345	$	—	$	—	$	14,532,345
FlexShares® International Quality Dividend Index Fund
Investments
Common Stocks*	$	2,480,354	$	—	$	—	$	2,480,354
Preferred Stocks*		74,200		—		—		74,200
Total Investments	$	2,554,554	$	—	$	—	$	2,554,554
Other Financial Instruments
Assets
Futures Contracts	$	140	$	—	$	—	$	140
Total Other Financial Instruments	$	140	$	—	$	—	$	140
FlexShares® International Quality Dividend Dynamic Index Fund
Investments
Common Stocks*	$	2,444,660	$	—	$	—	$	2,444,660
Preferred Stocks*		99,202		—		—		99,202
Total Investments	$	2,543,862	$	—	$	—	$	2,543,862

FLEXSHARES SEMIANNUAL REPORT 173

Notes to the Financial Statements (cont.)

	Level 1 — Quoted Prices		Level 2 — Other Significant Observable Inputs		Level 3 — Significant Unobservable Inputs		Total
FlexShares® International Quality Dividend Defensive Index Fund
Investments
Common Stocks*	$	2,475,150	$	—	$	—	$	2,475,150
Preferred Stocks*		76,797						76,797
Total Investments	$	2,551,947	$	—	$	—	$	2,551,947
Other Financial Instruments
Assets
Futures Contracts	$	140	$	—	$	—	$	140
Total Other Financial Instruments	$	140	$	—	$	—	$	140
FlexShares® Ready Access Variable Income Fund
Investments
Asset-Backed Securities	$	—	$	300,366	$	—	$	300,366
Corporate Bonds*		—		6,385,965		—		6,385,965
Certificates of Deposit		—		300,827		—		300,827
Municipal Bonds		—		100,005		—		100,005
Commercial Paper		—		299,784		—		299,784
Repurchase Agreements		—		100,000		—		100,000
Total Investments	$	—	$	7,486,947	$	—	$	7,486,947

* See Schedules of Investments for segregation by industry type

1. Security transferred from Level 1 to Level 3 during the period. Transferred into Level 3 due to security being valued by the Northern Trust Investment Pricing and Valuation Committee.

2. Security transferred from Level 3 to Level 1 during the period. Transferred out of Level 3 due to security being valued at an unadjusted quoted market price.

Foreign Securities

The FlexShares^® Morningstar Global Upstream Natural Resources Index Fund, FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund, FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares^® International Quality Dividend Index Fund, FlexShares^® International Quality Dividend Dynamic Index Fund, and the FlexShares^® International Quality Dividend Defensive Index Fund invest in publicly-traded equity securities of issuers in countries other than the United States of America (“U.S.”). Such investments include direct investments in non-U.S. dollar denominated securities traded outside the U.S. The Fund’s investment also may be in the form of ADRs and Global Depositary Receipts (“GDRs”) (collectively, “Depositary Receipts”) based on securities in its Underlying Index. ADRs are receipts that are traded in

the United States evidencing ownership of the underlying foreign securities and are denominated in U.S. dollars. GDRs are receipts issued by a non-U.S. financial institution evidencing ownership of underlying foreign or U.S. securities and usually are denominated in foreign currencies. GDRs may not be denominated in the same currency as the securities they represent. Generally, GDRs are designed for use in foreign securities markets.

To the extent a Fund invests in ADRs, such ADRs will be listed on a national securities exchange. To the extent a Fund invests in GDRs, such GDRs will be listed on a foreign exchange. A Fund will not invest in any unlisted Depositary Receipt, any Depositary Receipt that NTI deems to be illiquid or any Depositary Receipt for which market quotations are not readily available. Generally, all Depositary Receipts must be sponsored.

174 FLEXSHARES SEMIANNUAL REPORT

Notes to the Financial Statements (cont.)

The FlexShares^® Ready Access Variable Income Fund may invest, without limitation, in fixed-income securities and instruments of foreign issuers in developed and emerging markets, including debt securities of foreign governments.

Investing in foreign securities, including Depositary Receipts, may result in a Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to less liquid markets, and adverse economic, political, diplomatic, financial, and regulatory factors. Foreign governments also may impose taxes and limits on investment and repatriation. Any of these events could cause the value of a Fund’s foreign investments to decline. The FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund will invest primarily in emerging market countries. In addition, the FlexShares^® Morningstar Global Upstream Natural Resources Index Fund, FlexShares^® International Quality Dividend Index Fund, FlexShares^® International Quality Dividend Dynamic Index Fund, and the FlexShares^® International Quality Dividend Defensive Index Fund may invest its assets in emerging market countries. The FlexShares^® Ready Access Variable Income Fund may invest up to 20% of its total assets in fixed-income securities and instruments of issuers in emerging markets. The markets of emerging market countries are less developed and less liquid, subject to greater price volatility and generally subject to increased economic, political, regulatory and other uncertainties than more developed foreign markets. The risks of foreign investment are increased when the issuer is located in a country with an emerging economy or securities market.

Inflation-Indexed Securities

FlexShares^® iBoxx 3-Year Target Duration TIPS Index Fund and FlexShares^® iBoxx 5-Year Target Duration TIPS Index Fund invest primarily in U.S. Treasury Inflation-Protected Securities (“TIPS”). The FlexShares^® Ready Access Variable Income Fund may invest in inflation-indexed securities. The value of inflation-indexed debt securities is subject to the effects of changes in real interest rates that may change as a result of different factors. In general, the value of an inflation-indexed security, including TIPS, tends to decrease when real interest rates increase, and increase when real

interest rates decrease. Interest payments on inflation-indexed securities will vary along with changes in the Consumer Price Index for All Urban Consumers (CPI-U) before seasonal adjustment (calculated by the Bureau of Labor Statistics). Thus generally, during periods of rising inflation, the value of inflation-indexed securities will tend to increase and during periods of deflation, their value will tend to decrease. There can be no assurance that the inflation index used (i.e. CPI-U) will accurately measure the price increase of a certain good or service. Increases in the principal value of TIPS due to inflation are considered taxable ordinary income for the amount of the increase in a calendar year.

Repurchase Agreements

The FlexShares^® Ready Access Variable Income Fund may enter into repurchase agreements under which it purchases securities (collateral) for cash from a seller and agrees to resell those securities to the same seller within a specified time at a specified price. During the term of a repurchase agreement, the market value of the underlying collateral, including accrued interest, is required to equal or exceed the market value of the repurchase agreement. The underlying collateral for tri-party repurchase agreements is held in accounts for JP Morgan Chase, the Fund’s custodian, at the Bank of New York or JPMorgan Chase which, in turn, holds securities through the book-entry system at the Federal Reserve Bank of New York. The Fund is subject to credit risk on repurchase agreements to the extent that the counterparty fails to perform under the agreement and the value of the collateral received falls below the agreed repurchase price.

The Northern Trust Company, the parent of NTI, currently is a party to various Master Repurchase Agreements with a number of different counterparties, and acts as agent of behalf of various disclosed principals, including the Fund and various other accounts managed by NTI, in entering into repurchase agreements under the Master Repurchase Agreements. NTI administers and manages these repurchase agreements in accordance with and as part of its duties under its investment advisory agreement with the Fund and does not collect any additional fees from the Fund for such services. The Fund has entered into repurchase agreements at April 30, 2013, as reflected in its Schedule of Investments.

FLEXSHARES SEMIANNUAL REPORT 175

Notes to the Financial Statements (cont.)

Derivative Contracts

Futures Contracts

All of the Index Funds may invest in futures contracts to help track the price and yield performance of their underlying indexes. At the time a Fund enters into a futures contract, it is generally required to make a margin deposit with the custodian of a specified amount of liquid assets. Subsequent payments are made or received by the Funds equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. Futures are marked to market each day with the change in value reflected in the unrealized gains or losses. A Fund recognizes a realized gain or loss when a contract is closed or expires. The Statements of Operations reflect gains or losses, if any, as realized gain (loss) on futures contracts and as unrealized appreciation (depreciation) on futures contracts. As of April 30, 2013, the FlexShares^® Morningstar Global Upstream Natural Resources Index Fund, FlexShares^® Morningstar US Market Factor Tilt Index Fund, FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund, FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares^® Quality Dividend Index Fund, FlexShares^® International Quality Dividend Index Fund, and the FlexShares^® International Quality Dividend Defensive Index Fund had open futures contracts.

The use of futures contracts involves, to varying degrees, elements of market and counterparty risk which may exceed the amounts recognized in the Statements of Assets and Liabilities. Futures contracts present the following risks: imperfect correlation between the change in market value of a Fund’s securities and the price of futures contracts; the possible inability to close a futures contract when desired; losses due to unanticipated market movements which potentially are unlimited; and the possible inability of NTI to correctly predict the direction of securities prices, interest rates, currency exchange rates and other economic factors. Futures markets are highly volatile and the use of futures may increase the volatility of a Fund’s NAV. As a result of the low margin deposits normally required in futures trading, a relatively small price movement in a futures contract may result in substantial losses to a Fund. Futures contracts

may be illiquid, and exchanges may limit fluctuations in futures contract prices during a single day. Foreign exchanges or boards of trade generally do not offer the same protection as U.S. exchanges.

Foreign Currency Translations

Values of investments denominated in foreign currencies are converted into U.S. dollars using the prevailing market rates on the date of valuation as quoted by one or more banks or dealers that make a two-way market in such currencies (or a data service provider based on quotations received from such banks or dealers). Any use of a rate different from the rates used by an Index Fund’s index provider may affect a Fund’s ability to track its Underlying Index. The cost of purchases and proceeds from sales of investments, interest and dividend income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such transactions. The gains or losses, if any, on investments resulting from changes in foreign exchange rates are included in the Statements of Operations as realized gain (loss) on foreign currency transactions and unrealized appreciation (depreciation) on translation of other assets and liabilities denominated in foreign currencies.

Forward Foreign Currency Exchange Contracts

The FlexShares^® Morningstar Global Upstream Natural Resources Index Fund, FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund, FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund, FlexShares^® International Quality Dividend Index Fund, FlexShares^® International Quality Dividend Dynamic Index Fund, FlexShares^® International Quality Dividend Defensive Index Fund and FlexShares^® Ready Access Variable Income Fund may enter into forward foreign currency exchange contracts to facilitate local settlements or to protect against currency exposure in connection with its distributions to shareholders. The Index Funds, however, do not expect to engage in currency transactions for speculative purposes or for purposes of hedging against declines in the value of an Index Fund’s assets that are denominated in a foreign currency. The FlexShares^® Ready Access Variable Income Fund also may engage in forward foreign currency transactions for hedging purposes in order to protect against uncertainty in

176 FLEXSHARES SEMIANNUAL REPORT

Notes to the Financial Statements (cont.)

the level of future foreign currency exchange rates. The Fund, however, does not expect to engage in currency transactions for speculative purposes (e.g., for potential income or capital gain). All forward foreign currency exchange contracts are “marked-to-market” daily at the applicable exchange rates and any resulting unrealized gains or losses are recorded in the financial statements. The Funds record realized gains or losses at the time the forward foreign currency exchange contract is offset by entering into a closing transaction or extinguished by delivery of the currency.

There are several risks associated with these contracts. One risk is the potential inability of counterparties to meet the terms of their contracts, and unanticipated movements in the value of a foreign currency relative to the U.S. dollar. The contractual amounts of forward foreign currency exchange contracts do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when

all related and offsetting transactions are considered. The Statements of Operations reflect realized gains or losses, if any, in realized gain (loss) on foreign currency transactions and unrealized gains or losses in unrealized appreciation (depreciation) on forward foreign currency contracts. Forward foreign currency exchange contracts are privately negotiated transactions and can have substantial price volatility. As a result, they offer less protection against default by the other party than is available for instruments traded on an exchange. The institutions that deal in forward foreign currency exchange contracts are not required to continue to make markets in the currencies they trade, and these markets can experience periods of illiquidity.

As of April 30, 2013, the FlexShares^® Morningstar Global Upstream Natural Resources Index Fund, FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund and FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund had open forward foreign currency contracts.

The following tables indicate the location of derivative-related items on the Statements of Assets and Liabilities as well as the effect of derivative instruments on the Statements of Operations during the reporting period.

Fair Value of Derivative Instruments as of April 30, 2013
Derivatives not accounted for as hedging instruments under ASC 815	Counterparty		Statement of Assets and Liabilities Location	Fund	Value
Equity Index Futures Contracts		UBS AG	Assets — Unrealized appreciation on futures contracts	FlexShares® Morningstar Global Upstream Natural Resources Index Fund	$	32,899
Foreign Currency Contracts		Citibank and Goldman Sachs	Assets — Unrealized appreciation on forward foreign currency contracts	FlexShares® Morningstar Global Upstream Natural Resources Index Fund		85,098
Foreign Currency Contracts		Citibank and Morgan Stanley	Liabilities — Unrealized depreciation on forward foreign currency contracts	FlexShares® Morningstar Global Upstream Natural Resources Index Fund		(162,273	)
Equity Index Futures Contracts		UBS AG	Assets — Unrealized appreciation on futures contracts	FlexShares® Morningstar US Market Factor Tilt Index Fund		50,802	*
Equity Index Futures Contracts		UBS AG	Assets — Unrealized appreciation on futures contracts	FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund		43,955

FLEXSHARES SEMIANNUAL REPORT 177

Notes to the Financial Statements (cont.)

Derivatives not accounted for as hedging instruments under ASC 815	Counterparty		Statement of Assets and Liabilities Location	Fund	Value
Foreign Currency Contracts		Citibank	Assets — Unrealized appreciation on forward foreign currency contracts	FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund	$	704
Equity Index Futures Contracts		UBS AG	Assets — Unrealized appreciation on futures contracts on futures contracts	FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund		68,552
Foreign Currency Contracts		Morgan Stanley and UBS AG	Assets — Unrealized appreciation on forward foreign currency contracts	FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund		61,603
Equity Index Future Contracts		Citigroup	Assets — Unrealized appreciation on future contracts	FlexShares® Quality Dividend Index Fund		2,094	*
Equity Index Futures Contracts		Citigroup	Assets — Unrealized appreciation on futures contracts	FlexShares® International Quality Dividend Index Fund		140
Equity Index Futures Contracts		Citigroup	Assets — Unrealized appreciation on futures contracts	FlexShares® International Quality Dividend Defensive Index Fund		140

* Includes cumulative appreciation/depreciation on futures contracts as reported in the Schedule of Investments. Only the current day’s variation margin is reported within the assets or liabilities shown on the Statement of Assets and Liabilities.

The Effect of Derivative Instruments on the Statement of Operations for the Period Ended April 30, 2013
Derivatives not accounted for as hedging instruments under ASC 815	Location of Gain or (Loss) on Derivatives on the  Statements of Operations	Fund	Realized Gain or (Loss) on Derivatives		Change in Unrealized Appreciation or (Depreciation) on Derivatives
Equity Index Futures Contracts	Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures Contracts	FlexShares® Morningstar Global Upstream Natural Resources Index Fund	$	105,948	$	29,944
Foreign Currency Contracts	Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts	FlexShares® Morningstar Global Upstream Natural Resources Index Fund		228,647		(70,383	)
Equity Index Futures Contracts	Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts	FlexShares® Morningstar US Market Factor Tilt Index Fund		197,166		57,728

178 FLEXSHARES SEMIANNUAL REPORT

Notes to the Financial Statements (cont.)

Derivatives not accounted for as hedging instruments under ASC 815	Location of Gain or (Loss) on Derivatives on the  Statements of Operations	Fund	Realized Gain or (Loss) on Derivatives			Change in Unrealized Appreciation or (Depreciation) on Derivatives
Equity Index Futures Contracts	Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts	FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund		27,178		$	46,511
Foreign Currency Contracts	Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts	FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund		(10,613	)		690
Equity Index Futures Contracts	Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts	FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund		(82,697	)		73,799
Foreign Currency Contracts	Net realized gain (loss) on Foreign currency transactions, Net change in unrealized appreciation (depreciation) on Forward foreign currency contracts	FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund		14,768			68,358
Equity Index Futures Contracts	Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts	FlexShares® Quality Dividend Index Fund		(3,639	)		2,094
Equity Index Futures Contracts	Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts	FlexShares® International Quality Dividend Index Fund		607			140
Equity Index Futures Contracts	Net realized gain (loss) on Futures contracts, Net change in unrealized appreciation (depreciation) on Futures contracts	FlexShares® International Quality Dividend Defensive Index Fund		607			140

FLEXSHARES SEMIANNUAL REPORT 179

Notes to the Financial Statements (cont.)

At April 30, 2013, the volume of derivative activities for the period was as follows:

	Foreign Exchange Contracts				Equity Contracts
Fund	Number of Trades		Average Notional Amount		Number of Trades		Average Notional Amount
FlexShares® Morningstar Global Upstream Natural Resources Index Fund		6	$	178,333		162	$	116,746
FlexShares® Morningstar US Market Factor Tilt Index Fund		—		—		15		89,398
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund		1		40,000		13		87,040
FlexShares® Morningstar Emerging MarketsFactor Tilt Index Fund		1		1,338,333		371		13,470
FlexShares® Quality Dividend Index Fund		—		—		1		79,610
FlexShares® International Quality Dividend Index Fund		—		—		1		11,847
FlexShares® International Quality Dividend Defensive Index Fund		—		—		1		11,847

Taxes and Distributions

Each Fund has qualified and intends to continue to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, which includes distributing substantially all of its net investment income and net capital gains to shareholders. Accordingly, no provision for federal and state income taxes is required in the financial statements.

As of October 31, 2012, management of the Funds has reviewed all open tax years and major jurisdictions and concluded that there is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns. The Funds are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next 12 months. On an ongoing basis management will monitor the tax positions taken to determine if adjustment to conclusions are necessary based on factors including but not limited to further implementation on guidance expected from Financial Accounting Standards Board (“FASB”) and on-going analysis of tax law, regulation, and interpretations thereof.

3. Investment Transactions and Related Income and Expense

Throughout the reporting period, investment transactions are accounted for no later than one business day following the trade date. For financial reporting purposes, investment transactions are accounted for on trade date on the last business day of the reporting period.

Interest income is recognized on an accrual basis. Bond discount is accreted and premium is amortized over the expected life of each applicable security using the yield to maturity method. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are determined using the specific identification method by comparing the identified cost of the security lot sold with the net sales proceeds.

All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign markets in which a Fund invests. These foreign taxes, if any, are paid by the Fund and disclosed in the Statements of Operations. Foreign taxes payable, if any, are reflected in the Funds’ Statements of Assets and Liabilities.

Expenses directly attributable to a Fund are charged to that Fund, while expenses which are attributable to more than one Fund are allocated among the respective Funds based upon relative net assets or another reasonable basis.

180 FLEXSHARES SEMIANNUAL REPORT

Notes to the Financial Statements (cont.)

4. Investment Advisory Fees

NTI serves as the Investment Adviser of the Funds pursuant to the Investment Advisory Agreement. The Investment Adviser is responsible for making investment decisions for the Funds and for placing purchase and sale orders for portfolio securities, subject to the general supervision of the Trust’s Board of Trustees.

As compensation for its advisory services and assumption of Fund expenses, NTI is entitled to a unitary management fee, computed daily and payable monthly, at the annual rates set forth in the table below (expressed as a percentage of each Fund’s respective average daily net assets).

From the unitary management fee, NTI pays most of the expenses of the Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other services (“Covered Expenses”). Covered Expenses do not include the fee payments under the Investment Advisory Agreement, interest expenses, brokerage commissions and other trading expenses, fees and expenses of the independent trustees and their independent legal counsel, taxes and other extraordinary costs such as litigation and other expenses not incurred in the ordinary course of business.

The unitary management fee rate payable by each Fund is set forth in the following table:

Fund	Unitary Management Fee
FlexShares® Morningstar Global Upstream Natural Resources Index Fund		0.48	%
FlexShares® iBoxx 3-Year Target Duration TIPS Index Fund		0.20	%
FlexShares® iBoxx 5-Year Target Duration TIPS Index Fund		0.20	%
FlexShares® Morningstar US Market Factor Tilt Index Fund		0.27	%
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund		0.42	%
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund		0.65	%
FlexShares® Quality Dividend Index Fund		0.37	%

Fund	Unitary Management Fee
FlexShares® Quality Dividend Dynamic Index Fund		0.37	%
FlexShares® Quality Dividend Defensive Index Fund		0.37	%
FlexShares® International Quality Dividend Index Fund		0.47	%
FlexShares® International Quality Dividend Dynamic Index Fund		0.47	%
FlexShares® International Quality Dividend Defensive Index Fund		0.47	%
FlexShares® Ready Access Variable Income Fund		0.25	%

The Investment Adviser may voluntarily waive any portion of its advisory fee from time to time, and may discontinue or modify any such voluntary waiver in the future at its discretion.

Amounts voluntarily waived by the Investment Adviser may not be recouped by the Investment Adviser. As of April 30, 2013, no advisory fees had been waived.

5. Administration Fees

JPMorgan Chase Bank, N.A. (“the Administrator”) serves as administrator of the Funds. The Administrator provides certain administrative services to the Funds. For these services, the Administrator is entitled to certain fees and reasonable out-of-pocket expenses. These fees and expenses are Covered Expenses as defined above.

6. Custodian Fees

JPMorgan Chase Bank, N.A. (the “Custodian”) acts as custodian for the Funds in accordance with a Global Custody Agreement. The Custodian holds cash, securities and other assets of the Funds as required by the 1940 Act. As compensation for the services rendered under the agreement, the Custodian is entitled to fees and reasonable out-of-pocket expenses. These fees and expenses are Covered Expenses as defined above.

FLEXSHARES SEMIANNUAL REPORT 181

Notes to the Financial Statements (cont.)

7. Trustees Fees

The Trust compensates each Trustee who is not an officer, director or employee of Northern Trust Corporation, or its subsidiaries, for his or her services as a Trustee of the Trust and as a member of Board committees.

NTI has contractually agreed with each Fund to reimburse the fees and expenses of the Trust’s independent trustees and their independent legal counsel paid by each Fund until at least March 1, 2014. After this date, NTI and each Fund may mutually agree to extend the contractual arrangement. The Board may terminate the contractual arrangement at any time if it determines that it is in the best interest of the Fund and its shareholders.

The Trust has adopted a deferred compensation plan (“DC Plan”) for its Trustees who are not officers of Northern Trust or NTI. Under the DC Plan, an Independent Trustee may elect to defer all or a portion of their compensation. The amount deferred is adjusted periodically based upon the performance of the investment options selected by the Trustees. The investment options currently under the DC Plan are the FlexShares^® Morningstar US Market Factor Tilt Index Fund and the FlexShares^® iBoxx 5-Year Target Duration TIPS Index Fund. Expenses related to the DC Plan are stated on the Statements of Operations.

8. Distribution and Service Plan

Foreside Fund Services, LLC (“Foreside”) serves as the Funds’ distributor and distributes Creation Units (as defined in Note 9) for each Fund on an agency basis. The Distributor does not receive a fee from the Funds for its distribution services. However, it receives compensation from NTI for its services as distributor pursuant to a separate letter agreement between it and NTI.

The Trust has adopted a Distribution and Service Plan pursuant to Rule 12b-1 under the Investment Company Act of 1940. Payments to financial intermediaries under the Plan are tied directly to their own out-of-pocket expenses. As of this date, the Plan has not been implemented with respect to the Funds. The Plan may not be implemented without further Board of Trustees approval. The maximum distribution fee is 0.25% of each Fund’s respective average daily net assets

under the Plan. The Funds did not pay any 12b-1 fees during the current period.

9. Issuance and Redemption of Fund Shares

Each Fund issues and redeems shares only to Authorized Participants (typically market makers, large investors and institutions) in exchange for the deposit or delivery of a basket of assets (securities and/or cash), in large blocks known as Creation Units, each of which is comprised of a specified number of shares.

Retail investors may only purchase and sell fund shares on a national securities exchange through a broker-dealer and such transactions may be subject to customary commission rates imposed by the broker-dealer.

Authorized Participants may pay transaction fees to the Funds to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units. Transaction fees remaining in the Funds were as follows:

Fund	As of April 30, 2013*		As of October 31, 2012**
FlexShares® Morningstar Global Upstream Natural Resources Index Fund	$	85,500	$	28,500
FlexShares® Morningstar US Market Factor Tilt Index Fund		10,500		10,500
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund		40,000		20,000
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund		75,000		50,000
FlexShares® Quality Dividend Index Fund		7,000		N/A
FlexShares® Quality Dividend Dynamic Index Fund		2,000		N/A
FlexShares® International Quality Dividend Index Fund		5,000		N/A
FlexShares® International Quality Dividend Dynamic Index Fund		5,000		N/A
FlexShares® International Quality Dividend Defensive Index Fund		5,000		N/A

182 FLEXSHARES SEMIANNUAL REPORT

Notes to the Financial Statements (cont.)

Fund	As of April 30, 2013*		As of October 31, 2012**
FlexShares® Ready Access Variable Income Fund	$	—	$	700

* The FlexShares^® Quality Dividend Index Fund, The FlexShares^® Quality Dividend Dynamic Index Fund and FlexShares^® Quality Dividend Defensive Index Fund commenced investment operations on December 14, 2012 and the FlexShares^® International Quality Dividend Index Fund, FlexShares^® International Quality Dividend Dynamic Index Fund and FlexShares^® International Quality Dividend Defensive Index Fund commenced operations on April 12, 2013.

** The FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund and FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund commenced investment operations on September 25, 2012 and the FlexShares^® Ready Access Variable Income Fund commenced investment operations on October 9, 2012.

10. Investment Transactions

For the six months ended April 30, 2013, FlexShares^® iBoxx 3-Year Target Duration TIPS Index and FlexShares^® iBoxx 5-Year Target Duration TIPS Index Funds invested solely in U.S. Government Securities. The cost of securities purchased and proceeds from sales of securities, excluding short-term securities, derivatives and in-kind transactions for the period ended April 30, 2013, were as follows:

Fund	Purchases		Sales
FlexShares® Morningstar Global Upstream Natural Resources Index Fund	$	184,483,506	$	118,066,478
FlexShares® iBoxx 3-Year Target Duration TIPS Index Fund		422,449,117		418,373,787
FlexShares® iBoxx 5-Year Target Duration TIPS Index Fund		164,065,643		164,016,698
FlexShares® Morningstar US Market Factor Tilt Index Fund		15,449,963		14,658,886
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund		77,842,626		1,055,205
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund		93,076,911		3,293,296
FlexShares® Quality Dividend Index Fund		6,115,878		5,855,168

Fund	Purchases		Sales
FlexShares® Quality Dividend Dynamic Index Fund	$	556,709	$	489,586
FlexShares® Quality Dividend Defensive Index Fund		1,241,154		1,127,815
FlexShares® International Quality Dividend Index Fund		2,502,947		—
FlexShares® International Quality Dividend Dynamic Index Fund		2,503,760		—
FlexShares® International Quality Dividend Defensive Index Fund		2,502,144		—
FlexShares® Ready Access Variable Income Fund		4,150,453		2,125,498	***

*** Includes $200,523 sales of U.S. Government Securities.

11. In-Kind Transactions

During the six-month period ended April 30, 2013, the Funds received securities in exchange for subscriptions of shares (subscriptions-in-kind). For the period ended April 30, 2013, the fair value of the securities received for subscriptions for each Fund was as follows:

Fund	Fair Value
FlexShares® Morningstar Global Upstream Natural Resources Index Fund	$	1,716,870,726
FlexShares® iBoxx 3-Year Target Duration TIPS Index Fund		858,144,643
FlexShares® iBoxx 5-Year Target Duration TIPS Index Fund		144,935,540
FlexShares® Morningstar US Market Factor Tilt Index Fund		105,770,872
FlexShares® Morningstar Developed Markets ex-US Factor Tilt Index Fund		8,121,902
FlexShares® Morningstar Emerging Markets Factor Tilt Index Fund		6,137,794
FlexShares® Quality Dividend Index Fund		65,598,925
FlexShares® Quality Dividend Dynamic Index Fund		5,363,112
FlexShares® Quality Dividend Defensive Index Fund		13,581,768
FlexShares® International Quality Dividend Index Fund		—
FlexShares® International Quality Dividend Dynamic Index Fund		—

FLEXSHARES SEMIANNUAL REPORT 183

Notes to the Financial Statements (cont.)

Fund	Fair Value
FlexShares® International Quality Dividend Defensive Index Fund	$	—
FlexShares® Ready Access Variable Income Fund		—

During the six months ended April 30, 2013, the FlexShares^® Morningstar US Market Factor Tilt Index Fund delivered securities in exchange for redemption of shares (redemptions-in-kind). For financial reporting purposes, the Fund recorded net realized gains and losses in connection with each transaction. For the six months ended April 30, 2013, the fair value of the securities transferred for redemptions for each Fund was as follows:

Fund	Fair Value		Net Realized Gains(Losses)
FlexShares® Morningstar US Market Factor Tilt Index Fund	$	3,263,804	$	1,050,406

12. Principal Risk

As with any investment, you could lose all or part of your investment in a Fund, and the Fund’s performance could trail that of other investments. In addition to the discussion of the risks of certain of the Funds’ investments included in Note 2, some of the principal risks of investment in the Funds are summarized below. A more complete description of principal risks is included in each Fund’s Prospectus.

The following principal risks apply to all of the Funds:

Derivatives Risk

Changes in the value of a derivative instrument may not correlate perfectly with the underlying asset, rate or index, and the Funds could lose more than the principal amount invested.

Market Trading Risk

Each Fund’s shares are listed on a securities exchange, which presents risks including the potential lack of an active market for Fund shares, losses from trading in secondary markets, and disruption in the creation/redemption process of the Funds. Any of these factors may lead to the Funds’ shares trading at a premium or discount to NAV.

The following principal risk applies only to the Index Funds:

Tracking Error Risk

Tracking error risk is the risk that an Index Fund’s performance may vary substantially from the performance of the Underlying Index it tracks as a result of imperfect correlation between a Fund’s securities and those of the Underlying Index. Imperfect correlation may result from share purchases and redemptions, expenses, changes in the Underlying Indexes, asset valuations, foreign currency valuations, market impact, corporate actions (such as mergers and spinoffs), legal restrictions (such as tax-related diversification requirements that apply to the Funds but not to the Underlying Index) and timing variances, among other factors.

The following principal risks apply to each Fund as disclosed:

Concentration Risk

Each of the Index Funds, except the FlexShares^® iBoxx 3-Year Target Duration TIPS Index Fund and FlexShares^® iBoxx 5-Year Target Duration TIPS Index Fund, are subject to Concentration Risk. To the extent that the investments of these Funds are concentrated in the securities of issuers in a particular region, country, market, industry, sector or asset class, the Funds may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that region, country, market, industry, sector or asset class.

Interest Rate/Maturity Risk

FlexShares^® iBoxx 3-Year Target Duration TIPS Index Fund, FlexShares^® iBoxx 5-Year Target Duration TIPS Index Fund and FlexShares^® Ready Access Variable Income Fund are subject to the risk that the value of the Funds’ fixed-income assets will decline because of rising interest rates. The magnitude of this decline will often be greater for longer-term fixed income securities than shorter-term fixed-income securities. Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates.

184 FLEXSHARES SEMIANNUAL REPORT

Notes to the Financial Statements (cont.)

Non-diversification Risk

The FlexShares^® Morningstar Global Upstream Natural Resources Index Fund, FlexShares^® iBoxx 3-Year Target Duration TIPS Index Fund, FlexShares^® iBoxx 5-Year Target Duration TIPS Index Fund, and FlexShares^® Ready Access Variable Income Fund (each a “Fund” and collectively the “Funds”) are non-diversified series of the Trust, pursuant to the 1940 Act. Performance of these Funds may depend on the performance of a small number of issuers because the Funds may invest a large percentage of their assets in securities issued by or representing a small number of issuers.

Small Cap Stock Risk

FlexShares^® Morningstar Global Upstream Natural Resources Index Fund, FlexShares^® Morningstar US Market Factor Tilt Index Fund, FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund and FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund may invest in stocks of smaller companies which may be subject to more abrupt or erratic market movements than stocks of larger, more established companies. Small companies may have limited product lines or financial resources, or may be dependent upon a small or inexperienced management group, and their securities may trade less frequently and in lower volume than the securities of larger companies, which could lead to higher transaction costs. Generally the smaller the company size, the greater the risk.

Value Investing Risk

FlexShares^® Morningstar US Market Factor Tilt Index Fund, FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund and FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund’s investment in companies whose securities are believed to be undervalued, relative to their underlying profitability, may not appreciate in value as anticipated.

The following principal risk applies only to the FlexShares^® Morningstar Global Upstream Natural Resources Index Fund:

Global Natural Resource Industry Risk

The Fund is subject to the risks associated with investment in the global natural resources sector in addition to the general

risk of the stock market. The natural resources sector can significantly be affected by events relating to U.S. and foreign political and economic developments and environmental and other government regulations, as well as other factors including, but not limited to: commodity price volatility, technological developments and natural or man-made disasters. Declines in the demand for, or prices of, natural resources generally would be expected to contribute to declines in the value of the Fund’s equity securities. Such declines may occur quickly and without warning and may negatively impact the value of the Fund and your investment.

The following principal risks apply only to the FlexShares^® Quality Dividend Index Fund, FlexShares^® Quality Dividend Dynamic Index Fund, FlexShares^® Quality Dividend Defensive Index Fund, FlexShares^® International Quality Dividend Index Fund, FlexShares^® International Quality Dividend Dynamic Index Fund and FlexShares^® International Quality Dividend Defensive Index Fund:

Dividend Risk

The Fund is subject to the risk that an issuer of stock held by the Fund may choose not to declare a dividend or the dividend rate might not remain at current levels. Dividend paying stocks might not experience the same level of earnings growth or capital appreciation as non-dividend paying stocks. The Fund’s performance during a broad market advance could suffer because dividend paying stocks may not experience the same capital appreciation as non-dividend paying stocks.

Volatility Risk

The Fund is subject to the risk that the actual level of volatility experienced by the Fund may be greater or lower than the targeted overall volatility of the Underlying Index. Although the Underlying Index is designed to have a targeted overall volatility, there is no guarantee that it will have the targeted overall volatility. The Fund will continue to seek to track the Underlying Index even if the Underlying Index does not have the targeted overall volatility. There is also the risk that the Fund may experience volatility greater or lower than that of the Underlying Index as a result of tracking error. A portfolio of securities with greater volatility is generally considered to have a higher risk profile than a portfolio with lower volatility.

FLEXSHARES SEMIANNUAL REPORT 185

Notes to the Financial Statements (cont.)

The following principal risks apply to the FlexShares^® Ready Access Variable Income Fund:

Credit (or Default) Risk

The Fund is subject to the risk that the inability or unwillingness of an issuer or guarantor of a fixed-income security, or a counterparty to a repurchase or other transaction, to meet its payment or other financial obligations will adversely affect the value of the Fund’s investments and its returns. Changes in the credit rating of a debt security held by the Fund could have a similar effect.

Debt Extension Risk

The Fund is subject to the risk that an issuer will exercise its right to pay principal on an obligation held by the Fund (such as a mortgage-backed security) later than expected. This may happen during a period of rising interest rates. Under these circumstances, the value of the obligation will decrease and the Fund will suffer from the inability to invest in higher yielding securities.

Financial Sector Risk

The Fund is subject to the risk that the Fund will be impacted by events affecting the U.S. and non-U.S. financial sectors if it invests a relatively large percentage of its assets in those sectors, adversely affecting the Fund’s performance. The U.S. and non-U.S. financial sectors can be significantly affected by changes in interest rates, government regulation, the rate of corporate and consumer debt defaulted, price competition, the availability and cost of capital funds and fallout from the housing and sub-prime mortgage crisis. In 2008 and 2009, the U.S. financial sector was significantly impacted by bankruptcies and consolidations of major financial firms. Events affecting the U.S. and non-U.S. financial sectors have had, and may continue to have, a significant negative impact on the valuations and stock prices of companies in this sector and have increased the volatility of investments in those sectors.

Mortgage-Related and Other Asset-Backed Risks

The Fund is subject to the risks of investing in mortgage-related and other asset-backed securities, including Interest

Rate/Maturity Risk, Debt Extension Risk and Prepayment (or Call) Risk.

Prepayment (or Call) Risk

The Fund is subject to the risk that prepayment of the underlying mortgages or other collateral of some fixed-income securities may result in a decreased rate of return and a decline in value of those securities.

U.S. Government Securities Risk

The Fund is subject to the risk that the U.S. government will not provide financial support to its agencies, instrumentalities or sponsored enterprises if it is not obligated to do so by law. Many U.S. government securities that may be purchased by the Fund are not backed by the full faith and credit of the United States. It is possible that the issuers of such securities will not have the funds to meet their payment obligations in the future.

13. Guarantees and Indemnifications

In the normal course of business each Fund enters into contracts with third-party service providers that contain a variety of representations and warranties and that provide general indemnifications. Additionally, under the Funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. The Funds’ maximum exposure under these arrangements is unknown, as it involves possible future claims that may or may not be made against the Funds.

14. New Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11, Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”), to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting (“netting”) on the statement of assets and liabilities. This information will enable users of a Fund’s financial statements to evaluate the effect or potential effect of netting arrangements on a Fund’s financial position.

In January 2013, the FASB issued ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities,

186 FLEXSHARES SEMIANNUAL REPORT

Notes to the Financial Statements (cont.)

which replaced ASU 2011-11. ASU 2013-01 limits the scope of the new statement of assets and liabilities offsetting disclosures to derivatives, repurchase agreements and securities lending transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement. Both ASU 2011-11 and ASU 2013-01 are effective prospectively for interim or annual periods beginning on or after January 1, 2013. At this time, management is evaluating the implications of both of these requirements and the impacts they will have to the financial statement amounts and footnote disclosures, if any.

15. Subsequent Events

Management has evaluated subsequent events for the Funds through the date the financial statements were issued, and has concluded that there are no additional recognized or non-recognized subsequent events relevant for financial statement disclosure.

FLEXSHARES SEMIANNUAL REPORT 187

Fund Expenses (Unaudited)

As a shareholder, you incur two types of costs: (1) transaction costs for purchasing and selling shares and (2) ongoing costs, including advisory and trustee fees. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds.

Actual Expenses

The actual expense examples are based on an investment of $1,000 invested at the beginning of a six month period and held through the period ended, April 30, 2013.

The first line in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The hypothetical expense examples are based on an investment of $1,000 invested at the beginning of a six month period and held through the period ended, April 30, 2013.

The second line under each Fund in the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as brokerage commissions on purchases or sales of Fund shares. Therefore, the second line for each Fund in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account Value		Ending Account Value 04/30/13		Expenses Paid During the Period*		Annualized Expense Ratio During Period
Flexshares® Morningstar Global Upstream Natural Resources Index
Actual	$	1,000.00	$	986.40	$	2.36		0.48	%
Hypothetical	$	1,000.00	$	1,022.41	$	2.41		0.48	%
Flexshares® iBoxx 3-Year Target Duration TIPS Index
Actual	$	1,000.00	$	1,001.30	$	0.99		0.20	%
Hypothetical	$	1,000.00	$	1,023.80	$	1.00		0.20	%
Flexshares® iBoxx 5-Year Target Duration TIPS Index
Actual	$	1,000.00	$	1,003.00	$	0.99		0.20	%
Hypothetical	$	1,000.00	$	1,023.80	$	1.00		0.20	%
Flexshares® Morningstar US Market Factor Tilt Index
Actual	$	1,000.00	$	1,159.80	$	1.45		0.27	%
Hypothetical	$	1,000.00	$	1,023.46	$	1.35		0.27	%

188 FLEXSHARES SEMIANNUAL REPORT

Fund Expenses (cont.)

	Beginning Account Value		Ending Account Value 04/30/13		Expenses Paid During the Period*		Annualized Expense Ratio During Period
Flexshares® Morningstar Developed Markets ex-US Factor Tilt Index
Actual	$	1,000.00	$	1,154.40	$	2.24		0.42	%
Hypothetical	$	1,000.00	$	1,022.71	$	2.11		0.42	%
Flexshares® Morningstar Emerging Markets Factor Tilt Index
Actual	$	1,000.00	$	1,072.20	$	3.34		0.65	%
Hypothetical	$	1,000.00	$	1,021.57	$	3.26		0.65	%
Flexshares® Quality Dividend Index Fund(a)
Actual	$	1,000.00	$	1,173.40	$	1.49		0.37	%
Hypothetical	$	1,000.00	$	1,022.96	$	1.86		0.37	%
Flexshares® Quality Dividend Dynamic Index Fund(a)
Actual	$	1,000.00	$	1,173.80	$	1.49		0.37	%
Hypothetical	$	1,000.00	$	1,022.96	$	1.86		0.37	%
Flexshares® Quality Dividend Defensive Index Fund(a)
Actual	$	1,000.00	$	1,167.10	$	1.48		0.37	%
Hypothetical	$	1,000.00	$	1,022.96	$	1.86		0.37	%
Flexshares® International Quality Dividend Index Fund(b)
Actual	$	1,000.00	$	1,027.60	$	0.21		0.47	%
Hypothetical	$	1,000.00	$	1,022.46	$	2.36		0.47	%
Flexshares® International Quality Dividend Dynamic Index Fund(b)
Actual	$	1,000.00	$	1,022.80	$	0.21		0.47	%
Hypothetical	$	1,000.00	$	1,022.46	$	2.36		0.47	%
Flexshares® International Quality Dividend Defensive Index(b)
Actual	$	1,000.00	$	1,026.80	$	0.21		0.47	%
Hypothetical	$	1,000.00	$	1,022.46	$	2.36		0.47	%
Flexshares® Ready Access Variable Income
Actual	$	1,000.00	$	1,005.30	$	1.24		0.25	%
Hypothetical	$	1,000.00	$	1,023.55	$	1.25		0.25	%

Please note that while some of the Funds commenced operations in December 2012 and April 2013, the “Hypothetical Expenses Paid during the Period” reflect projected activity for the full six-month period as opposed to the shorter inception period.

* Expenses are equal to the average account value over the period multiplied by the Fund’s annualized expense ratio, multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year (to reflect the one half year period).

(a) The Fund commenced operations on December 14, 2012. Actual Expenses Paid During the Period are equal to the Fund’s annualized net expense ratio, multiplied by the average account value over the period, multiplied by 135 divided by 365 (to reflect the actual days in the period). Hypothetical Expenses Paid During the Period are equal to the Fund’s annualized net expense ratio, multiplied by the average account value over the period, multiplied by 181 divided by 365 (to reflect the one-half year period).

(b) The Fund commenced operations on April 12, 2013. Actual Expenses Paid During the Period are equal to the Fund’s annualized net expense ratio, multiplied by the average account value over the period, multiplied by 16 divided by 365 (to reflect the actual days in the period). Hypothetical Expenses Paid During the Period are equal to the Fund’s annualized net expense ratio, multiplied by the average account value over the period, multiplied by 181 divided by 365 (to reflect the one-half year period).

FLEXSHARES SEMIANNUAL REPORT 189

Approval of Advisory Agreement

The Board of Trustees (the “Board”) of the FlexShares^® Trust (the “Trust”) oversees the management of the Trust and each separate series of the Trust covered in this report, and, as required by law, determines whether to approve the Trust’s investment advisory and ancillary services agreement (the “Advisory Agreement”) with Northern Trust Investments, Inc. (“NTI”), an indirect subsidiary of the Northern Trust Corporation. The following discussion relates to the Advisory Agreement for certain FlexShares^® Funds launched during the period covered by this report. Please see: (a) the annual report for the period ended October 31, 2011 for a discussion of the approval of the Advisory Agreement for FlexShares^® Morningstar Global Upstream Natural Resources Index Fund, FlexShares^® Morningstar U.S. Market Factor Tilt Index Fund, FlexShares^® iBoxx 3-Year Target Duration TIPS Index Fund and FlexShares^® iBoxx 5-Year Target Duration TIPS Index Fund; and (b) the annual report for the period ended October 31, 2012 for a discussion of the approval of the Advisory Agreement for the FlexShares^® Morningstar Developed Markets ex-US Factor Tilt Index Fund, FlexShares^® Morningstar Emerging Markets Factor Tilt Index Fund and FlexShares^® Ready Access Variable Income Fund.

The Board, including all of the Trustees who are not parties to the Advisory Agreement or interested persons of any such party (the “Independent Trustees”), met on September 20, 2012 (the “Meeting”) to consider whether to approve the Advisory Agreement for the FlexShares^® Quality Dividend Index Fund, FlexShares^® Quality Dividend Dynamic Index Fund, FlexShares^® Quality Dividend Defensive Index Fund, FlexShares^® International Quality Dividend Index Fund, FlexShares^® International Quality Dividend Dynamic Index Fund and FlexShares^® International Quality Dividend Defensive Index Fund (each a “Fund” and together, the “Funds”).

In advance of, and in preparation for, the Trustees’ consideration of the Advisory Agreement at the Meeting, the Trustees received written materials relating to the Advisory Agreement and had the opportunity to ask questions and request further information in connection with their consideration. At the Meeting, the Trustees considered NTI’s verbal presentations and discussed all of the information that had been provided. Among other things, the Board considered comparisons with other funds in

relevant peer universes and peer groups that had been objectively determined solely by Lipper, Inc. (“Lipper”), an independent provider of fund data.

The Independent Trustees met with their independent legal counsel separately from the “interested” Trustee of the Trust and officers and employees of the Trust and NTI to consider approval of the Advisory Agreement. After evaluating all the materials, the Trustees, including the Independent Trustees, concluded that the Advisory Agreement for the Funds was in the best interest of each Fund and its shareholders and approved the Advisory Agreement.

In approving the Advisory Agreement, the Board, including the Independent Trustees advised by independent legal counsel, considered the factors they deemed relevant, including, but not limited to: (1) the nature, extent and quality of the services that NTI is expected to provide to the Funds; (2) the anticipated fees and projected expenses for the Funds; (3) the projected profits to be realized by NTI and its affiliates from the relationship with the Funds; (4) the extent to which economies of scale would be realized if the Funds grew and whether the fee levels in the Advisory Agreement reflected these economies of scale; and (5) other benefits that NTI and its affiliates may realize as a result of their relationship with the Funds. In their deliberations, the Trustees did not identify any single factor which alone was responsible for the Board’s decision to approve the Advisory Agreement.

The material factors and conclusions that formed the basis for the Trustees reaching their determinations to approve the Advisory Agreement are separately discussed below.

The Nature, Quality and Extent of Services

The Board examined the nature, quality and extent of the services proposed to be provided by NTI to each Fund. The Board evaluated information regarding NTI’s organizational structure and the experience and qualifications of NTI’s key personnel. The Board also considered NTI’s responsibilities under the Advisory Agreement to perform securities trading services and ancillary services including, among other things: (i) filing reports with the SEC, (ii) periodically updating the Trust’s registration statement, (iii) establishing and maintaining the Funds’ website to comply with regulatory requirements, (iv) monitoring anticipated purchases and redemptions of

190 FLEXSHARES SEMIANNUAL REPORT

Approval of Advisory Agreement (cont.)

creation units by shareholders and new investors, (v) providing information and assistance as required by the Trust’s administrator and fund accountant in connection with the Trust’s shares, and (vi) providing assistance in connection with the operations of the Trust generally.

The Board also considered the quality of the services to be provided and the quality of NTI’s resources that would be made available to the Trust. The Board noted NTI’s and its affiliates’ financial position, stability, and commitment to growing the exchange-traded funds business. The Board also considered the operation and strength of NTI’s compliance program.

The Board concluded that it was satisfied with the nature, quality and extent of the investment management services proposed to be provided by NTI, and that there was a reasonable basis on which to conclude that the Funds would benefit from the services proposed to be provided by NTI under the Advisory Agreement.

Performance

The Board considered that, because the Funds had not started operations, meaningful data relating to their performance was not available and could not be a factor in the initial approval of the Advisory Agreement for the Funds.

Fees and Expenses

The Board considered the proposed unitary fee structure and the projected expenses for each Fund. The Board noted that, under the Advisory Agreement, NTI would be responsible for most expenses of the Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services. The Board considered that NTI would not be responsible under the Advisory Agreement for certain expenses, including the fees and expenses of the Trust’s Independent Trustees and their independent legal counsel, litigation expenses and other extraordinary expenses. The Board also considered the agreement between the Trust and NTI, whereby NTI agreed to reimburse the fees and expenses of the Independent Trustees and their independent legal counsel with respect to a Fund until at least one year from the effective date of the Funds’ registration statement. The Board reviewed comparative fee data for each Fund, including fees and expenses paid by comparable exchange-traded funds selected by Lipper, an independent data service.

In reaching its determinations, the Board considered that the contractual management fee and total expenses, after expense reimbursements, for each Fund were lower than the median contractual management fee and median total expenses of the comparable exchange-traded funds that Lipper had selected. The Board noted that NTI did not manage private accounts with substantially similar investment strategies as the Funds.

Projected Profits of NTI

The Board examined NTI’s projected profits in serving as each Fund’s investment adviser. The Board noted information provided by NTI with respect to the length of time it would take its Funds-related advisory business to become profitable. The Board also considered NTI’s projections of assets in the Funds over various time periods.

Economies of Scale

The Board considered whether NTI may realize economies of scale in managing and supporting the Funds. The Board reviewed each Fund’s fee arrangements, and considered that, in light of the unitary fee structure and proposed expense reimbursement agreement, the fact that NTI will not initially make any profit from its services to the Funds and the significant investment that NTI is making in the Trust, breakpoints were not necessary at the present time.

Other Benefits to NTI

In addition to considering the profits that may be realized by NTI, the Board considered information regarding other direct and indirect benefits NTI may receive as a result of its relationship with the Funds, including whether any compensation would be paid to NTI’s affiliates. The Board also considered that some of the Funds’ expected shareholders will have other client relationships with NTI’s affiliates. The Board also reviewed the extent to which NTI and its other clients, as well as the Funds, will benefit from receipt of the research products and services generated by the Funds.

For the foregoing reasons, the Board, including a majority of the Independent Trustees, determined that the Advisory Agreement was fair and reasonable in light of the services to be provided, fees to be charged and such other matters as the Trustees considered relevant in the exercise of their reasonable business judgment.

FLEXSHARES SEMIANNUAL REPORT 191

For More Information

Portfolio Holdings

FlexShares^® Trust files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s Web site at sec.gov. You may also review and obtain copies at the SEC’s Public Reference Room in Washington, D.C. Information about the Public Reference Room may be obtained by calling 800-SEC-0330.

Proxy Voting

FlexShares^® Trust Proxy Voting Policies and Procedures are available upon request and without charge by calling 1-855-FLEXETF (1-855-353-9383) or by visiting the Funds’ Web site www.flexshares.com or the SEC’s Web site at sec.gov. Each Fund’s portfolio securities voting record for the 12-month period ended June 30 is available upon request and without charge by calling 1-855-FLEXETF (1-855-353-9383) or by visiting the SEC’s Web site at sec.gov.

192 FLEXSHARES SEMIANNUAL REPORT

FlexShares^® Trust

50 S. LaSalle Street

Chicago, IL 60603

800.595.9111

www.flexshares.com

FlexShares^® is a registered trademark of NTI. Morningstar^® is a registered trademark of Morningstar, Inc. (“Morningstar”). Morningstar^® Global Upstream Natural Resources Index^SM and Morningstar^® US Market Factor Tilt Index^SM are service marks of Morningstar, Inc. The iBoxx 3-Year Target Duration TIPS Index and iBoxx 5-Year Target Duration TIPS Index are each the property of Markit North America, Inc. (“Markit”) and have been licensed for use in connection the FlexShares iBoxx 3-Year Target Duration TIPS Index Fund and the FlexShares iBoxx 5-Year Target Duration TIPS Index Fund, respectively. Northern Trust Quality Dividend Index ^SM, Northern Trust Quality Dividend Dynamic Index ^SM, Northern Trust Quality Dividend Defensive Index ^SM, Northern Trust International Quality Dividend Index ^SM, Northern Trust Quality Dividend Dynamic Index ^SM, Northern Trust International Quality Dividend Defensive Index ^SM are service marks of NTI and have been licensed for use by FlexShares Trust.

FS00041-0613

Item 2. Code Of Ethics.

Not applicable for this reporting period.

Item 3. Audit Committee Financial Expert.

Not applicable for this reporting period.

Item 4. Principal Accountant Fees and Services.

Not applicable for this reporting period.

Item 5. Audit Committee of Listed Registrants.

Not applicable for this reporting period.

Item 6. Investments

(a) Schedule I – Investments in Securities of Unaffiliated Issuers

The complete schedule of investments is included in the report to shareholders in Item 1 of this Form N-CSR.

(b) Securities Divested of in accordance with Section 13(c) of the Investment Company Act of 1940.

Not applicable.

Item 7. Disclosure Of Proxy Voting Policies And Procedures For Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchase Of Equity Securities By Closed-End Management Investment Company And Affiliated Purchasers.

Not applicable.

Item 10. Submission Of Matters To A Vote Of Security Holders.

There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.

Item 11. Controls And Procedures.

(a) The Registrant’s principal executive officer and principal financial officer, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 as of a date within 90 days of the filing date of this report.

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a - 3(d) under the 1940 Act) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1)	Not applicable for this reporting period.
(a)(2)	Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(b)	Certifications required by Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 is attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FlexShares Trust

By:
	/s/ Shundrawn A. Thomas
	Shundrawn A. Thomas
	President
	July 5, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:
	/s/ Shundrawn A. Thomas
	Shundrawn A. Thomas
	President
	July 5, 2013

By:
	/s/ Randal Rein
	Randal Rein
	Treasurer and Principal Financial Officer
	July 5, 2013

EX-99.CERT

CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE INVESTMENT COMPANY ACT OF 1940

AND SECTION 302 OF THE SARBANES OXLEY ACT OF 2002:

I, Shundrawn A. Thomas, certify that:

1. I have reviewed this report on Form N-CSR of FlexShares Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:       July 5, 2013	By:	/s/ Shundrawn A. Thomas
		Shundrawn A. Thomas
		President

CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE INVESTMENT COMPANY ACT OF 1940

AND SECTION 302 OF THE SARBANES OXLEY ACT OF 2002:

I, Randal Rein, certify that:

1. I have reviewed this report on Form N-CSR of FlexShares Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:       July 5, 2013	By:	/s/ Randal Rein
		Randal Rein
		Treasurer and Principal Financial Officer

EX-99.906CERT

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of

section 1350, chapter 63 of title 18, United States Code)

In connection with the attached Report of FlexShares Trust (the “Trust”) on Form N-CSR to be filed with the Securities and Exchange Commission (the “Report”), each of the undersigned officers of the Trust does hereby certify that, to the best of such officer’s knowledge:

1. The Report fully complies with the requirements of 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust as of, and for, the periods presented in the Report.

Dated: July 5, 2013

By:	/s/ Shundrawn A. Thomas
	Shundrawn A. Thomas
	President
By:	/s/ Randal Rein
	Randal Rein
	Treasurer and Principal Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Trust and will be retained by the Trust and furnished to the Securities and Exchange Commission or its staff upon request.