On On Tuesday, Northern Trust Asset Management’s FlexSharesÂ® exchange-traded funds announced the launch of a new lineup of core climate-focused ESG ETFs. These funds include the FlexShares ESG & Climate US Large Cap Core Index Fund (NYSE: FEUS), the FlexShares ESG & Climate Developed Markets ex-US Core Index Fund (NYSE: FEDM), the FlexShares ESG & Climate Investment Grade Corporate Core Index Fund (NYSE: FEIG), and the FlexShares ESG & Climate High Yield Corporate Core Index Fund (NYSE: FEHY).
The four new climate ETFs are in addition to FlexShares’ existing ESG offerings, FlexShares STOXX US ESG Select Index Fund (ESG) and FlexShares STOXX Global ESG Select Index Fund (ESGG). The new range of funds aims to help investors improve the overall ESG scores of their portfolios and reduce carbon risk while maintaining core exposure to equities and fixed income securities. The funds use the Northern Trust ESG Vector Score and a carbon risk rating to hedge ESG risks and capitalize on sustainable opportunities.
âThe combination of our ESG Vector score and our carbon risk rating creates a complementary strategy to identify sustainability leaders and laggards in each sector in a consistent manner,â said Christopher Huemmer, senior investment strategist for FlexShares ETFs. âIn response to increased customer demand for climate investing, we have created this new suite to deliver core investment strategies that we believe are best positioned to benefit from the ongoing transition to a low-cost economy. low carbon emission. “
The ESG Vector Score methodology developed by Northern Trust Asset Management (NTAM) seeks to identify the business issues related to ESGs most likely to impact a company’s financial performance and a portfolio’s return on investment. The rating methodology is based on a framework established by the Sustainable Accounting Standards Board (SASB) which seeks to identify industry leaders in sustainability and mitigate sustainability risks before impacting the financial statements of the business and portfolio performance.
As climate change is a major concern of many investors and regulators around the world, each basic strategy in the ESG ETF suite also includes a particular focus on carbon risk. In partnership with Institutional Shareholder Services (ISS), each company is screened using a carbon risk assessment methodology to determine its current carbon emissions, efforts to reduce its carbon footprint, and potential exposure to carbon risk. compared to other companies in its sector. Using these ratings, each strategy in the suite targets a reduction in overall carbon emissions and carbon reserves relative to its parent index, while also targeting an overall improvement in its carbon risk rating.
The launch of FlexShares’ new ESG suite coincides with the 10th anniversary of the introduction of its first ETFs in 2011. Over the past decade, FlexShares has grown into a $ 19 billion global brand committed to tackling the complex challenges of investors by providing investment solutions that go beyond conventional solutions. âoff the shelfâ products. Following the brand’s expansion into the European market in January this year, FlexShares’ product line consists of 33 unique ETFs in the United States and Europe. At the heart of its targeted investment solutions are four real investment objectives: capital appreciation, risk management, income generation and liquidity management.
Darek Wojnar, Head of Funds and Managed Accounts for NTAM, added: âOver the past decade, we have defined our place in the ETF industry by focusing primarily on achieving specific investor goals with quantitative solutions. . Looking ahead to the next ten years, we recognize the growing importance of sustainability for these goals and the need for ESG funds that can serve as a core portfolio across all asset classes. We believe this is a key area for growth as we position the company for continued success. “
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FlexShares exchange traded funds are designed to pursue specific investment objectives through passive and active strategies. FlexShares offers differentiated ETF strategies that can improve and simplify the investment decision process for the long-term investor. Please visit our website or connect with us on our LinkedIn page.
About Northern Trust Asset Management
Northern Trust Asset Management is a global investment manager who helps investors navigate changing market environments, so they can confidently achieve their long-term goals. Trusted with US $ 1.2 trillion in investor assets as of June 30, 2021, we understand that investing ultimately serves a more important purpose and believe that investors should be compensated for the risks they take – in all market environments and any investment strategy. That’s why we combine solid capital market research, expert portfolio construction and comprehensive risk management to design innovative and effective solutions that deliver targeted investment results. As committed contributors to our communities, we consider it a great privilege to serve our investors and our communities with integrity, respect and transparency.
Northern Trust Asset Management is made up of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Fund Managers (Ireland) Limited, Northern Trust Global Investments Japan, KK, NT Global Advisors, Inc., 50 South Capital Advisors, LLC , Belvedere Advisors LLC and the investment staff of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset services, asset management and banking services to businesses, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 22 US states and Washington, DC, and 23 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of June 30, 2021, Northern Trust had assets under custody / administration of US $ 15.7 trillion and assets under management of US $ 1.5 trillion. For over 130 years, Northern Trust has distinguished itself as an industry leader for its exceptional service, financial expertise, integrity and innovation. Visit Northerntrust.com or follow us on Twitter @NorthernTrust.
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