Firm celebrates 10-year anniversary with
heightened focus on sustainability
Northern Trust Asset Management’s FlexShares® Exchange Traded
Funds announced today the launch of a new suite of core
Environmental, Social and Governance (ESG)* ETFs focused on
climate, including:
- FlexShares ESG & Climate US Large Cap Core Index Fund
(NYSE: FEUS)
- FlexShares ESG & Climate Developed Markets ex-US Core Index
Fund (NYSE: FEDM)
- FlexShares ESG & Climate Investment Grade Corporate Core
Index Fund (NYSE: FEIG)
- FlexShares ESG & Climate High Yield Corporate Core Index
Fund (NYSE: FEHY)
The four new climate ETFs add to FlexShares’ existing ESG ETF
offerings, FlexShares STOXX US ESG Select Index Fund (ESG) and
FlexShares STOXX Global ESG Select Index Fund (ESGG). The new fund
suite seeks to help investors improve their portfolio’s overall ESG
score and reduce carbon risk, while maintaining core equity and
fixed-income exposure. The funds utilize the Northern Trust ESG
Vector Score** as well as a carbon risk rating in an effort to
hedge ESG-related risks and capitalize on sustainable
opportunities.
“The combination of our ESG Vector Score and carbon risk rating
creates a complementary strategy to identify sustainability leaders
and laggards in each sector in a consistent way,” said Christopher
Huemmer, Senior Investment Strategist for FlexShares ETFs. “In
response to heightened client demand for climate investing, we
created this new suite to offer core investing strategies that we
believe are better positioned to benefit from the ongoing
transition to a low-carbon economy.”
The ESG Vector Score methodology developed by Northern Trust
Asset Management (NTAM) seeks to identify ESG-related business
issues most likely to impact a company’s financial performance and
a portfolio’s investment return. The scoring methodology relies on
a framework established by the Sustainable Accounting Standards
Board (SASB) that seeks to determine sustainability industry
leaders and mitigate sustainability risks before they impact the
company’s financial statements and the portfolio’s performance.
With climate change a top concern among many investors and
regulators globally, each strategy in the core ESG ETF suite also
includes a special focus on carbon risk. In partnership with
Institutional Shareholder Services (ISS), each company is examined
using a carbon risk rating methodology to determine its current
carbon emissions, its efforts to reduce its carbon footprint, and
its potential exposure to carbon risk relative to other companies
in its industry. Using these ratings, each strategy in the suite
targets a reduction in aggregate 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
10-year anniversary of the introduction of its first ETFs in 2011.
Over the past decade, FlexShares has become a $19 billion global
brand committed to meeting complex investor challenges by providing
investment solutions that go beyond conventional “off the shelf”
products. Following the brand’s expansion into the European market
in January of this year, FlexShares’ product lineup now consists of
33 unique ETFs across the U.S. and Europe. At the core of its
purposeful investment solutions are four real-world investment
objectives: capital appreciation, risk management, income
generation and liquidity management.
Darek Wojnar, Head of Funds and Managed Accounts for NTAM,
added: “For the past decade, we’ve defined our place in the ETF
industry through our primary focus on meeting specific investor
objectives with quantitative solutions. Looking ahead to the next
10 years, we recognize the growing importance of sustainability to
those objectives and the need for ESG funds that can serve as a
core holding across asset classes. We believe this is a key area
for growth as we position the business for continued success.”
About FlexShares
FlexShares Exchange Traded Funds are designed to pursue specific
investment goals across both 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
that helps investors navigate changing market environments, so they
can confidently realize their long-term objectives. Entrusted with
US$1.2 trillion of investor assets as of June 30, 2021, we
understand that investing ultimately serves a greater purpose and
believe investors should be compensated for the risks they take —
in all market environments and any investment strategy. That’s why
we combine robust capital markets research, expert portfolio
construction and comprehensive risk management to craft innovative
and efficient solutions that deliver targeted investment outcomes.
As engaged 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 composed of Northern Trust
Investments, Inc., Northern Trust Global Investments Limited,
Northern Trust Fund Managers (Ireland) Limited, Northern Trust
Global Investments Japan, K.K., NT Global Advisors, Inc., 50 South
Capital Advisors, LLC, Belvedere Advisors LLC and investment
personnel 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 servicing, asset management and banking
to corporations, institutions, affluent families and individuals.
Founded in Chicago in 1889, Northern Trust has a global presence
with offices in 22 U.S. states and Washington, D.C., and across 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 more than 130 years, Northern
Trust has earned distinction as an industry leader for exceptional
service, financial expertise, integrity and innovation. Visit
northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle
Street, Chicago, Illinois 60603 U.S.A., incorporated with limited
liability in the U.S. Please read our global and regulatory
information.
* ESG investing is defined as utilizing environmental, social,
and governance (ESG) criteria as a set of standards for a company’s
operations that socially conscious investors use to screen
potential investments.
** The Northern Trust ESG Vector Score is designed to rank
companies based on their management of and exposure to material ESG
metrics. The Score was designed to align with the Sustainability
Accounting Standards Board (SASB) Standards. The SASB Standards
were designed for investors and focus on only financially material
issues based on the industry in which the company operates. Based
on that structure, the ESG Vector Score is a combination of
individual ESG indicators, adjusted for industry membership. Click
here to learn more.
Before investing, carefully consider the FlexShares
investment objectives, risks, charges and expenses. This and other
information is in the prospectus, a copy of which may be obtained
by visiting www.flexshares.com. Read the prospectus carefully
before you invest. Foreside Fund Services, LLC,
distributor.
An investment in FlexShares is subject to numerous risks,
including possible loss of principal. Fund returns may not match
the return of the respective indexes. A full description of risks
is in the prospectus.
Important Risks
The funds are passively managed meaning NTI does not attempt to
take defensive positions in any market conditions, including
declining markets. The funds employ a representative sampling
strategy, and therefore, may incur tracking error. Because the
funds include and exclude securities based on ESG factors, the
Funds may underperform the broader equity market or other funds
that do or do not use ESG investment criteria. Although the
underlying indexes are designed to measure a portfolio of companies
with certain ESG characteristics, there is no assurance that the
underlying indexes or funds will be comprised of such securities.
The funds are non-diversified meaning performance may depend on a
small number of issuers. The funds may experience increased
volatility if investments are concentrated in a particular region,
country, market, industry, sector or asset class. The funds may use
derivatives which involve increased risks different from more
traditional securities.
FEDM invests in foreign securities which may result in rapid and
extreme changes in value due to less liquid markets, tariffs and
trade disputes and adverse economic, political, diplomatic,
environmental, financial, and regulatory factors. Investments in
Japan and Europe are subject to additional risks due to political,
social, and economic uncertainty. Mid cap stocks may be subject to
more abrupt or erratic market movements than larger companies.
FEHY and FEIG invest in debt securities which involve credit
risk and typically decrease in value when interest rates rise.
Active and frequent trading can subject the funds to increased
transaction costs. FEHY invests in high yield securities which are
subject to greater credit risk, price volatility and risk of loss
than investment grade bonds. Corporate debt securities are subject
to the risk that the issuer is unable to make principal and
interest payments. Investments in bonds of non-US issuers may
involve certain risks that are greater than those associated with
US issuers.
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version on businesswire.com: https://www.businesswire.com/news/home/20210921005353/en/
Tom Pinto 212-339-7288 tp117@ntrs.com
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