New Custom ESG Index Fund Using Six Common Value Based Exclusions Launched by Northern Trust

LONDON--()--The asset management arm of Northern Trust (Nasdaq:NTRS) has launched the Northern Trust World Custom ESG Equity Index Fund. The Fund which has been customised according to six common value based exclusions enables institutional investors across the globe to meet commonly held environmental, social, and governance (ESG) criteria and support their investment objectives.

“Throughout Europe, we see an increasing trend among institutional investors looking to include ESG criteria in their investment portfolios,” said John Krieg, managing director of Northern Trust asset management in Europe, Middle East and Africa. “Through the launch of this fund, we are able to respond to the most important ESG themes identified by our clients, and include the benefits associated with a pooled fund structure.”

Northern Trust’s customised index fund has been created based on six key common areas:

environment, human rights, anti-corruption, labour and supply chain, tobacco suppliers/producers, and controversial/indiscriminate weapons. Northern Trust’s ESG screening methodology then excludes companies in these areas which:

  • do not comply with United Nations (UN) Global Compact Principles
  • derive more than five per cent of revenues from the tobacco industry
  • have any involvement in the production of cluster bombs, landmines, nuclear weapons, deplete uranium weapons, biological/chemical weapons, or their related components

“Northern Trust engaged with a number of our institutional clients across Europe to identify any commonalities in the way that investors implement ESG screening criteria in developed and emerging markets,” said Mamadou-Abou Sarr, senior product specialist for global index management at Northern Trust. “This consultative approach offered us excellent insight into the various questions that investors had on human rights, labour, environment and anti-corruption.”

The Fund is structured as a Common Contractual Fund which offers tax-transparency through exercising withholding tax treaties that exist between countries in which investors are based, and those in which they invest. Over the long-term, investors using tax-transparent structures may benefit from enhanced investment returns owing to reduced tax drag.

Northern Trust manages approximately US$17 billion in socially screened, active and passive managed portfolios for clients across the globe and has over 20 years of experience managing socially responsible portfolios and socially-screened assets. Earlier this year Northern Trust announced a partnership with MSCI to enhance its range of solutions for institutional investor clients across the globe through an agreement with MSCI ESG Indices and MSCI ESG Research.

CCFs are tax-transparent fund structures that provide investors with the opportunity to pool assets to achieve cost and administrative efficiencies. Tax-transparency is achieved through exercising withholding tax treaties that exist between countries in which investors are based, and those in which they invest. Over the long-term, a benefit to investors using tax-transparent structures may be enhanced investment returns owing to reduced tax drag.

As at 30 September 2012, Northern Trust managed over US$749.7 billion of assets for its clients worldwide. Of this US$344.4 billion are index assets with US$354 billion active, and the remainder managed in alternatives or multi-manager solutions. Northern Trust is currently ranked fourth largest index manager in the world, according to a Pensions & Investments magazine special report published in May 2012.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2012, Northern Trust had assets under custody of US$4.8 trillion, and assets under investment management of US$749.7 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.

The material within and any linked material accessed via this communication is directed to eligible counterparties and professional clients only and should not be distributed to or relied upon by retail investors. For Asia Pacific markets, it is directed to institutional investors, expert investors and professional investors only and should not be relied upon by retail investors.

Northern Trust (Guernsey) Limited, Northern Trust Fiduciary Services (Guernsey) Limited, and Northern Trust International Fund Administration Services (Guernsey) Limited are licensed by the Guernsey Financial Services Commission. Northern Trust International Fund Administrators (Jersey) Limited and Northern Trust Fiduciary Services (Jersey) Limited are regulated by the Jersey Financial Services Commission. Northern Trust International Fund Administration Services (Ireland) Limited, Northern Trust Securities Services (Ireland) Limited and Northern Trust Fiduciary Services (Ireland) Limited are regulated by the Central Bank of Ireland. Northern Trust Global Services Limited has a Luxembourg Branch, which is authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF). Northern Trust Luxembourg Management Company S.A. is regulated by the Commission de Surveillance du Secteur Financier (CSSF). Northern Trust Global Investments Limited has a Netherlands branch, which is authorised by the Financial Services Authority and subject to regulation in the Netherlands by the Autoriteit Financiële Markten. Northern Trust Global Services Limited has a Netherlands Branch, which is authorised and regulated in the Netherlands by De Nederlandsche Bank. Northern Trust Global Investments Limited has a Sweden branch, which is authorised by the Financial Services Authority and subject to regulation in Sweden by the Finansinspektionen. Northern Trust Global Services Ltd (UK) Sweden Filial is authorised by the Financial Services Authority and subject to regulation by the Finansinspektionen. Northern Trust Global Services Limited operates in Abu Dhabi as a Representative Office. Our registered office is authorised and regulated by the Central Bank of the United Arab Emirates. The Northern Trust Company operates in Australia as a foreign authorised deposit-taking institution (foreign ADI) and is regulated by the Australian Prudential Regulation Authority. The Northern Trust Company has a branch in China regulated by the China Banking Regulatory Commission. The Northern Trust Company of Hong Kong Limited is regulated by the Hong Kong Securities and Futures Commission. Northern Trust Global Investments Japan, K.K. is regulated by the Japan Financial Services Agency. The Northern Trust Company has a Singapore Branch, which is a foreign wholesale bank regulated by the Monetary Authority of Singapore. The Northern Trust Company operates in Canada as The Northern Trust Company, Canada Branch, which is an authorised foreign bank branch under the Bank Act (Canada). Trustee related services in Canada are provided by the wholly owned subsidiary The Northern Trust Company, Canada, an authorised trust company under the Trust & Loans Companies Act (Canada). Deposits with The Northern Trust Company and its affiliates and subsidiaries are not insured by the Canada Deposit Insurance Corporation.

IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. For more information about this notice, see http://www.northerntrust.com/circular230.

Contacts

Northern Trust
EMEA Contacts:
Camilla Greene, +44 (0) 207 982 2176
Camilla_Greene@ntrs.com
OR
US, Canada & APAC Contacts:
John O’Connell, +1 312 444 2388
John_O’Connell@ntrs.com
http://www.northerntrust.com

Sharing

Contacts

Northern Trust
EMEA Contacts:
Camilla Greene, +44 (0) 207 982 2176
Camilla_Greene@ntrs.com
OR
US, Canada & APAC Contacts:
John O’Connell, +1 312 444 2388
John_O’Connell@ntrs.com
http://www.northerntrust.com