Northern Trust Asset Management launches global low-volatility, low-carbon quality strategy

LONDON–(BUSINESS WIRE)–Northern Trust Asset Management (NTAM), one of the world’s leading investment managers, continues to expand its sustainable investment solutions with the launch of the Quality Low Volatility Low Carbon World (Low Carbon QLV) Strategyan actively managed quantitative strategy focused on high quality, low volatility stocks while maintaining a lower carbon footprint relative to the MSCI World Index (“Benchmark”).

The strategy is NTAM’s latest sustainable investing solution which aims to address climate risk while investing in high quality, low volatility stocks and is designed to provide reasonable exposure to potential market upside while seeking to mitigate downside risk. The strategy complements NTAM’s Quality Low Volatility World (QLV World) strategy, launched in 2015, and is the latest in a series of climate-conscious strategies launched by NTAM with carbon reduction targets.

The QLV Low Carbon strategy aims to reduce the carbon footprint of a portfolio, by seeking a reduction in the carbon intensity of the portfolio and potential emissions from fossil fuel reserves, compared to its benchmark index. As of launch date, the strategy has achieved a 50% reduction in carbon intensity compared to the benchmark. Through strict risk control, the strategy aims to limit sector and regional biases that can create unintended and/or uncompensated risks in a low volatility strategy.

“Many low volatility strategies tend to have high carbon intensity due to their overweight exposure to high carbon intensive sectors that have lower volatility, notably utilities, which contribute nearly 50% of the intensity. carbon of the MSCI World index”, said Michael Hunstad, head of quantitative strategies at NTAM. “With an increased investor focus on reducing carbon emissions across all portfolios, this is leading many investors to move away from using low volatility strategies. Designed to limit exposure to both volatility and while using risk efficiently and without sacrificing performance, the strategy helps investors manage climate risk while achieving their investment objectives.This is in line with NTAM’s fundamental investment principle: investors should be compensated for the risks they take in all market environments and in any investment strategy.”

“This latest strategy underscores NTAM’s philosophy and commitment to sustainable investing,” said Julie Moret, Global Head of Sustainability and Stewardship at NTAM. “Sustainability is central to our investment capabilities, consistent with our belief that ESG considerations are financial considerations, the effective management of which supports the achievement of long-term financial success.”

With $1.1 trillion in investor assets, NTAM is one of the largest investment managers in the world. The company helps investors navigate changing market environments so they can confidently achieve their long-term goals.

The company is a signatory of the UNPRI and a founding signatory of the Climate Action 100+ initiative which engages with 167 companies representing 80% of corporate greenhouse gas emissions globally, as well as a founding member of the One Planet Asset Manager initiative in which member asset managers commit to advancing understanding of the implications of climate-related risks and opportunities in long-term investment portfolios through engagement, research and the sharing of investment practices. Additionally, the firm is rated A+ for Strategy and Governance by the Principles of Responsible Investment and has been a member since 2009. Additionally, NTAM is a member of the Sustainability Accounting Standards Board (SASB) Investor Advisory Group. listen)) and an official supporter of the Financial Stability Board. Task Force on Climate-Related Financial Disclosure (TCFD) – a consortium established in 2015 to develop a voluntary and consistent framework for companies to disclose climate-related financial risks to investors and other stakeholders.


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 achieve their long-term goals. With US$1.1 trillion in investor assets as of March 31, 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 all investment strategies. That’s why we combine sound capital markets 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 comprised 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 servicing, 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 March 31, 2021, Northern Trust had assets under custody/administration of US$14.8 trillion and assets under management of US$1.4 trillion. For more than 130 years, Northern Trust has distinguished itself as an industry leader for its exceptional service, financial expertise, integrity and innovation. Please visit our website or follow us on Twitter.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 USA, incorporated with limited liability in the USA Please read our global and regulatory information.