Northern Trust launches two ESG factor ETFs for emerging markets

Both ETFs will target low volatility and income with an ESG slant

Northern Trust Asset Management has expanded its FlexShares range with the launch of two climate-focused smart beta ETFs for emerging markets.

The FlexShares Emerging Market High Dividend Climate ESG UCITS ETF (QDFE) and the FlexShares Emerging Market Low Volatility Climate ESG UCITS ETF (QVFE) were listed on Euronext and Deutsche Boerse with a total expense ratio of 0.35% and 0.31 %, respectively.

The Chicago-based ETF issuer has partnered with index provider Qontigo to develop the iSTOXX Northern Trust Emerging Markets High Dividend Climate ESG Index and the iSTOXX Northern Trust Developed Markets Low Volatility Climate ESG Index.

Each strategy will use Northern Trust Asset Management’s Quality Factor Rating, targeting companies that display strong profitability, management expertise and cash flow demonstrating efforts to reduce their carbon footprint.

QDFE will aim to provide exposure to high-quality, dividend-paying emerging market stocks, while QVFE will target low volatility alongside its ESG and climate-related objective.

Marie Dzanis (photo), Head of EMEA at Northern Trust, said: “We believe investors should be compensated for the risks they take in all market environments. As we see growth opportunities in various regions of emerging markets, our newly launched ETFs are designed to capitalize on this growth while leveraging our more than 30 years of expertise in sustainable investing.

Darek Wojnar, Global Head of Funds, ETFs and Managed Accounts at Northern Trust, added: “Looking to the next 10 years, we recognize the growing importance of sustainability to these goals and the need for ESG funds that can serve as a base portfolio. across asset classes.

“We believe this is a key area for growth in both Europe and the United States as we position the business for continued success.”

Northern Trust entered the European ETF space in March with the launch of the FlexShares Developed Markets Low Volatility Climate ESG UCITS ETF (QVFD) and the FlexShares Developed Markets High Dividend Climate ESG UCITS ETF (QDFD).

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