New Listing

Northern Trust launches two emerging market factor ESG ETFs

The two ETFs will target low volatility and income with an ESG tilt

Theo Andrew

Marie Dzanis

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

The FlexShares Emerging Market High Dividend Climate ESG UCITS ETF (QDFE) and the FlexShares Emerging Market Low Volatility Climate ESG UCITS ETF (QVFE) have been listed on the 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 utilise Northern Trust Asset Management’s quality factor scoring, targeting companies that show strong profitability, management expertise and cash flow showing efforts to reduce their carbon footprint.

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

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

Darek Wojnar, global head of funds, ETFs and managed accounts at Northern Trust, added: “Looking ahead to the next 10 years, we recognise 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 both in Europe and the US 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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