Global investment manager Northern Trust Asset Management (NTAM) announced the launch of two new actively managed UCITS funds – NT World Multifactor Focus Select Fund and NT World Multifactor Select Fund, aimed at enabling investors to pursue outperformance while efficiently managing climate transition-related risks and opportunities.

The new funds incorporate climate-focused investment criteria, including targeted reductions in portfolio carbon footprint and assessments of industry-specific climate risks and opportunities to support security selection, while maintaining exposure to key factor characteristics, according to the firm.

Northern Trust added that the funds also seek to promote improved ESG practices and corporate disclosures through active engagement and proxy voting activities.

According to NTAM, the NT World Multifactor Focus Select Fund aims to generate excess returns over a full market cycle, while the NT World Multifactor Select Fund is focused on delivering long-term capital growth. Both funds are actively managed by the company’s proprietary multifactor investment approach, incorporating value, quality, momentum and low-volatility signals.

The firm said that the strategies leverage financial, alternative and sustainability datasets to identify sources of return in a risk-efficient manner, while integrating climate-related considerations into the investment process.

Guido Baltussen, global head of quant strategies at Northern Trust Asset Management said:

“These fund strategies combine the Northern Trust Asset Management quantitative investment team’s deep experience in factor-based investing, built over three decades, with our proprietary research into integration of meaningful decarbonisation and other climate-related criteria. In the Multifactor UCITS fund strategies we employ a multi-faceted approach to portfolio construction to actively manage alpha, investment risks, climate risks and costs.”