NTAM’s FlexShares Continues Europe Expansion with Launch of ESG & Climate-Focused Emerging Markets ETFs
FlexShares Exchange Traded Funds, sponsored and managed by global investment manager Northern Trust Asset Management, announced today the launch of the FlexShares Emerging Markets High Dividend Climate ESG UCITS ETF (QDFE) and the FlexShares Emerging Markets Low Volatility Climate ESG UCITS ETF (QVFE), two new emerging markets climate and ESG-focused exchange traded funds.
The launch marks the continuation of FlexShares’ ESG-focused expansion into Europe, following the firm’s entry earlier this year into the European market with a pair of developed market climate-focused ETFs.
Darek Wojnar, Global Head of Funds, ETFs & Managed Accounts at Northern Trust Asset Management, said:
“The addition of QDFE and QVFE will enhance our ETF suite in Europe, providing investors a diverse set of equity strategies within the growing FlexShares lineup. For the past decade in the United States (US), we’ve defined our place in the ETF industry through our primary focus on meeting specific investor objectives with quantitative solutions. Looking ahead to the next 10 years, we recognize 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.”
Both of the new funds use NTAM’s Quality factor scoring in order to identify companies that exhibit strength in profitability, management expertise and cash flow, while maximizing ESG exposure and reducing portfolio carbon footprint, with QDFE investing in high-quality, dividend paying emerging market stocks, and QVFE targeting companies that exhibit lower overall absolute volatility.
FlexShares partnered with index provider Qontigo to develop the benchmarks for each ETF. The indices are derived from the iSTOXX Northern Trust Emerging Markets Index, with Northern Trust ESG Scores, ESG Exclusion Flags and ISS ESG carbon risk rating and emissions data used for measurement of the sustainability and climate targets.
Stephan Flaegel, Chief Product Officer, Indices and Benchmarks at Qontigo, said:
“Climate and sustainability have become central investment themes for many of our clients. Northern Trust’s proprietary datasets and our portfolio construction expertise made this cooperation possible. The index contains companies that exhibit strength in profitability, management expertise and cash flow. The weighting of each constituent security is determined through an optimization process that is designed to meet climate and sustainability targets.”
The new ETFs are available in the UK, Ireland, Germany, Sweden, and the Netherlands, and are listed on the Euronext exchange and Deutsche Börse.
Marie Dzanis, head of Northern Trust Asset Management for Europe, Middle East and Africa (EMEA), said:
“We are proud to expand our Environmental, Social and Governance (ESG) product offerings in Europe. 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.”