09.27.2021

FlexShares Launches Emerging Markets Climate-Focused ETFs

Northern Trust Asset Management’s FlexShares Exchange Traded Funds announced the launch of two Emerging Markets climate-focused exchange traded funds (ETFs): the FlexShares® Emerging Markets High Dividend Climate ESG UCITS ETF (QDFE) and the FlexShares® Emerging Markets Low Volatility Climate ESG UCITS ETF (QVFE). The strategies are the second launch of FlexShares’ ETF offerings in Europe.

“We are proud to expand our Environmental, Social and Governance (ESG) product offerings in Europe,” said Marie Dzanis, head of Northern Trust Asset Management for Europe, Middle East and Africa (EMEA). “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.”

The strategies will utilize Northern Trust Asset Management’s Quality factor scoring in an effort to identify companies that exhibit strength in profitability, management expertise and cash flow while also maximizing the portfolio’s ESG exposure and reducing its carbon footprint.

  • QDFE is designed to offer exposure to high-quality, dividend paying emerging market stocks while seeking to achieve ESG and climate related improvements. It utilizes a robust, multi-lens, multi-metric approach to assess quality across three dimensions: management efficiency, profitability and cash flow.
  • QVFE is designed to offer exposure to a high-quality universe of emerging markets companies that exhibit lower overall absolute volatility while seeking to achieve ESG and climate-related improvements. It aims to minimize overall portfolio volatility, improve ESG score, improve carbon risk rating and reduce carbon emissions intensity.

“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,” added Darek Wojnar, global head of Funds, ETFs & Managed Accounts at Northern Trust Asset Management. “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.”

FlexShares 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, which act as benchmarks for QDFE and QVFE, respectively. The ETFs launched today with a listing on the Euronext exchange and Deutsche Börse and are available in five countries across Europe: the UK, Ireland, Germany, Sweden, and the Netherlands.

Source: Northern Trust Asset Management

Related articles

  1. A Web of Interdependencies

    The buyside seeks greater control and optimization of their trading opportunities.

  2. The test confirmed the viability of a blockchain-based distribution model.

  3. Daily Email Feature

    Bitcoin-Related ETPs Take Off

    The first bitcoin-related ETF has listed in the US.

  4. The ETF will invest primarily in bitcoin futures contracts and does not directly invest in bitcoin.

  5. RBC GAM finds anti-corruption, cybersecurity and climate change are top ESG concerns.