Northern Trust’s FlexShares launches ETFs in Europe

Marie Dzanis, Northern Trust

Northern Trust Asset Management’s FlexShares Exchange Traded Funds has announced it is to open in Europe, with the launch of two climate focused ETFs, the FlexShares Developed Markets Low Volatility Climate ESG UCITS ETF (QVFD) and the FlexShares Developed Market High Dividend Climate ESG UCITS ETF (QDFD).

The Funds represent FlexShares’ first ETFs available in Europe, with additional funds planned for the coming months.

“We’re pleased to present the first FlexShares products in Europe, which reflect Northern Trust Asset Management’s three decades of experience in managing sustainability-focused investment strategies,” says Marie Dzanis (pictured), head of Europe, Middle East and Africa (EMEA).

“Actively designed with the transparency of indexing, these two ETFs are built specifically to fit within EMEA investors’ evolving needs to help manage portfolio volatility and deliver income in a low yield environment while doing so with a focus on quality.”

The firm writes that both strategies will utilise Northern Trust Asset Management’s proprietary Quality factor in an effort to identify companies that exhibit strength in profitability, management expertise and cash flow while maximising the portfolio’s ESG exposure and reducing its carbon footprint.

QVFD is a low volatility fund featuring stocks that exhibit lower overall absolute volatility cash flow, combined with quality and ESG to maximise quality, improve ESG ratings and create minimum variance. It tracks the iSTOXX Northern Trust Developed Markets Low Volatility Climate ESG Index.

QDFD is an income fund featuring stocks that exhibit a high potential to generate income, combined with quality and ESG to maximise quality, improve ESG ratings and enhance dividend yield. It tracks the iSTOXX Northern Trust Developed Markets High Dividend Climate ESG Index.

FlexShares partnered with index provider STOXX to develop benchmarks for both QVFD and QDFD. As FlexShares expands its platform in Europe, it will be looking for various opportunities to develop new proprietary benchmarks best suited to its products and investor needs.

“FlexShares has been leveraging Northern Trust Asset Management’s investment capabilities since our initial US launch in 2011,” says Darek Wojnar, global head of Funds, ETFs & Managed Accounts. “As a global asset manager, we are pleased to extend our deep principle-based culture and collaborative approach with leading market expertise to complement our existing strategies in the European marketplaces.”

The ETFs launched today with a listing on both the London Stock Exchange and EuroNext and are available in five countries across Europe, including the UK, Ireland, Sweden, Germany and the Netherlands.

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