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Active Equity

Quality ESG

Designed to outperform by investing in high quality companies that are well positioned to manage their ESG risks and opportunities relative to their industry peers.

Our Philosophy
We believe investors should be compensated for the risks they take — in all market environments and any investment strategy.

Overview

Sustainable Investing, Focused on High Quality Companies

Investors increasingly want or are required to implement rigorous ESG investing. Our solution invests in companies with multiple facets of sustainability, including financial strength as well as a track record of managing ESG-related issues within their business models.

Benefits

Seeks Attractive Risk-Adjusted Returns

Significant Carbon Footprint Reduction Versus the Broad Market

Active Management at a Low Cost

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Principles of Investing

Focus on Persistent Sources of Excess Return

Our strategies target systematic sources of excess returns that have been proven over long periods.

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Principles of Investing

Seeking to Improve Risk-Adjusted Returns by Integrating a High-Quality Foundation

The inclusion of a proprietary quality factor roots our security selection process in strong company fundamentals and has shown to potentially improve risk-adjusted returns over time.

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Potential Improvements in Sharpe Ratio for Factor-Mimicking Portfolios Driven by Addition of the Quality Factor

Source: Morningstar, Northern Trust Asset Management. December 31, 1996 to June 30, 2023. Past performance is no guarantee of future results. Index performance returns do not reflect any management fees, transaction costs, or expenses. It is not possible to invest directly in any index. Indexes are the property of their respective owners, all rights reserved.

Principles of Investing

Utilize a Systematic Approach to Maximize Efficiency

Generating excess returns is important but risk and cost effectiveness are critical. We believe utilizing a systematic investment approach enables our strategies to consistently deliver on all three objectives.

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A Systematic Approach Maximizes Efficiency

Past performance is no guarantee of future results. Index performance returns do not reflect any management fees, transaction costs, or expenses. It is not possible to invest directly in any index. Indexes are the property of their respective owners, all rights reserved.

Principles of Investing

Invest at the Intersection of Quality and ESG to Increase Returns

Companies with strong fundamentals that also earn high ESG ratings have historically outperformed their peers.

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Annualized Returns of MSCI World Index by Quality and ESG Ratings*

*MSCI World Index (February 2007 through June 2023) using MSCI ESG Rating methodology.

 

Source Northern Trust Asset Management, MSCI, Factset. Returns represent annualized average returns of equally weighted portfolios formed as follows, ESG Leaders and Laggards represent companies with ESG Ratings of AAA/AA for Leaders and B/CCC for Laggards. High and Low Quality represents the top and bottom quintile of Northern Trust's Quality score, respectively. Returns are gross of dividends and withholding taxes. Returns include backtested performance.

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How it works

Score Companies for ESG Practices

Screen the starting universe for violation of international norms, controversial business involvement and poor management of key ESG-related issues.

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How it works

Target Quality Companies

Favor high cash flow, profitability and return on capital, while not investing in low-quality stocks.

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How it works

Integrate Purposeful ESG Objectives

Lift the overall ESG profile and reduce the carbon footprint while keeping portfolio sector- and region-neutral.

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How it works

Optimize Portfolio to Balance Risk, Return and Cost Objectives

A final optimization is conducted to verify the portfolio maximizes exposure to the high quality and specific ESG characteristics, and seeks to minimize any excess risks that don’t contribute to outperformance.

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Who it's for

Investors Seeking Sustainability and Long Term Outperformance

High quality and highly‑rated ESG stocks seek to deliver compelling risk‑adjusted returns.

Investors Seeking Carbon Reduction

Target meaningful carbon footprint reduction and exposure to low carbon economy transition.

Investors Seeking Cost-Effective Active Management

A systematic approach enables access to potential drivers of excess return, cost‑effectively.

Fund Documents

Literature

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    Contact Us

    Interested in learning more about our investment strategies? 

    All securities investing and trading activities risk the loss of capital. Each portfolio is subject to substantial risks including market risks, strategy risks, advisor risk, and risks with respect to its investment in other structures. There can be no assurance that any portfolio investment objectives will be achieved, or that any investment will achieve profits or avoid incurring substantial losses. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Risk controls and models do not promise any level of performance or guarantee against loss of principal. Any discussion of risk management is intended to describe NTAM’s efforts to monitor and manage risk but does not imply low risk. This information is general in nature and should not be construed as tax advice. Please consult a tax advisor or professional as to how this information may affect your particular circumstance.

     

    Not FDIC Insured | May Lose Value | No Bank Guarantee

    Northern Trust Asset Management is composed of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Fund Managers (Ireland) Limited, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc., 50 South Capital Advisors, LLC, Northern Trust Asset Management Australia Pty Ltd, and investment personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.