Investment Strategies

MSCI Europe Net Total Return (TR) in EUR: The MSCI Europe Index captures large and mid-cap representation across 15 Developed Markets (DM) countries in Europe. With 428 constituents, the index covers approximately 85% of the free float-adjusted market capitalization across the European Developed Markets equity universe.

 

MSCI World Net Total Return Total Return (TR) Index: The MSCI World Index captures large and mid-cap representation across 23 Developed Markets (DM) countries. With 1,517 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.

 

MSCI World Ex U.S. Net Index: The MSCI World ex U.S.A. Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries – excluding the United States. With 885 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.

 

MSCI World Custom ex SR) Gross: The MSCI World ex U.S.A. SRI ex Fossil Fuels Index is a custom index based on MSCI World ex U.S.A. SRI Index, its parent index, and includes large and mid-cap stocks across 22 Developed Markets (DM) countries. The index includes companies with high Environmental, Social and Governance (ESG) ratings and excludes companies with an industry tie to fossil fuels (thermal coal, oil and gas) and other coal reserves that do not have evidence of energy application including metallurgical coal. The Index is designed for investors seeking a diversified Socially Responsible Investment (SRI) benchmark comprised of companies with strong sustainability profiles while avoiding companies incompatible with values screens.

 

MSCI World ex U.S.A. SRI Index includes large and mid-cap stocks from 22 Developed Markets countries (excluding the U.S.). The index is a capitalization weighted index that provides exposure to companies with outstanding Environmental, Social and Governance (ESG) ratings and excludes companies whose products have negative social or environmental impacts.

 

Russell 2000® Value Index measures the performance of those Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values.

 

MSCI World Net of Dividend (ND): The MSCI World Index captures large and mid-cap representation across 23 Developed Markets (DM) countries. With 1,517 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.

 

S&P ADR Index Net: The S&P ADR Composite Index seeks to track all American depositary receipts trading on the NYSE, NYSE American, and NASDAQ, subject to minimum size and liquidity requirements.

 

MSCI KLD 400 Social Index is a capitalization weighted index of 400 U.S. securities that provides exposure to companies with outstanding Environmental, Social and Governance (ESG) ratings and excludes companies whose products have negative social or environmental impacts.

 

Bloomberg 1 – 10 Year Blend Municipal Bond Index: The Bloomberg 1 – 10 Blend Municipal Bond Index is a rules-based, market-value-weighted index engineered for the intermediate term tax-exempt bond market.

 

Bloomberg Muni 1 – 15 Yr. Blend: The Bloomberg 1 – 15 Year Blend Municipal Bond Index is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market.

 

Bloomberg 1 – 5 Yr Blend Muni Bond Index is a rules-based, market-value-weighted index engineered for the long-term tax-exempt bond market.

 

Bloomberg U.S. Municipal Index: Bloomberg Municipal Bond Index is an unmanaged index of investment grade (Baa3 or better) tax-exempt bonds with a remaining maturity of at least one year.

 

BofA 91-Day T-Bill Index: The ICE BofA 3 Month Treasury Bill Index is comprised of a single issue purchased at the beginning of the month and held for a full month.

 

Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities and commercial mortgage-backed securities (agency and non-agency).

 

Bloomberg High Yield Corporate 2% Cap Index: Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index is an unmanaged index that measures the market of U.S. dollar-denominated, non-investment grade, fixed-rate, taxable corporate bonds. It is a version of the Bloomberg High Yield Corporate Bond Index except it limits its exposure of each issuer to 2% of the total market value and redistributes any excess market value Index-wide on a pro-rata basis.

 

Bloomberg Muni Bond 60 – 40 High Yield/Inv Grade: The Bloomberg Municipal Bond 60 – 40 Investment Grade/ High Yield Index is an unmanaged index of investment and non-investment-grade bonds with a 60% weighting in the Bloomberg U.S. Municipal Index and a 40% weighting to the Bloomberg Municipal High Yield Index.

 

Bloomberg U.S. Intermediate Government/Credit Idx: Bloomberg Intermediate U.S. Government/Credit Index is an unmanaged index of prices of U.S. government and corporate bonds with remaining maturities of one to 10 years.

 

ICE BofA 1- Year U.S. Treasury Note Index: ICE BofA 1-Year U.S. Treasury Note Index is composed of a single issue: the outstanding Treasury note that matures closest to, but not beyond, one year from each monthly rebalancing date.

 

75% ICE BofA 6 – 12m Muni/ 25% ICE BofA 1 – 3y US Muni: ICE BofA 6 – 12 Month Municipal Securities Index tracks the performance of U.S. dollar denominated, investment-grade, tax-exempt debt, publicly issued by U.S. states and territories, and their political subdivisions, in the U.S. domestic market. Qualifying securities must have at least six months and less than12 months remaining term to final maturity, a fixed coupon schedule, and an investment-grade rating (based on an average of Moody's, S&P and Fitch).                        

 

ICE BofA 1 – 3 Year U.S. Municipal Securities Index tracks the performance of U.S. dollar-denominated, investment-grade, tax-exempt debt, publicly issued by U.S. states and territories, and their political subdivisions, in the U.S. domestic market. Qualifying securities must have one to three years remaining term to maturity, a fixed coupon schedule, and an investment-grade rating (based on an average of Moody's, S&P and Fitch).

 

Bloomberg U.S. Aggregate Index: Bloomberg U.S. Aggregate Bond Index is an unmanaged index of prices of U.S. dollar-denominated investment grade fixed income securities with remaining maturities of one year and longer.

 

Bloomberg Govt Credit Index: Bloomberg Government/Credit Bond Index Created in 1979, the U.S. Government/Credit Index is the oldest macro index published by Lehman Brothers. It is the combination of the U.S. Treasury, U.S. Government- Related, and U.S. Corporates Indices and is equivalent to the union of the U.S. Government and U.S. Credit Indices. Prior to 2000, the index was named the U.S. Government/Corporate Index.

 

Bloomberg Intermediate Govt/Credit Index is an unmanaged index of prices of U.S. government and corporate bonds with remaining maturities of one to 10 years.

 

Bloomberg TIPS Adjusted Index (Legacy Lehman): Bloomberg U.S. TIPS Index is an unmanaged index designed to represent securities that protect against adverse inflation and provide a minimum level of real return.

 

iMoneyNet Fund Average^TM Government/Agencies Retail category includes all the most broadly based of the government retail funds. These funds may invest in U.S. Treasuries, U.S. agencies, repos or government[1]backed floating rate notes. The category average is the average of all of the funds in this category reported by iMoneyNet.

 

Indices are unmanaged and investors cannot invest directly in an index. Unless otherwise noted, performance of indices do not account for any fees, commissions or other expenses that would be incurred. Returns do not include reinvested dividends.

 

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market value weighted index with each stock’s weight in the index proportionate to its market value.

 

The Russell 3000 Index is unmanaged index comprised of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market.

 

The MSCI ACWI Index is a free float‐adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI consists of 46 country indexes comprising 23 developed and 23 emerging market country indexes.

 

The Russell 1000 is a market capitalization-weighted index of 1,000 of the largest companies in the U.S. equity markets, the Russell 1000 is a subset of the Russell 3000 Index. The Russell 1000 comprises over 90% of the total market capitalization of all listed U.S. stocks, and is considered a bellwether index for large cap investing.

 

The Russell 2000 Index is an unmanaged index that measures the performance of the small-cap segment of the U.S. equity universe.

 

The MSCI All Country World Index ex USA Investable Market Index (IMI) captures large, mid and small cap representation across 22 of 23 Developed Markets (DM) countries (excluding the United States) and 23 Emerging Markets (EM) countries. With 6,062 constituents, the index covers approximately 99% of the global equity opportunity set outside the U.S.

 

MSCI EAFE is a Morgan Stanley Capital International Index that is designed to measure the performance of the developed stock markets of Europe, Australasia, and the Far East.

 

MSCI Emerging Markets is a Morgan Stanley Capital International Index that is designed to measure the performance of equity markets in 23 emerging countries around the world.

 

The FTSE EPRA/Nareit Global Real Estate Index is a free-float adjusted, market capitalization-weighted index designed to track the performance of listed real estate companies in both developed and emerging countries worldwide. Constituents of the Index are screened on liquidity, size and revenue.

 

The S&P Global Infrastructure Index is comprised of 75 of the largest publicly listed infrastructure companies that meet specific investability requirements. The Index is designed to provide liquid exposure to the leading publicly listed companies in the global infrastructure industry, from both developed markets and emerging markets. The Index includes publicly traded companies with stock traded on a developed market exchange with float-adjusted market capitalizations of a minimum of $100 million and minimum total market capitalizations of $250 million. Stocks must satisfy liquidity thresholds on 3 month average daily value trading of $1 million for developed markets and $500,000 for emerging markets.

 

Investing in alternative assets including hedge funds involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses.  They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested.

 

Interests are being offered only to persons who qualify as accredited investors under the Securities Act, and a Qualified Purchaser as defined in Section 2(a)(51)(A) under the Company Act or an eligible employee of the management company. This presentation does not constitute an offer to sell or a solicitation of an offer to buy Interests in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.  There will not be any public market for the Interests.

 

Hedge Funds are unregistered private investment partnerships, funds or pools that may invest and trade in many different markets, strategies and instruments (including securities, non-securities and derivatives) and are NOT subject to the same regulatory requirements as mutual funds, including mutual fund requirements to provide certain periodic and standardized pricing and valuation information to investors. Hedge Funds represent speculative investments and involve a high degree of risk. An investor could lose all or a substantial portion of his/her investment. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment.

 

The information contained herein is intended for use with current or prospective clients of Northern Trust Investments, Inc (NTI) or its affiliates. The information is not intended for distribution or use by any person in any jurisdiction where such distribution would be contrary to local law or regulation. Northern Trust Asset Management’s (NTAM)  and its affiliates may have positions in and may effect transactions in the markets, contracts and related investments different than described in this information. This information is obtained from sources believed to be reliable, its accuracy and completeness are not guaranteed, and is subject to change. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice and does not take into account all the circumstances of each investor.

 

This report is provided for informational purposes only and is not intended to be, and should not be construed as, an offer, solicitation or recommendation with respect to any transaction and should not be treated as legal advice, investment advice or tax advice. Recipients should not rely upon this information as a substitute for obtaining specific legal or tax advice from their own professional legal or tax advisors. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities. Indices and trademarks are the property of their respective owners. Information is subject to change based on market or other conditions.

 

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.

 

Environmental, Social and Governance (ESG) investing involves certain risks because the methodology of an underlying index selects and assigns weights to securities of issuers for nonfinancial reasons, a strategy may underperform the broader equity market or other strategies that do not utilize ESG criteria when selecting investments. The companies selected by an index provider as demonstrating ESG characteristics may not be the same companies selected by other index providers that use similar ESG screens. In addition, companies selected by an index provider may not exhibit positive or favorable ESG characteristics. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on a strategy’s ability to invest in accordance with its investment policies and/or achieve its investment objective. 

 

Past performance is not a guarantee of future results.
Performance returns and the principal value of an investment will fluctuate. Performance returns contained herein are subject to revision by NTAM. Comparative indices shown are provided as an indication of the performance of a particular segment of the capital markets and/or alternative strategies in general. Index performance returns do not reflect any management fees, transaction costs or expenses. It is not possible to invest directly in any index. Net performance returns are reduced by investment management fees and other expenses relating to the management of the account. Gross performance returns contained herein include reinvestment of dividends and other earnings, transaction costs, and all fees and expenses other than investment management fees, unless indicated otherwise. For additional information on fees, please refer to Part 2a of the Form ADV or consult an NTI representative.

 

Forward-looking statements and assumptions are NTAM’s current estimates or expectations of future events or future results based upon proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve.  Actual results could differ materially from the results indicated by this information.

 

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.

 

Not FDIC insured | May lose value | No bank guarantee