A sustainable approach to factor investing - Northern Trust

Sponsored Statement Northern Trust Asset Management manages US$168 billion in ESG assets globally and is a top ten player in the factor investing spac...

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Australia , Malaysia , New Zealand , Hong Kong , South Korea , Singapore , Australian , Scott Bennett , Asia Pacific , John Mccareins , Northern Trust , Northern Trust Asset Management , Asia Asset Management , Best Application , Best Factor Investing , Sponsored Statement Northern Trust Asset Management Manages Us 168 Billion In Esg Assets Globally And Isa Top Ten Player The Factor Investing Space Firm Has Been Recognised Asia Amp Rsquos Aam Best Of 2022 Awards , S Co Winner Of Best Esg Manager In Asia , Est Application Of Esg And Best Factor Investing Manager Amp Nbsp According To John Mccareins , Ead Of Asset Management , Hrough Its Integrated Esg And Factor Investing Approach , He Firm Has Seen Exceptional Growth In Apac Over The Two Years Of Pandemic From 2020 Through To Early 2022 , Ew Clients Have Come On Board From South Korea , Ustralia And New Zealand To Embrace The Firm Amp Rsquos Integrated Solution Esg Client Growth In Apac Was Also Close 75 Over That Time Period , Ith Esg Aum Growth Up By 40 Amp Nbsp On The Side , He Firm Launched Around 6 Billion In Esg Mandates And Various Pooled Fund Strategies Throughout Apac It Wasa Similar Story For Factor Investing Across The Region Too , Ith Around 150 Growth In Clients Over The Pandemic Period , Nd Around 142 Increase In Aum Amp Nbsp Ldquo We Find That Our Investment Philosophy Is Resonating With Clients , Nd Is Consistent With Our View That Investors Should Be Compensated For The Risk They Take In Any Market Environment , Mp Rdquo Scott Bennett , Head Of Quantitative Solutions , Ells Aam Amp Nbsp Ldquo The Additional Insight That Comes From Our Risk Assessment And , Specifically , Ur Incorporation Of Esg Within Portfolios Helps Ensure That We Amp Rsquo Re Not Just Delivering On Profitable Outcomes , Ut Sustainable Outcomes As Well , Mp Rdquo He Adds Amp Nbsp Over The Last Couple Of Years Firm Has Also Been Developing Its Esg Framework Through Proprietary Northern Trust Vector Scoretm Ndasha Measurement That Assesses Publicly Traded Companies In Context Financially Relevant Environmental , Ocial And Governance Esg Related Criteria That Could Impact Their Operating Performance The Firm Uses Best In Class Data Providers To Identify Those Characteristics Are Relevant Fora Particular Industry Amp Ldquo We Systematically Issues Material For Each Company Utilise Several Vendors Inform Our Score , Mp Rdquo He Explains Also Notes The Inclusion Of Forward Looking Estimates That Not Only Provide An Historical View But Alsoa Trajectory As To How Those Characteristics Might Perform In Future Amp Nbsp For Bennett , T Amp Rsquo Sa Process That Helps To Inform Not Only Howa Portfolio Is Positioned , Ut Also How Engagements With Companies Are Structured Amp Nbsp Esg Trends Climate Change , Et Zero And Decarbonisation Are Key Esg Trends , Ut Sustainability Is Key Amp Nbsp Ldquo We Rsquo Re Looking At Of The Planet Live On , Ustainability Of The Communities We Live In And Sustainability Businesses Invest , Mp Rdquo Says Bennett Amp Nbsp Ldquo We Believe Material Environmental , Ocial And Governance Factors Are Pre Financial Indicators That Can Affecta Company Amp Rsquos Future Viability Clients Rsquo Long Term Risk Adjusted Investment Returns When Managed Well , Hey Can Positiona Company For Success And When Mismanaged , Hey Can Result In Significant Risks , Mp Rdquo He Adds When It Comes To Portfolio Design And Application , Ccareins Observes Investors Being Split Acrossa Number Of Different Objectives Amp Ldquo For Some , He Goal Is Not Necessarily Outperformance , Ut Rather Managing Toa Specific Thematic Goal , Uch As Lower Exposure To Carbon Other Investors Want Takea More Conventional Approach They See Excess Returns Whilst Also Achieving Decarbonisation , O Depending On The Investors Amp Rsquo Philosophy Or Preference It Might Bea Combination Of Both We Re Also Seeing Clients Interested In Global Equity Mandates With Esg Integration , R Narrowing To Australian Equities Specifically Or Pivoting Fixed Income Strategies All Seeking Mitigate Climate Change Related Risk Incorporate Sustainable Investing Considerations , Mp Rdquo He Explains Amp Nbsp For Bennett , Ustainability And Factor Investing , Oth Globally And Specifically Within The Apac Region , Ie On The Same Spectrum Amp Nbsp Ldquo When We Consider Esg Factors Rsquo Re Really Uncovering What Other Are Associated With That Profile And How Can Best Leverage Our Knowledge Of To Enhance Results Also Looking At Use Factor , Mp Rdquo He Explains And The Numbers Quoted By Mccareins Bear Themselves Out 60 Of Ntam Amp Rsquos Asia Based Aum Today Incorporates Specific Esg Metrics , Oals And Targets , A Figure That Extends To 90 For Australia Mitigating Risk As Well Demonstrating Its Commitment Sustainability And Factor Investing , Orthern Trust Asset Management Is Confident Of How Its Factor Investing Approach Has Resonated With Investors Across The Region Bennett Notes There Been Increasing Acknowledgment That Factors And Material Return Drivers Investment Markets Have Key Influences On Portfolios Returns Amp Ldquo We Rsquo Re Seeinga More Sophisticated Investor Base , Here Investors Are Much More Aware Of The Risks That Present In Their Portfolio And Looking For Asset Managers Who Can Help Manage Or Mitigate Uncompensated Unintended , Mp Rdquo He Says Amp Nbsp Ldquo Investors Are Embracing The Systematic Nature Of Factor Investing And Appreciate Consistency It Offers Transparency Risk Management Key Drivers To Taking On Board Benefits ,