Advisors Incorporate ESG Investing Into Client Portfolios
As ESG continues to trend in the market, managers and advisors focus more on incorporating specified ESG investments into client portfolios as the ESG criteria offer opportunities for investors to combine their principal values with their investment selections.
ESG, which stands for Environmental, Social and Governance, are the factors that gauge the sustainability of an investment. The ESG Criteria refers to the standards the company's operations adhere to that investors use to screen investments. These factors may include how the company performs in support to the environment, upholds positive relationships with employees and customers, and securing shareholder rights. Investors usually examine such factors when purchasing securities.
The ESG factors, when integrated into investment analysis and portfolio construction, provide investors potential long-term advantages. ESG is considered a fast-growing market, with its current global assets of more than $21 trillion.
The Northern Trust Corporation promotes the attainment of high portfolio performance while also maintaining personal values. The firm, which has $946 billion in assets under management, has recently launched two ESG focused ETFs. These are the FlexShares STOXX US ESG Impact Fund ETF and FlexShares STOXX Global Impact Fund.
The establishment of the exchange-traded funds manifests the firm's effort to offer clients an investment option that supports ESG factors while ensuring high returns.
Because of the company's partnership with STOXX, it has gained access to companies based on Performance Indicators in ESG categories.
The FlexShares ESG ETF serves as a core equity holding with ESG exposure to enhance risk adjust returns. Among the top holdings in the fund are Apple, Microsoft, Exxon, and General Electric.
The FlexShares ESGG ETF, which can also serve as a core holding within a portfolio, aims to gain investment returns that correspond to the price and yield performance of the STOXX Global ESG Impact Index. The index screens global firms based on specific standards of environmental, social and governance KPIs to positively impact shareholder equity.
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