The FEDM issuer is Northern Trust Investments, which designed the Underlying Index to provide exposure to developed market countries excluding the U.S., incorporating specific environmental, social, and governance (ESG) criteria. This index employs an ESG Vector Score to assess companies' ESG metrics based on Sustainability Accounting Standards Board (SASB) standards and applies carbon-related risk metrics for climate assessment. The issuer seeks to optimize the index composition to minimize tracking differences, enhance ESG scores, and mitigate carbon-related risks while adhering to various exclusionary screens. The FEDM Fund aims to replicate this index's performance and is managed passively by Northern Trust Investments, using a representative sampling strategy and occasionally using futures exposure to manage its cash allocation.
The FEDM ( ESG Developed Markets) Index is designed to track the performance of companies with strong environmental, social, and governance (ESG) characteristics from developed market countries, excluding the U.S. The index aims to enhance ESG scores and reduce carbon-related risks compared to its parent index, while also employing screens to exclude companies involved in controversial activities. It employs an optimization process during reconstitution to achieve these goals while adhering to various constraints. The associated investment fund seeks to replicate this index passively, primarily investing in its constituents. The fund may also use representative sampling and futures contracts for tracking purposes, aiming to maintain exposure to target markets. It's important to note that this information pertains to a scenario, as the FEDM Index and related fund do not exist in reality.
The FEDM Index is designed to closely track the performance of a selection of developed-market companies with strong environmental, social, and governance (ESG) characteristics. The index aims to minimize tracking differences with the Northern Trust Developed Markets ex-US Large Cap Index while prioritizing higher ESG Vector Scores and reduced carbon-related risk. Exclusions based on ESG criteria and norms are applied, and an optimization process is used to select and weight securities to achieve these goals. The index is governed by transparent rules and reconstituted quarterly, providing investors with exposure to companies demonstrating ESG leadership.
The FEDM Index is designed to track the performance of developed market companies outside the U.S. that display favorable environmental, social, and governance (ESG) characteristics while minimizing tracking differences with the Northern Trust Developed Markets ex-US Large Cap Index. The index integrates an ESG Vector Score, carbon risk metrics, and exclusionary screens to enhance ESG attributes and mitigate climate-related risks. NTI, the index provider, employs an optimization process during reconstitution to achieve these objectives. The FEDM Index, with inception in July 2021, is managed by NTI and serves as the basis for the fund's investment strategy, which employs representative sampling while allowing for exposure through derivative instruments. The fund may concentrate investments within specific countries or industries as per the index concentration.
The FEDM Sector Index is designed to capture the performance of companies demonstrating specific environmental, social, and governance (ESG) characteristics while maintaining exposure to publicly traded equity securities from developed market countries, excluding the U.S. The index employs an ESG Vector Score, incorporating Sustainability Accounting Standards Board (SASB) standards and governance assessments, to rank companies based on their ESG metrics. Additionally, carbon-related risk metrics are utilized to assess climate risk. Exclusions are made based on international guidelines, with screens applied to controversial business activities. The index is governed by transparent rules and rebalanced quarterly, aiming to optimize tracking while enhancing ESG and reducing carbon risk. As of its inception in July 2021, the index comprised 299 constituents, and the fund that tracks the index employs a representative sampling strategy with an 80% investment focus on index securities.
The FEDM Exposure strategy aims to provide exposure to developed market countries outside of the U.S. through a selection of companies displaying favorable environmental, social, and governance (ESG) characteristics. The underlying index seeks to align with the Northern Trust Developed Markets ex-US Large Cap Index while enhancing ESG Vector Scores and reducing carbon-related risks. By applying ESG Vector Scores and carbon metrics, the index provider optimizes security selection, striving to minimize tracking differences and improve ESG profiles while excluding companies engaged in certain controversial activities. The strategy employs passive management and representative sampling, with up to 20% flexibility for non-index securities. The fund may also utilize derivatives for equitization and securities lending, offering exposure to diversified markets while maintaining concentration policies.
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