Northern Trust to offer special funds for clients to comply with Sudan divestment
CHICAGO, Dec. 6 /PRNewswire-FirstCall/ — Northern Trust Global
Investments (NTGI) announced today the creation of seven new institutional
index funds designed to assist U.S. public funds to meet their investment
objectives while complying with recently-enacted laws that mandate divestment
of stocks of companies having business ties to Sudan.
“We are pleased to introduce a family of funds that help our current
clients and other public and private entities meet a socially-oriented
investment objective without undue risk to the long-term goal of funding
retirement benefits for public employees,” said Lyle Logan, Senior Vice
President and Managing Director of Institutional Sales and Client Servicing
for NTGI. “Northern Trust is particularly well-suited to create an effective
solution for compliance with Sudan divestment legislation, given our
quantitative investment expertise and our history of developing customized
products to manage our client’s complex investment needs.”
“These new investment options demonstrate our commitment to U.S. public
fund clients who are using their investment policies to make a statement in
support of human rights for all the people of Sudan,” said Northern Trust
Senior Vice President Connie Lindsey, Group Head of the Public Entities and
Institutions Market Segment. “Our flexible model can be adjusted to meet the
needs of public pension funds, university endowments and other clients across
the United States that face compliance with legislation or investment policy
mandating Sudan divestment.”
The funds were created to meet the requirements of an Illinois law, passed
earlier this year, which orders state public pension funds to divest by July
26, 2007 investment holdings of companies that do business in Sudan. The
Illinois law on Sudan divestiture is expected to affect 13 state pension funds
for public employees. Similar laws have been passed in New Jersey and Oregon,
and others have been proposed for Indiana, Connecticut, Missouri, New York,
Ohio and California.
The Northern Trust Special Purpose Collective Trust funds will track the
return and risk characteristics of major stock and bond indexes while
screening out investments in companies that operate in Sudan. Northern Trust
will rely on an independent research firm to identify companies doing business
in Sudan, and has completed extensive due-diligence on the resources of the
data sources and methodologies of firms offering this information.
Utilizing its proprietary quantitative investment process and extensive
experience in customized benchmarks, Northern Trust will construct portfolios
that will minimize the tracking variance caused by the elimination of the
divested stocks in “Sudan-free” versions of the following indexes:
— Standard & Poor’s 500 Index
— Standard & Poor’s Growth Index
— Standard & Poor’s Midcap 400 Index
— Dow Jones Wilshire 5000 Index
— Dow Jones Wilshire 4500 Index
— MSCI EAFE (Europe Australasia and Far East) Index
— Lehman Aggregate Bond Index
“Drawing on the experience of our portfolio managers and strategists, I am
confident that we will meet our client’s dual goal of following the
requirements of the legislation while simultaneously delivering the return and
risk characteristics of the range of seven benchmark indexes with minimal
variance” said Steven Schoenfeld, Senior Vice President and Global Chief
Investment Strategist, NTGI Quantitative Management. “The growing trend toward
socially-screened investment policies are often best implemented through
customized index-based strategies, and we continue to apply NTGI’s expertise
in this area to serve our clients.”
In addition to maintaining compliance with the Sudan divestment
legislation, Northern Trust will set minimum targets for minority and women
owned brokerage firms for these funds. These goals will be subject to best
execution requirements.
Northern Trust Global Investments has approximately $4.5 billion in assets
under management in a wide range of socially-screened quantitative investment
strategies, as of September 30, 2005, managed for a variety of institutional
and high-net worth clients. With over $209 billion in index and enhanced
index assets under management, Northern Trust is one of the world’s largest
quantitative management firms.
– About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of
investment management, asset and fund administration, fiduciary and banking
solutions for corporations, institutions and affluent individuals worldwide.
Northern Trust, a multibank holding company based in Chicago, has a growing
network of 84 offices in 18 U.S. states and 11 international offices. As of
September 30, 2005, Northern Trust had assets under custody of $2.8 trillion,
and assets under investment management of $607 billion. Northern Trust,
founded in 1889, has earned distinction as an industry leader in combining
high-touch service and expertise with innovative products and technology. For
more information, visit http://www.northerntrust.com.