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First Emerging Markets Custom Index and Fund with ESG Screens announced by Northern Trust in conjunction with MSCI ESG Research



  First Emerging Markets Custom Index and Fund with ESG Screens announced by
  Northern Trust in conjunction with MSCI ESG Research and ISS

  Unique Fund Designed for Investors Seeking Emerging Markets Exposure while
                      Incorporating Governance Screening

Business Wire

LONDON -- March 25, 2013

The first emerging markets custom index which integrates Environmental, Social
and, uniquely, Governance (ESG) screens has been announced by Northern Trust
(Nasdaq: NTRS), in collaboration with MSCI ESG Research’s and Institutional
Shareholder Services’ (ISS) ESG screens. A pooled fund passively managed to
this new index has also been launched.

The MSCI Emerging Markets Custom ESG Index and Northern Trust's corresponding
fund are designed to enable institutional investors across the globe to gain
exposure to the potential growth and diversification benefits of emerging
markets investment, while incorporating traditional environmental and social
screening, as well as a unique governance screen.

“We see an increasing demand for exposure to emerging markets, particularly
among our institutional investor clients,” said John Krieg managing director
for Northern Trust’s asset management arm in Europe, Middle East and Africa.
“While many government or majority family owned and run companies are very
well managed, some investors are concerned that certain emerging market
companies lack sufficient executive independence and scrutiny of management.
This challenge led us to examine how we could develop a passive investment
vehicle that could filter out companies with less satisfactory governance
criteria, while still enabling access to emerging markets.”

The index was developed by Northern Trust in conjunction with MSCI ESG
Research and ISS - a leading provider of corporate governance solutions The
process comprises four steps: three screens are applied to the MSCI EM Index
universe, followed by a sequence of checks on governance and executive
independence.

The first three screens were determined based on common factors for norms
based and industry screening criteria identified in consultation with Northern
Trust’s existing European investor clients. The first eliminates constituent
companies of the MSCI EM Index that have been found to be in breach of the UN
Global Compact’s ten principles. The second screen removes manufacturers of
controversial weapons such as cluster bombs and landmines and finally tobacco
manufacturers are excluded.

Following these exclusions, any constituents lacking sufficient independence
across ownership, board representation, key corporate committees and audit and
remuneration committees are filtered out.

“This Index is unique in combining industry screens, norms-based screens and
governance screens,” said Thomas Kuh, executive director, MSCI ESG Indices.
“Research shows that good corporate governance matters and the addition of the
governance screen should improve the quality of the companies in the index
from an ESG perspective.”

According to a Northern Trust study, Changing Perspectives on Passive
Investing, published in 2012, 44 percent of institutional investors
incorporate ESG considerations within their investment planning. This supports
research from the Global Sustainable Investment Alliance which indicates that
22 percent of assets globally invested currently incorporate ESG criteria.
Meanwhile, allocation by institutional investors to emerging markets has
increased by 30 percent in the last three years according to research by
EIRIS.

“We believe there are three key drivers behind the growth in ESG
considerations,” said Mamadou-Abou Sarr, senior product specialist for global
index management at Northern Trust. “These include the obligation of asset
owners to abide by their internal governance policies or the broader
regulatory environment, and the growing recognition of the importance of ESG
as an investment theme. The latest custom index and fund contribute to our
existing ESG capabilities and address the challenge of combining ESG criteria
with exposure to emerging markets.”

As of 31 December 2012, Northern Trust managed more than US$20 billion in
socially screened assets for clients across the globe. It has over 20 years of
experience managing socially responsible portfolios and socially-screened
assets. In late 2012, Northern Trust announced it had launched the World
Custom ESG Equity Index Fund which enables institutional investors across the
globe to meet commonly held ESG criteria.

To read more about emerging markets and ESG Investing, read our white paper
here.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment
management, asset and fund administration, banking solutions and fiduciary
services for corporations, institutions and affluent individuals worldwide.
Northern Trust, a financial holding company based in Chicago, has offices in
18 U.S. states and 16 international locations in North America, Europe, the
Middle East and the Asia-Pacific region. As of December 31, 2012, Northern
Trust had assets under custody of US$4.8 trillion, and assets under investment
management of US$758.9 billion. For more than 120 years, Northern Trust has
earned distinction as an industry leader in combining exceptional service and
expertise with innovative products and technology. For more information, visit
www.northerntrust.com or follow us on Twitter @NorthernTrust.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago,
Illinois 60603 U.S.A, incorporated with limited liability in the U.S.

The Northern Trust Company, London Branch (reg. no. BR001960), Northern Trust
Global Investments Limited (reg. no. 03929218) and Northern Trust Global
Services Limited (reg. no. 04795756) are authorised and regulated by the
Financial Services Authority.

Northern Trust (Guernsey) Limited, Northern Trust Fiduciary Services
(Guernsey) Limited, and Northern Trust International Fund Administration
Services (Guernsey) Limited are licensed by the Guernsey Financial Services
Commission. Northern Trust International Fund Administrators (Jersey) Limited
and Northern Trust Fiduciary Services (Jersey) Limited are regulated by the
Jersey Financial Services Commission. Northern Trust International Fund
Administration Services (Ireland) Limited, Northern Trust Securities Services
(Ireland) Limited and Northern Trust Fiduciary Services (Ireland) Limited are
regulated by the Central Bank of Ireland. Northern Trust Global Services
Limited has a Netherlands Branch which is authorised and regulated in the
Netherlands by De Nederlandsche Bank. Northern Trust Global Services Limited
has a Luxembourg Branch which is authorised and regulated by the Commission de
Surveillance du Secteur Financier (CSSF). Northern Trust Luxembourg Management
Company S.A. is regulated by the Commission de Surveillance du Secteur
Financier (CSSF). Northern Trust Global Services Limited operates in Abu Dhabi
as a Representative Office, Licence number 13/238/2008 which is authorised and
regulated by the Central Bank of the United Arab Emirates. The Northern Trust
Company operates in Canada as The Northern Trust Company, Canada Branch which
is an authorized foreign bank branch under the Bank Act (Canada). Trustee
related services in Canada are provided by the wholly owned subsidiary The
Northern Trust Company, Canada, an authorized trust company under the Trust &
Loans Companies Act (Canada). Deposits with The Northern Trust Company and its
affiliates and subsidiaries are not insured by the Canada Deposit Insurance
Corporation. Northern Trust operates in Australia as a foreign authorised
deposit-taking institution (foreign ADI) and is regulated by the Australian
Prudential Regulation Authority and the Australian Securities & Investments
Commission (AFS Licence No: 314970). The Northern Trust Company of Hong Kong
Limited is regulated by the Hong Kong Securities and Futures Commission. The
Northern Trust Company has a Singapore Branch which is a foreign wholesale
bank regulated by the Monetary Authority of Singapore. The Northern Trust
Company has a branch in China regulated by the China Banking Regulatory
Commission. Northern Trust Global Investments Japan, K.K. is regulated by the
Japan Financial Services Agency. Northern Trust Global Services Ltd (UK)
Sweden Filial is authorised by the Financial Services Authority and subject to
regulation by the Finansinspektionen. Northern Trust Global Investments
Limited has a Netherlands branch which is authorised by the Financial Services
Authority and subject to regulation in The Netherlands by the Autoriteit
Financiële Markten. Northern Trust Global Investments Limited has a Sweden
branch which is authorised by the Financial Services Authority and subject to
regulation in Sweden by the Finansinspektionen.

Contact:

Northern Trust
EMEA Contact:
Camilla Greene
+44 (0) 207 982 2176
Camilla_Greene@ntrs.com
or
US, Canada & APAC Contact:
John O’Connell
+1 312 444 2388
John_O’Connell@ntrs.com
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