Labour Union Co-operative Retirement Fund (LUCRF) has appointed Northern Trust Asset Management's international business to manage a $220 million World ex-Australia index mandate.
It has appointed Northern Trust Global Investments Limited for the mandate, which includes Environmental, Social and Governance (ESG) screens into Northern Trust's portfolio construction process.
The mandate will exclude tobacco companies and cluster munitions manufacturers, in line with the United Nations' Principles for Responsible Investments.
This involves including custom environmental, social and corporate governance screens into investment analysis.
This comes in an effort to achieve similar benchmark risk and return characteristics with lower transactions costs compared to a fully replicated strategy.
"ESG screening is a core component of our investment decision-making process," head of investment at LUCRF Roger McIntosh said.
"Northern Trust's extensive experience managing ESG portfolios, coupled with their ability to provide a customized investment solution, were key factors in our decision."
While the Financial Advice Association Australia said it supports a performance testing regime “in principle”, it holds reservations about expanding this scope to retirement products.
In a Senate submission, the Financial Services Council said super funds should be able to nudge members on engaging with their super and has cautioned against default placements.
The Joint Associations Working Group, which counts FSC in its ranks, has issued an urgent warning to the government.
Senator Jane Hume will join the speaker lineup at the inaugural Australian Wealth Management Summit.
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