Chicago-based investment manager Northern Trust has launched a global sustainability index fund. It seeks long-term performance by investing in companies selected for their projected investment and social returns. The new fund includes stocks in 24 developed markets, in each sector, that promote environmental, social and governmental responsibility. Northern Trust now offers a total of 39 no-load domestic and international retail mutual funds.

The new fund is the first to track the KLD global sustainability index, a market capitalisation weighted index of large and mid-cap developed companies in North America, Europe and Asia-Pacific launched in late 2007. It includes 693 of the highest-ranked companies in each sector based on a comprehensive environmental, social and governance screening process. Stocks are selected for social responsibility factors through qualitative and quantitative analysis. The fund is priced at 65 basis points with no sales charge.

The bank says that the fund’s sustainability strategy seeks to include companies that address the social and environmental needs of the present, without compromising the quality of life of future generations, rather than exclude companies referred to as “sin stocks” or those that do not meet set criteria of social responsibility. Northern Trust says that because this emerging methodology does not prohibit investments in particular sectors, it is sector neutral and thus limits the risk associated with sector variance found in many traditional socially responsible investment vehicles.