Global index, data and analytics provider FTSE Russell and Japan-based securities and investment banking company Nomura Securities announced today the launch of the FTSE Nomura Climate Risk-Adjusted Carry and Roll Down World Government Bond Index Series (FTSE Nomura Climate CaRD WGBI series), a new index series encompassing both climate considerations and carry and roll down factor strategies.
The new series is derived from the FTSE World Government Bond Index, a widely used benchmark of investment-grade sovereign bonds from over 20 developed economies. Based on that underlying index, the series applies a forward-looking assessment of the climate risks sovereigns face and tilts towards government markets that, on a relative basis, demonstrate a greater degree of resilience and preparedness to the risks of climate change. The series also employs carry and roll yield and spread strategies.
Tadashi Tago, Japan Country Head, FTSE Russell said:
“This innovative new index series is the result of our important partnership with Nomura Securities in Japan and offers investors greater choice when investing in developed market sovereign debt. Users of this new product will benefit from a powerful combination of climate risk mitigation and carry factor strategies. The index series also achieves closer alignment to the goals of the Paris Agreement by reducing the aggregate carbon emissions relative to the standard FTSE World Government Bond Index.”
Tadashi Kikugawa, Managing Director, Head of Quantitative Index Strategies, Nomura Securities, said:
“Climate risk mitigation and reduction of carbon dioxide emissions have become a central theme for the environment. Our partnership with FTSE Russell will enable us to provide an innovative solution to asset owners looking for climate risk-adjusted investment. By offering ESG investment opportunities in government bonds, which account for more than half of the global bond market, it will be possible to increase the ratio of ESG investment in the portfolio.”