Index provider S&P Dow Jones Indices (S&P DJI) announced today the launch of the S&P ESG Equity Target Risk Index Series. The series consists of three new indices, which track and reflect varied risk-return characteristics through a variety of stock-bond allocations, while incorporating ESG values. According to S&P DJI, each index measures the performance of specific allocations to ESG equities and fixed-income across a risk spectrum from moderate to growth to aggressive.
Tianyin Cheng, Senior Director, Strategy Indices at S&P Dow Jones Indices said:
“We are excited to launch the S&P ESG Equity Target Risk Index Series. These innovative ESG indices aim to give investors exposures to global equity and bond markets with enhanced ESG characteristics, while providing targeted risk levels according to their appetite and investment goals. Target risk indices are widely used to construct balanced funds with a desired risk and return outcomes. This targeted strategy is commonly used by investors to develop retirement solutions.”
The universe of eligible component indices for the new index series includes six ESG equity indices covering the United States, Canada, Europe, the Middle East and Africa, Asia Pacific and other emerging markets, as well as two fixed-income indices including the S&P Green Bond Select Index and S&P U.S. Aggregate Bond Index.
The new index series include:
- S&P ESG Equity Target Risk Moderate Index – measures the performance of moderate stock-bond allocations to fixed income, while seeking to increase opportunities for higher returns through ESG-themed equities.
- S&P ESG Equity Target Risk Growth Index – measures the performance of ESG-themed equity allocations, while seeking to provide limited fixed-income exposure to diversity risk.
- S&P ESG Equity Target Risk Aggressive Index – measures the performance of aggressive allocations to equities, seeking to maximize opportunities for long-term capital accumulation through ESG-themed equities, while also including small allocations to fixed income to enhance portfolio efficiency.
S&P DJI also announced a licensing agreement with Taiwan Cooperative Securities Investment Trust Co., Ltd, which will use the S&P ESG Equity Target Risk Growth Index and the S&P ESG Equity Target Risk Aggressive Index as the basis of index funds.