NEW YORK, HONG KONG AND TAIPEI, JANUARY 22, 2021: S&P Dow Jones Indices (“S&P DJI”), the world’s leading index provider, today announced the launch of the S&P ESG Equity Target Risk Index Series, which measures the performance of stock-bond allocations as it incorporates ESG values.
The series, comprised of three indices, tracks and reflects varied risk-return characteristics. Each index measures the performance of specific allocations to ESG equities and fixed-income across a risk spectrum from moderate to growth to aggressive:
- S&P ESG Equity Target Risk Moderate Index is designed to measure 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 is designed to measure 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 is designed to measure 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 has recently entered into a licensing agreement with Taiwan Cooperative Securities Investment Trust Co., Ltd to 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.
The universe of eligible component indices 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 index series is semi-annually rebalanced in April and October.
“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,” Tianyin Cheng, Senior Director, Strategy Indices at S&P Dow Jones Indices said, “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 full methodology for the S&P ESG Equity Target Risk Index Series is available at:
https://www.spglobal.com/spdji/en/
