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Index IDEA: FTSE environmental indexes exceed benchmarks

As we celebrate the 43rd annual World Environment Day on June 5, a day on which the United Nations encourages worldwide awareness and action for the protection of our environment, four groups of environmental indexes from FTSE Russell have recorded a five year rise in excess of their benchmarks.

As of the end of April, all indexes within the FTSE All-World ex CW Climate Balanced Factor Indexes, FTSE Divest-Invest Developed 200 Index Series, FTSE Environmental Opportunities Index Series and FTSE ex Fossil Fuels Index Series have risen more than their benchmark indexes for the last five years.

Source: FTSE Russell. Returns as of April 30, 2017. Past performance is no guarantee of future results. Returns shown may reflect hypothetical historical performance. Please see the end for important legal disclosures.

 

These returns come as the fourth annual FTSE Russell global institutional smart beta survey indicates rising ESG interest by asset owners. According to the survey, 46% of asset owners currently evaluating or using investment strategies based on smart beta indexes anticipate applying ESG considerations.
 

Tony Campos, director, ESG product management, FTSE Russell, said:

“Recent environmental index performance supports the growing recognition by market participants globally that applying ESG considerations to portfolios can align with investment objectives and not simply meet an investment quota or policy objective. Increasingly we are seeing investors look to smart beta indexes to incorporate ESG exposure into their core passive equity portfolios.”

 

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Views expressed by Tony Campos are as of June 5th and subject to change. These views do not necessarily reflect the opinion of FTSE Russell or the LSE Group. 

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No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this IDEA should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional. 

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Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index returns shown may not represent the results of the actual trading of investable assets. Certain returns shown may reflect back-tested performance. All performance presented prior to the index inception date is back-tested performance. Back-tested performance is not actual performance, but is hypothetical. The back-test calculations are based on the same methodology that was in effect when the index was officially launched. However, back- tested data may reflect the application of the index methodology with the benefit of hindsight, and the historic calculations of an index may change from month to month based on revisions to the underlying economic data used in the calculation of the index. 

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