The DAX® 50 ESG Index is the flagship index for sustainable equity investments in Germany and the most recent addition to the DAX® index offerings. The DAX® 50 ESG tracks the performance of a diversified portfolio of 50 largest, most liquid eligible German market stocks screened for Global Standards Screening, involvement in controversial weapons, tobacco, thermal coal, nuclear power and military contracting.
Following on from the successful derivatives launches in 2019, STOXX Ltd. (now part of Qontigo) has recently licensed the STOXX® USA 500 ESG-X Index as an underlying for listed futures on Eurex. These are the first derivatives covering the US market to include screening for thermal coal mining and coal-fired power plants. The new futures have been available since February 10, 2020, expanding the ESG derivatives product suite to a global level.
STOXX is synonymous with equity indexing in Europe. The EURO STOXX 50® Index, EURO STOXX® Index and STOXX® Europe 600 Index have for over 20 years provided liquid and effective access to the region’s stock market, based on transparent rules and an objective methodology.
Earlier this year, STOXX introduced the EURO STOXX 50® ESG Index, a ESG version of the iconic EURO STOXX 50® that follows standard responsible investment exclusions and integrates companies’ ESG scores into stock selection.
The latest STOXX research paper examines the effect on a portfolio’s risk and returns of implementing standardized environmental, social and governance (ESG) exclusions, by looking at the profile and performance characteristics of six STOXX ESG-X Indices.
The term “megatrend” was coined by US political scientist and author John Naisbitt at the start of the 1980s. It refers to powerful macroeconomic transformative forces that have a major impact on countries, businesses and societies around the world, disrupting the way products and services are produced, delivered and consumed.
Minimum variance strategies have gained significant traction especially since the global financial crisis. They aim at reducing or minimizing variance, i.e. the square of volatility as measured by standard deviation, or, in this case, price fluctuations of portfolio prices around their mean.
Ever since the onset of the financial crisis in 2008, volatility has become a critical aspect for investors to consider, measure and position in their portfolios. During the peak of the financial crisis, realized volatilities of asset prices soared as well as volatilities implied by option prices and measured by volatility indices such as the EURO STOXX 50® Volatility (VSTOXX®) Index and VDAX® reached unprecedented levels, reflecting the increasing cost of buying downside protection in the form of options during the market turmoil.
Sustainable investing has been gaining prominence and popularity among investors, institutional and retail alike. Our article ESG Surveys Point to Widespread Adoption sheds more light on the results from some of the recent surveys that show increasing adoption, but also highlight some challenges to adopting environmental, social and governance (ESG) considerations in investing.