Whitepaper - July 2020

STOXX® ESG-X Indices Outperform During Market Distress

In this paper, we analyze the performance of some of the flagship ESG-X indices underlying exchange-traded derivatives (ETDs) and exchange-traded funds (ETFs) over a period beginning towards the end of 2019 till mid-July 2020. We note that the STOXX ESG-X indices have markedly outperformed their benchmarks over a period covering the recent short-term market distress caused by the COVID-19 pandemic. This was primarily driven by stock selection (or deselection in the case of the ESG-X indices), with the indices avoiding some of the risky exposures to securities belonging to industries such as Aerospace & Defense, Tobacco, Utilities (Electric, Gas and Multi), etc. that were affected badly during the COVID-19 market distress.

Authors

Ladi Williams

Product Manager

Anand Venkataraman

Head of Section, Product Management