Zug (Nov. 14, 2019) – Qontigo’s global index provider STOXX Ltd. has licensed the STOXX Europe 600 ESG-X Index to Kairos Partners SGR to serve as an underlying for an actively managed fund.
The STOXX Europe 600 ESG-X index includes a product involvement screening for controversial weapons, tobacco and thermal coal as well as a norm-based screening that follows the United Nations Global Compact principles of human and labor rights, the environment, business ethics and anti-corruption. STOXX cooperates with the ESG data provider Sustainalytics for the screening.
“Sustainable investing has become mainstream. In the market, there is strong demand for ESG versions of benchmarks, with a focus on liquidity and lower cost of trading. The STOXX Europe 600 ESG-X is a simple way of incorporating ESG criteria into the portfolio. This index is easy to implement and has a very similar risk-return profile, compared to the STOXX Europe 600 benchmark,” said Willem Keogh, Head of ESG, Thematic and Factor Indices at Qontigo.
“Our fund will invest in mid- and large-cap European stocks and will be actively managed in reference to the STOXX Europe 600 ESG-X index. It is one of the first long-short ESG funds available on the market with an investment approach based on fundamental analysis: it’s an innovative product for investors looking to integrate environmental, social and governance criteria into their portfolios. Kairos wants to promote, grow and support the market for sustainable investment products in Europe,” said Riccardo Valeri, Senior Portfolio Manager at Kairos Partners SGR.
STOXX provides ESG-screened versions of nearly 50 benchmarks that meet the standard responsible-investing criteria of leading asset owners. The suite offers ESG-X versions of global, regional and emerging markets benchmarks, including ESG-X versions of the EURO STOXX 50® and the STOXX® Europe 600. The ESG-X indices incorporate standard norm- and product-based exclusions that aim to limit market and reputational risks while keeping a low tracking error and a similar risk-return profile to the respective benchmark.