Analysis of the index data shows that:
- By using the FTSE ISS CGI Series, global investors can identify and manage corporate governance risk within global portfolios;
- In terms of index design, an inclusion methodology gives the best return while minimising exposure to companies with poorer corporate governance, and has therefore been used in the construction of the FTSE ISS CGI Series;
- The indices have a low tracking error and the historical performance is in line with the underlying benchmarks.
Quantifying corporate governance risk within a global portfolio has posed a challenge to investors. Producing a solution for the global investment community has been the main driver behind the creation of this index series.
The report includes an introduction on the importance of Corporate Governance, written by William Crist, Chairman FTSE ISS Advisory Group, Emeritus Professor of Economics at California State University and former chairman of CalPERS.
It looks at the FTSE ISS CGI ratings, why they have been created and how they work within the context of the index series. The report also takes an in-depth look at the creation, methodology, performance and risk analysis of the FTSE ISS CGI series.
To receive a copy of this report please go to www.ftse.com/corpgov
