Solactive AG has launched the Ethical US Equity Index, designed to follow US-listed ethical stocks selected according to a best-in class-approach. This Index has been licensed to BNP Paribas, which will use it as underlying for investment solutions, including structured products.
The Ethical US Equity Index is the second index launched by Solactive, following the Ethical Europe Equity Index in April 2013, also licensed to BNP Paribas. The demand for the structured products associated to this first Index has exceeded expectations over the last year. BNP Paribas launched back in September the first World Bank Green Bond linked to an equity index, the Ethical Europe Equity Index. The product has been designed by the capital markets teams of BNP Paribas in collaboration with the World Bank, and the first issue was purchased by BNP Paribas Cardif, the group’s insurance division.
Steffen Scheuble, CEO, Solactive, said: “The Ethical US Equity Index tracks the price movements of stocks that have a high dividend, relatively low historical volatility and, above all, that pass several strict corporate social responsibility screens. By doing so, the Index combines standard financial objectives together with the investors’ rising demand for social, environmental and ethical tools.”
Neven Graillat, European Head of Sustainable Investment Client Solutions, BNP Paribas, said: “Sustainable investments have cemented their place in capital markets while investors are increasingly incorporating ethical considerations into their investment choices, leading to a growing interest in sustainable products. Therefore, this second index solution was a natural extension of the product range, giving access to our clients to a basket of US ethical stocks.”
Nicole Notat, Chairwoman of Vigeo, said: “We are delighted to have taken part in the creation of this second index that required the know-how of 4 experts: Solactive, BNP Paribas, Forum Ethibel and Vigeo in order to offer an innovative and demanding solution. We hope this new index will be as successful as the Ethical Europe Equity Index has been.”
Vigeo, the leading environmental, social and governance rating agency, provides the starting index universe based on stocks score compared with the global average and sector peers scores. Companies with more than 5% of sales from weapons, gambling, tobacco and nuclear are removed from the universe.
To be included in the Index, components also need to be incorporated and listed in the US, have an average daily trading volume of at least USD 50 million over the last 20 trading days, and a dividend yield of at least 115 % of the average dividend yield. Solactive then selects companies within the universe, filtering stocks based on their volatility compared with sector peers.
The final index components are the 30 highest ranked companies chosen following an ethical selection certified by Forum Ethibel, an independent Belgian audit institute, which verifies the strict respect of defined ethical principles.
The top 10 components of the Ethical US Equity Index are the following (as of 6th October):
|
ISIN Code |
Company title |
Weighting |
|
US88579Y1010 |
3M Co. |
4.25% |
|
US7427181091 |
Procter & Gamble Co. |
4.23% |
|
US7134481081 |
PepsiCo Inc. |
3.87% |
|
US2635341090 |
E.I. DuPont de Nemours & Co. |
3.84% |
|
US4943681035 |
Kimberly-Clark Corp. |
3.81% |
|
US1912161007 |
Coca-Cola Co. |
3.77% |
|
US9113121068 |
United Parcel Service Inc. |
3.70% |
|
US94106L1098 |
Waste Management Inc. |
3.69% |
|
US3696041033 |
General Electric Co. |
3.69% |
|
US4781601046 |
Johnson & Johnson |
3.62% |
The performance of the Ethical US Equity Index is the following (as of 6th October):
The In Ethical US Equity Index is price return and published in USD. The Index was launch on 28th August 2014. Back tested historical data is available since 31st December 1999. The Index is rebalanced on a quarterly basis.
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