Barclays Global Investors (BGI) has announced the launch of its second exchange-traded fund (ETF) designed specifically for socially responsible institutional and individual investors.
The iShares KLD 400 Social Index Fund seeks to maximize exposure to companies that have positive environmental, social and governance (ESG) characteristics.
The Fund seeks to track the Domini 400 Social(SM) Index created and maintained by KLD Research & Analytics, Inc., a Boston-based independent investment research and index firm with expertise in socially responsible investing (SRI).
"The DSI provides investors with a cost-effective way to invest in a fund that tracks the highly-regarded Domini 400 Social(SM) Index, which identifies a universe of socially responsible companies and completely avoids others that derive a substantial portion of their revenues from certain industries such as alcohol and tobacco," explained Lee Kranefuss, CEO of BGI's Intermediary and ETF Business.
"This new ETF complements iShares' other SRI ETF, the iShares KLD Select Social(SM) Index Fund, which over-weights companies with higher environmental, social and governance (ESG) performance and under-weights companies with lower ESG performance. We believe that BGI is meeting the needs of most socially responsible investors with these two SRI Funds," added Kranefuss.
The Domini 400 Social(SM) Index consists of 400 companies drawn primarily from the universe of companies included in the S&P 500 Index and the Russell 3000 Index.
KLD seeks to include in the index companies with positive ESG performance relative to their industry and sector peers, and in relation to the broader market.
Companies that KLD determines have revenues beyond specified thresholds in the following businesses are not eligible for the Domini 400 Social(SM) Index: alcohol, tobacco, firearms, nuclear power, military weapons and gambling.
"The launch of DSI allows institutional and retail investors interested in issues such as climate change, treatment of overseas workers or executive compensation to gain exposure to the Domini 400 Social(SM) Index," noted Peter Kinder, President of KLD.
"KLD is very pleased to work with Barclays Global Investors to provide ETFs to the rapidly growing SRI market," he added.
The iShares Funds are index funds that are bought and sold like common stocks on securities exchanges. Both individual and institutional investors are attracted to ETFs due to their their relatively low cost, tax efficiency and trading flexibility.
A comprehensive report in our Intelligence Report series examining offshore investment, offshore stock exchanges, and hedge funds is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp
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