How do you pick the stocks in your index?
Posted on September 21st, 2016 by OWLinsights
Generally, index holdings are determined by rules our clients have chosen to govern the indices we build for them. Depending on client requirements, these indices may or may not hold companies that are perceived to be either socially responsible or socially irresponsible. Generally, these indices tend to closely track benchmarks, but are optimized to have ESG characteristics better than the benchmark. For the OWL ESG Benchmark Family of Indices, which we jointly own with our partner Axioma, we’ve decided to utilize a multi-factor approach to choosing securities with the goal of delivering both improved performance and a weighted average ESG score greater than benchmarks.