Investors in search of diversified performance and income amid today’s volatile market are seeing the potential benefits of dividend index strategies of different types, says Jason Ye, director of factors and thematics indices in APAC at S&P Dow Jones Indices (S&P DJI).
The Dutch pension fund manager has introduced the Real Estate Responsible Investment Index Strategy, an innovative product that could cater to the growing trend of ESG customisation in the Asia-Pacific region.
The $31 billion Australian superannuation fund hopes to have a carbon reduction overlay in place over its passive equities portfolio within six months.
As debates continue over how much is enough to green the world’s energy supply, transparent, diversified and liquid strategies may help enable investors play their part while also pursuing sustainable outcomes, says Jason Ye, head of strategy indices in APAC at S&P Dow Jones Indices (S&P DJI).
As investors increasingly recognise the risks and opportunities from the low carbon transition, they are incorporating a wider set of considerations into their decision making, including carbon, green revenues and environmental, social and governance (ESG) factors.
Amid global growth in fixed income ETFs, RMB bond index funds have shown rapid growth in the past three years. By the end of June 2020, there were 133 domestic bond index funds with a total value of ¥455.5 bn in China - 23 times greater than in 2018 - and 27 overseas-listed RMB bond ETFs with a total value of ¥53.6 bn, 99% of which comprised Chinese government bonds and policy bank bond ETFs.
As asset managers and owners tighten their grip on costs and self-indexing gains traction, index providers are working more with clients in areas such as ESG and risk analytics.
The outperformance of funds that take environmental, social and governance (ESG) issues more seriously than their peers has reinforced why investors might want to integrate these factors into portfolios via the type of tools that S&P Dow Jones Indices has developed.
A quarter of all professionally managed assets incorporate environmental, social and governance (ESG) principles, including climate change, in their considerations. As demand for data grows, indices reducing carbon emissions risk are now more attractive.