Pension fund demand prompts launch of new Dow Jones sustainability index family

New ‘diversified’ sustainable indices from RobecoSAM/S&P Dow Jones

Demand from mainly European pension funds is behind the launch today of a new range of diversified sustainable indices from S&P Dow Jones Indices and RobecoSAM.

The new eight-strong Dow Jones Sustainability Diversified Indices series will complement the venerable “pure play” Dow Jones Sustainability Index (DJSI) group that was launched in 1999 and which has around $6bn of assets tied to it.

It’s hoped that the new family will be attractive for passive investors who measure performance against a standard benchmark but who wish to “tilt” their portfolios towards sustainable companies – without taking on additional active country, size or sector risks. It’s hoped investors will avoid having to make major shifts to their strategic asset allocation.

“The idea grew out of discussions with some pension funds,” said Guido Giese, Head of Indices at RobecoSAM, pointing to their long-term view and strict risk guidelines.The aim is to offer a similar risk profile and performance to the S&P Global LargeMidCap Broad Market Index, yet with a higher sustainability exposure.

The new offering follows the two firms’ new sustainability-themed emerging markets index in February.

The flagship of the new series will be the 677-component DJSI World Diversified, covering 26 developed and 20 emerging market countries.

Component companies will be analysed using RobecoSAM’s familiar assessment methodology.

Others in the family cover World Developed, World Developed ex-Korea, North America, Europe Developed, Asia-Pacific Developed, Emerging Markets and Emerging Markets Plus (which includes Korea).

RobecoSAM is new name for Zurich-based sustainability boutique SAM, which is part of the Robeco fund management firm that was acquired recently by Japanese conglomerate ORIX.