Frequently Asked Questions
What is the KLD Dividend Achievers Social Index?
Who created the KLD Dividend Achievers Social Index and why?
What is the Domini 400 Social Index?
What is the KLD Large Cap Social Index?
How does a dividend-paying company become a Dividend AchieverTM?
What percentages of dividend-paying companies are classified as Dividend Achievers?
What distinguishes Dividend Achievers from other U.S. listed companies?
Does Mergent Inc. offer a Dividend Achiever Index?
What universe does the DASI utilize?
How many companies are in the DASI?
Is there a minimum size for DASI companies?
How many industry sectors are represented in the DASI?
How was the Index constructed?
What ESG screens does the Index utilize?
How is the Index maintained?
How often are the Indices reconstituted?
How are corporate actions handled?
How is the DASI weighted?
Who calculates the index performance and values?
Where can I obtain Index data?
What determines turnover of the Index?
Are the constituents of the Index the best "socially responsible" companies?
Can I use the Index as an investment universe?
How can I invest in the DASI?
Can I start a mutual fund, ETF or UIT based on the Index?
How can I obtain a list of the constituents in the Index?
Can I be notified of changes to the Index?
How can I obtain Index analytics for portfolio performance measurement and attribution?
What is the KLD Dividend Achievers Social Index?
Jointly developed using KLD’s accepted ESG indexing process and coupled with Mergent, Inc.’s Dividend AchieversTM requirements, the KLD Dividend Achievers Social Index (DASI)is the first benchmark for equity portfolios subject to ESG screens and dividend criteria. The DASI is an equal weighted common stock index comprised of environmental, social and governance (ESG) screened performers with 10 or more consecutive years of dividend growth.
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Who created the KLD Dividend Achievers Social Index and why?
The KLD Dividend Achievers Social Index is a jointly developed and maintained by KLD Research & Analytics, Inc. and Mergent, Inc. The Index was created to provide SRI investors with an equity income investment option currently unavailable in the market. The DASI methodology leverages the research and index aptitudes of both firms. First, by using the KLD Large Cap SocialSM Index (LCSI) and Domini 400 SocialSM Index (DS400) as the universe of DASI candidates, investors gain exposure to ESG performers. Second, application of the Dividend AchieversTM overlay seeks out those KLD–evaluated ESG performers with the longest records of dividend growth.
What is the Domini 400 Social Index?
KLD’s Domini 400 SocialSM Index (DS400) is a float-adjusted market capitalization weighted common stock index modeled on the S&P 500 Index. The DS400 is the first benchmark for equity portfolios that apply environmental, social and governance screens. It is a widely recognized and studied benchmark for measuring the impact of ESG screening on financial returns and the performance of screened portfolios.
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What is the KLD Large Cap Social Index?
The KLD Large Cap SocialSM Index (LCSI) is a float-adjusted market capitalization weighted index designed to represent the large-cap segment of the U.S. equity market available to social investors. The LCSI includes the best environmental, social and governance (ESG) performers in each sector of the Russell 1000® while approximating the sector diversification of the Russell 1000®.
How does a dividend-paying company become a Dividend AchieverTM?
A publicly-traded company incorporated in the U.S. or its territories and is listed on NYSE, AMEX or NASDAQ that has increased its dividends for the last ten or more consecutive years will be classified as a Dividend Achiever. Visit http://www.dividendachievers.com/ for further information.
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What percentages of dividend-paying companies are classified as Dividend Achievers?
Just 10.0% of 3,300-plus North American-listed, dividend-paying common stocks are classified as Dividend Achievers. Visit http://www.dividendachievers.com/ for further information.
What distinguishes Dividend Achievers from other U.S. listed companies?
Dividend Achievers have demonstrated the ability to consistently increase dividend payments over a substantial period of time, though volatile markets and challenging political climates. In addition, over 30% of Dividend Achievers have increased their dividends for a minimum of 25 years or more. Visit http://www.dividendachievers.com/ for further information.
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Does Mergent Inc. offer a Dividend Achiever Index?
Mergent, Inc. offers a family of Dividend Achiever Indexes. Dividend Achiever indexes include an international, a Canadian, a North American as well as indexes based on sectors and performance measurements. Visit http://www.dividendachievers.com/ for further information.
What universe does the DASI utilize?
The DASI universe consists of companies that are either a constituent of the KLD Large Cap Social Index or KLD’s Domini 400 Social Index.
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How many companies are in the DASI?
For most current number of companies on the Index, please see the Index Fact Sheet.
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Is there a minimum size for DASI companies?
There is not a minimum size requirement, however; the Large Cap Social Index only includes members of the Russell 1000® Index, an Index of the largest 1000 public U.S. companies, and the Domini 400 Social Index has a target composition of approximately 250 S&P 500 companies and seeks to include companies with a market capitalization greater than USD 200 million.
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How many industry sectors are represented in the DASI?
At launch, nine economic sectors are represented in the DASI.
How was the Index constructed?
To be eligible for the DASI, a company must be incorporated in the United States or its territories, trade on NYSE, AMEX, or NASDAQ, and must be a member of the KLD Large Cap SocialSM Index (LCSI) or KLD’s Domini 400 SocialSM Index (DS400).
Companies in the Russell 3000® and Standard & Poor’s 500® involved beyond specific KLD thresholds in adult entertainment, alcohol, tobacco, firearms, gambling, nuclear power and military weapons are ineligible for consideration for the LCSI or DS400.
After KLD applies these screens, each company is evaluated based on performance on the following issues: environment, community relations, diversity, employee relations, human rights, product quality and safety, and corporate governance. KLD evaluates and selects companies in the context of their industry and sector as well as in relation to the broader market.
The Mergent Dividend AchieversTM overlay is then applied to the combined LCSI and DS400 universe. The overlay selects only those companies that have paid an increasing regular cash dividend for a minimum of 10 consecutive years. In addition, each company’s stock average daily cash volume must exceed $1 million for 60-day period prior to each Reconstitution.
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What ESG screens does the Index utilize?
The DASI universe consists of companies that are either a constituent of the KLD Large Cap Social Index or KLD’s Domini 400 Social Index. KLD uses a two-step screening process for selecting LCSI or DS400 companies. Companies involved beyond specific KLD thresholds in alcohol, tobacco, firearms, gambling, nuclear power and military-weapons activities are ineligible for consideration for either Index. KLD excludes companies that fail these screens regardless of other social and environmental attributes of these companies.
KLD then selects eligible companies that have positive social and environmental records based on the following issues: community relations, diversity, employee relations, human rights, and product quality and safety, environment and corporate governance. KLD evaluates companies in the context of their industry and sector as well as in relation to the broader market.
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How is the Index maintained?
The DASI Index Committee reconstitutes the Index every year on the first business day in February in conjunction with the reconstitution schedule of the Dividend AchieversTM. The Index is reconstituted again on the first business day in August following reconstitution of the LCS. Changes to Index constituents from corporate actions are handled on a case-by-case basis. KLD may remove a company at any time for reasons related to its ESG performance. Companies that fail to increase their cash dividend are removed at February reconstitution. Companies removed from the DASI between reconstitutions are not replaced and all Index additions occur only at reconstitution. The Committee makes the final decision on all changes to the Index related to ESG screens.
How often are the Indices reconstituted?
The Index is reconstituted semi-annually after the close of business on the last trading day in January and July (“Semi-Annual Reconstitution Date”) according to KLD’s and Mergent’s proprietary screening methodologies.
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How are corporate actions handled?
In the event of a merger between two companies included in the Index, the common shares of the surviving issuer will continue to be represented in the Index. In the event of a merger between a company in the Index and a company not in the index, Mergent and KLD shall evaluate the permanence of the resulting entity.
A company will be dropped from the Index in the case of its acquisition.
In the event of certain types of corporate actions such as the payment of a dividend, other than an ordinary cash dividend, rights offering, or a distribution with respect to a component stock, Mergent will adjust the divisor for the Price Return Index to reflect the adjustment to the price of that component stock for the distribution.
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How is the DASI weighted?
The index is calculated using an equal weighting methodology. Between the semi-annual reconstitution dates, the Index weights of each company will float. Hence it will be possible for a company’s weight to exceed the average weighting of the index constituents during this interim period.
Who calculates the index performance and values?
Mergent, Inc calculates the DASI using end of day prices.
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Where can I obtain Index data?
Performance and Index constituent changes are available on www.KLDIndexes.com and www.dividendachievers.com. Tickers will be assigned and included on the DASI Fact Sheet. Index data will also be available through major market data vendors.
What determines turnover of the Index?
A substantial majority of index changes are attributable to corporate actions occurring throughout the year. Companies may also be removed for concerns related to problematic ESG performance or lack of dividend growth.
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Are the constituents of the Index the best "socially responsible" companies?
No. Since the screens for the DS400 and LCSI reflect a broad cross section of ESG issues and because the DASI includes only those DS400 or LCSI companies satisfying dividend growth requirements, not all DASI holdings will reflect everyone's standards for corporate social responsibility.
Can I use the Index as an investment universe?
Yes. The DASI contains companies in the U. S., that, in addition to passing ESG and dividend performance metrics reflect the general market behavior of stocks of the average socially responsible investor.
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How can I invest in the DASI?
KLD and Mergent are index providers and neither manages any funds. However, KLD Indexes are licensed as investable products for individuals and institutions. KLD and Mergent are actively seeking licensees for investment products based on the DASI.
For a complete list of products based on KLD Indexes, please see the Product Fact Sheet.
Can I start a mutual fund, ETF or UIT based on the Index?
KLD Indexes can serve as the basis for mutual funds, exchange-traded funds, separately managed accounts, UITS and other products. Please contact Shirley.Petersen@mergent.com or indexes@kld.com to discuss licensing opportunities.
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How can I obtain a list of the constituents in the Index?
To purchase a current list of constituents, or to subscribe to constituents lists for one or more KLD indexes, please contact indexes@kld.com.
Can I be notified of changes to the Index?
Whenever possible, KLD provides advance notification of additions to or removals from its indexes to index licensees. KLD publishes prior month changes on www.KLDIndexes.com in the middle of every month. Constituent changes are also available on www.dividendachievers.com. Please contact indexes@kld.com for more information.
How can I obtain Index analytics for portfolio performance measurement and attribution?
KLD can provide clients with index data to measure portfolio performance and conduct attribution analysis. KLD Indexes can be used to measure the financial performance of ESG portfolios and quantify the risk and return characteristics of ESG screened portfolios relative to unscreened market benchmarks. Please contact indexes@kld.com.
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