Frequently Asked Questions
What is the KLD Global Sustainability Index Ex-US?
What universe does the Index utilize?
How is the Index constructed?
How is the GSIXUS maintained?
How many countries are represented in the eligible universe for the GSIXUS?
How many companies are in the KLD Global Sustainability Index Ex-US?
What is “Sector Neutrality”?
Does KLD consider all constituents of the Index to be “socially responsible” companies?
How does KLD define “sustainability”?
What ESG factors are used in the selection process of GSIXUS constituents?
How can I invest in the KLD Global Sustainability Index Ex-US?
How can I obtain a list of constituents of the Indexes?
Can I start a mutual fund or an ETF based on the Index?
How can I obtain analytics for portfolio performance measurement and attribution?
What is the KLD Global Sustainability Index Ex-US?
The KLD Global SustainabilitySM Index Ex-US (GSIXUS or “The Index”) is a diversified global benchmark constructed using environmental, social and governance (ESG) factors as selection criteria. The Index holds the top ESG-ranked companies by sector in Europe, Asia-Pacific and Canada.
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What universe does the Index utilize?
The GSIXUS utilizes the S&P / Citigroup Broad Market World Index Ex-US.
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How is the Index constructed?
The GSI Committee uses the following process to select index constituents:
- Companies in the eligible universe are rated by KLD and its research partners on their environmental, social and governance performance. These companies are then divided based on their respective regions: Europe, Asia Pacific and North America.
- The highest-ranking companies that comprise 37.5% of the market capitalization in each sector by region of the eligible universe are then selected.
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How is the GSIXUS maintained?
The GSI Committee is responsible for monitoring the holdings to ensure there are no major events that would require removal of a company from the KLD Global Sustainability Index. The Committee also reconstitutes the GSIXUS each year based on an updated ranking of the eligible universe of companies. KLD announces the reconstituted GSIXUS on the first business day of November each year.
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How many countries are represented in the eligible universe for the GSIXUS?
There are 24 developed market countries represented in the KLD Global Sustainability Index eligible universe:
- Australia
- Hong Kong
- Japan
- New Zealand
- Singapore
- Austria
- Belgium
- Canada
- Denmark
- Finland
- France
- Germany
- Greece
- Iceland
- Ireland
- Italy
- Luxembourg
- Netherlands
- Norway
- Portugal
- Spain
- Sweden
- Switzerland
- United Kingdom
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How many companies are in the KLD Global Sustainability Index Ex-US?
For the most current number of companies, please see the GSIXUS Fact Sheet.
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What is “Sector Neutrality”?
A portfolio is sector neutral when its sector weights match those of the underlying market. Sector bias occurs when the sectors weights in an index or investment portfolio vary from those in the underlying market. SRI and sustainability indexes are often compared to unscreened market benchmarks (such as the S&P 500 or the S&P/Citigroup BMI World) to evaluate risk and return differences.
Sector bias contributes to financial risk, as measured by tracking error – in this case, how closely the GSIXUS tracks a traditional benchmark. By making the GSIXUS sector neutral, KLD reduces the expected tracking error of the GSI and eliminates one factor contributing to financial risk.
To achieve sector neutrality, KLD selects the top 37.5% of the market capitalization of each sector in each region of the S&P/Citigroup BMI World. This process creates a sustainability index that is expected to closely track the global market while exhibiting a strong sustainability identity.
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Does KLD consider all constituents of the Index to be “socially responsible” companies?
KLD evaluates companies on the GSI based on a broad range of ESG issues. Companies included on the GSI have taken an industry leading position on issues relevant to its sector. KLD is aware that holdings in the GSI may not meet the standards of all socially responsible investors.
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How does KLD define “sustainability”?
Sustainability refers to the degree to which a company addresses the social and environmental needs of the present without compromising the quality of life of future generations.
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What ESG factors are used in the selection process of GSIXUS constituents?
KLD uses a variety of factors including those listed in the following table. KLD’s GSI Committee identifies and applies key ESG performance indicators to formulate the rankings for each sector.
| Environmental, Social and Governance Factors |
Environment |
Social |
Governance |
| Policies and Mgt. Systems |
Employees |
Governance Structure |
| Products & Services |
Contractors & Supply Chain |
Business Ethics |
| Natural Resource Use |
Customers |
Transparency & Reporting |
| Climate Change |
Communities & Society |
Shareholder Relations |
| Waste & Emissions |
|
|
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How can I invest in the KLD Global Sustainability Index Ex-US?
KLD Indexes is an independent index provider and does not mange any funds or money. However, KLD indexes are licensed as investable products for individuals and institutions.
The KLD Global Sustainability Index is currently not licensed as an investable product.
For a complete list of products based on KLD Indexes, please see the Product Fact Sheet.
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How can I obtain a list of constituents of the Indexes?
To purchase a current list of constituents, or to subscribe to constituent lists for one or more KLD indexes, please contact indexes@kld.com.
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Can I start a mutual fund or an ETF based on the Index?
Please contact us at indexes@kld.com to discuss licensing opportunities.
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How can I obtain analytics for portfolio performance measurement and attribution?
KLD can provide clients with index data to measure portfolio performance and conduct attribution analysis. Please contact indexes@kld.com.
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