KLD Launches Dividend Achievers Social Index with Mergent
By Chris McKnett, Business Development Manager, KLD Indexes
On November 1, 2006, KLD teamed with Mergent, Inc. to launch the KLD Dividend Achievers Social Index (DASI), the first benchmark for US equity portfolios meeting investor demand for an index combining environmental, social and governance (ESG) factors and dividend growth.
“We believe KLD’s Dividend Achievers Social Index not only fills a diversification gap for social investors, but also is attractive to a range of equity investors because of its high yield, low risk and low volatility,” said Thomas Kuh, Ph.D., Managing Director of KLD Indexes.
“The KLD Dividend Achievers Social Index is an important and exciting addition to Mergent’s Dividend Achievers family,” said Jonathan Worrall, CEO of Mergent. “Our partnership with KLD enables us to offer the first such index aimed at investors looking for socially responsible investments with low risk returns, and delivers on our commitment to bringing the very best investment opportunities to dividend-focused investors.”
The DASI marks the first time dividend criteria have been applied to an equity social index. The DASI is an equal weighted common stock index comprised of 167 US companies that are members of the KLD Large Cap Social Index (LCSI) or KLD’s Domini 400 Social Index (DS400) and that also satisfy Mergent’s Dividend AchieversTM criteria.
To construct the Index, Mergent’s proprietary Dividend Achievers™ overlay is 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 in the 60-day period prior to Index reconstitution.
The DASI methodology leverages the research and index experience of both KLD and Mergent. Using the LCSI and DS400 as the universe of DASI candidates offers investors exposure to companies exhibiting positive ESG performance. The Dividend AchieversTM overlay selects the sub-set of these companies with the strongest records of dividend growth such as Procter & Gamble, Johnson & Johnson and AT&T.
An investment product based on the DASI will soon be available, as KLD and Mergent have secured an agreement with a Unit Investment Trust (UIT) sponsor. The UIT is expected to launch in late first quarter 2007.
For more information about KLD Indexes, please visit www.KLDIndexes.com or contact us at indexes@kld.com.
Copyright © 2007 KLD Research & Analytics, Inc. All rights reserved. “Domini 400 Social Index” and “KLD Large Cap Social Index” are service marks of KLD Research & Analytics, Inc. “Dividend Achievers is a trademark of Mergent, Inc.
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