KLD Research & Analytics, Inc. and Mergent, Inc. announced the launch of the KLD Dividend Achievers Social Index, the first benchmark for US equity portfolios meeting investor demand for both environmental, social and governance (ESG) performance and dividend growth.
“KLD is delighted to work with Mergent to capitalize on their dividend growth expertise,” said Peter D. Kinder, president of KLD. “We know social investors will be excited about this new equity income index based on the long and established track record of trusted leaders in their markets.”
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.”
Back tests of the KLD Dividend Achievers Social Index (DASI) show increased performance and lower volatility compared to an appropriate market benchmark such as the Russell 1000 Value® Index. At the same time, it provides an above market yield and greater small and mid cap diversification than most socially responsible indexes.
The KLD Dividend Achievers Social Index 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 168 US companies that are members of the KLD Large Cap SocialSM Index (LCSI) or KLD’s Domini 400 SocialSM 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 ESG 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. First, by using the KLD LCSI and DS400 as the universe of DASI candidates, investors gain exposure to positive ESG performance. Second, application of the Dividend AchieversTM overlay seeks out those KLD-evaluated ESG performers with the strongest records of dividend growth such as Procter & Gamble, Johnson & Johnson and AT&T.
KLD Indexes, a division of KLD Research & Analytics, constructs indexes for investors who integrate environmental, social and governance factors into their investment decisions. Investors, trustees, and consultants depend on the quality and integrity of KLD Indexes, which are designed to be transparent, representative and investable. Today, more than $10 billion is invested in funds based on KLD’s family of six benchmark and strategy indexes.
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