by Qontigo
November 3, 2022 — Qontigo has licensed the newly launched iSTOXX World Min Vol ESG Index to Legal & General Investment Management (LGIM). The index will be used for a large pension fund mandate. This index is based on STOXX’s broadest equity universe, the STOXX World AC (All Countries), including both Developed and Emerging Markets and incorporates both proprietary ESG data provided by LGIM and data from ISS ESG.
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“Investing in minimum volatility strategies has traditionally come at the cost of potentially poorer ESG outcomes compared with standard market cap benchmarks. However, this new solution can allow the investor to enhance their environmental objectives, improve ESG profiles and achieve a net zero decarbonization pathway, while also targeting a lower risk profile than a broad market benchmark. The research process was a truly collaborative effort carried out by LGIM, the client and Qontigo who shared the same vision. We are pleased to have created an innovative solution which incorporates LGIM’s ESG framework.”
Fadi Zaher, Head of Index Solutions at Legal & General Investment Management
“Investors in general, and pension trustees in particular, increasingly need to meet a higher number of objectives in their investment allocations. This is particularly true of sustainability criteria and, given the market backdrop, a defensive positioning. The iSTOXX World Min Vol ESG index is an example of how we can embed multiple requirements, and incorporate the most appropriate third-party data, into a rules-based, passive strategy. The index methodology also incorporates risk mitigation with the help of our Axioma optimizer.”
Axel Lomholt, Chief Product Officer, Indices & Benchmarks at Qontigo
Qontigo’s iSTOXX World Min Vol ESG Index tracks the performance of an optimized minimum variance portfolio that tilts towards companies that exhibit low volatility, favorable fundamentals, and superior ESG scores. The index is constructed in two steps: first by creating a minimum variance portfolio based on the STOXX World index, and second by improving the Climate and ESG profiles of this portfolio. The index rules ensure tradability, diversification, and positive exposure to fundamental quality.
About Qontigo
Qontigo is a leading global provider of innovative index, analytics and risk solutions that optimize investment impact. As the shift toward sustainable investing accelerates, Qontigo enables its clients—financial-products issuers, asset owners and asset managers—to deliver sophisticated and targeted solutions at scale to meet the increasingly demanding and unique sustainability goals of investors worldwide.
Qontigo’s solutions are enhanced by both our collaborative, customer-centric culture, which allows us to create tailored solutions for our clients, and our open architecture and modern technology that efficiently integrate with our clients’ processes.
Part of the Deutsche Börse Group, Qontigo was created in 2019 through the combination of Axioma, DAX and STOXX. Headquartered in Eschborn, Germany, Qontigo’s global presence includes offices in New York, London, Zug and Hong Kong.
www.qontigo.com
About STOXX
STOXX Ltd. is Qontigo’s global index provider, currently calculating a global, comprehensive index family of about 13,000 strictly rules-based and transparent indices. Best known for the leading European equity indices EURO STOXX 50, STOXX Europe 50 and STOXX Europe 600, STOXX Ltd. maintains and calculates the STOXX Global index family which consists of total market, broad and blue-chip indices for the regions Americas, Europe, Asia/Pacific and sub-regions Latin America and BRIC (Brazil, Russia, India and China) as well as global markets.
STOXX is the administrator of the STOXX® and DAX® indices under the European Benchmark Regulation and exercises control over all benchmark administration processes within Qontigo.
STOXX indices are licensed to more than 600 companies around the world as underlyings for Exchange Traded Funds (ETFs), futures and options, structured products and passively managed investment funds.
Legal disclaimer:
STOXX, Qontigo GmbH, Qontigo Index GmbH, Deutsche Boerse Group and their licensors, research partners or data providers do not make any warranties or representations, express or implied, with respect to the timeliness, sequence, accuracy, completeness, currentness, merchantability, quality or fitness for any particular purpose of its index data and exclude any liability in connection therewith. STOXX, Qontigo GmbH, Qontigo Index GmbH, Deutsche Boerse Group and their licensors, research partners or data providers are not providing investment advice through the publication of indices or in connection therewith. In particular, the inclusion of a company in an index, its weighting, or the exclusion of a company from an index, does not in any way reflect an opinion of STOXX, Qontigo GmbH, Qontigo Index GmbH, Deutsche Boerse Group or their licensors, research partners or data providers on the merits of that company. Financial instruments based on the STOXX® indices, DAX® indices or on any other indices supported by STOXX are in no way sponsored, endorsed, sold or promoted by STOXX, Qontigo GmbH, Qontigo Index GmbH, Deutsche Boerse Group or their licensors, research partners or data providers.
