State Street Global Advisors has launched a fund based on the MSCI World Select 5-Factor ESG Low-Carbon Target Index.
The index aims to efficiently balance risk and returns by targeting a blend of smart beta factors and ESG characteristics.
It targets five well established equity factors, improved ESG scores and a reduction in carbon emissions and reserves intensity.
Ana Harris, head of equity indexed strategies at State Street GA, said: “A careful bottom-up portfolio construction process, which utilises optimisation, is a necessary element to ensure any trade-offs are well managed and that both factor and ESG exposures are attained most effectively.”
The fund will sit within the State Street Authorised Contractual Scheme (ACS) range, allowing UK pension funds to benefit from double taxation agreements.
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