Among the 30 new exchange-traded products Deutsche Bank plans to launch through its db x-trackers unit in 2009 is a proposed fund that would track the S&P Carbon Efficient Index, a benchmark based on the performance of large-cap U.S. companies with relatively low carbon emissions while seeking to replicate the return of the S&P 500. “This is the first time that investors have had the opportunity to track the S&P 500 with a 50% lower Carbon Footprint and 60% lower greenhouse gas emissions,” said Db x-trackers UK head Manooj Mistry.
The index weightings for the new ETF will be based on a methodology that determines the carbon footprint of each company. The index is being developed and maintained by S&P and Deutsche Bank in connection with TruCost, a provider of carbon footprint analysis. As environmentally-friendly corporate policies and actions have become increasingly important to consumers and investors, ETF issuers have flooded the markets with socially responsible products that offer exposure to clean energy providers and responsible corporate citizens. There are currently several ETFs available to U.S. investors that offer exposure to socially conscious companies, including:
- iShares KLD Select Social Index Fund (KLD): KLD follows an index constructed to maximize exposure to positive environmental, social, and governance factors while exhibiting risk and return characteristics similar to the S&P 500.
- iShares KLD 400 Social Index Fund (DSI): DSI tracks the Domini 400 Social(SM) Index, a benchmark that attempts to hold 100 large and mid cap companies from the S&P 500 and 50 smaller companies with exceptional environmental, social, or governance performance.
- PowerShares WilderHill Clean Energy Portfolio (PBW): PBW tracks the WilderHill Clean Energy Index, which applies a quantitative selection methodology to a universe of companies that focus on greener and generally renewable sources of energy and technologies that facilitate cleaner energy.
- JETS Dow Jones Islamic Market International index Fund (JVS): The first Shari’ah-compliant ETF to hit the market, JVS seeks to track the performance of an index that complies with the body of Islamic religions laws. JVS does not hold any companies in sectors that are incompatible with the Shari’ah, including conventional financial services, casinos, firearms, and pork-related products.
- PowerShares Cleantech Portfolio (PZD): PZD is an equal-weighted index that tracks an index comprised of U.S. and international cleantech companies. Major holdings of PZD include ABB Ltd., Siemens AG, Vestas Wind Systems, and First Solar.
Disclosure: No positions at time of writing.
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