CHICAGO–(BUSINESS WIRE)–#Australia–Chicago based V-Square Quantitative Management LLC (V-Square), a global asset management firm with sustainability at its core, announced today that it has expanded its market-leading separately managed account platform with the launch of the V-Square MSCI Global Equity ESG Materiality and Carbon Transition Indexed Strategy.
V-Square’s strategy tracks the MSCI All Country World Index (ACWI) ex-Australia ESG Materiality and Carbon Transition Select Special Tax Index and is designed to consider financially material ESG issues and promote companies participating in opportunities associated with the low carbon transition while using the withholding tax rates applicable to Australian superannuation funds. V-Square’s indexed strategy seeks to align with the current Your Future, Your Super International Equity indexes.
The underlying MSCI custom index represents the performance of companies which are assessed to be sector leaders based on a set of relevant key issues scores that are aligned with the Sustainability Accounting Standards Board (SASB) Materiality Framework. Additionally, the index seeks to minimize exposure to companies with carbon transition risk and increase exposure to companies participating in opportunities related to the carbon transition.
The MSCI ACWI ex-Australia ESG Materiality and Carbon Transition Select Special Tax Index reflects a universe consisting of large and mid-capitalization companies across 23 developed countries excluding Australia and 24 emerging countries. The daily net return of the index is calculated using the withholding tax rates applicable to Australian superannuation funds.
V-Square’s indexed strategy is currently offered with an unconstrained tracking error and V-Square plans to develop a second version to target a lower tracking error.
“We are thrilled to expand our investment solutions to the Australian market with an innovative strategy, focusing on the financial impacts of sustainability and accounting for current and potential exposure to climate change transition risks and opportunities,” said Mamadou-Abou Sarr, Co-Founder and President of V-Square.
The investment framework is reinforced by V-Square’s custom proxy voting policy guided by the core tenets of accountability, stewardship, transparency, and sustainability. By focusing on these areas of responsible governance, V-Square seeks to promote long-term shareholder value creation and risk mitigation at portfolio companies.
A solution for Australian Superannuation funds
Glen Gee, Head of ANZ Asset Owner Client Coverage, MSCI, said, “We are pleased to license this custom index to V-Square, which is designed to track the performance of sector leaders based on relevant key ESG issues that are aligned with SASB’s Materiality Map. MSCI ESG and Climate Indexes are designed to provide institutional investors with effective and transparent tools to facilitate integrating ESG and Climate considerations in their investment portfolios and align their benchmarks with their objectives.”
For more news and information about V-Square, visit the www.vsqm.com
V-Square Quantitative Management LLC is a global asset manager with sustainability at its core. V-Square specializes in developing and managing innovative thematic, customized passive and factor-based portfolios and delivers analytics to integrate Environmental, Social and Governance (ESG) into portfolio, risk management and reporting. A subsidiary of Chicago private equity firm Valor Equity Partners, V-Square has a distinct approach to sustainability taking a long-term view that is deeply rooted in academic research overlayed with a rigorous quantitative process.
The contents within this release is solely for investors who are wholesale clients as defined in the Corporations Act 2001 (Cth) (Australia) and is only directed at such investors. V-Square Quantitative Management LLC (“V-Square”) is a corporate authorised representative of Currawong Fund Services Pty Ltd (ABN 138 846 723, AFSL No. 341759).
V-Square MSCI Global Equity ESG Materiality and Carbon Transition Indexed Strategy seeks to track the investment results before fees of the MSCI ACWI ex Australia ESG Materiality and Carbon Transition Select Special Tax Index. The index includes large and mid-cap securities across 23 Developed Markets (DM) countries and 24 Emerging Markets (EM) countries (EM) and is designed to represent the performance of companies which are assessed to be sector leaders based on a set of relevant key issues scores that are aligned with SASB’s Materiality Map. The index excludes companies involved in Controversial Weapons, Tobacco-related businesses, Thermal Coal mining, Thermal Coal power generation and unconventional Oil and Gas. Also, it excludes companies that fail to comply with the United Nations Global Compact Principles and companies with Low Carbon Transition (LCT) category of Asset Stranding.
A strategy or emphasis on environmental, social and governance factors (“ESG”) may limit the investment opportunities available to a portfolio. Therefore, the portfolio may underperform or perform differently than other portfolios that do not have an ESG investment focus.
Passive Investment Risk. The strategy is not actively managed and therefore will generally not sell a security due to current or projected underperformance of a security, industry or sector, unless that security is removed from the Underlying Index or the selling of the security is otherwise required upon a rebalancing of the Underlying Index.
Methodology Risks. The Index Provider relies on various sources of information to assess the criteria of issuers included in the Underlying Index, including information that may be based on assumptions and estimates. Neither the Adviser nor the Index Provider can offer assurances that Underlying Index’s calculation methodology or sources of information will provide an accurate assessment of included issuers or that the included issuers will provide the strategy with the market exposure it seeks.