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MSCI Minimum Volatility ESG Reduced Carbon Target Indexes

For many investment managers and product providers, the key challenge of combining factor and ESG into a single portfolio has been to construct an appropriate methodological framework to balance the desired factor exposure while meeting ESG considerations. MSCI is at the forefront of the integration of ESG into factor portfolios to enable investors to better manage key drivers of risk and return with an extensive set of risk factor models, ESG research and factor and ESG indexes.

The MSCI Minimum Volatility ESG Reduced Carbon Target Indexes are designed to represent the performance of a strategy that seeks systematic integration of environmental, social and governance (ESG) norms along with the minimum volatility factor. The Indexes are constructed by selecting constituents of a market capitalization weighted index (the ‘Parent Index’) through an optimization process that aims to minimize volatility risk, reduce the carbon-equivalent exposure to CO2 and other GHG as well as the exposure to potential emissions risk of fossil fuel reserves by thirty percent (30%) and improve the weighted-average industry-adjusted ESG score of the Index portfolio by 20% with respect to their respective underlying market capitalization weighted indexes (the ‘Parent Index’) under certain constraints.

 

Minimum Volatility ESG Reduced Carbon Target Indexes brochure

Minimum Volatility ESG Reduced Carbon Target Indexes methodology


Performance and Factsheets

Factor indexes overview

Factor indexes overview

Adding to the investment tool kit.
Learn more about our factor index offering.

MSCI ESG Indexes

MSCI ESG Indexes

The MSCI ESG indexes are designed to support common approaches to ESG investing, and help institutional investors more effectively benchmark to ESG investment performance as well as manage, measure and report on ESG mandates.

The FaCS report

The FaCS report

The FaCS report allows investors to understand what is driving their investments and help them build better portfolios. In this report, we help investors compare point in time and historical factor exposures (10+ years) of 8,000+ Stocks, 11,000+ Mutual Funds and 1,500+ ETFs