Qontigo's DAX 50 ESG Index to underlie ETF by Credit Suisse Asset Management
Qontigo has licensed the DAX 50 ESG Index to Credit Suisse Asset Management to serve as an underlying for an ETF which is now trading on Xetra and via Börse Frankfurt. The CSIF (IE) DAX 50 ESG Blue UCITS ETF offers investors access to the 50 largest and most liquid German companies from the DAX, MDAX and TecDAX that stand out in terms of environmental, social and corporate governance criteria.
The DAX 50 ESG Index is a broad market cap benchmark for German sustainable equities and extends beyond the DAX. Selection of its fifty constituents is based on ranking by market capitalisation, turnover and ESG score.
“Our new ETF on the DAX 50 ESG allows investors to participate in the growth of Europe’s largest economy while respecting the environmental, social, and governance standards defined by the index methodology. The new ETF complements our range of 105 index mutual funds and ETFs with combined assets of EUR 117 bn. Today’s launch underlines the importance of the German market for Credit Suisse Asset Management in general and our index business in particular,” says Dr Valerio Schmitz-Esser, Head of Index Solutions at Credit Suisse Asset Management.
“Financial instruments that meet environmental, social and governance requirements have enjoyed steadily growing demand in recent years. We are very pleased that Credit Suisse Asset Management has chosen the DAX 50 ESG Index as an underlying for their new ETF. The methodology is designed to ensure an ESG index whose liquidity and risk-return characteristics are similar to those of the flagship DAX while drawing from a broader universe,” says Stephan Flaegel, Chief Product Officer, Index, at Qontigo.
The starting point for the DAX 50 ESG Index is the HDAX which currently includes 98 components (HDAX is made up of DAX, MDAX and TecDAX). In creating the index, norm-based exclusion criteria are applied in accordance with the UN Global Compact Principles, and also product involvement screening for controversial weapons, tobacco, coal, nuclear power and military contracts. The remaining stocks are ranked according to market capitalisation, stock exchange turnover and ESG scores calculated by Sustainalytics, a leading global provider of ESG research, ratings and data. From this list, the top 50 stocks are selected for the index and weighted by free-float market capitalisation, subject to a 7 per cent component cap. The index is reviewed every three months.
The DAX 50 ESG Index is part of Qontigo’s suite of Sustainable Index Solutions, a comprehensive offering of ESG, sustainability and climate indices. Qontigo offers a wide range of ‘exclude’ and ‘enhance’ strategies to enable investor choice. Indices in the ‘exclude’ category, like the DAX 50 ESG Index, have been designed for investors who are seeking to raise the ESG profile of portfolios but want to maintain low tracking errors and similar risk-return characteristics to those of STOXX and DAX benchmarks.