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RAFI™ ESG Indices

DATA AS OF: 2017-12-31

RAFI ESG is a thoughtfully designed smart beta strategy that helps investors achieve the dual objectives of social responsibility and long-horizon outperformance.

Rulebook

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Available Indexes

RAFI ESG Developed Index — RAESGDVT

RAFI ESG Europe Index — RAESGEUT

RAFI ESG US Index — RAESGUST

AT A GLANCE

Integrates environmental,
social, and
governance metrics

Offers potential for improved returns with financial discipline and diversity

Utilizes the
return-enhancing engine
of fundamental weighting

Index Construction

RAFI ESG promotes sustainability, financial discipline, and gender diversity, while delivering the potential for added returns through a thoughtful smart beta approach.

  • An integrated ESG strategy which overweights companies that rate well across various ESG themes and excludes companies engaged in the tobacco, gaming, weapons and fossil fuels industry.
  • Supplements traditional ESG metrics with both financial discipline and diversity for improved return potential.
  • Applies the Fundamental Index™ approach, a proven smart beta indexing strategy built on the principles of contrarian investing and disciplined rebalancing

Financial discipline measures a firm’s commitment to generating sustainable long-term performance rather than making decisions to benefit managers in the short run. The RAFI ESG Index series incorporates four measures of financial discipline that are aligned with long-term value creation and sustainable growth; high profitability, low investment, low issuance and dilution and low accounting accruals.

For gender diversity, the RAFI ESG Index series incorporates measures that determine a firm’s commitment to gender diversity, with particular attention paid to women in management, the c-suite and company boards.

RAFI Indices is built with the research, insights, and strategies of our sister company: Research Affiliates, LLC