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RAFI™ ESG Indices

DATA AS OF: 12-31-2018

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

Available Indices

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.

Performance

As of 12/31/2018 in USD

Source: FactSet | Inception Date: 03/30/2018

*Inception to Date (ITD) uses the first full month of returns after inception date. **Simulated returns begin July 2009. All returns prior to inception are simulated. Please see disclosures for important information regarding simulated performance.

Learn more about ESG Investing

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