KLD Research & Analytics and financial information company Mergent on Nov. 1 will introduce the KLD Dividend Achievers Social index, comprising stocks screened for dividend growth, social, environmental and governance factors. The two companies jointly own the new index and are seeking to license it for index funds and other investment products, said Thomas Kuh, managing director of KLD indexes, and Shirley Petersen, Mergent vice president-index licensing, said in separate interviews.
The new index consists of 168 stocks, equally weighted, with a $2.7 trillion total market capitalization. The index has a yield of 2.37% and will be rebalanced twice a year, Mr. Kuh said. It "fills a diversification gap for social investors and will be attractive to a wide-range of equity investors" because of its high yield and low volatility, Mr. Kuh said.
To create the new index, Mergent applies its propriety dividend overlay to the combined 662-stock KLD Large-Cap Social index and the KLD Domini 400 Social index to screen for Mergent's criteria.