A fixed-income index series introduced today will apply environmental, social and governance factors to bonds. The new KLD U.S. Corporate Bond index series is a collaboration among KLD Research & Analytics, Ryan ALM and Mergent, according to a joint statement.
The investible index series consists of the KLD 1-3 Year U.S. Corporate Bond index, KLD 1-5 Year U.S. Corporate Bond index and KLD 1-10 Year U.S. Corporate Bond index.
Components will consist only of issues of companies with investment-grade fixed-income ratings, the statement said.
The firms seek to license the series for index funds, derivatives and other strategies.
These bond indexes provide an additional asset class for investors wanting to integrate KLDs ESG factors into their fixed-income portfolios, Peter Ellsworth, business development manager, KLD Indexes, said in the statement. Our clients have made it clear that environmental, social and governance issues are as important to fixed-income investors as they are to equity investors.
KLD, which has its own series of equity indexes based on ESG factors, provides research, Ryan ALM provides structuring for the fixed-income index and Mergent provides fixed-income data and index calculation.
The indexes will be rebalanced monthly and reconstituted annually.