BOSTON and NEW YORK, Aug. 7 /PRNewswire/ -- KLD Research & Analytics, Inc,
Ryan ALM, Inc. and Mergent, Inc. announced today the August 1, 2008 launch of
the KLD U.S. Corporate Bond (USCB) Index series. These investable indexes are
the first to apply environmental, social and governance (ESG) performance
factors to a U.S. fixed income asset class. The KLD 1-3 Year U.S. Corporate
Bond Index (USCB3), KLD 1-5 Year U.S. Corporate Bond Index (USCB5), and KLD
1-10 Year U.S. Corporate Bond Index (USCB10) are available for licensing.
The KLD USCB series is the product of collaboration by three firms: KLD
Research & Analytics, the leading ESG research and index provider since 1988;
fixed income index architect Ryan ALM; and Mergent, the fixed income data and
calculation agent.
"These bond indexes provide an additional asset class for investors
wanting to integrate KLD's ESG factors into their fixed income portfolios,"
said Peter Ellsworth, Business Development Manager for KLD Indexes. "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."
"The KLD USCB series provides index solutions that minimize ESG risk
factors and limit exposure to any one issuer," said Ron Ryan, CEO of Ryan ALM.
"Traditional bond indexes are market-weighted, so companies who issue more
bonds gain a larger share of the overall index. The KLD USCB indexes are
equal-weighted with a 5% cap, so no one issuer could ever become a significant
weight factor," Ryan explained. "Moreover, the USCB indexes only use the
largest issues of each issuer, which provides the best liquidity and pricing."
"These indices will help meet the increasing demand that we have found for
the inclusion of ESG performance factors into fixed-income portfolios," said
Jonathan Worrall, CEO of Mergent, Inc. "Mergent is pleased to have brought
together KLD and Ryan ALM to satisfy this need, as we represent an ideal team
to develop these indices given our collective experience."
The KLD USCB series covers three maturity parameters with 1-3 year, 1-5
year, and 1-10 year indexes. To construct the USCB10 and USCB5 indexes, KLD
evaluates the ESG performance of the largest one thousand publicly traded
companies in the United States. Ryan then selects companies from the top
quartile of ESG performers that issue investment grade debt within the
maturity parameters of each index and meet specific liquidity criteria. The
USCB3 index includes companies ranked in KLD's 1st and 2nd quartiles of ESG
performers whose issues are within the 1-3 year maturity parameter.
All indexes are equal weighted and no issuer may exceed 5% of the total
value of the index. The indexes are rebalanced monthly and reconstituted
annually. Custom fixed income indexes can be built to meet customer demand.
These could include indexes with market-weighted or alternative weight
factors; indexes with longer term maturities; or indexes with specific
responsible investing strategies such as faith-based investing, sustainable
investing, or green investing.
KLD U.S. Corporate Bond (USCB) Index series
KLD 1-3 Year U.S. Corporate Bond Index (USCB3)
KLD 1-5 Year U.S. Corporate Bond Index (USCB5)
KLD 1-10 Year U.S. Corporate Bond Index (USCB10)
KLD U.S. Corporate Bond (USCB) Index series
Minimum Credit Worthiness: Investment Grade
Minimum Issue Amount: $250 Million
Maturity Parameters: 1-3 years, 1-5 years, 1-10 years
Call Protection: 1, 3, 3 years
Weight Factor: Equal Weighted
Cap: 5% per Issuer
Frequency of Rebalance: Monthly
Frequency of Reconstitution: Annually in August
About KLD Research & Analytics, Inc.
KLD Indexes is a unit of KLD Research & Analytics, Inc., the leading provider
of environmental, social and governance (ESG) research for institutional
investors. KLD Indexes develops and licenses benchmark, strategy and custom
indexes that investment managers use to integrate ESG criteria into their
investment decisions. KLD Indexes are designed to be transparent,
representative and investable. Products based on KLD Indexes include:
Mutual Funds ETFs
Separately Managed Accounts Unit Investment Trusts
Variable Annuities Structured Products
More than $10 billion is invested in vehicles based on KLD Indexes.
For more information about KLD's indexes visit http://www.kld.com/indexes
For information about licensing a KLD index for the creation of an
investment product, please email indexes@kld.com
About Ryan ALM, Inc.
Ryan ALM, Inc. is both a bond index provider and an asset management firm.
Its ALM Research Solutions division maintains and delivers all indexes
designed by the firm, including the Ryan Treasury Index series, ETF indexes
(see www.RyanIndex.com) and numerous Custom Indexes for its clients. The Ryan
ALM Advisers division manages assets versus liabilities as a turnkey system
where Ryan creates Custom Liability Indexes and manages the assets as
Liability Beta and Liability Alpha portfolios in an integrated Portable Alpha
system named PALS. For more information, please visit www.RyanALM.com.
About Mergent, Inc.
Mergent, Inc. is a leading provider of business and financial data on
global publicly listed companies. Based in the U.S., the company maintains a
strong global presence, with offices in New York, Charlotte, San Diego,
London, Tokyo and Melbourne. Founded in 1900 as the original publisher of
Moody's(R) securities manuals, Mergent operates the longest continuously
collected database of: descriptive and fundamental information on domestic and
international companies, pricing and terms and conditions data on fixed income
and equity securities and corporate action data. In addition, Mergent develops
and licenses equity and fixed income investment products based on its
proprietary investment methodologies. Mergent-licensed products have several
billion dollars in assets under management and are offered by major investment
management firms. Mergent's index calculation platform is the chosen
technology for some of the world's largest index companies. Its index
calculation and pricing distribution protocols are used to administer index
rules and distribute real-time pricing data. Learn more at www.mergent.com.
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