Chicago based V-Square Quantitative Management LLC (V-Square), an international asset management organisation with sustainability at its core of operations, announced that it has expanded its market-leading separately managed account platform with the launch of the V-Square MSCI Global Equity ESG Materiality and Carbon Transition Indexed Strategy.
What is the market offering of V-Square’s product?
V-Square’s strategy tracks the MSCI All Country World Index (ACWI) ex-Australia ESG Materiality and Carbon Transition Select Special Tax Index and is designed to consider financially material ESG issues and promote companies involved with the low carbon transition while using the withholding tax rates applicable to Aussie superannuation funds.
V-Square’s indexed strategy seeks to align with the Your Future, Your Super International Equity indexes. The underlying MSCI custom index represents the performance of firms which are assessed to be sector leaders based on a set of relevant key issues scores that are aligned with the Sustainability Accounting Standards Board (SASB) Materiality Framework.
Also, the index seeks to minimize exposure to companies with carbon transition risk and increase exposure to companies participating in opportunities related to the carbon transition.
How best can the product be leveraged?
The MSCI ACWI ex-Australia ESG Materiality and Carbon Transition Select Special Tax Index reflects a universe consisting of large and mid-capitalization companies across 23 developed countries excluding Australia and 24 emerging countries. The daily net return of the index is calculated using the withholding tax rates applicable to Australian superannuation funds.
The investment framework is reinforced by V-Square’s custom proxy voting policy guided by the core philosophy of accountability, stewardship, transparency, and sustainability. By focusing on this foundations or areas of responsible governance, the organisation seeks to promote long-term shareholder value creation and risk mitigation at portfolio companies.
V-Square’s indexed strategy is currently offered with an unconstrained tracking error and therefore, V-Square plans to develop a second version to target a lower tracking error.
What were the executives’ thoughts on the product?
Commenting on the expansion, Mamadou-Abou Sarr, Co-Founder and President of V-Square said, “We are thrilled to expand our investment solutions to the Australian market with an innovative strategy, focusing on the financial impacts of sustainability and accounting for current and potential exposure to climate change transition risks and opportunities.”
Glen Gee, Head of ANZ Asset Owner Client Coverage, MSCI, commented, “We are pleased to license this custom index to V-Square, which is designed to track the performance of sector leaders based on relevant key ESG issues that are aligned with SASB’s Materiality Map.”
“MSCI ESG and Climate Indexes are designed to provide institutional investors with effective and transparent tools to facilitate integrating ESG and Climate considerations in their investment portfolios and align their benchmarks with their objectives,” Gee further said.
For more news and information about V-Square, visit the website.