Products March 13, 2008

Pax to Launch KLD-Index Oriented Investment Products

Pax World Management Corp., investment adviser to Pax World Funds (Pax), and KLD Research&Analytics, Inc. (KLD), have entered into a licensing agreement wherein Pax will manage investment products based on three KLD indexes.
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The three indexes involved are: the KLD Global Sustainability Index (GSI), KLD North America Sustainability Index (NASI) and KLD Europe Asia Pacific Sustainability Index (EAPSI).

As part of the agreement, Pax has licensed exclusive rights to use the three KLD indexes for managing ETFs. Pax has filed an application with the Securities and Exchange Commission (SEC), seeking exemption from certain provisions of the Investment Company Act of 1940, which would allow it to launch ETFs based upon the three sustainability indexes.

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Additionally, according to a press release, Pax is planning to launch a suite of investment products based on the KLD indexes, which may include passive index, enhanced index and actively managed strategies. These strategies will likely be offered across different types of investment vehicles, and may include exchange-traded funds (ETFs), mutual funds and separately managed accounts.

Index Basis

The KLD Global Sustainability Index series is broad, sector-neutral and based on rigorous sustainability standards, favoring companies that are:

  • strong stewards of the environment;
  • devoted to serving local communities and the broader society;
  • devoted to high labor and supply chain standards;
  • dedicated to producing high-quality, safe products; and
  • managing according to high ethical and governance standards.

When evaluating a company’s ESG performance, KLD takes into account the challenges faced by businesses operating in different sectors of the global economy and rates companies on how they address ESG challenges specific to their industry and the regions in which they operate.

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