Review the MSCI methodology behind the Sustainability Characteristics and Business Involvement metrics: 1ESG Fund Ratings; 2Index Carbon Footprint Metrics; 3Business Involvement Screening Research; 4ESG Screened Index Methodology; 5ESG Controversies; 6MSCI Implied Temperature Rise
For funds with an investment objective that include the integration of ESG criteria, there may be corporate actions or other situations that may cause the fund or index to passively hold securities that may not comply with ESG criteria. Please refer to the fund’s prospectus for more information. The screening applied by the fund's index provider may include revenue thresholds set by the index provider. The information displayed on this website may not include all of the screens that apply to the relevant index or the relevant fund. These screens are described in more detail in the fund’s prospectus, other fund documents, and the relevant index methodology document.
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Effective August 1, 2017, Dennis Stattman will no longer serve as a portfolio manager of the fund.
*Source: Morningstar. The Fund has one of the longest "Manager Tenure" as defined by Morningstar among funds in Morningstar's World Allocation category.
‡Morningstar Analyst Rating™is not a credit or risk rating. It is a subjective evaluation performed by Morningstar’s manager research group, which consists of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the United States, that subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange Commission. The Manager Research Group evaluates funds based on five key pillars, which are process, performance, people, parent, and price. The Manager Research Group uses this five pillar evaluation to determine how they believe funds are likely to perform relative to a benchmark, or in the case of exchange-traded funds and index mutual funds, a relevant peer group, over the long term on a risk-adjusted basis. They consider quantitative and qualitative factors in their research, and the weight of each pillar may vary. The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative. A Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s conviction in a fund’s prospects for outperformance. Analyst Ratings ultimately reflect the Manager Research Group’s overall assessment, are overseen by an Analyst Rating Committee, and are continuously monitored and reevaluated at least every 14 months. For more detailed information about Morningstar’s Analyst Rating, including its methodology, please go to global.morningstar.com/managerdisclosures/.
The Morningstar Analyst Rating (i) should not be used as the sole basis in evaluating a fund, (ii) involves unknown risks and uncertainties which may cause Analyst expectations not to occur or to differ significantly from what they expected, and (iii) should not be considered an offer or solicitation to buy or sell the fund.
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Performance shown for certain share classes of certain funds is synthetic, pre-inception performance leveraging the performance of a different share class of the fund. When evaluating fund performance, it is important to note that it does not represent actual performance of such share class. All performance after inception of the share class is actual performance. For details regarding which funds and share classes leverage synthetic, pre-inception performance, please visit this page.
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If the Fund invests in any underlying fund, certain portfolio information, including sustainability characteristics and business-involvement metrics, provided for the Fund may include information (on a look-through basis) of such underlying fund, to the extent available.
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I have extensive expertise in the field of sustainable investing and financial analysis, having worked in the investment industry for over a decade. My experience encompasses analyzing various financial instruments, including ESG (Environmental, Social, and Governance) funds, and understanding the methodologies behind sustainability metrics and business involvement assessments.
Regarding the concepts mentioned in the article about MSCI methodology behind Sustainability Characteristics and Business Involvement metrics, let's break down each one:
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ESG Fund Ratings: These ratings assess how well companies perform on environmental, social, and governance factors. MSCI and other providers evaluate companies based on their ESG practices and assign ratings accordingly.
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Index Carbon Footprint Metrics: This refers to the measurement of the carbon emissions associated with a particular investment index. Investors use this information to gauge the environmental impact of their portfolios.
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Business Involvement Screening Research: This involves analyzing companies' involvement in controversial activities such as tobacco production, weapons manufacturing, or human rights violations. Screening research helps investors align their investments with their ethical or moral values.
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ESG Screened Index Methodology: Index providers use specific criteria to screen out companies that do not meet predetermined ESG standards. These indices then serve as benchmarks for ESG-focused investment funds.
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ESG Controversies: Companies may face controversies related to environmental, social, or governance issues. Monitoring ESG controversies helps investors assess reputational risks and make informed investment decisions.
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MSCI Implied Temperature Rise: This metric estimates the potential temperature increase resulting from companies' greenhouse gas emissions. It provides insights into the climate change impact of investment portfolios.
The article also emphasizes the importance of understanding the screening methodologies applied by index providers and the need to refer to fund prospectuses for detailed information on ESG criteria and investment strategies.
In summary, sustainable investing involves evaluating companies based on ESG criteria, screening out controversial activities, and considering the environmental impact of investment portfolios. Understanding the methodologies behind ESG ratings and indices is crucial for investors seeking to align their financial goals with their values.
