Data and technology solutions provider ISS STOXX has expanded its collaboration with global asset manager BlackRock to incorporate sustainability principles within a series of custom index solutions. As part of the arrangement, a number of existing equity indices will now screen out companies based on “controversial activities and carbon emissions”. Axel Lomholt, General Manager at index solutions business STOXX, said: “The STOXX Equity Factor Screened indices offer investors a unique methodology to target long-term potential outperformance and diversified exposure while controlling for systematic risk and integrating sustainability principles.” Multifactor indices track the performance of various factors that have historically produced higher returns than the market. They are often used to mitigate long periods of portfolio underperformance. BlackRock and STOXX first teamed up to deliver such solutions in 2022. Their collaboration now covers ten exchange-traded-funds (ETFs) with total assets under management of US$6.4 billion. “Our expanding collaboration with BlackRock allows us to combine our indexing and portfolio construction capabilities with industry-leading factor analytics and design, to capture potential for long-term enhanced returns,” said Lomholt.
