Nasdaq joins with KLD in socially-screened stock index
Date: 14-Feb-02
Country: USA
The KLD-Nasdaq Social Index is initially comprised of 280 Nasdaq companies with about 75 percent of the $2.7 trillion market capitalization in the technology sector, Zoe Van Schyndel, KLD senior vice president of research products, told a telephone news briefing.
The index includes such Nasdaq stalwarts as Microsoft Corp. , Intel Corp. and Amgen Inc. .
John Jacobs, senior vice president of Nasdaq, said there has been interest on the part of investment firms in sponsoring mutual funds or exchange traded funds based on the new index but it was "too soon" to name any.
The index is constructed by excluding companies involved in activities such as alcohol, tobacco, gambling, military contracting and nuclear power. Companies are also judged on other criteria such as environmental stewardship, employee relations and non-U.S operations.
The first socially responsible mutual fund was launched in the U.S. in 1971. Proponents say such funds try to "do good" by investing only in companies whose polices mesh with certain social goals.
Assets in U.S. socially responsible mutual funds climbed above $100 billion in in 2001.
KLD, which provides research and consulting services, is known for its creation of the Domini 400 Social Index, a widely used benchmark for socially-screened portfolios.
"KLD believes there is a natural affinity between the interests of social investors and companies on the Nasdaq stock market," Van Schyndel said. Technology companies, which typically are not involved in "smokestack" industries, generally figure prominently in social portfolios.