A newly launched index is the first benchmark for US equities meeting investor demand for environmental, social and governance performance and dividend growth.
The KLD Dividend Achievers Social Index (DASI) is claimed to be the industry's first index that brings high yield and low risk to SRI investors by applying dividend criteria to an equity social index.
It is a joint effort by KLD Research & Analytics, which constructs indices for SRI investors, and Mergent, which produces the Dividend Achievers investment tools in the US. Dividend Achievers are companies that have increased their regular annual dividends for at least 10 consecutive years, as well as meeting certain liquidity criteria.
"We know social investors will be excited about this new equity income index based on the long and established track record of trusted leaders in their markets," said Peter Kinder, president of KLD.
He said that back tests of the index show increased performance and lower volatility compared with a market index such as the Russell Value Index. It also provides "an above market yield and greater small and mid-cap diversification than most socially responsible indices".
The DASI is an equal weighted
common stock index comprising 168 US firms that are part of the KLD Large cap Social Index or the KLD Domini 400 Social Index that satisfy the criteria for Mergent's Dividend Achievers.
In constructing the index, the ‘Dividend Achievers overlay' is applied to the two KLD indices universes. The overlay selects only companies that meet the Mergent criteria regarding dividends. In addition, "each company's stock average daily cash volume must exceed $1m in the 60-day period prior to index reconstitution".