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GreenMoney Journal - publishing since 1992
Fall 2010 issue
Socially Responsible Investing – Better Companies, Better Communities
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Barclays Global Investors Announces The First U.S. Exchange-Traded Fund For Socially Responsible Investors
The First iShares® ETF for Socially Responsible Investors Tracks The KLD Select Social Index,
An Innovative Index That Seeks To Optimize Socially Responsible Factors While Managing Risk
Barclays Global Investors, N.A. (BGI) today announced the launch of its first exchange-traded
fund designed specifically for socially responsible institutional and individual investors. The
iShares KLD Select Social Index Fund seeks to maximize exposure to large capitalization companies
that have positive social and environmental characteristics while at the same time maintaining risk
and return characteristics similar to the Russell 1000® Index.
The Fund tracks the KLD
Select Social Index from KLD Research & Analytics, Inc., a Boston-based independent investment
research and index firm with expertise in socially responsible investing (SRI).
The
iShares KLD Select Social Index Fund has an expense ratio of 0.50% and began trading January 28,
2005, on the NYSE under the symbol "KLD."
"The iShares KLD Fund provides socially
responsible investors with what we believe is a more thoughtful portfolio approach to optimizing
positive social and environmental criteria while seeking to reduce sector risk," said Lee
Kranefuss, CEO of Barclays Global Investors' Intermediary Business. "BGI continues to offer
institutions and individuals new ways of accessing the markets to complete their portfolio
strategies."
The iShares KLD Select Social Index Fund relies on the KLD index's
optimization technique that over-weights and under-weights companies based on their social and
environment performance, as evaluated by KLD, across sectors while seeking to control investment
risk similar to the Russell 1000 Index. The Index selects approximately 250 to 350 companies from a
universe of Russell 1000 and S&P 500® companies. With the exception of tobacco companies, which are
excluded, the optimized Index is not limited to "hold/not hold" distinctions like some other social
indexes. Rather than screening companies or entire sectors without considering the risk and return
impact of the screens, the Index over-weights companies with higher social and environmental
performance and under-weights companies with lower social and environmental performance, relative
to the Russell 1000 Index. In evaluating a company's social and environmental performance, KLD
considers, among other things, the environment, labor relations, community relations, diversity,
product safety, human rights record and governance. The iShares KLD Select Social Index Fund also
has adopted proxy-voting guidelines that support greater reporting in these issues for companies it
holds.
"In the past, SRI funds have focused on values-based investors--those who do not
want to hold companies or sectors for ethical reasons. These investors tend to be willing to give
up some diversification and some return in exchange for consistency with their values," said Peter
Kinder,
President of KLD Research & Analytics, Inc. "More recently, we've seen growing interest
from investors who want to take advantage of the insights of social analysis but are more risk
averse than values-based investors. Their interest led KLD to devise a portfolio approach that
addresses both their fiduciary concerns and their wish for greater exposure to companies that rate
highly on particular social screens." Kranefuss continues, "The iShares KLD Select Social Index
Fund addresses one of the principal barriers facing socially responsible investment: the reluctance
of institutional investors to adopt SRI strategies because those strategies may limit
diversification across the market. This Fund responds to these concerns by investing in domestic
companies representing every industry--except tobacco--modifying their weights based on their
social characteristics and maintaining risk exposure similar to the Russell 1000."
The
iShares Funds are index funds whose shares may be bought and sold like common stocks on securities
exchanges. The iShares Funds are attractive to many individual and institutional investors and
financial intermediaries because of their relatively low cost, tax efficiency and trading
flexibility.
Investors can purchase and sell shares through any brokerage firm, financial
advisor, or online broker, and hold the funds in any type of brokerage account. To determine if the
fund(s) are an appropriate investment for you, carefully consider the funds' investment objectives,
risk factors and charges and expenses before investing.
This and other information can be
found in the funds' prospectuses, which may be obtained by calling 1-800-iShares or by visiting-
http://www.ishares.com .
Read the prospectus carefully before investing.
About Barclays Global Investors
Barclays Global Investors is
one of the world's largest asset managers1 providing structured investment strategies such as
risk-controlled active strategies and indexing. In the US, BGI is one of the largest active
managers,2 set apart by its risk-controlled approach. BGI managed over $1.3 trillion in assets as
of 12/31/04, for more than 2,500 clients in 47 countries around the world. BGI is an innovator in
investment management, applying science and technology to the investment process. BGI is owned
by Barclays PLC, one of the world's leading global financial services providers.
Article Notes:
1 Source: "P&I/Watson Wyatt World 500," Pensions &
Investments, September 6, 2004.
2 Source: "Special Reports: Money Manager Directory," Pensions
& Investments, May 31, 2004.
About KLD
KLD Research &
Analytics, Inc. is an independent investment research firm whose products and services help meet
the investment strategy requirements of institutional and individual investors.
KLD's
SocratesSM web-based database provides in-depth research on more
than 3,000 companies based on social and environmental rating criteria. KLD provides a family of
socially responsible benchmark and strategy indexes, as well as compliance and consulting services.
All Other Inquiries:
1-800-iShares (1-800-474-2737)
Investing involves risk,
including possible loss of principal. In addition to the normal risks associated with investing,
the Fund may be subject to increased risk because the stocks in the index may under perform
investments that track other markets or sectors. In addition, the index itself may under perform
its benchmark index because it includes different
constituents securities.
The iShares
Funds are distributed by SEI Investments Distribution Co. (SEI). Barclays Global Fund Advisors
(BGFA) serves as the investment advisor to the iShares Funds. Barclays Global Investor Services
(BGIS) assists in the marketing of the iShares Funds. BGFA and BGIS are subsidiaries of Barclays
Global Investors, N.A., none of which is affiliated with SEI iShares Fund transactions will result
in brokerage commissions and will generate tax consequences. Mutual funds and the iShares Funds are
obliged to distribute portfolio gains to shareholders. Shares of each iShares Fund may be sold
throughout the day on the exchange through any brokerage account. However, shares of each iShares
Fund may only be redeemed directly from the fund by Authorized Participants, in very large
creation/redemption units.
The iShares Funds are not sponsored, endorsed, sold or promoted
by KLD Research & Analytics, Inc., and KLD Research & Analytics, Inc. makes no representation
regarding the advisability of investing in iShares Funds.
© 2005 Barclays Global
Investors. All rights reserved. iShares is a registered trademark of Barclays Global Investors,
N.A. All other trademarks, service marks or registered trademarks are the property of their
respective owners. (2005-134)
For more information go to- http://www.barclaysglobal.com
(Source: Barclays)
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