RAFI ESG

RAFI ESG strategies combine the pioneering Fundamental Index™ approach with thoughtfully designed environmental, social, and governance investment themes.

At a Glance


 

Designed for investors with ESG investment objectives in mind

Based on the RAFI Fundamental Index methodology

Systematic, contrarian approach to ESG investing

 

Whether because of personal convictions, risk-reduction objectives, or a changing regulatory landscape, investors are increasingly considering the importance of integrating environmental, social, and governance (ESG) issues into their investment guidelines. RAFI ESG is a family of strategies that combine various ESG investing themes with the benefits of our leading smart beta construct.

Combining ESG with Smart Beta

Traditionally, most ESG strategies have been actively managed. Identifying active managers that outperform net of fees, and having the discipline to stick with them, is difficult. In addition, many actively managed ESG strategies lack transparency or are inconsistent in their application of ESG themes to individual stocks. By relying on the RAFI™ Fundamental Index approach, RAFI ESG strategies retain the benefits of traditional passive investing: simple, rules-based, transparent, and low cost, while offering the potential for outperformance.


RAFI™ Diversity & Governance Indices combines the Fundamental Index™ methodology with measures of gender diversity, governance, financial discipline, and low volatility to allocate to well-managed companies.

RAFI™ ESG Indices is a thoughtfully designed smart beta strategy that helps investors achieve the dual objectives of social responsibility and long-horizon outperformance.

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Related

Unlocking the Performance Potential in ESG Investing

By Jonathan Treussard Feifei Li Katy Sherrerd

March 2018 | Read Time: 15 min

By combining a tilt toward companies that display financial discipline and that embrace corporate diversity with the return engine of a fundamentally weighted portfolio, we believe investors in environmental, social, and governance (ESG)–related strategies have the opportunity to earn superior long-term risk-adjusted returns.