• New Zealand asset owner licences custom version of FTSE Global Choice Index for two Managed Investment Schemes including the BNZ KiwiSaver scheme
  • Transparent exclusion methodology screens stocks according to social and environmental impacts
  • Custom index excludes Controversial Weapons and Tobacco companies 

FTSE Russell, the global index provider, announces that Bank of New Zealand (BNZ) has licenced a custom index based on the FTSE Global Choice Index Series. Launched last year, the FTSE Global Choice Index Series uses a transparent, rules-based framework to apply values-based exclusions to broad FTSE Russell indexes. The index applies screens to filter companies based on the impact of their products and conduct on society and the environment. In addition to the standard index family, clients can construct bespoke ‘Choice’ indexes using an innovative ‘building blocks’ approach, to customise alignment with their particular values.

The custom ‘Choice’ index that BNZ has licenced currently uses a screening methodology to exclude companies involved in manufacturing weapons banned under international treaties, such as cluster munitions and land mines, and tobacco firms. The transparent, rules-based construction reflects the market-cap weighted performance of eligible securities from the FTSE All-World® Index minus Australian and New Zealand securities.  The index’s ESG screens are also adaptable – meaning that the screening criteria can be adjusted as  responsible investing policies evolve.

Tony Campos, Director, ESG Product Management, FTSE Russell:
“We are delighted to work with BNZ to help design index tools that allow their index-managed security holdings to be aligned with their responsible investment commitments. Our FTSE Global Choice Index Series helps meet the growing demand for integrating ESG preferences into investments and draws on our extensive experience in designing indexes that account for social and environmental impacts.” 

Peter Forster, General Manager, Wealth, BNZ:
“A huge focus for the BNZ Wealth team in the past year has been refreshing our Managed Investment Scheme offerings, including the BNZ KiwiSaver Scheme. We know how important investing responsibly is for our customers, so we have built a KiwiSaver scheme with that in mind. Using the bespoke index from FTSE Russell, combined with our move to individual mandates for our security holdings, gives us the flexibility to move with the changing expectations that our customers have. It’s a big part of our low-cost, high-quality offering.”

The FTSE Global Choice Index Series is part of FTSE Russell’s extensive sustainable investment index and data offering which includes the Smart Sustainability indexes, FTSE4Good indexes, Green Revenues data model and ESG Ratings. London Stock Exchange Group is a pioneer in supporting the growing global green and sustainable financing movement, providing a comprehensive green and sustainable product offering.

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About FTSE Russell:

FTSE Russell is a leading global provider creating and managing a wide range of indexes, data and analytic solutions to meet client needs across asset classes, style and strategies. Covering 98% of the investable market, FTSE Russell indexes offer a true picture of global markets, combined with the specialist knowledge gained from developing local benchmarks around the world.

FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. More than $15 trillion is currently benchmarked to FTSE Russell indexes. For over 30 years, leading asset owners, asset managers, ETF providers and investment banks have chosen FTSE Russell indexes to benchmark their investment performance and create investment funds, ETFs, structured products and index-based derivatives. FTSE Russell indexes also provide clients with tools for asset allocation, investment strategy analysis and risk management.

A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on index innovation and customer partnership applying the highest industry standards and embracing the IOSCO Principles. FTSE Russell is wholly owned by the London Stock Exchange Group.

For more information, visit www.ftserussell.com.

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