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KLD and Nasdaq Launch New Socially Responsible Index

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Think Nasdaq "cubes" for investors with a conscience.

Boston-based KLD Research & Analytics and the Nasdaq stock market introduced a new socially responsible index of companies trading on the tech-heavy exchange that lists over 4,100 securities. The new green benchmark, called the KLD-Nasdaq Social Index, is a cap-weighted index selected from Nasdaq-traded securities with over $1 billion in market capitalization.

KLD looks for companies that have clean records in employee relations and environmentalism; "sin stocks" involved in areas like tobacco and military weapons production don't make the cut. Some of the top holdings in the new index include Oracle, Amgen, and Qualcomm.

KLD, which also partnered with Russell last year to launch socially responsible benchmarks, maintains the highly visible Domini 400 Social Index.

Socially responsible investing has become all the rage of late, with assets under management in socially screened portfolios topping $2 trillion, according to Social Investment Forum. London-based index provider FTSE also unveiled a socially responsible index family last year.

The KLD-Nasdaq partnership seems like a good fit because most socially responsible indexes are by nature overweighted to technology. Tech funds enjoyed outsized returns during the late 1990s but have found themselves in the market's wringer in the last 12 months despite a late year-end rally.

Index
1 mo.
3 mo.
1 yr.
3 yr.
5 yr.
10 yr.
Nasdaq Composite
-0.84%
14.43%
-30.25%
-8.27%
6.99%
12.05%
DSI 400
-0.36%
n/a
-16.13%
-4.30%
10.10%
13.84%
S&P 500
-1.46%
7.03%
-16.14%
-2.84%
9.05%
12.97%
DJ U.S. Tech
-9.18%
0.31%
-32.77%
-10.13%
9.36%
n/a

Source: Morningstar and KLD, Inc.    
*all returns as of 01/31/2002 except DJ US Tech as of 02/12/2002