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Russell Enters Socially Responsible Index Market

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The Frank Russell Company, the index provider that has over $175 billion invested in funds modeled on its U.S. indexes, is stepping into the world of socially responsible investing.

Boston-based Kinder, Lydenberg, Domini (KLD), which provides socially responsible investing research to institutional investors, has partnered with Russell/Mellon Analytical Services to jointly market a new family of KLD social indexes and performance analytics. The alliance is a significant step forward in the world of socially responsible investing (SRI) because it teams a top SRI researcher with a major index provider.

"For the first time, institutional investors have access to the same caliber of performance analytics for their domestic screened portfolios that they expect for unscreened portfolios," said Peter Kinder, KLD cofounder and president. "Now managers can compare 'apples to apples' using performance attribution data from Russell/Mellon."

KLD is perhaps best known for its Domini 400 Social Index, which was launched in 1990, and is the benchmark of choice for many socially responsible investors.

Index 1 yr. ret. 3 yr. ret.* 5 yr. ret.* 10 yr. ret.*
Domini 400
-18.30%
5.33%
16.55%
16.32%
S&P 500
-12.97%
5.30%
15.56%
15.25%

*annualized returns             Source: KLD, Morningstar - all returns as of 4/30/2001

The firm also maintains the Broad Market Social Index, which is a screened version of the Russell 3000 index. Comprised of over 2,200 companies, the Broad Market Social Index is the largest screened index in the world.

Additionally, KLD earlier this month launched a Large Cap Social Index based on Russell 1000 index companies that pass through the KLD social screening colander. KLD indicated that it will soon introduce a screened Russell 2000 index and several custom indexes.

"When we adopted the Russell universe, we expanded our universe five-fold," said KLD index services manager Zoë Van Schyndel. "KLD can now create market and custom benchmarks based on 98% of U.S. market capitalization."

Dow Jones to Launch UK Titans 50 Index

Dow Jones Indexes today announced that it will begin calculating the Dow Jones UK Titans 50 index beginning June 12.

The index contains the 50 largest blue-chip companies, and is free-float weighted.

"Coupled with the Dow Jones EURO STOXX 50 Index, the Dow Jones UK Titans 50 Index provides an easy, efficient way to capture the entire U.K./European equities market," said Michael Petronella, managing director of Dow Jones Indexes.

Below is a list of the top ten holdings of the index, as of the end of April.

Company name
Weight
BP Amoco
11.15%
GlaxoSmithKline
10.73%
Vodafone Group
9.63%
HSBC Holdings
7.51%
Shell Transport & Trading Co.
5.42%
Astrazeneca Group
4.64%
Lloyds TSB Group
3.73%
Royal Bank of Scotland Group
3.65%
Barclays
3.51%
British Telecommunications
3.41%

 

Source: Dow Jones Indexes