The MSCI KLD 400 Social Index was launched in 1990 and is designed to help socially conscious investors weigh social and environmental factors in their

investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...

choices. It was founded by KLD's

Amy Domini Amy Lee Domini (born January 25, 1950) is an American investment adviser and author known for her work in social investing. Early life and education Amy Lee Domini was born on January 25, 1950, in New York City, to Margot Cabot (Colt), a te ...

as the Domini 400 Social Index. The

MSCI MSCI Inc. is an American finance company headquartered in New York City. MSCI is a global provider of equity, fixed income, real estate indexes, multi-asset portfolio analysis tools, ESG and climate products. It operates the MSCI World, MSCI ...

KLD 400 Social Index is designed to provide exposure to the

common stock Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other Com ...

s of companies that KLD determines have positive

environmental, social and corporate governance ESG (environmental, social, and corporate governance) data reflect the negative externalities (costs to others) caused by an organization with respect to the environment, to society and to corporate governance. ESG data can be used by investor ...

(ESG) characteristics. The KLD400 consists of 400 companies drawn from the universe of the 3,000 largest U.S. public

equities In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...

as measured by float-adjusted

market capitalization Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by t ...

. The

index Index (or its plural form indices) may refer to: Arts, entertainment, and media Fictional entities * Index (''A Certain Magical Index''), a character in the light novel series ''A Certain Magical Index'' * The Index, an item on a Halo megastru ...

is composed approximately 90% of

large cap Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by t ...

companies, 9%

mid cap Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...

companies chosen for sector

diversification Diversification may refer to: Biology and agriculture * Genetic divergence, emergence of subpopulations that have accumulated independent genetic changes * Agricultural diversification involves the re-allocation of some of a farm's resources to ...

, and 1% small cap companies with exemplary social and environmental records. The eligible universe for the KLD400 is the 3,000 largest U.S. companies (by float-adjusted market capitalization) in the U.S.

equity market A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange, as ...

. KLD selects the eligible universe index on April 15 (or closest business day) of each year. KLD defines U.S. equity as follows: * U.S. headquarters * Primary market listing is the

NYSE The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is by far the List of stock exchanges, world's largest s ...

NASDAQ The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...

* Companies with non-U.S. incorporation for tax or regulatory purposes are evaluated on a case-by-case basis KLD follows the rules of the FTSE AWD USA Index. The following types of equities are not eligible for the KLD400: *

Preferred stock Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt ins ...

s * Limited or other types of partnerships *

Royalty trust A royalty trust is a type of corporation, mostly in the United States or Canada, usually involved in petroleum, oil and gas production or mining. However, unlike most corporations, its profits are not taxed at the corporate level provided a certai ...

s *

Closed-end fund A closed-end fund (CEF) is a fund that raises capital by issuing a fixed number of shares which are not redeemable, and then invest that capital in financial assets such as stocks and bonds. Unlike open-end funds, new shares in a closed-end fund ...

s In 2010, it was renamed from FTSE KLD 400 Social Index to MSCI KLD 400 Social Index.Announcement July 1, 2010 - ESG Indexes - MSCI
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References

External links

MSCI KLD 400 Social Index Factsheet
American stock market indices Ethical investment stock market indices {{invest-stub

See also

References

External links