BNZ adopts custom based index

Friday, September 13th 2019, 5:41PM

Bank of New Zealand has licenced a custom index based on the FTSE Global Choice Index Series. 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.

Beside the standard index family, firms can construct bespoke ‘Choice’ indexes using a ‘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 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 and can be adjusted as  responsible investing policies evolve.

BNZ general manager, Wealth, Peter Forster, says: “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.”

Tags: index funds responsible investing

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