iQ ESG 10 Model

INVESTMENT OBJECTIVE

The iQ ESG 10 (SRI) Model seeks to provide returns in excess of the S&P 500 Index by selecting stocks that rate high on environmental, social and governance criteria.

INVESTMENT PROCESS

The iQ ESG 10 (SRI) Model implements the following rules-based process:

  • Begin with a starting universe of stocks held by '40 Act funds that are classified as a “Sustainable Investment” and are members of the S&P 1500 Index.

  • Sort the starting universe by market capitalization and select the top 100.

  • Sort the remaining 100 stocks by Working Capital-to-Assets ratio and select the top ten.

This model reconstitutes every February, May, August and November and averages less than one position change every reconstitution.

What is Socially Responsible Investing (“SRI”)

Investing in socially responsible stocks, also known as sustainable or ESG (Environmental, Social, and Governance) investing, allows investors to align their investments with their values and principles. This type of investing seeks to consider not only the potential financial return but also the impact that a company's business practices have on society and the environment.

There are several benefits to investing in socially responsible stocks. First, it can help investors feel good about where their money is going, knowing that they are supporting companies that are making positive contributions to society and the environment. Second, companies that prioritize sustainability and social responsibility may be better positioned for long-term success, as they are better equipped to navigate social and environmental risks and adapt to changing consumer preferences. Finally, socially responsible investing may offer an opportunity for market outperformance, as companies that prioritize sustainability may be more resilient to environmental and social risks, and may be better positioned for long-term growth.