Methodical monitoring of a global stock universe, and applying MSCI ESG standards to the selected stocks
Every day, starting from a universe of 15.000 stocks globally, SIMAG’s proprietary systems screen around 7.500 liquid stocks for exploitable patterns. SIMAG focuses on ESG-compliant investment universes, such as defined by the range of MSCI ESG Leaders indices following a Best-in-class approach – the indexes select the highest rated companies in each sector, and exclude companies involved in severe controversies. The indexes targets a 50% sector representation vs. the parent index. In the case of the MSCI USA ESG Leaders benchmark this amounts to ca. 339 stocks. From this investment universe our methodology identifies the most promising investment opportunities and form a diversified portfolio which consists of around 120-180 stocks.
Partnering with MSCI ESG Research
We recognise that environmental, social and corporate governance (ESG) factors play a material role in determining risk and return of an investment. Therefore we apply established ESG standards and frameworks in our investment approach and proprietary stock selection process. While our core capability is the signal detection in noisy financial markets, we partner with MSCI ESG Research, the world’s largest provider of ESG research and data. They offer a breadth and depth of information that we simply cannot replicate on our own. These award-winning ESG Ratings cover over 6,800 companies (13,000 total issuers, including subsidiaries) and more than 650,000 equity and fixed income securities globally.
MSCI continuously evaluates ESG risks, including daily monitoring of 2,100 media publications and regular updates of public documents and third-party data sets. MSCI ESG Indexes leverage this data in more than 900 indexes. Therefore we are using MSCI ESG Ratings to assess the ESG performance of single stocks, giving our investors confidence that our ESG metrics meet emerging regulatory standards, enable comparison across investment offerings, increase transparency and limit the potential for “greenwashing”.
Since our foundation, we reached a number of important milestones in the areas of corporate responsibility and sustainability.
Since the early days of SIMAG, we are a (provisional) signatory of the Principles for Responsible Investment (PRI), an initiative launched by the United Nations.
Our ambition and commitment from the beginning was to incorporate ESG issues into investment analysis and decision-making processes and be a part of the change happening within the investment industry.