Smart Climate™ Indices

Entelligent offers a suite of indices based upon climate change and varying patterns of energy usage and their effect on publicly traded securities. Our indices are designed to outperform various market benchmarks and can be tailored to individual client needs.

Smart Climate Indexing Methodology

Entelligent’s Smart Climate Indices are designed to significantly reduce the risk of climate change, and to increase investment performance, when compared to relevant well-known benchmarks.

Index calculations involve a 3-step process, beginning with En-Roads, a global integrated resource assessment model that constructs climate and energy simulations based on a system of dynamic equations.

In step one, simulations rely on multiple feedback loops to determine changes in future energy investment, capital expenditure and supply costs impacting global carbon emissions.

In step two, a separate financial simulation model forecasts the sensitivity of each security to varying carbon emissions scenarios based on historic sensitivity to varying energy input sources, and on the forecasts from step one, which are updated regularly.

In the final step, the optimization process makes adjustments to constituent weightings, over-weighting individual securities that demonstrate the least sensitivity to a baseline carbon emissions scenario, and under-weighting those with high sensitivity.

All Smart Climate indices are rebalanced on a quarterly basis.

Smart Climate 500 Index - SCLMX

The SCLMX Index uses a highly recognized large-cap benchmark as the parent index.

Historical Performance SCLMX:  2006-2017 

Summary Observations

Over the 12-year period from Jan 2006 to Dec 2017 SCLMX index had greater cumulative returns than the SPDR SP 500 ETF. Over this period the cumulative returns of SCLMX and benchmark are 208% and 180% respectively. The SCLMX is designed to maximize performance while minimizing the sensitivity to projected high and low carbon emissions scenarios. It achieves this result with a lower beta 0.76 relative to the benchmark, while also outperforming the benchmark's Treynor and Sharpe Ratios. Treynor ratio for SCLMX and benchmark are 11.56 and 7.90 respectively. Sharpe ratio for SCLMX and benchmark are 0.75 and 0.57 respectively. 

Smart Climate 1000 Index - SCLMK

The SCLMK Index uses the Russel 1000 Index (INDEXRUSSELL: RUI) as the parent index.

Historical Performance SCLMK: 2006-2017 

Summary Observations

Over the 12-year period from Jan 2006 to Dec 2017 SCLMK index had greater cumulative returns than the Russell 1000. Over this period the cumulative returns of SCLMK and benchmark are 254.56% and 142.68% respectively. The SCLMK is designed to maximize performance while minimizing the sensitivity to projected high and low carbon emissions scenarios. It achieves this result with a lower beta 0.91 relative to the benchmark, while also outperforming the benchmark's Treynor and Sharpe Ratios. Treynor ratio for SCLMK and benchmark are 10.75 and 6.60 respectively. Sharpe ratio for SCLMK and benchmark are 0.69 and 0.44 respectively. 

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