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 is 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 SPDR S&P 500 ETF as the parent index.

Historical Performance SCLMX:  January 2006- March 2018 

Summary Observations

Over the 12-year and three-month period from January 2006 to March 2018, the SCLMX Index outperformed the benchmark SPDR S&P 500 ETF by 16%.

 The SCLMX is designed to maximize performance while minimizing the sensitivity to projected high and low carbon emissions scenarios. It achieves this with significantly lower beta  (0.75) compared to the benchmark, while also outperforming the benchmark's Treynor and Sharpe Ratios. Treynor Ratios for SCLMX and benchmark are 11.38 and 7.64 respectively. Sharp ratios 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: January 2006 - March 2018 

Summary Observations

Over the 12-year and three-month period from January 2006 to March 2018, the SCLMK Index outperformed the benchmark Russell 1000 Index by 69%.

The SCLMK Index is designed to maximize performance while minimizing the sensitivity to projected high and low carbon emission scenarios.  It achieves this with significantly lower beta  (0.92) compared to the benchmark while also outperforming the benchmark’s Treynor and Sharpe Ratios. Treynor Ratio for SCLMK and benchmark are 10.79 and 6.72 respectively. Sharpe Ratio for SCLMK and benchmark are 0.70 and 0.45 respectively. 

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