Index Strategies

RAFI™ Fundamental Carbon Neutral
Index Series

AT A GLANCE

Maintains index-level carbon intensity at a level equivalent to the overall market

Embeds a buy-low, sell-high approach

Thoughtfully designed and highly implementable

Designed for investors who seek Fundamental Index™ exposure and want to mitigate their exposure to high-emitting companies, the RAFI Fundamental Carbon Neutral Index strategy seeks to maintain carbon intensity at a level similar to the overall market.

The RAFI Fundamental Carbon Neutral Indices begin with the RAFI Fundamental Index™ and tilt constituent weights at each rebalance to be at or below the carbon-intensity levels of the market.

The RAFI Fundamental Index approach uses fundamental measures of company size to select and weight companies. The index strategy aims to deliver excess return versus a capitalization-weighted benchmark by severing the link between price and index weight, systematically rebalancing against the markets constantly shifting expectations and avoiding the trendy, popular and most expensive securities.

Thoughtfully designed to deliver for investors

The RAFI Fundamental Carbon Neutral Index Strategy

Matches carbon intensity of the market.
The strategy maintains carbon-intensity levels equal to that of the market.
Embeds a buy-low, sell-high approach.
The strategy sells securities whose prices have increased and purchases securities whose prices have fallen and thus have more-attractive relative equity valuations.
Benefits the investor.
The strategy preserves the positives of traditional passive investing—simple, transparent, broadly diversified, and low cost. Regular periodic rebalancing helps investors capture excess return from long-term mean reversion, one of the largest and most persistent active investment opportunities.