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Social Select Strategy

Strategy Dynamics

The Tone Capital Social Select Strategy provides investors opportunity to pursue financial goals in a way that is aligned with their personal values. Socially responsible investment can play a key role in promoting good corporate behavior, and positively impact society and the environment. Our proprietary quantitative model seeks to identify companies that have positive environmental, social and governance characteristics and are positioned for sustainable growth, examining factors including revenue growth, research & development spending, and momentum. The model selects 25 securities from the MSCI KLD 400 Social Index, equally weighting each stock in the portfolio. The model is analyzed semi-annually for potential rebalance.

Characteristics

The SOCIAL SELECT STRATEGY is an equity-based model investing in constituents of the MSCI KLD 400 Social Index, selecting a concentrated portfolio of stocks based on factors, keying on growth and momentum characteristics. The SOCIAL SELECT STRATEGY seeks to outperform the S&P 500 TR Index.

  • Tactical allocation strategy
  • Investment horizon: long-term
  • Rules-based investment process
  • Disciplined model-directed trading
  • Rebalance frequency: monthly

The S&P 500® Index is widely regarded as the best single gauge of large-cap U.S. equities. There is over USD 9.9 trillion indexed or benchmarked to the index, with indexed assets comprising approximately USD 3.4 trillion of this total. The index includes 500 leading companies and covers approximately 80% of available market capitalization.

The Investment Process

The MSCI KLD 400 Social Index is a capitalization weighted index of 400 US securities that provides exposure to companies with outstanding Environmental, Social and Governance (ESG) ratings and excludes companies whose products have negative social or environmental impacts. The selection universe for the MSCI KLD 400 Social Index are large, mid and small cap companies in the MSCI USA IMI Index. The index has outperformed the S&P 500 Index since inception.

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