Exchange Announces 5 Indices Including ESG High Dividend and Market Representative Futures

[Image source=Yonhap News]

[Asia Economy Reporter Myunghwan Lee] Korea Exchange announced on the 28th that it will start publishing a total of five indices, including the 'KRX/S&P ESG High Dividend Index' and four types of the 'Market Representative Futures TWAP High Leverage Index,' from the 4th of next month.

The 'KRX/S&P ESG High Dividend Index' is an index jointly developed with global index provider S&P DJI to promote the spread of ESG (Environmental, Social, and Governance) investment culture. According to the exchange, this index simultaneously meets the investment demand for ESG and high dividend blue-chip stocks.

This index consists of the top 50 stocks by dividend yield that meet financial and ESG screening criteria among the KOSPI 200 index components. The stocks include Samsung Electronics, KT, KB Financial Group, Kia, and DB Insurance, among others.

The exchange noted, "Through the development and commercialization of ESG indices, if investment weights increase in companies with excellent ESG management, it is expected to create a virtuous cycle that provides incentives to strengthen corporate ESG management activities."

The exchange will also release four types of the 'Market Representative Futures TWAP High Leverage Index,' which are derivative strategy indices that track the daily returns of the KOSPI 200 Futures TWAP type and KOSDAQ 150 Futures TWAP type at 2 times the forward direction (leverage index) or 2 times the inverse direction (inverse-2X index). However, it should be noted that due to the repeated fluctuations of the underlying index, the cumulative returns do not exactly track twice the underlying index.

An exchange official stated about these indices, "They are expected to be utilized in financial products such as Exchange-Traded Notes (ETNs) and to satisfy various investment demands according to economic conditions and investment preferences."