UNJSPF Press Release: New Custom Global Equity Index Benchmark for Global Equity

Press Release: United Nations Joint Staff Pension Fund (UNJSPF)

24 September 2018

The United Nations Joint Staff Pension Fund (UNJSPF, the Fund) is pleased to announce that it has worked with MSCI, a leading provider of market indexes and investment decision support tools, in the development of a new custom global equity index which can serve as a benchmark for global equity investors. This index takes into account investment restrictions on companies which surpass a defined threshold of revenue generated from Tobacco or Controversial Weapons.
UNJSPF has historically not invested in Tobacco and Controversial Weapons companies.
This MSCI ACWI ex Tobacco/Controversial Weapons Index will therefore better reflect the available investment universe for UNJSPF’s active and passive global equity investments. It will provide a more accurate measure of performance from, and risk in, UNJSPF’s global equities portfolio.
The index is designed to encompass MSCI’s global universe of All Country World Index (ACWI) equity securities for a highly diversified portfolio, with the intention of minimizing tracking error. The exclusions are based on revenue restrictions and determined by publicly available company information, which is regularly maintained by MSCI ESG Research.
UNJSPF’s Office of Investment Management (OIM) worked with MSCI’s Custom Index and ESG Research teams to determine parameters that capture business involvement in these controversial activities and reflect an appropriate investment universe of public equity securities. MSCI and UNJSPF will publish a white paper in the fall of 2018 to outline the methodology.
Sudhir Rajkumar, Representative of the Secretary-General (RSG) for UNJSPF Investments, stated his strong commitment – implemented since he took office in January 2018 — to ensuring that the Fund achieves and maintains a leadership position in implementing sustainable investment strategies in its US$65 billion multi-asset class, global investment portfolio — 85% of which is actively managed in-house. Herman Bril (Director, OIM), who has lead responsibility for the Fund’s sustainable investment strategy, stated that a key part of the Fund’s approach to sustainable investing is the belief that portfolios which integrate material Environmental, Social, and Governance (ESG) metrics in their investment decision making process have the potential to provide returns that are superior to those of conventional portfolios, while exhibiting lower risk over the long term.
Deborah Yang, Global Head of MSCI ESG Indexes stated that MSCI is proud to support the UNJSPF in their effort to move from a traditional global equity policy benchmark to one that is designed to exclude companies with involvement in tobacco and controversial weapons.

Profile of UNJSPF:

The United Nations Joint Staff Pension Fund (UNJSPF, the Fund) is a defined benefit fund established by the General Assembly of the United Nations in 1948.
The Fund manages a US$65 billion multi-asset class, global investment portfolio, 85% of which is actively managed in-house.
The Fund invests globally in over 100 countries and regions, and in a broad range of asset classes (global equities, global fixed income, private equity, real estate, infrastructure, timber, and commodities).
The Fund is entrusted to provide retirement, death, disability and other benefits and related services to over 205,000 staff and retirees of the United Nations and 23 other organizations admitted to membership in the Fund.
The Fund has a long-term investment return target of 3.5% real (net of inflation) annualized in USD terms, which it has to achieve while remaining within approved risk tolerance parameters and meeting investment criteria mandated by the United Nations General Assembly.

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