CBOE - Ethical Investment Opportunities – A Look Into Cboe’s S&P 500 ESG Index Options
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With the release ofS&P 500 ESG Index Options, Cboe Global Markets Inc. (BATS:CBOE) offers investors the opportunity to invest in companies with astrong environment, social and governance (ESG) score while offering arisk and return profile similar to the S&P 500.
Cboe’s S&P500ESG Index Options offer exposure to 75% of the S&P 500’smarket capitalization by industry. It’s an industry-leading indexcreated by the S&P Dow Jones Indices using proprietary ESG scores,which focus on the most financially material and relevant ESG signalswithin specific industries. S&P 500 ESG Index options are easy totrade long and short, and they’re cash-settled, meaning there’s norisk of early assignment.
Many unethical business practices have been exposedin recent times, making the public more ethically conscious of theirinvesting decisions. Human rights abuses in cobalt mining, pricegouging in life-saving drugs, and greenhouse gas emissions have alltaken a spotlight in the media throughout the last five years,prompting global and governmental interventions on corporatepractices.
Cboe’s S&P 500 ESG Index options offer exposure tocompanies that have been investigated for confirmation of their ESGprinciples. Companies under the “Mining & Minerals” umbrella,for example, are drilled for their payment transparency, mineral wastemanagement, water-related risks, and community impact before beinggiven an ESG score. Similarly, companies in the “Restaurants”category are scrutinized for their local impact on businessoperations, customer relationship management, and raw materialsourcing.
As thefigure above demonstrates, the S&P 500 ESG Index is highlycorrelated with the broader S&P 500 Index. As such, it offersinvestors very similar returns and risks while ensuring the companiesthey invest in are a little more ethically, socially andenvironmentally conscious.
Click here to learn more about Cboe’s S&P 500 ESG Index.
This article originally appeared on Benzinga here .
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