According to the announcement, the new strategies are designed to track well-known US and international equity benchmarks. BGI is also offering investment solutions to plan sponsors who may require customized portfolios to meet the divestiture legislation.
The new strategies will screen out stocks of companies that have been identified as having business ties to Sudan, while at the same time tracking as closely as possible the return and risk characteristics of the major US and international stock indexes, the announcement said. BGI will rely on an independent research firm to identify companies doing business in Sudan, and will use its quantitative portfolio construction techniques to seek to minimize the tracking variance that will occur with the deletion of stocks.
Illinois (See Illinois Measure Bars Sudan Investments), Oregon and New Jersey (See New Jersey Assembly Bans State Investment in Sudan) have all passed legislation banning state pension funds from investing in companies with Sudan ties. Similar legislation has been proposed for Indiana, Connecticut, Missouri, New York, Ohio, and California.