In conjunction with the change in portfolio composition, the account’s composite benchmark will change to include the MSCI EAFE + Canada, alongside the Russell 3000 and Lehman Brothers U.S. Aggregate indexes, the announcement said. Inclusion of non-domestic companies in the CREF Social Choice Account will offer investors looking for global investment opportunities that align with their values a socially screened investment vehicle.
Under the new benchmark, the account will expand the universe of stocks in which it can invest beyond those in the KLD Broad Market Social Index (BMSI) to also include the recently launched KLD Global Sustainability Index Ex-US (GSIXUS). The research process evaluates a company’s sustainability performance by analyzing its relative strength in environmental stewardship; serving local communities and society overall; commitment to high labor standards throughout the supply chain; production of safe, high-quality products; and governance and ethics.
With approximately $9.2 billion in net assets as of December 31, 2007, CREF Social Choice is the largest socially screened portfolio in the United States and the largest socially-screened global portfolio with over 430,000 individual investors, the company asserted. The account is a balanced portfolio with an overall target asset allocation of 60% equity securities and 40% fixed income securities, including a 2% target for proactive social and community investments within the fixed-income portfolio.
The new international equity investments, which are expected to be added gradually throughout March 2008, will total approximately 13% of the account’s total assets.
The CREF Social Choice Account is available to investors through TIAA-CREF’s employer-sponsored retirement plans or through TIAA-CREF IRAs and variable life policies.