Exploring climate scenarios

In this episode of FTSE Russell Index Ideas, Stephanie Maier, global head of sustainable at FTSE Russell, rejoins us to discuss the results of FTSE Russell’s 9th Annual Sustainable Investment Asset Owner Survey. She describes the record levels of adoption of sustainable investment, how climate risk concerns have intensified and why governance, tax and shareholder rights are now asset owners’ top priority. Chapters (00:01:41) - Sustainable Investing Hits 84%(00:02:17) - Why is ESG adoption rising globally?(00:03:24) - 55% of Assets Now Apply ESG(00:04:51) - Why Governance Risk Is Rising(00:08:20) - Can ESG Improve Portfolio Returns?(00:10:58) - How ESG Data Shapes Index Design

In this episode of FTSE Russell Index Ideas, Matt Monach, senior manager of equity quant research and index design at FTSE Russell, looks at the equity quality factor, which combines measures of profitability and leverage. He discusses the striking recent divergence between profits and cash flow amidst the heavy infrastructure spending on the artificial intelligence (AI) boom. Chapters (00:01:17) - What is the quality factor?(00:03:11) - How does FTSE Russell measure the quality factor?(00:04:44) - Why have tech companies historically scored highly on the quality factor(00:06:43) - Why tech company accruals are at record levels(00:09:25) - 2027 and Beyond: Will Tech’s AI Spending Pay Off?(00:15:04) - What index users can do to downsize large tech bets?

In this episode of FTSE Russell Index Ideas, Abhi Desai, Senior Analyst, Fixed Income Custom Solutions at FTSE Russell and Olivier Genin, Deputy Head Investment and Product Strategy, Head of Fixed Income and Responsible Investing Product Strategy, Amundi ETF and Indexing, discuss the design and use cases of FTSE GDP-Weighted World Government Bond index (WGBI), in which constituent country weights are determined by economic footprint, rather than the market value of debt in issue.  Chapters (00:01:39) - What is the GDP-Adjusted FTSE World Government Bond Index (WGBI)?(00:03:57) - GDP weighting explained: A new approach to sovereign bond allocation(00:05:36) - How GDP weighting changes country exposure and diversification(00:08:10) - FTSE WGBI vs. GDP-adjusted WGBI(00:11:12) - Methodology, performance and the future of GDP-based index investing

In this episode of FTSE Russell Index Ideas, Paul Clarke, head of FX benchmark product management at FTSE Russell, talks about the unique role played by benchmarks in the global currency markets. He describes the design features, use cases and oversight of the WMR FX benchmarks, which provide an objective, reliable and representative snapshot of FX rates across global markets. Chapters (00:00:00) - Introduction(00:01:31) - What are the WMR FX benchmarks, and who uses them?(00:03:36) - Comparing equity and FX benchmarks(00:04:34) - Why FX markets trade over the counter(00:05:52) - Processing data(00:08:18) - Explaining the 5-minute benchmark window(00:09:38) - Designing benchmarks: Are there trade-offs?(00:11:32) - Unpacking standard benchmark timings(00:14:15) - How the FX market is evolving(00:16:00) - Upcoming changes

In this episode of FTSE Russell Index Ideas, Stephanie Maier, global head of sustainable at FTSE Russell and Thomas Bremner Bligaard, Managing Director and co-founder of Planetrics, talk about climate scenarios following the fracturing of the global consensus on 2050 net-zero targets. They discuss how best to price climate risk and integrate transition and physical risk into a combined portfolio view. Chapters (00:00:01) - Introduction(00:01:13) - What is climate risk analytics? Meet Planetrics(00:01:48) - FTSE Russell & Planetrics climate index partnership(00:02:26) - Why global climate policy is becoming more fragmented(00:03:40) - Net zero progress: where the energy transition is succeeding and lagging(00:04:35) - Climate scenario analysis in an uncertain world(00:06:17) - How asset owners are managing climate risk and investment opportunities(00:07:50) - Pricing climate risk in investment portfolios(00:09:10) - Physical vs transition risk: building a complete climate risk view(00:11:04) - Climate scenario-based indices and the future of sustainable investing(00:11:55) - Planetrics & FTSE Russell indices(00:12:37) - Closing remarks

In this episode of FTSE Russell Index Ideas, Lee Clements, director of applied sustainable investment research at FTSE Russell, discusses the energy shock triggered by the 2026 Iran war, its likely impact on economies and the energy transition and how the shock has affected the risk and return characteristics of different FTSE Russell sustainable indices. Chapters (00:00:01) - Introduction(00:01:16) - A historically unprecedented energy shock(00:02:16) - The energy shock is rewiring global supply chain(00:03:43) - Countries most impacted by the 2026 energy shock(00:06:29) - The global pivot to fossil fuels(00:09:20) - How the war is accelerating clean energy transition(00:10:51) - The energy crisis impact: 1970s vs 2026(00:14:04) - How the war is reshaping the global economy(00:16:09) - How investors should incorporate energy sensitivity in their portfolios

In this episode of FTSE Russell Index Ideas, Sergiy Lesyk, director of research and analytics at FTSE Russell, looks at one of the classic equity market factors—value. He explains why value investors have faced a tough time in recent years and how definitions of value have also been questioned. Lesyk discusses FTSE Russell’s approach to building value portfolios and how best to remove off-target exposures. Chapters (00:00:01) - Disclaimer(00:00:35) - Introduction(00:01:37) - Why are markets questioning the value premium?(00:02:25) - Recent market trends that have made value investing hard(00:04:13) - How does FTSE Russell calculate the value factor?(00:04:55) - Why does a single value factor portfolio have exposures to other factors?(00:06:20) - Why value factor portfolio exposures matter(00:07:05) - How can the Index designer remove undesired factor exposures from the value portfolio?(00:09:34) - What impact does neutralisation have on the value factor portfolio's risk and return?(00:11:05) - Trade-offs of more neutralised value indexes(00:12:00) - Find out more on the FTSE Russell website

In this episode of FTSE Russell Index Ideas, Matt Monach, senior manager, research at FTSE Russell, explains the design and use cases of the FTSE Real Assets Industry Select Equity Index Series (FTSE RAISE), a new index family designed to help investors diversify away from the AI boom and gain exposure to companies whose value is rooted in real, hard, economically critical assets.  Chapters (00:00:00) - Introduction(00:01:50) - What is the FTSE Real Assets Industry Select Equity Index Series (RAISE)?(00:03:08) - Included/excluded industries(00:03:44) - Index construction(00:05:24) - Index Families available in a RAISE version(00:05:38) - Real asset equities vs. commodities: Key differences(00:06:45) - Performance over the last 25 years: FTSE RAISE vs. broad equity markets(00:08:15) - Correlation insights(00:09:23) - Dividend yield comparison(00:10:20) - RAISE vs. HALO trade(00:11:35) - Real assets and AI(00:12:20) - Feedback from clients

In this episode of FTSE Russell Index Ideas, Robin Marshall, director of fixed income research at FTSE Russell, and Gary Tan, FX and rates derivatives manager at SGX, discuss the FTSE Asia Pacific Liquid Government Bond Index Series and its role as the reference benchmark for new dollar-based futures contracts on the Singapore Exchange. Chapters (00:00:39) - Introduction(00:02:09) - What is the FTSE Asia Pacific Liquid Government Bond Index series? (00:04:32) - Singapore Exchange & FTSE Russell partnership(00:05:40) - How SGX bond futures addresses the constrained APAC hedging exposure(00:07:28) - Key trends in the APAC markets(00:10:30) - The choice: US dollar vs local currency expression(00:11:32) - Where to find out more about the FTSE Asia Pacific liquid government bond series(00:12:16) - Conclusions on the FTSE Asia Pacific liquid government bond series

In this episode of FTSE Russell Index Ideas, Catherine Yoshimoto, director of product management at FTSE Russell, talks about the design and use cases of the new Russell 9000 Global index, which builds on the 40-year history of the Russell index series to bring together US, developed ex-US and emerging markets stocks in a single benchmark. Chapters (00:00:00) - Introduction(00:00:54) - Why are the Russell indexes going global?(00:01:38) - What is the Russell 9000 Global Index?(00:01:58) - The building blocks of the Russell 9000 global(00:04:06) - Classification of countries as developed or emerging(00:06:15) - How the Russell 9000 handles local listings(00:07:04) - How the Russell 9000 Global compares with other global equity benchmarks(00:07:34) - Who would benefit from the Russell 9000?(00:07:55) - Where to go to learn more about the Russell 9000 Global