Insights

Climate Change Aware, Alpha-Oriented Portfolio Construction

A core, beta-based climate strategy, combined with a satellite, alpha-oriented high-conviction climate strategy, demonstrated alpha and diversification benefits for a controlled tracking error.


Senior Strategist / Investment Strategy & Research
Senior Research Analyst

For institutional investors seeking answers wishing to integrate their strategic views on climate change into their portfolios, State Street Global Advisors offers both alpha- and beta-oriented solutions.

The State Street Global Climate Transition strategy is a concentrated, high-conviction approach that seeks to generate alpha by selecting securities based on our analysts’ proprietary and forward-looking climate transition scores. The objective is to select companies that are climate-transition leaders and influencers in their respective industries. We believe the high-conviction nature of the Global Climate Transition strategy makes it suitable for use as a satellite in core-satellite portfolio construction.

The State Street Sustainable Climate World Equity strategy is much broader and is fully rules-based, with climate change parameters that are more historically focussed.

The two strategies are highly complementary in terms of investment style and conviction. They:

  • Fit well together in terms of a strategic allocation which takes climate change into consideration
  • Fit well together in terms of core-satellite portfolio construction

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