Index Design Services (Pre-Production Services)

Index Design Services is one of our core strengths, where we take a seed idea and after a focused collaborative process turn it into an Index Methodology Document.

From a seed idea to an index production, it usually takes about 3-4 weeks depending on the Index complexity.

While new indexes can be set up based on a client's existing concept, they're often the result of a client coming to us with a rough idea or are based on a concept jointly developed with our client – a highly flexible approach.

Once we have finalized on a concept, we develop 3-4 precise variants of it. Then using our highly automated back-testing module each of those ideas are validated with market data going back between 10 and 30 years.

The performance of each of the variants are then benchmarked against known standards for risk, returns, volatility etc. and only after a thorough evaluation the ideal variant is selected in conjunction with the client for production.

final deliverables
  • Daily Index value and total returns for the entire back-testing period
  • A regulatory (e.g. SEC) compliant methodology document for the Index
  • A starter Factsheet for sales and marketing purposes
  • Historical Performance Benchmarking against 1 or 2 named benchmarks
  • Summary of any data/model corrections made to ensure desirable Index behaviour – e.g. low beta, reduced churn.

Automated Back-Testing

In addition to our extensive capital markets experience, our fully automated back-testing tool is the key differentiator - providing 10-100x efficiency & performance jumps by back-testing a variant of an idea in a few minutes, which usually used to take weeks. Thus, enabling our customers to validate several permutations & combinations of the different variants to come up with the ideal Index that best reflects their concept and meets their performance goals.

 

Asset Classes

We provide exposure to virtually everything that can be done with equities and fixed income over different asset classes including derivatives, commodities, currencies, interest rates, alternatives, and multi-asset indices.

Indexes can also be developed to provide exposure to certain thematic strategies, like:

Smart Beta Indexes:
  • Alternative Weighting methods that improve returns significantly
  • Caps on sectors weights and constituents’ weights
  • Weighting factors determined using Artificial Intelligence – boost in returns
Regional Benchmark Indexes:
  • Diversified regional indexes for APAC, South East Asia, Eastern & Western Europe
  • Sector and size indexes for regions
  • Use of Smart Beta weighting mechanism to improve returns
Thematic Indexes:
  • Customized themes – combination of geography, financial performance, sector, sustainability, etc.
  • New themes like combination of short and long-term performance