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Solactive Starts Benchmark Offering - Sets The Foundation For New Smart Beta Index Creation

Date 07/01/2016

Solactive, one of the growing player in the index space, made a strategic decision to enter the benchmark index business with the launch of benchmark families in the equity as well as the fixed income space. Solactive will approach market participants by offering an aggressive pricing model.

With the launch of the benchmark indices, Solactive complements its product range and allows clients to do three things: Firstly, construct smart beta indices directly by using broad Solactive benchmarks as starting universe. Secondly, use the benchmark itself as an underlying for investment products or to benchmark an active strategy and lastly, conduct index analytics across countries, regions or sectors, and therefore slice and dice individual index strategies.

The wider product range will broaden the customer base, by adding two important groups – firstly, the active fund-companies that need a cost-efficient benchmark to measure their fund performance and secondly, the product shop that is looking for interesting smart beta concepts.

Commenting on the new strategy, Astrid Ludwig, Head of Bond & Complex Indexing says: "This is definitely a milestone for Solactive, enabling us to focus our development efforts on smart beta strategies and offer well researched and innovative index concepts for our customers."

Steffen Scheuble, CEO and founder of Solactive explains: "We have been approached by several asset owners, who are unhappy with either the service offered by the existing benchmark providers or find that the pricing for their service is unreasonable. Therefore we decided to close the gap and offer exactly what is missing - a cost-efficient and high quality service alternative."

In a first step the following benchmark indices will be launched:

Index

Asset Class

Target

Solactive US Broad Market Index

Equity

covers Large Cap, Mid Cap and Small Cap US companies 

Solactive US Large Cap Index

Equity

covers the 500 largest companies in the U.S. (buffer rules apply)

Solactive US Large & Mid Cap Index

Equity

covers the 1000 largest companies in the U.S. (buffer rules apply)

Solactive Euro IG Corporate Index

Fixed Income

measures the performance of Investment-Grade Corporate Bonds denominated in EUR

 

The following performance figures represent the market movement of the US stock market for the Solactive equity indices as well as the corporate bond market for the fixed income index. The table below shows different performance figures as well as information on components. The Solactive US Equity Index family is calculated in USD. The Solactive Euro IG Corporate Index is calculated in EUR with coupons reinvested at each monthly rebalancing.

MV_Solactive_Fig1L_07Jan15

 

Solactive EUR IG Corporate Bond Index

Return

48.54%

Return p.a.

4.48%

Vola p.a.

2.69%

Return/Risk

1.67

Maximum Drawdown

-7.83%

Currency

EUR

# of Instruments

1773

as of Jan 4th 2015 

 

MV_Solactive_Fig2L_07Jan15

 

 

Solactive US Broad Market Index

Solactive US Large & Mid Cap Index

Solactive US Large Cap Index

Return

106.60%

99.52%

86.91%

Return p.a.

4.63%

4.41%

3.98%

Vola p.a.

20.34%

20.19%

20.10%

Return/Risk

           0.228

           0.218  

           0.198  

Maximum Drawdown

-55.53%

-55.07%

-54.73%

Currency

USD

USD

USD

# of Instruments

 2990

 981

 494