Société Générale has established Société Générale Index, which it says constitutes a new generation of indices designed to meet grow
Société Générale has established Société Générale Index, which it says constitutes a new generation of indices designed to meet growing market demand for innovative index solutions that are distinct from today’s major market indices.
SG says 15 indices have already been launched and that the number of SGI indices will increase significantly by the end of the year. The indices can be accessed by investors through exchange-traded funds and Société Générale certificates, as well as by using structured products.
According to the bank, the indices draw on its strength as a leader in equity derivatives. In contrast with more traditional indices, the SGI benchmarks seek to provide both systematic strategy (_-research) and thematic (_-research) indices offering access to new asset classes.
The _-research indices are discretionary and/or quantitative indices based on Société Générale’s own research that aim to outperform traditional reference indices. For example, the SGI Fed Model index systematically optimises equity and bond weightings in order to beat a benchmark index equally balanced between these two asset classes.
Similarly, the SGI Vol Target BRIC aims to outperforming the S&P BRIC 40 index benchmark through an allocation between risky (S&P BRIC 40 index) and non-risky (US Libor 1-month) assets, taking advantage of the relationship between bear markets and rising volatility observed in the Brazilian, Russia Indian and Chinese markets.
The _-research indices aim to reflect high potential investment universes that are difficult to access compared with traditional indices. For example, the Wowax index aims to track the water industry via a selection of companies that are the most representative of the industry.
Other funds of this type cover markets such as European renewable energy, private equity, waste management, synthetic five-year bonds, world alternative energy, bio energy, solar energy, timber and uranium.
To create the indices, SGI has developed partnerships with leading calculation agents. For example, the integrity and independence of several SGI valuations is maintained by daily calculation from Standard & Poor’s.
Société Générale is one of the largest financial services groups in the eurozone, employing 120,000 people worldwide in the three key businesses of retail banking and financial services, global investment management and services, and corporate and investment banking. SG is one of the leading banks worldwide in euro capital markets, derivatives and structured finance, and one of the largest in the eurozone in terms of assets under custody (EUR2.45trn at the end of March) and under management (EUR441.4 billion).