Source has launched four Market Quartile exchange-traded funds on Deutsche Börse’s XTF segment.
They are the first European ETFs designed to capture the market impact of standard phases in the business cycle.
The products allow investors to implement market cycle driven investments based on the underlying companies’ correlation to economic cycles and consumer behaviour.
In the underlying indices, Stoxx has mapped each of the ICB sub-sectors to one of the Market Quartiles: consumer discretionary, consumer staples, cyclicals and defensives.
The indices use the same methodology as the Stoxx Europe 600 Optimised Supersectors indices, with companies being removed from the Stoxx Europe 600 index in order to create a more liquid universe of stock components.
The Market Quartile ETFs allow investors to implement market cycle investing through four Ucits III compliant funds.
“The Stoxx Europe 600 Optimised Market Quartile indices track the successful Stoxx Optimised Index methodology, which is especially focused on increased liquidity and diversification in the indices, in order to make the financial products based on them easily tradable,” says Hartmut Graf (pictured), head of Deutsche Börse’s index business and chief executive of Stoxx. “In the innovative index concept, European companies are grouped into the four new indices on the basis of their performance in relation to the economy.”