STOXX Limited won the etfexpress award for Most Innovative Index Provider again this year, making it the first company in the industry to win the accolade for the fourth consecutive time.
“We introduced many indices in 2012, spanning various risk-based approaches to the managed futures space to other strategies. We also introduced indices for new global regions, expanding for example our footprint in China,” confirms STOXX Chief Executive, Dr Hartmut Graf.
Investors’ search for alternative beta continued last year, prompting STOXX to offer products aimed at risk.
STOXX’s Minimum Variance family, introduced in May, is a first-of-its-kind, based on a sophisticated methodology and a fundamental factor model provided by Axioma. The indices are designed to minimise risk by reducing the volatility of the underlying index. Two versions of each index are available, with the constrained version optimising the benchmark index with respect to volatility, offering investors an improvement over the benchmark. The unconstrained version, a novelty in the index world, provides a strategy index minimised for volatility that is not restricted to follow a specific benchmark too closely.
The EURO iSTOXX® 50 Equal Risk index, released in June, offers a risk-balanced blue-chip representation of supersector leaders in the eurozone. The objective of the equal risk portfolio is to find a risk-balanced allocation such that the risk contribution of each asset in the portfolio is equal. This avoids a concentration in specific risk.
The STOXX® Low Risk Weighted indices focus on stocks that have displayed the greatest price stability in the past year and represent the least volatile companies in a respective benchmark. The index family was launched in October.
In September of 2012, STOXX expanded its Global Index family with the launch of 1,200 supersector, size, regional and total market indices covering global equity markets. The company also launched the STOXX® China A, China B, China H and China Red Chip Total Market indices, offering international as well as domestic Chinese investors a first set of transparent and rules-based indices for the world’s second largest economy.
In May of last year, STOXX also expanded its ESG index family for sustainable investing, releasing regional STOXX® ESG Leaders blue-chip indices for North America, Asia/Pacific, Europe and the e`urozone, which represent companies that are global leaders in terms of environmental, social and governance criteria.
The indices are the first sustainability indices with full transparency over the selection method and scores used, essentially eliminating subjective elements from selection. In keeping with its mission of providing investors with innovative products during difficult economic times, STOXX introduced the iSTOXX® Efficient Capital® Managed Futures 20 index in December of 2012.
The index is the first benchmark for the Managed Futures space and exhibits a lower overall correlation to traditional asset classes such as stocks and bonds.
Also in December, the company launched the STOXX® Global 1800 EM Exposed index, allowing investors to gain emerging markets exposure by buying shares of companies listed in developed markets, which generate 33 per cent or more of their revenue outside of developed markets.
STOXX celebrated its 15th anniversary in February 2013. The company’s index expansion in 2012 and the years before shows it has grown from a European specialist to a global expert.
On winning the etfexpress award, Graf comments: “This is an honor and provides evidence that the market values our innovative products, even during tough economic times.”