Provider of managed data and regtech services to asset managers, owners, servicers and banks, RIMES Technologies, has expanded its offering beyond indices to include ETFs.
The new ETF Managed Data Service is designed to provide a single source of quality-assured global ETF data that has been validated, enriched and delivered in client-specified format via feed or API.
RIMES has sourced over 90 per cent of global ETF data directly from the world’s leading sponsors. As part of its MDS capabilities, RIMES normalises, validates and enriches ETF data sets by linking compositions with their underlying constituents, enabling users to perform portfolio management, risk, compliance and performance analysis according to their specifications.
Brett Schechterman, Head of Product – North America, says: “We really haven’t been fully engaged on ETFs before but it is a natural and organic extension of what we have done in the index space, where we have been a leading supplier of index content of both public and private indices, to the buyside for over 20 years.”
Beyond aggregating and redistributing third party index content, RIMES can also deliver standard or customised content depending on client demand via their relationships with 400 data partners across a range of data domains.
“So, we provide the enrichment of that content and the associated validation checks that an asset manager needs,” Schechterman says. “With the explosive growth in the ETF landscape and our unique experience of working with indices, these have put us in a good position to speak directly to our existing client base about ETFs”.
The new product is aimed at the broad asset management industry. “Asset owners are increasingly using ETFs in their allocations and portfolio construction processes,” Schechterman says. “ETFs are an efficient way to obtain exposure to specific asset classes.”
RIMES has 11 offices globally and more than 200 staff focusing on bringing their capabilities and services to ETFs, in addition to indices.
“There are unique regulatory considerations in each country regime and across borders,” Schechterman says, “but in general multi-asset investment managers and outsource-CIO types of models need a laser focus on asset allocation and portfolio construction using the most efficient toolkit.
“It’s hard to ignore ETFs because of the product innovation out there. People are creating new products on the fly and using them for pick up in smart beta or ESG-focused strategies with such nimbleness. The ETF wrapper looks attractive to everyone.”
And it is in that spirit that RIMES is aiming to provide further transparency into the underlying ETFs.
“Organisations ultimately need to have transparency to the underlying exposures of those ETFs,” he says. “You have an ETF and the NAV of the fund but you want to know more about how a particular issuer is gaining that exposure. Are they replicating using derivatives? Are they using optimisation, particularly in fixed income, where the ETF might own just 300 bonds that are replicating that index? You need to know that and that’s what we are doing, providing the constituent level look through.”
That level of detail allows institutional managers to invest with the appropriate insight, Schechterman believes.
“Asset managers are looking for risk monitoring and performance tracking at a granular level, asking ‘how are they obtaining their beta’ and ‘how are they achieving these returns?’”
RIMES will be tracking the broadest set of issuers globally, approaching the issuers with the largest AUM footprint such as iShares, Vanguard or Invesco and plans to start with North America, then Europe, Japan and then Asia ex-Japan.
“We feel we differentiate ourselves as a managed data service by sourcing the content directly from the issuers and leveraging our proven data quality services and scalable eco-system,” Schechterman says.