Index Investments Group (IIG), a division within index provider FTSE Russell, has extended its range of indices through two new collaborations in the last few months.
The first of the two joint ventures, with crypto asset manager Grayscale Investments, was launched in October 2023. The goal of the collaboration with Grayscale is to help investors categorise and analyse the crypto ‘ecosystem’, with plans for creating tools and structures to monitor themes, risks and opportunities, to support more informed investment decisions.
Grayscale created a new product, Grayscale crypto sectors, a framework designed to set the standard for organising the crypto asset class, and FTSE Russell developed a crypto-sector index series, a set of five rules-based indices, capturing the investable crypto market of Grayscale’s crypto sectors. The sector indices cover currencies; smart-contract platforms; financials; consumer and culture; and utilities and services.
Kristen Mierzwa, head of digital assets at IIG joined FTSE Russell 16 years ago and her role now encompasses developing and executing digital-asset index strategy for FTSE Russell globally. Reflecting on how the first of the two projects emerged and took shape, she says:
“About this time last year, FTSE Russell and Grayscale were both thinking about trends in the crypto marketplace and the partnership developed when we got together and discovered that we were thinking alike.” They identified sectors as a key area that they could work on together, with a view to defining this area of the market.
The collaboration was founded on the basis of the key strengths of each firm, as Mierzwa adds: “We’re indexing experts and Grayscale has over a decade’s experience in managing and working with digital assets, so they know the space. We’ve each brought different expertise.”
IIG’s index design for Asia-based, digital asset-management business, HashKey Capital, announced in January, focused on the launch of three custom digital-asset indices, which went live that month.
The indices comprise the FTSE custom digital asset top-20 index, which includes the top-20 digital assets by market capitalisation, with a 40 per cent capping on a single asset; the FTSE custom digital asset infrastructure index, which includes digital assets in the crypto infrastructure chains; and the FTSE custom digital-asset application index, which includes digital assets, encompassing decentralised finance and other decentralised applications that are directly accessible to ‘Web3’ users and allow them to interact with the applications directly.
In addition to these two recent collaborations, IIG has other significant projects in the pipeline, as Mierzwa explains: “One of the things that we’re focused on developing at the moment is the reward that holders of proof-of-stake digital assets can receive, if they’re participating in a staking pool. It’s not quite a dividend payment, nor is it a bond yield, but it does help them to earn something on top of the capital appreciation of the holding.”
Smaller but equally important projects are underway too: “We’re still also building out our index series,” she confirms: “We’re running about 65 indices at the moment and there are about 360 assets in our universe.”
