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Vinit Srivistava, MerQube
Vinit Srivistava, MerQube

MerQube and the evolution of indexing   

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Index provider, MerQube, launched in 2019, with the aim of providing a “technology-driven answer to the most complex, rules-based investment strategies.”

Observing the evolution of indexing over the years, co-founder, Vinit Srivastava, notes three key developments: “Firstly, indexing has grown, and its use cases have expanded. Secondly, options and derivatives have become a huge part of the ecosystem of financial products, and customisation has become of significant interest to investors, whether retail or institutional. The third development is the growth of data and the different types of data that have been used to build investment strategies.” 

Srivastava took the step to launch MerQube with his business partners, when they saw these trends emerging. There were many challenges, initially, but they persevered: “Covid hit just after we started but we kept on building our infrastructure,” he confirms.  

Today, the firm is seeing the results of its persistence, through significant collaborations, as Srivastava reports: “We recently worked with Calamos Investments, a large mutual-fund business in the US, on the launch of its range of option-based, defined-outcome ETFs.”  

MerQube also partnered with Impact Cubed, a provider of ESG data and investment solutions in November last year, to create bespoke, next-generation indices that are driven by factual ESG-impact data. At the launch of the venture, Srivastava commented: “The evolution of ESG indices demands next-generation products that are transparent and bespoke. We are combining our sophisticated indexing capabilities with Impact Cubed’s factual ESG data, delivering indices that not only reflect but propel investors’ sustainability agendas.”

There have been further MerQube developments in the sustainability space, as Srivastava says: “We recently launched a new family of biodiversity indices that will enable investors to back firms that are proactively tackling the biodiversity crisis.”

AI-based indices are on the agenda too, says Srivastava: “One of the main areas that we’ve been looking at, since last year, is AI-based indices. AI is the hottest topic on the planet and in the financial-services sector, people are embracing it, in two particular areas that we are working on. One is stock selection − selecting stocks using AI and the other is asset-class selection. 

“In both of those areas, the insurance industry in the US has been one of the early adopters and we have seen the launch of AI-based strategies here in the insurance sector in the last year.  MerQube did the calculations behind a couple of them. We didn’t run the models but one of the things we’re working on at the moment is building the models to undertake the active stock selection and the asset-class allocation. 

“These are systematic strategies, so in other words, these are not the passive strategies of the past where you selected stocks based on certain criteria and created a portfolio.”  

Reflecting on other recent achievements, Srivastava says: “One of the biggest developments for us in the last year was getting our Series B funding from a West Coast venture-capital firm, Intel Capital, which we view as a validation of our work and the growth in this space.”  

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