Custom Indices
Elston is an independent UK-based index provider
We are a UK-based independent Index Provider and have been managing indices since December 2014 and developing Index Calculation Methodologies for licensing since 2013. We can work with asset managers, investment consultants or research providers to design and build custom indices. We specialise in Multi-Asset Indices.
How we design & build your index
Step 1: convert an investment strategy into a codified methodology.
Step 2: back-test and stress-test the index rules
Step 3: launch, publish and manage the index
How we design & build your index
Step 1: convert an investment strategy into a codified methodology.
Step 2: back-test and stress-test the index rules
Step 3: launch, publish and manage the index
Case Study 1: University endowment fund
Queens' College Cambridge: MSCI ACWI SRI ex Energy ex Materials ex Utilities Index
Case Study 2: UK Equity Income fund
Coming soon...
Why launch an index?
Launching an index enables methodology owners to evidence their strategy in the real world.
This can have either a Strategy Application or a Benchmark Application.
Strategy Application
Index performance track record can evidence the characteristics of an investment strategy without necessitating product build. Investment strategies can be managed to that index via a segregated account, index-tracking fund or Exchange Traded Products (ETPs).
Benchmark Application
A publicly available index can be used as a benchmark so long as it has the following qualities*:
Specified: The benchmark is specified in advance - prior to the start of the evaluation period.
Appropriate: The benchmark is consistent with the manager’s investment style or area of expertise.
Measurable: The benchmark’s return is readily calculable on a reasonably frequent basis.
Unambiguous: The identities and weights of securities are clearly defined.
Reflective: The manager has current knowledge of the securities in the benchmark.
Accountable: The manager is aware and accepts accountability for the constituents and performance of the benchmark.
Investable: It is possible to simply hold the benchmark.
* See Managing investment portfolios: A dynamic process (CFA institute investment Series), Third edition, John L. Maginn, Donald L. Tuttle, Jerald E. Pinto, Dennis W. McLeavey
This can have either a Strategy Application or a Benchmark Application.
Strategy Application
Index performance track record can evidence the characteristics of an investment strategy without necessitating product build. Investment strategies can be managed to that index via a segregated account, index-tracking fund or Exchange Traded Products (ETPs).
Benchmark Application
A publicly available index can be used as a benchmark so long as it has the following qualities*:
Specified: The benchmark is specified in advance - prior to the start of the evaluation period.
Appropriate: The benchmark is consistent with the manager’s investment style or area of expertise.
Measurable: The benchmark’s return is readily calculable on a reasonably frequent basis.
Unambiguous: The identities and weights of securities are clearly defined.
Reflective: The manager has current knowledge of the securities in the benchmark.
Accountable: The manager is aware and accepts accountability for the constituents and performance of the benchmark.
Investable: It is possible to simply hold the benchmark.
* See Managing investment portfolios: A dynamic process (CFA institute investment Series), Third edition, John L. Maginn, Donald L. Tuttle, Jerald E. Pinto, Dennis W. McLeavey