Custom Indices
Your partner for index innovation
We are a registered index provider, specialising in multi-asset indices, offering our own or your custom indices.
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
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
Case Study 1: University endowment fund
Queens' College Cambridge: MSCI ACWI SRI ex Energy ex Materials ex Utilities Index. We were invited to develop a custom index that was both SRI-screend and excluded the most intensive producers and consumers of fossil-fuels. We worked with MSCI to deliver the solution. The index is used as a benchmark for the equity allocation of the College's Endowment Fund.
Case Study 2: UK Equity Income fund
We were invited to assume the index administration responsibilities of the Freedom Smart-Beta UK Dividend Index which weights constituents of a UK All Share index by their forward-looking dividend contribution. The index is used as a benchmark for an index-tracking fund and has been renamed the Elston Smart-Beta UK Dividend Index.
Case Study 3: Active Net Zero Clean Energy research
We worked with leading clean energy research firm Longspur and capital markets specialist Radnor to develop the Active Net Zero Clean Energy Index. This uses the Active Net Zero selection methodolog developed by Longspur Radnor Indices, a Data Contributor.
ESG Indices
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Active Net Zero Clean Energy Index
The Active Net Zero Clean Energy Index includes shares of companies in European clean energy-related businesses that are positively screened for their commitment to Active Net Zero transition targets, their market capitalisation, and their liquidity, with a target constituent count of 50. Net Total Return index in GBP. [ANZNRG Index]. Format: Non-significant Benchmark Index Data Contributor: Longspur Radnor Indices Selection Methodology Owner: Longspur Radnor Indices Benchmark Index Administrator: Elston Indices MSCI ACWI SRI ex-Energy/ex-Materials/ex-Utilities Index
The index is constructed from the MSCI ACWI parent index, applying SRI screen (ESG + reputational risk) and negatively screening the Energy, Materials and Utilities sectors. [NU721312 Index]. Custom Index Client: Queens' College Cambridge Format: Non-significant Benchmark Index Methodology Owner: MSCI Benchmark Index Administrator: MSCI |
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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