These low risk indices, developed in partnership with Finvex Group, are based on the successful European national blue chip indices and provide new risk adjusted investment possibilities for investors and Exchange Traded Product (ETP) providers.
With the introduction of the new low risk index series NYSE Euronext is responding to growing demand from institutional investors for better risk control mechanisms. Through the use of advanced risk analysis tools and an optimization process, a robust insight into risk is achieved. The careful selection and weighting of equities in the low risk indices [1] aims at lower overall risk than traditional market capitalization weighted indices. The compounding of more stable returns also allows to target a positive effect on returns.
“Given the current challenging economic and financial environment, we are very pleased to be able to offer investors, in partnership with Finvex, the opportunity to reduce their market risk and volatility, thanks to these new Low Risk Indices.”, said George Patterson, Head of NYSE Euronext’s European Indices Group. “Due to the advanced risk adjusted technology we are able to extend our successful CAC and AEX index series and provide their respective markets with an optimized market risk strategy reducing volatility and drawdowns in declining markets.”
Benedict Peeters, co-founder of Finvex Group, added: “Indices based on robust risk reduction technology are an attractive alternative or complement to traditional benchmarks that generally do not include any risk element. NYSE Euronext’s high quality platform is now including these advanced solutions and we are confident their client base will start tracking or using these indices in the near future.”
