Keefe Bruyette & Woods (KBW) and Nasdaq have teamed up to launch the KBW Nasdaq Global Bank Index (Ticker: GBKX), according to a Nasdaq statement.
The KBW Nasdaq Global Bank Index is designed to track the performance of a number of banks designated as global systemically important (G-SIBs) by the Financial Stability Board and Basel Committee on Banking Supervision.
The index includes a total of 28 banks, collectively representing 45% of the global investable banking universe, which accounts for approximately $3.0 trillion in total market cap.
In particular, the KBW Nasdaq Global Bank features an equal-weighted index that boasts an average yield of 3.14% (as recently as 7/7/15). The index has exposure to a number of currencies, including the US dollar, British pound, euro, Japanese yen, Swiss franc, and the Swedish Krona. Both companies revealed that the Index would undergo a quarterly rebalancing, based on FSB and the Basel Committee’s update to the list of G-SIBs.
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According to Fred Cannon, Global Director of Research at KBW, “Global banks trade together, significantly different than their domestic peers and until now, there hasn’t been an index available in the marketplace that exclusively tracks this specific universe.”
“The GBKX is a substantial benchmark index, as our research shows G-SIBs trade at a lower valuation than domestic banks, even when adjusting for profitability. This is due to the unique global regulatory structure that G-SIBs operate under that exposes them to additional risks and capital requirements which domestic banks are not restricted by,” added Mr. Cannon.
“The KBW Nasdaq Global Bank Index is an incredibly important benchmark for market participants who are interested in monitoring the health of international financial institutions. This is the first of many new and innovative products to be developed as a result of our strategic partnership with KBW,” added Salil Donde, Executive Vice President, Nasdaq Global Information Services.
Late last month, Nasdaq made headlines with the implementation of its Nasdaq Index Calculation System. The solution helps provides marketplaces with an index calculation platform for computing multi-asset, multi-currency indexes.