Solactive Launches New USD and EUR High Yield Bond Benchmarks

The German index provider has extended its services to the non-investment grade bond market.

Following the launch of the Solactive Euro IG Corporate Index tracking the performance of the EUR-denominated investment grade bond market, Solactive has released two new fixed-income benchmarks: the Solactive Euro HY Corporate Index and the Solactive USD High Yield Corporate Index.

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The new benchmarks are designed to provide a snapshot of non-investment grade bond markets denominated in EUR and USD respectively, and are a first for the German index provider whose benchmarks have until now focused on the investment grade space.

The launch of the new benchmarks represents a further move towards Solactive’s strategic goal of expanding its product range and includes broad market indices in addition to the customised smart beta offering.

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Multi-Purpose Benchmarks

Solactive benchmarks can serve multiple purposes. Firstly, investors can use them as reference standards to compare and evaluate portfolio results. In addition, they can provide a starting universe on which to build investment strategies or smart-beta indices. Finally, the benchmarks can constitute a basis for investment products such as ETFs, as well as providing analytics of market performance across countries, regions or sectors.

The Solactive Euro HY Corporate Index and the Solactive USD High Yield Corporate Index are composed of corporate debt issued in developed and developing markets. Both indices are Total Return indices and are rebalanced monthly.

All index components have a rating that is sub investment grade and the amount outstanding must be at least €150 million and US$400 million respectively. The EUR index is based on 1000 at the close of trading on the 29th of December 2006 and the USD index on 1000 at the close of trading on the 31st of January 2005.

Astrid Ludwig, Head of Indexing, Solactive AG, commented: “The incorporation of benchmarks into our business model aims at broadening the range of index products offered, thus responding to the needs of a wider customer base looking for aggressive pricing on broad market indices covering the fixed-income asset class. As shown by our previous benchmarks launches, Solactive can effectively capitalize on its indexing infrastructure and operations to provide cost-efficient benchmarking solutions.”

 

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