Index providers join forces to launch new fixed income products

S&P Dow Jones Indices (S&P DJI) entered into a strategic collaboration with IHS Markit while London Stock Exchange Group’s FTSE Russell extended its long-standing partnership with the Johannesburg Stock Exchange (JSE) to launch a series of co-branded of fixed income indices.

S&P DJI will construct new multi-asset benchmarks using its own and IHS Markit’s leading indices, including the S&P 500 and IHS Markit’s iBoxx bond indices and CDX and iTraxx credit indices. The first phase will see the two firms design a liquid multi-asset allocation strategy, expanding S&P DJI’s broader multi-asset index strategies globally. These indices help meet investors’ growing demand for portfolio allocation, diversification and risk management solutions especially in times of market volatility.

“We are excited to collaborate with IHS Markit in developing innovative multi-asset solutions vital to investors,” said Jamie Farmer, Chief Commercial Officer, S&P Dow Jones Indices. “S&P DJI has had great success with indices such as the S&P MARC 5% ER Index and we are confident that together with IHS Markit, we will enable additional index solutions with just as much potential.”

Sophia Dancygier, Head of Indices at IHS Markit adds, “Our collective range of indices and associated financial products are the liquidity cornerstone of the global investment community, and they continue to act as a solid gateway into equity and fixed income markets.”

S&P DJI is an independent equity index provider, offering a comprehensive array of indices that serve any investment strategy while IHS Markit’s indices underpin some of the world’s most liquid fixed income financial products, including credit default swaps, total return swaps, exchange-traded funds, futures and options.

Separately, FTSE Russell and the Johannesburg Stock Exchange (JSE) will launch a series of co-branded of fixed income indices. Under the agreement, FTSE Russell will act as the benchmark administrator for JSE’s fixed income indices and provide daily index calculations on the FTSE/JSE All Bond Index Series, as well as the FTSE/JSE Inflation-Linked Index Series.

Dr. Leila Fourie, CEO, JSE

The new indices represent the performance of South African government, state-owned and corporate bonds, which both parties said offer investors multi-asset capabilities across South African capital markets.

“FTSE Russell aims to be the world leader in multi-asset indexing and now, domestic and overseas investors in local South African debt are able to benefit from FTSE Russell’s robust, transparent and objective approach to managing fixed income benchmarks,” said Waqas Samad, group director of information services at LSEG, and CEO of FTSE Russell.

Dr Leila Fourie, CEO, JSE, added, “Our partnership with FTSE Russell has seen local and foreign investors in stocks listed on our markets benefit from the expertise of an independent global index provider for almost twenty years. Today’s launch extends these benefits to corporate and government bond investors and will improve international access to our debt markets.”

FTSE Russell and JSE have been working together on providing equity indices since 2002, and agreed to branch out into fixed income indices in 2017.

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