Customized Indices

Customized indices are constructed based on specific client requirements. The process involves defining the index universe, selecting eligible securities, determining index weighting (e.g., market cap, equal-weighted), and setting rules for inclusion and exclusion. The methodology is systematic and well-defined, ensuring efficient and relevant index construction.

 Using SIX as your partner has the following advantages:

• Expertise and experience: Long-term experience in calculating and licensing indices.
• Robust index calculation capabilities: State of the art, and reliable index calculation engine and associated processes for index set-up and maintenance.
• Regulatory compliance: SIX ensures regulatory compliance with IOSCO Principles for Financial Benchmarks and the EU Benchmark Regulation and offers its expertise and advice when constructing the custom index.
• Broad reach: SIX has well-established distribution channels to disseminate custom indices and can consult on licensing matters.

Customized indices are tailored to individual needs, whereas standard market indices follow predefined and transparent rules for a wider audience. Custom indices can include themes, ESG factors, and specific investment goals.

Factors are determined in collaboration with the specific requirements of the client/index owner and may include:

• Securities selection: Deciding which asset classes (equities, fixed income, etc.) to include.
• Investability criteria: Assessing how easily securities can be purchased and sold.
• Transparent methodology: Developing rules for index calculation, rebalancing, and maintenance.

Custom indices are calculated, disseminated, and published on a regular basis as specified by the index owner using SIX’ state of the art index calculation engine, long-term experience in index calculation and licensing and well-established distribution channels. 

Yes, customized indices can serve as benchmarks for evaluating portfolio performance, especially when tailored to specific investment guidelines.

SIX offers its advice and expertise in the design and ongoing maintenance of custom indices based on regulatory standards, such as IOSCO Principles for Financial Benchmarks and the EU Benchmark Regulation.

Investors can access customized indices through the SIX website, data vendors, and other authorized channels.

Risks depend on the asset class amongst many other factors. Custom index risks include, like any other index, market volatility, liquidity, and specific risks related to the customized criteria.

Rebalancing frequency depends on the index type and index owner specifications and preferences (e.g., annually, quarterly, monthly).

Custom indices have eligibility criteria, but they can include various asset classes based on client specifications.

ESG factors can be incorporated into customized indices, allowing investors to align their portfolios with sustainability goals.