Solactive Launches GBS United States 500 Enhanced Investment Grade with Zurich and DWS

Investors are facing a volatile financial environment amid inflation, ongoing Covid-19 restraints, and geopolitical conflicts.

In uncertain times, companies with higher credit scores tend to be more resilient, financially healthier, and suffer less with economic fluctuations than their counterparts with low credit scores. Within this framework, Solactive is pleased to announce the launch of the GBS United States 500 Enhanced Investment Grade Index, which will be used for an investment management mandate from Zurich managed by a global asset manager firm DWS America.

The GBS United States 500 Enhanced Investment Grade Index provides investors with exposure to securities from the top 500 companies in the United States stock market that are not insurance related and have high credit quality. Despite being a pure equity portfolio, the index innovates by screening stocks using the issuer’s credit-rating concept, which is generally employed on fixed-income products.

The index uses the Solactive GBS United States 500 Index as a starting point. In a second step, securities of companies assigned to any of the following insurance-related industries are excluded from the universe: multi-line insurance, life/health insurance, insurance brokers/services, property/casualty insurance, and specialty insurance. Lastly, the companies that constitute the index must also have a long-term issuer credit rating higher than or equal to A3, according to Moody’s rating scale, or A-, according to Standard & Poor’s or Fitch’s Ratings rating scale,or not being rated by all the agencies and without any debt outstanding.

Timo Pfeiffer Chief Markets Officer at Solactive “In an economic environment mined by increasing interest rates and fear of recession looming over multiple economies, investors might seek refuge in companies that are financially more solid and creditworthy. The index strategy can potentially benefit from inflows in these companies, while their counterparties with lower credit rates might face increasing costs and operational risks, which could ultimately hamper their profitability and stock market performance. This launch shows that our clients and us follow the same innovative mindset when it comes to offering the best solutions to investors according to their needs and current trends. We are content to have developed such an index, based on our Global Benchmark Series, for DWS and Zurich and we look forward to continuing this relationship.”

John Cassedy Head of Insurance Coverage-Americas at DWS “Insurance investing is a highly specialized and regulated segment of the institutional market, and we are proud to have been able to leverage our four-plus decades of experience and expertise working with insurers to develop a novel solution that could potentially have broader industry application.”

Matt Vincent Regional Investment Manager at Zurich “We appreciate the quick and proactive way of implementation of the custom-made index. Solactive also shows how simple but meaningful such an implementation can be given the dynamic environment and technology available.”

Next Finance , October 2022

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