A press release said the index offering provides an efficient, transparent, and cost-effective vehicle for capturing systematic sources of active equity returns. The new series draws on the FTSE All-World Index Series for its base universe.
The FTSE ActiveBeta Index Series’ approach to investing in equities is derived from the premise that a significant portion of traditional active equity management returns – or alpha – is attributable to systematic sources of active returns rather than a manager’s stock selection skill, according to the announcement. The new index series is based on research establishing that momentum and value, two widely used approaches in active management, are, in fact, systematic sources of active returns and should therefore be viewed as additional forms of betas – or ‘Active Betas.’
The index series can be used by a variety of institutional investors and product issuers to:
- structure more efficient equity portfolios through direct allocation to the systematic sources of active equity returns;
- benchmark active growth, value and core managers’ investment performance more appropriately by using indexes that better reflect their investment process; and
- create low cost passive investment vehicles which provide an alternative to traditional active management strategies.
“FTSE is proud to introduce this new range of equity style indices by partnering with Westpeak Global Advisors. The new FTSE ActiveBeta Index Series offers investors a fresh perspective on style investing as well as an alternative to traditional active management strategies, and further extends the range of tools FTSE provides to help clients meet their investment objectives,” said Mark Makepeace, Chief Executive, FTSE Group, in the press release.
More information is at http://www.ftse.com.