An Insight into the Custom Index

While you plan to invest in the funds, you go through the Index Provider for sure. You make all the attempts to locate the best Index Company. Here we will provide you a helping hand at making the best investment by giving you an insight into the Custom Index.

What is a custom index?

By custom index we mean a tailor-made alternative solution that is designed especially so as to suit the investment strategy of an individual clients. Here you have all the opportunities to modify the existing index as well as to create a completely new index that is based on your particular requirements. The custom indices are used primarily by the ETF sponsors, the derivative desks, the self-indexers, the structured product teams, the exchanges as well as the plan sponsors. All of them use the custom indices as the base for the new financial products in addition to the benchmarks.

Reasons to choose Custom Indices via professionals

Custom Indices help you to enable dedicated professionals to plan the development as well as the maintenance of custom indices for you. In addition to this, you can secure market recognition by simply leveraging the brand as the experts. Most of the services are quick at responding to the market changes. Experts are experienced and full of resources to track the custom indices quickly while bringing forth the new ETFs as well as the structured products to the market.

Creation of custom index

Client’s index methodology as well as requirements are assessed and after the approval the index is launched and then dissemination takes place. Calculating the custom index also takes place to trace the history in case the need arises. Index distribution takes places within seconds each day or throughout the day. Depending on the unique requirements as well as the methodology you may be charged for getting the custom index made.

All in all, this is an insight into the Custom Index. Getting the custom index made is not at all a difficult task and you can simply benefit a lot out of the same.

Source : http://thematicindex.soup.io/post/639328535/An-Insight-into-the-Custom-Index

Brief Know How About the Total Return Indices

When you step into fund investment field, you need to have a at least a little knowledge about the Dividend Index so as to benefit more.  Smart Beta is also being highlighted these days and people who have a thorough knowledge about the same are always at an edge. Here, however, we will give you a brief know how about the Total Return Indices.

What is Total Return Indices?

The total return index is basically a type of an equity index that has a track of both, the capital gains of a group of the stocks over a period of time, as well as the assumption that any of the cash distributions, including the dividends, are reinvested in the index. Index's total return is a better representation of the accurate performance of the index. By making an assumption that the dividends are reinvested, you can effectively account for the stocks in the index that is no issuing the dividends and as an alternative reinvest your earnings within the same company.

Insight into total return index

A total return index can be taken to be the more accurate method in comparison to the others that does not account for those activities that are associated with the dividends or else the distributions. One of the popular examples of the total return index is the Standard & Poor's 500 Index (S&P 500). The total return index is known to follow almost the same pattern as the one on which many of the mutual funds operate. Additionally most of the total return indexes are a reference to the equity-based indexes. Other prominent examples of the total return indexes are the very popular Dow Jones Industrials Total Return Index (DJITR) as well as the Russell 2000 Index.

All in all, this is the brief know how about the Total Return Indices. Index funds are actually a reflection of the index on which they are actually based.  The sole purpose of the index fund is to demonstrate the activity, as well as the growth, of the index that actually functions as its benchmark.

Source : https://storify.com/thematicindex/brief-know-how-about-the-total-return-indices

An Insight into The Index Calculation

When it comes to the Index Development there are several parameters that need to be taken into the consideration. For Formula index maintenance it is necessary for you to have a knowledge about the former. Here in this article we will provide you an insight into the index calculation.

Adjustments as per the Rights Issues are concerned

Index calculation requires adjustment for the issuance of bonus as well as the rights issue. In the absence of the same, a discontinuity arises between the current value and the previous value of the index.  When a company that is included in the compilation of index, gives out the right shares, then the free-float market capitalization of the given company increases by the number of the additional shares that are issued that is further based on the theoretical price of the same. An offsetting, that is the proportionate adjustment is further made to the Base Market capitalization.

Adjustment of the or for the Bonus Issue

When the company which has been included in the compilation of the index concerned leads to issuing the bonus shares, the market capitalization of that particular company does not have to undergo any type of alteration. Thus, there arises no changes as far as the Base Market capitalization is concerned. What is actually updated is only the number of shares in the given formula.

Some of the Other Issues

The need for the Base Market Capitalization Adjustment arise when the new shares are issued via observing the way of conversion of the debentures in addition to mergers and spin-offs etcetera or in case when the equity is reduced via the way of buy-back of the shares or the corporate restructuring etcetera.

Base Market Capitalization Adjustment

For this we use a formula. The formula used for adjusting the Base Market capitalization is given as follows:

New Base Market capitalization     = Old Base Market capitalization   x (New Market capitalization/ Old Market capitalization)

All in all, this is an insight into the Index Calculation. Using the formula and the steps concerned, you can simply get the values that you want. It is a simple process but there is a lot to be learnt.

Source : https://thematicindex.wordpress.com/2017/12/18/an-insight-into-the-index-calculation/

An Insight into The Thematic Investing

In case you have an inclination towards investing in then you must not restrict yourself to the Index Services. You must not only have a thorough knowledge about the Equity Index but about another types of investments too. Here we are talking about the Thematic Investing. Here is an insight into the thematic investing.

What is thematic investing?

Thematic Investing is one of the way of making an investment in the stock markets where you believe you have greater return earning opportunity. Unlike in other forms of investments, here you have no constraints as per the research on time limit or the expertise. Here you can make an investment in unique, diverse and completely specialized themes. Thematic Investing is a major platform where you can invest in the most effective way.

Benefits of Thematic Investing

It is a powerful portfolio structure having compact themes. In addition to this, the diversification is limited and you have an opportunity to earn more. Not only this, but the investment making decision is also easy as the themes can be customized. Above all, it is the intuitive as well as self-explanatory way of making the investment.

Choice of theme

You can easily choose themes on the basis of social beliefs and causes apart from geographical parameters. The government policies and the specific sectors plus the current trends in business can also be the basis of choosing the theme. You can also choose on the basis of business groups as well as conglomerates and the dividend strategies.

All in all, this is an insight into the thematic investing. In Thematic Investing platform there are over 100 plus themes available. By simply keeping in mind the wide variety of the parameters you can pick your type of an investment. One of the parameters is the Index Value that shows you the base value of the theme from the initial date of starting. It further provides you the themes overall value to Net Asset Value (NAV) of the mutual fund scheme. You can therefore track the theme easily. Another parameter is the Returns, that is, the ones that investment has earned in the past. Based on year or the months, you can easily sort these out.

Source : http://thematicindex.webnode.com/an-insight-into-the-thematic-investing/

Features of The Custom Index

There are several Index Company that are found operational across the globe. Some are popular among people while others are gaining the grounds. All of these make available the Index Provider that helps you at various instances. To know which one is the best for you, you need to get an insight into the indices. For this it becomes important to know about its features. Here are the features of the Custom Index.

Flexibility to customize the existing as well as create the new indices

By making use of the specific and the unique proprietary content sets, you get an opportunity to be able to create indices. These indices are not only competitive but at the same time these are highly innovative. These are far better in comparison to others.

The ever ready to help teams are functioning

There are teams ready to give you clarity about the index creating methods. These teams are always available to allow the validation of the proposed index methods. Here you get the independence to access the third-party approval for methodologies of the custom index.

The services are available 24*7

The actions in the market are continuously taking place. These are to be instantly identified so as to be in the win -win situation. Here the movements of the market as well as the changes that may have an impact on the custom indices are identified quickly and then implemented as well as delivered to the clients.

The platform is very resilient

Here you get the platform that is well designed to suit your needs. You can easily calculate the indices that hold a great value.  Some of these in real time are most relied upon by the world.

Quick and steady distribution of custom indices across the globe

The services are inclusive of the distribution of the custom indices through the industry standard feeds, the desktop networks, the FTP sites as well as the APIs.

All in all, these are the basic features of the Custom Index. Once you know these it will become much more easy for you to gain the maximum out of the same.

Source : https://thematicindex.quora.com/Features-of-The-Custom-Index

An insight into Index Maintenance

Index Maintenance is concerned with the eventual goal of providing the best to the investor. For this an investor must pay attention towards the Index Development. Prior to knowing this, in insight into other things is also important. One such thing is the Index Calculation that even a layman can do with the help of simple formulas that are available. Here in this article we will give you an insight into Index Maintenance. We will also highlight points about the other two aspects that you must know.

Index Development division

The task of the team that is concerned with the Index Development division is to create a unique index concept. This they do in-house via identifying the key market trends as well as opportunities. They conduct the relevant research and then develop the indices for the specific clients. This they do only on the request by the clients. They go in for including the back testing as well as the optimization of not only active but also the passive strategies. Also, the have the task to provide the licenses indices to the clients. These must have the garnered accolades in press for the unique composition besides unique design as well as positioning. The indices must include the financial instruments include Exchange Traded Products and the Passively Managed Index Funds. These also include the Mutual Funds, Structured Products and all other Index-linked Financial Assets

Index Calculation

When it comes to the Index Calculation division service, the services they include are many. To begin, they go in for the independent index back testing. They ensure end of day and real time index calculation. Index maintenance as well as administration, that includes the development of a method guide for the corporate action treatment in addition to rebalancing/reconstitution is necessary. Custom-built websites and act sheets are a necessity besides the other supporting index documentation. Public dissemination of the index data on exchanges in addition to adding data to vendors is vital.

All in all, having a thorough knowledge of the same can help you gain a lot out of the investment that you undertake.

Source : http://thematicindex.page.tl/An-insight-into-Index-Maintenance.htm

Steps to Calculate Total Return Indices

Steps to Calculate Total Return Indices

If you are fond of undertaking diverse investment then you need to pay more attention towards the Total Return Indices. Dividend Index is one important parameter in the same. Besides, knowing the Smart Beta, you need to know what you take home with each investment. Three important parameters are the total return of an index, the total dividends paid as well as that reinvested. Here we will know the steps to calculate Total Return Indices. The total return index actually reflects the entire benefit of holding the constituent of an index in a given time.  This implies reinvesting the dividends into the index by simply adding them, each period to the changes in price of index portfolio.

Adding dividends expressed in points

Here you need to know a common denominator.  You simply need to divide the dividends paid over the period by the same divisor that you have used in order to calculate the index.  This provides you with the dividends paid out per index point. Use the following equation. This equation consists of two parameters that are really important in calculating the same.

With this you have completed the initial step and now you can head towards the next step that is easy to approach. Now adjust the price return index value of the day by making use of the below given formula. It is the common point of the dividends as well as the index price change

.

Now apply this adjustment to total return index series. This will provide you the entire dividend payments. You now have to multiply it with previous day’s total return index level.

All in all, this is the basic insight into calculating the total return index. Having a thorough knowledge of the same will provide you a great help in the times to come. The Total Return is very powerful and should not be underestimated. You should never confuse the Price return indices” with the “price-weighted indices.” The two are very different. Also, you need to know that the components are given weights depending on the level of their individual price. 

Source : https://sites.google.com/site/thematicindex/steps-to-calculate-total-return-indices

Insight into The Thematic Investing

Investing of funds has gained momentum since people have become aware. There are these Index Services that provide you he best investment opportunities. Be it the Equity Index or any other, you need to have a thorough knowledge of the same. Here we will focus on the Thematic Investing. Only if you have the thorough knowledge of the same will you be able to undertake proper investment. Here is a brief insight into the Thematic Investing.

Understanding Thematic Investing

Thematic Investing is simply a way of investing by considering the future. It refers to investing in the stock markets. Here you can look for the greater opportunities or you can invest in the ideas that you prefer. You can also go in for the current trends. The last approach without requiring to go in for any sort of fundamental and technical research in details on the individual stocks. Many people have the constraint of both time as well as the expertise, because of which despite having the appropriate investment ideas they lack effective equity portfolios. In such a case the Thematic Investing comes into action. Here you can invest in around 100 different and unique themes that are specialized. This allows the concentrated exposure relevant to your thought process.

Powerful Portfolio Structure

Thematic Investing provides you a platform that helps you in effective investment with you having to utilize only couple of minutes. In the constantly altering business environment the ready to go themes provides you an edge over others to excel in what you do. Thematic Investing basically provides the powerful portfolio structure having compact themes giving you a concentrated exposure. In contrast to the mutual funds, diversification here is limited as well as optimal.

All in all, you need to know the Thematic Investing in brief. This will help you to do what is best for you in particular. You need to know that one common scenario of investing in not suitable for all in general. There needs to be, thus, umpteen themes that might prove beneficial for you in the times to come. This provides you an opportunity to leverage your ideas.

Role of an Index Provider

When it comes to the custom index, then there are certain things that must be clear to you from the core. Index maintenance plays a very vital role in the indices scenario. The role that an index provider plays here is elementary. There are many conventional things that an index provider is expected to fulfill. Here we will focus on the role of an index provider.

It is as follows:

1. Index provider bears the responsibility of compiling the statistics that has a relation with different asset divisions, industry as well as securities. He thereby provides the investors with the measure to quantify and know which of the asset or market is performing well.
2. Index providers make available the enhanced and different methods so as to describe the variety of indices. This enable investors to actively participate in a rational manner in the market.
3. With the help of the assembled Portfolios you can evaluate the performance of the indices in question. You can then go in for purchasing the bulk of securities instead of going in for an individual one. This way you get to achieve your target in a diversified investment.
4. Index providers keep an eagle eye on their indices so as to make sure that any changes that happen are able to cope with the methodologies. An apt response for one who has a specific index is changing the compositions of the portfolio.

All in all, these are the basic things that the index provider fulfills. There are various types of index provider in the market. To name a few are the MSCI and S&P DOW JONES INDICES. MSCI has been around for 40 years and has rightfully existed in the market. It is one of the global leader due to the improved methodologies they pursue. It follows always an alternative approach. In addition to this, S&P DOW JONES INDICES is again a world leader. It provides diverse investment portfolios and benchmark in the indices. Besides, there are many others in the market. The role of an index provider remains inevitable here.

Source : https://thematicindex.jimdo.com/2017/10/16/role-of-an-index-provider/

Insight into the Index Calculation

Index is a value that is used to figure out the alteration in the price change of its relevant constitute within a period. However, it is difficult for the Index Company to handle the host of numerals as it is hectic and weighing causing inefficiency. Thus there arise an urgency for one value. To know the concept of Index Development you need to have an insight into the Index Calculation. This article intends to inform you the handy formula that you can use so as to calculate the index value. Here is a little insight into the Index Calculation.

Index divisor is just a simple point for the varying values of constituents that provides an initial point to begin the calculations. With the help of this you can get an initial value by a simple division. Most of the time it is taken to be constant which changes only on addition of securities or due to actions of the corporate including the adjustment of share. If you have the index divisor in hand it becomes easy to calculate the daily cap-weighted index value.

The formula for Index Calculation is as follows:

Index value = Σ (market cap of securities) / index divisor

This is the elementary formula for the final index value calculation. For using this formula you need to know the value of market cap of securities as well as the value of the index divisor. In order to calculate the index divisor, you have another formula.

In order to calculate the index divisor you can use the following formula:

 Index divisor = total market value/ index value

So now when you know both the values you can easily calculate the Index value.

All in all, Index divisors do not solve just this purpose but has a lot more to offer. This lets you know the impact of a security price change on the total index. So, I guess the article was helpful to you as it gave you the exact way to compute the index value without having to follow a much confused way.

Source : https://thematicindex.tumblr.com/post/166349888659/insight-into-the-index-calculation

Importance of Dividend Index in Portfolio

Total Return Indices study has a lot to tell about the performance of the company. However, there is a lot more that the Thematic Investing has to add to the market study. Here we tend to focus on the Importance of Dividend Index in Portfolio.

1. Dividend Index provide help to reserve for the investors the purchasing power of the capital. Over the period of time, the companies engaged in payment of Dividend Index have given investors an annual return greater than the inflationary rate.
2. Dividends provide benefits when it comes to tax payment. Certain dividends face a tax of around 15%.
3. It is a direct insight into the standing of the company in the market that too with precision. The sound reason being that it provides the ongoing as well as the regular feedback regarding the performance of the company in the market.
4. Dividend payments leave no scope for any company to manipulate their standing in the market. This provides a way for the growth that too on the fair basis.
5. Dividend payments and the dividend payout ratio both are immensely important to analyse the performance of the company. Higher the dividend payout ratios greater the stability a company has indicating better future growth.
6. Companies that tend to pay the dividend index are better survivals during the adversities as compared to the counterparts.
7. Volatility tends to get reduced with the Dividends. Other things like Stock prices change constantly but this changes only one time in a year which tends to reflect how the company actually performs. This precision provides a help in the long run and better growth opportunities.
8. Dividends play a very vital role in the total investment return as these tends to contribute more than the mergers and acquisitions. In total returns a major share goes to it.

All in all this is the Importance of Dividend Index in Portfolio. Not only does it reveal the performance of the company in the market but at the same time helps you to have a true picture in front of you.

Source : http://thematicindex.beep.com/