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/