IndexUniverse & Solactive Unveil Indexes

January 28, 2013

New benchmarks peg dollar against broader basket of currencies.

IndexUniverse LLC, the leading independent authority on ETFs, indexes and index funds, and Structured Solutions AG, announced Monday the full commercial launch of a new family of currency indexes.

Jointly developed by IndexUniverse and Structured Solutions, a leader in the development and calculation of customized index solutions, the indexes are intended to fill a substantial gap in the modern indexing space by measuring the performance of the U.S. dollar against broadly diversified trade-weighted baskets of currencies, according to Jim Wiandt, founder and CEO of San Francisco-based IndexUniverse.

“We are deep believers in the power of good benchmarks, and after surveying the market, we were driven to develop our own indexes in the currency space,” said Wiandt. “We are already consumers of the indexes for our market-leading ETF Analytics product, and we are confident other investors, analysts and developers will find these indexes useful as well.”

The indexes are available through Bloomberg under the following symbols:

  • IndexUniverse–Solactive U.S. Dollar TW Index (Long USD) (IUSLATL Index)

  • IndexUniverse?Solactive U.S. Dollar TW Index (Short USD) (IUSLATW Index)

  • IndexUniverse–Solactive Developed Markets Currencies TW Index (IUSLADTW Index)

  • IndexUniverse–Solactive Emerging Markets Currencies TW Index (IUSLAETW Index)

  • IndexUniverse–Solactive Asia-Pacific Currencies TW Index (IUSLAATW Index)

Investable series:

  • IndexUniverse?Solactive U.S. Dollar TW Investable Index (Short USD) (IUSLTWI Index)

  • IndexUniverse–Solactive Developed Markets Currencies TW Investable Index (IUSLDTWI Index)

  • IndexUniverse–Solactive Emerging Markets Currencies TW Investable Index (IUSLETWI Index)

  • IndexUniverse–Solactive Asia-Pacific Currencies TW Investable Index (IUSLATWI Index)

Index weights are set each year based on Federal Reserve reported data on the level of trade between the U.S. and foreign countries. The index also takes into account the overnight lending rate of each currency, giving investors a full picture of the exposure they get to the currency markets. This process creates a dynamic index series that reflects the purchasing power of the U.S. dollar measured against the currencies of trading partners of the United States.

The flagship IU?Solactive U.S. Dollar TW Index holds a trade-weighted basket of 26 currencies, led by the Chinese renminbi, which represents 20.37 percent of the index. The US Dollar Index, by comparison, holds six currencies, led by the euro at a 57.60 percent weight. The renminbi is not included in the U.S. Dollar Index.

“There was definitely a niche to be filled in the market and we feel confident that the partnership we’ve created has addressed that need,” said Steffen Scheuble, CEO of Structured Solutions. “We look forward to presenting our newest product to investors.”

Trade with China has risen more than 67,000 percent since the U.S. Dollar Index’s weights and constituents were set in 1973. China is now the U.S.’ largest trading partner.

 

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