FTSE launches 12 new ‘alternative’ beta indices

UK index company FTSE has unveiled 12 “alternatively-weighted” products across the FTSE Developed and FTSE Emerging indices.

The Global Factor Index Series tilts the make up of the two market-cap indices by six characteristics:

  • Illiquidity
  • Momentum
  • Quality
  • Size
  • Value
  • Volatility

The indices went live at the end of July and are based at 1000 from 20 September 2013.

Further releases for the series will include tilts toward multiple factors and a greater range of base indices.

FTSE research and analytics managing director Peter Gunthorp says the series is evidence of the firm’s innovation.

“The new index series applies a consistent and transparent methodology to achieving a controlled factor tilt to any underlying index,” he says.

“This allows investors the granularity and consistency that they require when developing benchmarking tools and results in a mechanism for the creation of index tracking funds and derivatives.” 

Investor flow research by BlackRock shows smart beta ETFs hauled in a record $65.1bn (£38.6bn) in 2013, up from $32.2bn the previous year.