Individual risk-return profiles with regulated indices

Individualised indices and benchmarks in accordance with the EU Benchmark Regulation now allow for the implementation of bespoke investment strategies. “Partnering with a BaFin-regulated benchmark administrator, we are able to set up and securitise highly individual investment ideas for asset managers, family offices and financial advisors”, says Daniel Knoblach, General Manager of Super Global GmbH.

Cross-asset-class strategies consisting of stocks, bonds and even currencies can now be implemented for the first time. “Particularly in light of the current market volatility, many asset managers are utilising their own, sometimes alternative strategies and making them available to their clients”, Knoblach points out. “It is irrelevant in these cases whether the provider of the idea is regulated or unregulated.” The use of a regulated index makes the products derived from it transparent from a regulatory point of view.

“The indices are compiled by the clients and reflect their investment ideas”, says Knoblach. “Investments in these indices is possible by issuing a certificate or a fund based on them.” Either AMCs, Actively Managed Certificates, issued under Luxembourg law, or German AIFs are appropriate for implementation. “Both vehicles can be brought to market very quickly if you have the necessary expertise”, Knoblach highlights.

When it comes to compiling the index, the increasing availability of data presents the greatest opportunities. “The digitalisation of the markets has facilitated entirely new approaches”, Knoblach adds. “Much more data are available now, which can be used to implement quantitative strategies based on specific criteria without the need to develop your own stock or bond selection expertise.”

This also allows these index-based products to be launched with tremendous rapidity. “Our technology enables us to create indices in minutes, run back tests and analyse the results”, says Knoblach. “This allows for the creation of strategies that target specific market phases or sectors, taking into consideration fundamental data and ESG criteria.”