07.23.2013

ETFs Blend Indexes and Yield

07.23.2013
Terry Flanagan

The International Securities Exchange (ISE) and SecuredGrowth Quantitative Research (SGQR), a financial technology and research development company, have agreed to develop and promote indexes that combine the performance of popular Exchange-Traded Products (ETPs) with the proprietary SecuredGrowth process to enhance the return of any benchmark index or portfolio in a fully transparent, low-risk and liquid manner.

The SGQR SPY SecuredGrowth Index, the first index established through the partnership, adds a systematic yield from a unique methodology that includes a portfolio of investment grade domestic corporate bonds and U.S. Government-issued Treasury and Agency notes overlaid upon the SPDR S&P 500 ETF.

ISE ETF Ventures creates indexes that track growing industries, emerging technologies and markets, and packaged trading strategies. Its index design expertise includes a diverse range of asset classes and instrument types including global equities, fixed income, currencies, futures and options.

ISE currently has a portfolio of over 30 proprietary indexes, and supports over 15 ETPs and other investment products.

ISE ETF Ventures partners with issuers to launch unique exchange traded products (ETPs) such as exchange traded funds (ETFs), exchange traded notes (ETNs) and other similar product types. It also provides capital for the start-up and ongoing backstopping of new ETPs.

“As ISE ETF Ventures continues to grow, our partnership with SecuredGrowth is a prime example of taking part in bringing unique indexes to market,” said Kris Monaco, head of ISE ETF Ventures. “Their fixed income overlay concept can now be packaged into a single index with the world’s most popular ETFs, allowing investors an innovative enhancement to their existing strategies.”

The partnership combines ISE’s business development, marketing, and network and experience in the Index and ETF business with SGQR’s proprietary research and thought leadership on systematic methodologies that produce a persistent asymmetrical edge.

SecuredGrowth works by utilizing the positive spread between a held‐to‐a‐fixed‐maturity bond portfolio and the cost to finance 100% participation in the price movement of a selected benchmark or portfolio.

“The SecuredGrowth process was designed to improve the returns of an investment in any asset class across multi-year market cycles without increasing volatility,” said Matthew Sutherland, SGQR’s founder and CEO. “We are delighted to be partnering with ISE in our effort to introduce SGQR’s pioneering SecuredGrowth solution to the market place.”

Interactive Data is calculating intra-day index values for this new series of indices. “We are pleased to serve as the calculation agent for these new indices,” said Erin Heise, senior director for Interactive Data. “Our expertise in performing index calculations, along with our delivery of independent evaluated pricing for fixed income securities, enables us to deliver critical intra-day information on indices spanning a wide range of asset classes.”

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