Innovation, collaboration and factor indices. This week’s news optimizes all three, with S&P Dow Jones Indices announcing plans to develop new strategies across the smart beta and ESG space, powered by Axioma.
Commenting on the strategic agreement, Jamie Farmer, Chief Commercial Officer, S&P Dow Jones Indices, said: “We are pleased to work together with Axioma to leverage their systematic portfolio-construction capabilities and risk analytics, to further expand our factor index offering. This collaboration will accelerate the pace of innovation to deliver transparent, tailored factor indices that are designed to meet the increasing demand for benchmarks that encapsulate quantitative investment methodologies.”
Axioma CEO Sebastian Ceria added: “Axioma’s systematic portfolio-construction techniques and factor-based risk models are increasingly being used in best-of-breed indexing. We look forward to collaborating with S&P Dow Jones Indices on this exciting next generation of factor-based strategies.”
The agreement underscores the accelerating growth of Axioma’s index solutions business, which began in 2012. A dedicated, global index team now focuses on helping clients build and maintain factor-based strategies, by leveraging the tools and techniques used by quantitative managers.
As mentioned in a previous blog post, unbundling alpha and beta has been a key contributor to the spectacular growth of the index space. The proliferation of smart-beta strategies has meant greater choice for investors, but robust design is not necessarily easy to spot from a product name. Axioma is excited to be collaborating with S&P Dow Jones Indices, and continue to play a part in expanding the factor index space, by providing quantitative tools, models and expertise to help clients’ indices meet their objectives.