State Street launches daily volatility measure
State Street has launched a Turbulence Indices suite that measures market behaviour on a daily basis.
The indices are intended to help investors identify investment risk in various asset classes, including equities, currency, fixed income and global.
The indices were launched by State Street Global Markets, the investment research and trading arm of State Street Corporation. By measuring unusualness or turbulence in markets on a daily basis, the indices were aimed at helping investors stress test their investment strategies, build more versatile portfolios and dynamically scale risk exposure, the group stated. The indices cover US and European equities, currency, US fixed income and global asset classes.
“One of the most valuable lessons learnt over the last few years of market turbulence is that traditional portfolio construction techniques cannot comprehensively assess the full amount of risk inherent in a portfolio,” said the managing director and head of portfolio and risk management research at State Street Global Markets, Will Kinlaw.
“State Street’s Turbulence Indices go a step further from traditional volatility measures by identifying periods in which assumptions about correlations between investments – as well as their volatilities – should be revisited.”
He added that the indices could be used alongside other measures of volatility to better manage current portfolios and prepare for additional instability in the market.
Recommended for you
With wealth management M&A appetite only growing stronger, Business Health has outlined the major considerations for buyers and sellers to prevent unintended misalignment between the parties.
Industry body SIAA has said the falling number of financial advisers in Australia is a key issue impacting the attractiveness and investor participation of both public and private markets.
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
