Written on 17 October 2011.
In a new survey which elicited responses from 104 European institutional investment professionals, EDHEC-Risk Institute analyses the current uses of and opinions on equity and fixed-income indices.
Among the most prominent results of the survey:
Overall, the results show that European institutional investors are aware of a range of important issues with existing standard indices in the equity and fixed income arena. As long as indices remain transparent, objective and focused on beta management rather than alpha generation, respondents are open to exploring new ways of designing indices that match their investment objectives. This opening towards new forms of indices is occurring through relative risk and performance compared to cap-weighted indices, rather than the latter disappearing or being replaced.