Many banks already offer investable indices, but Parker Global Strategies says its new product is an innovation that will ultimately lead to far wider acceptance of foreign exchange (FX) as an asset class. Parker, in partnership with BlackTree Investment Partners, the London-based investment management firm, has created the Parker BlackTree Currency Indices (PBCI).
"We’ve created an index which we think is unique, as it combines manager and model-based programmes. This seems to create a more robust benchmark," says Ginny Parker, founder and chief investment officer of Parker. The company, formed in 1995, already provides its FX Index, regarded as one of the major benchmarks measuring the performance of currency-based fund managers.
Parker says the PBCI are the first indices of their kind to combine the alpha available from both active currency managers and a diversified portfolio of currency market drivers. The indices, which are designed to represent the wide range of FX funds available to investors, comprise a portfolio of sub-indices: the Currency Managers Index (CMI) tracks the returns of active currency managers, while the Investment Strategies Index (ISI) represents alpha derived by thematic rules-based investment strategies.
"The PBCI exhibits a low correlation to other asset classes and consequently offers outstanding diversification characteristics to investors," says Thomas Soede, managing partner at BlackTree.