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| Index Insight |
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August 2010
Dear Sir/Madam,
An index can be more than a benchmark or a basis for an investment in a certain market. Indices are also useful for effectively implementing various strategies and risk-optimizing investments. The strengths of strategy indices can really come to the fore especially during unsettled market phases. You can read about the different concepts and what you need to know about them in our current newsletter, and win a "Bull and Bear" tic tac toe game in our index quiz.
We wish an interesting and informative read.
The Deutsche Börse Index Team
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 More Than Just a Market Benchmark - Indices Support Customized Strategies
Beta is good, but most investors are striving for Alpha, i.e. more than the market return, or at least they want to avoid bearing the full market risk. The benchmark for market risk and return is usually formed by selected indices. But indices can do more than just that. They sometimes mirror selected strategies via their selection criteria and methodology. Deutsche Börse now calculates more than a hundred such strategy indices, including different types for individual markets and currencies and price and performance indices.
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The Volatility Game - And How to Win It with Index Products
Volatility is more than a thermometer for the markets. High market volatility also opens the door to generating additional returns via options and trading strategies. For example, strategies exploiting the market volatility during the turbulent market phases following the Lehman collapse, but also more recently during the crisis in association with the high levels of national debt in some southern European countries, were able to generate attractive returns. The broad range of DAXplus® indices means that options strategies and leveraged positions are also available to a larger group of experienced investors.
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"Strategy ETFs Should Be Included in a Comprehensive Product Range"
Lyxor Asset Management is one of the three leading ETF providers in Europe. The product range, in which a total of around EUR35 billion is invested, also comprises a number of ETFs on strategy indices. Thomas Meyer zu Drewer, head of Lyxor ETF business in Germany and Austria, explained to us why Lyxor offers strategy ETFs and how investors can benefit from them.
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