Morgan Stanley has licensed on an exclusive basis a smart beta index to North American Company for Life and Health Insurance, a member company of Sammons Financial Group.
The Morgan Stanley Dynamic Global Index (Dynamic Global) which is rooted in approaches to level out the highs and lows of the market will be incorporated to some products within the insurers’ index annuity range NAC VersaChoice, Performance Choice, and PrimePath which offer different growth and accumulation crediting methods with participation rate strategies at one- and two-year durations.
‘This Index provides global multi-asset diversification and includes provisions intended to address the unique risks and return characteristics of each asset class as part of its rules-based dynamic allocation,’ said Keshiv Desai, managing director at Morgan Stanley.
The Dynamic Global Index uses a rules-based approach and dynamically allocates across global assets with the goal of achieving diversified exposure across and within equities, fixed income and commodities to create a diversified, global portfolio that seeks positive returns in various market environments.
The index methodology includes provisions intended to address the unique risk and return characteristics of each asset class when re-allocating exposure during changing market conditions and may also reduce cash allocations to preserve gains during periods of high volatility and increasing leverage to capture returns when volatility decreases, as part of managing a 5% annual realized volatility target.
‘A top concern of today's annuity owners is outliving their money,’ said Rob TeKolste (pictured), president, Sammons Independent Annuity Group. ‘By applying this new index, we can help alleviate some of the risk in potentially volatile economic conditions.’
In calculating the level of the Index, the Index methodology deducts a fee equal to 0.50% per year.
Other custom indices from Morgan Stanley used in the US annuities market include the Morgan Stanley Dynamic Balance Index (four products/US$8.64m); Morgan Stanley Target Equity Balanced Index (32/ US$8.04m); Morgan Stanley 3D Index (three/ US$6m); Morgan Stanley Diversified Select Index (three/US$9.59m); Morgan Stanley Expanded Horizons Index (three/US$9m); Morgan Stanley Global Opportunities Index (three/US$27.81m); and Morgan Stanley Dynamic Rotator Index (two/US$6m).
Spectrum Markets onboards independent Italian investment bank
Pan-European trading venue for securitised derivatives Spectrum Markets has added Equita as a direct member of the exchange.
Equita will provide its network of clients and banking groups access to Spectrum Markets via its brokerage service offering, enabling their retail clients to trade securitised derivatives on the venue.
As a member of Spectrum Markets, Equita will also be able to expand its market making capabilities, where the bank already has an established position in Italy with more than 1,400 listed instruments and over 150,000 trades per year, enhancing liquidity and offering pan-European market making on local products from issuers that will be able to access the venue.
‘The financial instruments listed on Spectrum Markets can be used by investors in a range of strategies, from leverage to hedging, or optimising straightforward investment exposure, and offering an advantage in a product designed for retail investors,’ said Nicky Maan (right), CEO Spectrum Markets.
Equita has been active in the Italian market for more than 45 years and its business spans trading and brokerage services, investment banking and advisory, as well as alternative asset management.
J.P. Morgan joins ICE CDS derivatives complex via index options clearing
J.P. Morgan is now offering clearing services for client-executed Credit Default Swap (CDS) index options via ICE Clear Credit.
ICE Clear Credit supports the clearing of CDS index option instruments referencing the major North American and European corporate indices enabling traders to add cleared CDS index options to their risk management strategies.
‘Margining of index, single name and option instruments in one capital efficient portfolio provides growth opportunities for the ICE CDS derivatives complex,’ said Stan Ivanov, president of ICE Clear Credit.
‘The addition of options to the cleared product set is an important step in offering credit derivative clients a comprehensive clearing solution, allowing clients to achieve further operational and risk management efficiencies through clearing,” said Paul Davidson at J.P. Morgan
Launched in 2009, ICE Clear Credit clearing solutions offer clearing for more than 500 single name and index CDS instruments based on corporate and sovereign debt with reduced counterparty risk exposure as it clears over US$283 trillion in two-sided notional amount, with open interest of approximately US$2.0 trillion.
Hamburger Sparkasse enters Deritrade in ‘individualised’ product push
Hamburger Sparkasse (Haspa) and Vontobel have entered into a partnership for Haspa to use multi-issuer platform Deritrade to ‘give investment advisory clients the opportunity to tailor structured products to their individual needs live and in real time during consultations’.
Haspa, a bank for private clients and small and medium-sized corporate clients in the Hamburg Metropolitan Region, wants to leverage Vontobel's automated platform to enable investment advisors to create individual customised products.
‘For years, Deritrade has been supporting its platform partners in Germany with its fully digitalized processes,’ said Anton Hötzl (right), a member of the management board of Bank Vontobel Europe.
‘This partnership with Germany’s largest savings bank in one of the country’s strongest economic regions will show how Deritrade can be deployed in the German market. We also expect this to give additional momentum to tailored structured products in Germany.’
Vontobel’s multi-issuer platform is used by around 120 banks and 600 independent asset managers and investment advisors to create customised structured products in Europe and Asia.
Bloomberg partners with MSCI to launch Paris-Aligned indices
Bloomberg and MSCI have launched the first indices in their joint climate benchmark offering with the Bloomberg MSCI Global, Euro and US Corporate Paris-Aligned Indices.
These indices will serve as a benchmark for investors to assess the performance of corporate bond holdings that seek to meet or exceed the minimum standards of the EU Paris-Aligned Benchmark (PAB) label.
The indices are the latest addition to Bloomberg’s fixed income index family with MSCI’s Climate data, research, and analytics for investment-grade, fixed-rate, and global, US or EUR-denominated corporate bonds.
To ensure they meet the minimum PAB criteria, each index sets an initial 50% reduction of absolute greenhouse gas (GHG) relative to the standard Bloomberg parent (Euro, US, or Global) corporate index, followed by an annual 7.5% decarbonisation relative to the baseline emissions. These emissions reductions are achieved by excluding the largest GHG emitting companies.
The indices use an exclusions-based approach to achieve the required decarbonization trajectory. The monthly exclusions process will establish the emissions threshold required to maintain compliance with the PAB label decarbonization trajectory for the following month.