Singapore Exchange : SGX launches Developed Asia ex Japan Quality Index, its first smart beta index

Singapore Exchange (SGX) today announced the launch of the SGX Developed Asia ex Japan Quality Index, the first smart beta index by SGX Index Edge, which moves beyond traditional capitalisation-weighted indices to support investors seeking quality factor exposure in the region.

The SGX Developed Asia ex Japan Quality Index features an innovative factor-selection method with a bottom-up approach to selecting its constituents. The index was developed using data sourced from S&P Global Market Intelligence's leading Alpha Factor Library, with SGX Index Edge tailoring the index according to investor demand for alternative strategies such as risk-factor indexing.

Risk-factor indexing, a framework that forms a key aspect of smart beta and an increasingly prevalent alternative strategy, is employed together with quality factors such as profitability, accrual and leverage ratios. An SGX whitepaper, 'A Case for Quality in Asia,' has also been issued in support of the statistical methods used in the selection of quality factors for developed Asia. This can be found atwww.sgx.com/smartbeta.

Ng Kin Yee, Head of Market Data and Connectivity at SGX, said: 'We are pleased to launch our first smart beta index as we build our offering and tap into growing demand for such products. Amid an uncertain economic climate, investors are looking towards alternative index strategies in a hunt for better and more sustainable returns. SGX Index Edge has yet again demonstrated an innovative and solutions-driven approach to index design in Asia, while enforcing a discipline in index governance and oversight.'

Following the launch of its first smart beta index, SGX Index Edge will continue to enhance its existing research and design capabilities, and develop further customisation of index offerings for product issuers, asset managers, pension funds and investors across Asia-Pacific. This follows on from the successful launch of the SGX APAC Dividend Leaders REIT Index and the SGX Thematic Series of indices.