All to play for

Monetary union’s effect on European investment patterns is giving rise to a host of new benchmarks. In both equities and bonds, index providers are scrambling for continental superiority. New providers can win market share quickly but the established names are fighting back.

       
Rafey Sayood

By its very nature, index investing is a relatively effortless way to manage institutional money. All a fund manager need do is pile assets into a basket of securities that replicates the relevant yardstick, sit back and let the markets do the rest.

For the majority of active investors, index benchmarks provide the foundation for portfolio construction. The fraction of assets diverted away from market-neutral positions determines whether a fund outperforms or underperforms.

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