FTSE Group launches its currency indices
There would appear to be growing demand for robust, transparent and ultimately investable FX indices. To tap into this potential, FTSE Group has just launched its first set of indices in its FTSE Currency Forward Rate Bias (FRB) Index Series in conjunction with Record Currency Management.
The FRB series effectively provides a carry strategy on USD, EUR, JPY, GBP and CHF. Record’s research suggests that FRB provides a fundamental and sustainable return stream that rewards the risks associated with holding higher interest rate currencies. The index series is based on data going back to 1978 and shows a long-term return comparable to global equities and superior to global bonds, but with lower volatility. Ultimately, the hope is that products, such as ETFs and futures, will be based on the indices. A source close to the deal says launching a transparent index is the first stage in the process.