State Street Global Advisors (SSGA) is launching two fixed income funds based on an alternative-weighted index designed to measure company strength.
Barclays Capital developed the index, which assesses companies’ ability to generate earnings based on their assets and estimates the likelihood that companies will honour their debts. This is unlike traditional cap-weighted indices, which are tilted towards large companies with the most outstanding debt.
One fund will apply the Barclays Capital Issuer Scored Corporate Index to dollar-denominated corporate debt while the other will apply it to euro-denominated corporate debt.
The indices were based on research from SSGA, which has a licence to use the indices exclusively for two years.
SSGA said: “This approach preserves all of the primary benefits of passive investing, which are transparency, cost, efficiency and diversification.”
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