Salomon Smith Barney (SSB) has been stepping-up the marketing pace of its own international indices. It says the SSB Global Equity Index System (GEIS) – a family of indices which cover the entire world – more accurately replicates the market than its competitors.
The benchmarks are not new – they have been running for ten years. “But”, says Ian Toner, global head of marketing for the GEIS, “the firm has collectively made the decision to target the market for international indices. We are attacking this market very strongly.”
The firm has just appointed Craig Lazzara as a vice president of the Global Equity Index Group, to be based in New York. Toner says he was the first of several additions to the new marketing team which would be expanded globally over the coming months.
The GEIS index family takes in 49 countries and has 685 sub-sectors. While other global indices select stocks to include SSB’s, GEIS includes every stock with $100m or more of available capital, bringing the total to around 8,500. Investors and fund managers alike are becoming increasingly concerned about benchmark risk, says Toner, and this all-inclusive index methodology lays these worries to rest. “There is often a difference between the behaviour of your market index and the actual market you are trying to measure... sampling always introduces error,” he says.
Many stock indices now take account, not just of capitalisation, but also of the amount of stock which is freely floated on the market. But, SSB says its GEIS is fully free-float weighted. “Whichever way you cut it, it exactly replicates the market,” says Toner. Rachel Fixsen