Solactive launches SEK IG credit index family

May 27th, 2020 | By | Category: Fixed Income

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Solactive has unveiled a new fixed income index family tracking the performance of investment-grade credit issued in Swedish krona.

Swedish Krona solactive fixed income

The index provides exposure to investment-grade credit issued in Swedish krona by corporate and municipal issuers.

The index family has been introduced with the launch of the broad-market Solactive SEK IG Credit Index.

This principal index will serve as the parent universe from which Solactive will be able to customize indices to a more granular level.

The index provides exposure to SEK-denominated bonds from across the yield curve issued by corporate and municipal issuers.

Only fixed-rate, zero-coupon, and floating-rate notes are eligible for inclusion as these are the most liquid types of securities.

Potential index constituents are required to have at least SEK 50 million per bond and SEK 500 million per issuer outstanding.

In addition to utilizing traditional credit rating agencies, Solactive will harness the insights of Nordic Credit Rating, a local credit rating agency with operations in Oslo and Stockholm, to cover a wider range of bonds. The index currently contains more than 800 constituents.

Timo Pfeiffer, Chief Markets Officer of Solactive, commented, “The Solactive SEK IG Credit Index family enables us to serve our clients with broad and profound access to a vital part of the Nordics bond market. This new index family allows for a great degree of coverage as it benefits from a deeper analysis of the domestic bond market conducted by Nordic Credit Rating. We are very pleased to expand our index offering in that segment with particular relevance for product providers and real money investors in the region.”

With a focus on liquidity and a transparent rules-based process, the index is suitable as the underlying reference for investment products, including ETFs.

There are currently no ETFs listed on major European stock exchanges that target Nordic fixed income markets, yet the region is home to many large companies operating within a diverse range of industries such as telecommunications, pharmaceuticals, biotechnology, financial services, fossil fuels, forestry, industrial engineering & transportation.

Scandinavia is also known for its attractive macroeconomic environment, low public debt, current account surpluses, and competitive economies.

All this may point to an opportunity for ETF product developers.

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