Recommend Indices with Confidence

Finding the right indices or index-linked products for you or your clients can be a daunting task. There are millions of indices in all shapes and sizes, but not all of them are worth buying. Many have a short-lived track record; some are over-engineered; some contain significant over-exposures, and some may have hidden fees.

The Index Standard helps financial professionals make informed decisions with our objective ratings, which show investors how an index operates and help them identify its key strengths and weaknesses via critical metrics. 

The Index Standard® has no affiliation with any index providers, and we don’t provide buy, hold, or sell signals. Instead, we offer our independent, unbiased expert opinion to help you directly compare different indices, ETFs and annuities, holding them all to the same standard.

Objective Measurements of Index Quality

We rate indices as Platinum, Gold, Silver, Copper, Neutral, and Watch depending on their characteristics relative to their peers. The rating is meant to signify the quality of build of an index, but that is not to say a Platinum index will have good performance, nor that a Watch index could not still have high returns.

ETF & Index Ratings

We evaluate each index against the most appropriate benchmark, and all indices are evaluated at the same time to ensure consistency and fairness. To assign a rating, we first score each index based on over 30 qualitative and quantitative metrics using a purely algorithmic process that eliminates any potential bias. Once a raw score is calculated, we rank each index within its peer group by assigning the highest-scoring indices a Platinum rating, then in descending order from Gold to Watch.

All indices are evaluated in seven categories which we deem critical to index construction:

  • Transparency

    Explore the “small print” such as independence, rules transparency and hidden fees; also the index’s adherence to IOSCO principles.

  • Robustness

    Analyze diversification, index parameters and tradability in stressed markets.

  • Risk

    Examine an extensive array of risk metrics to determine how risky the index is.

  • Efficiency

    Determine the index’s ability to balance off risk and return attributes.

  • Returns

    The index is analyzed through metrics such as annualized returns, skew, and kurtosis to assess the stability of returns.

  • Attractiveness

    Quantify the current level of attractiveness and the future potential.

  • Capital at Risk

    Examine value at risk and drawdowns to identify potential unknown risks that may hinder performance.

We evaluate each index against the most appropriate benchmark, and all indices are evaluated at the same time to ensure consistency and fairness. To assign a rating, we first score each index based on over 30 qualitative and quantitative metrics using a purely algorithmic process that eliminates any potential bias. Once a raw score is calculated, we rank each index within its peer group by assigning the highest-scoring indices a Platinum rating, then in descending order from Gold to Watch.

All indices are evaluated in seven categories which we deem critical to index construction:

  • Explore the “small print” such as independence, rules transparency and hidden fees; also the index’s adherence to IOSCO principles.

  • Analyze diversification, index parameters and tradability in stressed markets.

  • Examine an extensive array of risk metrics to determine how risky the index is.

  • Determine the index’s ability to balance off risk and return attributes.

  • The index is analyzed through metrics such as annualized returns, skew, and kurtosis to assess the stability of returns.

  • Quantify the current level of attractiveness and the future potential.

  • Examine value at risk and drawdowns to identify potential unknown risks that may hinder performance.


ETF Examples
COPPER

ETF

iShares Select Dividend ETF

COPPER

ETF

iShares Edge MSCI USA Momentum Factor ETF

PLATINUM

ETF

iShares Edge MSCI Min Vol USA ETF

COPPER

ETF

iShares Select Dividend ETF

COPPER

ETF

iShares Edge MSCI USA Momentum Factor ETF

PLATINUM

ETF

iShares Edge MSCI Min Vol USA ETF


Index Examples
SILVER

INDEX

BNP Paribas US Governance Multi Asset Index

PLATINUM

INDEX

Deutsche Bank CROCI Sectors II PR Index

SILVER

INDEX

BNP Paribas US Governance Multi Asset Index

PLATINUM

INDEX

Deutsche Bank CROCI Sectors II PR Index