Brooklyn Investment Group, LLC in partnership with Nasdaq (Nasdaq: NDAQ), today announced the launch of the Nasdaq-Brooklyn ADR™ Index, designed specifically for direct indexing and tax-loss harvesting strategies implemented in separately managed accounts (SMAs) to address their greater liquidity requirements.
The index leverages a liquidity-adjusted weighting methodology to scale index weights down for American Depositary Receipts (ADRs) with liquidity below the underlying stock's market value. ADRs give investors the opportunity to diversify into international equities within the domestic U.S. equity market.
Adjusting for liquidity is important in the ADR market because the liquidity of the U.S.-listed instrument does not have to be closely tied to the market capitalization of the foreign-listed primary shares. The adjustment can help reduce trading and index turnover costs. As a result, the Nasdaq-Brooklyn ADR™ Index provides investors with broad international exposure in a potentially more cost-effective way. To learn more about the Nasdaq-Brooklyn ADR™ Index, please see our research note, https://www.nasdaq.com/nasdaq-brooklyn-adr-index.
"Together, Brooklyn Investment Group and Nasdaq are pushing the envelope on what's possible in the investment management industry," said Antti Petajisto, Head of Equities at Brooklyn Investment Group. "Combining Nasdaq's years of expertise in capital markets with Brooklyn's focus on tech-enabled innovation in portfolio management will widen the range of tools available to investors. We are particularly excited to introduce the novel concept of a liquidity adjustment factor and its potential to unlock significant savings on trading costs, even for relatively passive investment strategies."
"At the forefront of innovation, Nasdaq is focused on implementing unique technologies to enhance indexing," said Cameron Lilja, Vice President and Global Head of Index Product and Development at Nasdaq. "We're excited to partner with Brooklyn Investment Group to develop an index methodology that creates more opportunities for investors to gain differentiated exposure to the market."
The Nasdaq-Brooklyn ADR™ Index is now included in Brooklyn Investment Group's SMA platform and available for financial advisory firms and asset managers through Nasdaq.
