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- New FTSE Nomura Carry and Roll Down (CaRD) World Government Bond Index Series launches
- Meets investor demand for a fixed income “Carry” factor-based index for sovereign debt
- FTSE Russell partners with Nomura Securities to develop series
- Select Japanese pensions first to adopt series with over USD 1bn allocation into index-tracking funds
FTSE Russell, the global index, analytics and data provider, and Nomura Securities are launching a new index series: the FTSE Nomura Carry and Roll Down (CaRD) World Government Bond Index Series. This index series benchmarks the FTSE World Government Bond Index (WGBI) but is alternatively weighted to maximise the government bond portfolios which have the highest “carry and roll down”. Clients using the indexes can gain exposure to the WGBI universe, while maximising the “carry” (yield) of the underlying bonds as well as their “roll down” (returns from shortening of bond maturity and positive yield curve rolling down). The overall interest rate risk from constituent countries is matched to the WGBI benchmark, while the amount of each country’s proceeds can deviate.
The new series, designed in partnership between FTSE Russell and Nomura, is the first factor-based fixed income index series linked to the WGBI. Select Japanese pension firms will allocate funds to track these indexes for initial investments over USD 1 billion.
Arom Pathammavong, Managing Director, Benchmarks, FTSE Russell said:
“We are delighted to be partnering with Nomura Securities to develop the first factor-based indexes linked to our flagship FTSE World Government Bond Index. The new index series will meet global investor demand for a fixed income “carry” factor-based index for sovereign debt that can help them add a new tactical dimension to their investment portfolios. We are also pleased to welcome the Japanese pension firms who are the first globally to adopt these indexes.”
Tadashi Kikugawa, Managing Director, Structured Product Department, Nomura Securities said:
“Our partnership with FTSE Russell will enable us to provide greater choice to customers looking for greater flexibility and efficiency in their fixed income investment portfolios. This is the first time that factors have been applied to the widely used WGBI benchmark offering tailored exposure to the global sovereign fixed income market.”
The WGBI measures the performance of fixed-rate, local currency, investment-grade sovereign bonds. The WGBI is a widely used benchmark that currently comprises sovereign debt from over 20 countries, denominated in a variety of currencies, and has more than 30 years of history available. The WGBI is a broad benchmark providing exposure to the global sovereign fixed income market.
The FTSE Nomura Carry and Roll Down (CaRD) World Government Bond Index Series will be administered by FTSE Russell. Further information on the indexes, including the value, rulebook and other details will be published on FTSE Russell website
