ArthVeda Capital, the capital market arm of Mumbai-based global asset management firm ArthVeda Fund Management, announced the launch of its Smart Alpha Framework and its initial suite of eight indices. Smart Alpha is a rule-based, value investing framework that produces a portfolio of low risk, high quality stocks available at a discount to intrinsic value.
The Smart Alpha family consists of Smart Alpha, Smart Value and Smart Income indices. Each index component is weighted by its discount to intrinsic value, as compared to the float-adjusted market-cap weightings of conventional indexes. ArthVeda Capital is working with the New York Stock Exchange (NYSE), which is providing calculation and dissemination services, for its indices in the US.
"The major disadvantage of conventional indexes is that, because they are market-cap weighted, they tend to over-allocate to overvalued stocks and under-allocate to undervalued stocks," said Vikas Gupta, executive VP and CIO at ArthVeda Capital. "Smart Alpha does the reverse, which tends to produce better performance over the longer term."
ArthVeda Capital plans to launch options on each of the Smart Alpha indices on the NYSE later this month. In addition, the company is in discussion with several major ETP providers and expects to create investible products in early 2016.
ArthVeda Capital plans to launch options on each of the Smart Alpha indices on the NYSE later this month. In addition, the company is in discussion with several major ETP providers and expects to create investible products in early 2016.