Introducing Indexing Using a Pure-play Approach
By Joy Yang, Global Head of Index Product Management
At MarketVector IndexesTM ("MarketVector"), we understand that company classifications are complex, fluid, and dynamic. Classifications, like GICS can work well for one set of companies but may not be relevant for another, depending on the specific investment use case. Trying to capture evolving disruptive themes requires a precise approach for a moving target. MarketVector uses a pure-play approach to indexing. Our pure-play approach to indexing captures growth where it’s going, not just where it’s been, targeting value with precision, even as the theme evolves. We select companies that derive 50% or more revenue from the target theme, market or country, and we update each index regularly to ensure it stays that way.
A clear example of our pure-play approach can be seen in our BlueStar® Electric Vehicle Industry Index (BEVNTR). BEVNTR tracks the performance of the largest and most liquid companies in the global electric vehicle industry. This is a modified market cap-weighted index, and only includes companies that generate at least 50% of their revenue from electric vehicles, electric vehicle parts, charging technology, or related equipment. BEVNTR includes global automotive cars specializing in e-vehicles such as Tesla (TSLA) and NIO (NIO), as well as battery companies like SES AI (SES) and charging companies like Blink Charging (BLNK). Pure plays are an example of a transformative approach towards capturing an evolving theme over time, allowing investor to target disruptive themes with precision.
You can learn more about pure-play with our latest video series here.
For more information on our family of indexes, visit: www.marketvector.com
About the Author:
Joy Yang is Global Head of Index Product Management at MarketVector IndexesTM. She is responsible for managing MarketVector IndexesTM products and services to accelerate innovation in financial index design and adoption. Joy brings more than 25 years of investment experience to MarketVector IndexesTM, having led teams delivering index and quantitative-active investment solutions at Arabesque Asset Management, Dimensional Fund Advisors, Vanguard, Aberdeen Standard Investments, AXA Rosenberg, and Blackrock. Joy has an MBA from the University of Chicago Booth School of Business, and a BS in Electrical Engineering from Cooper Union’s Albert Nerken School of Engineering.
For informational and advertising purposes only. The views and opinions expressed are those of the authors but not necessarily those of MarketVector Indexes GmbH. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index. MarketVector Indexes GmbH does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. Inclusion of a security within an index is not a recommendation by MarketVector Indexes GmbH to buy, sell, or hold such security, nor is it considered to be investment advice.