Watch out FTSE 100: Bloomberg is coming after ‘entrenched’ players
Bloomberg has launched a series of fixed-count domestic equity indices in markets across Europe in an attempt to compete with the dominant providers, like the FTSE 100.
The indices were launched last month in the UK as well as France, Germany, Italy and a range of other countries around the world.
Speaking exclusively to Morning Wire, Allison Stone, head of multi-asset product at Bloomberg, said: “Bloomberg is actually the first competitor to come in who has the large brand name and the infrastructure to compete with the large entrenched players in the equity index business.”
“It has given us something of a late mover advantage… where we’ve been able to take a look at what’s worked and what’s not worked in the equity business. On the index side, we’ve taken a look at how different methodologies are written and what we think is the right way to do it,” she continued.
The new fixed-count indices share a common methodology around the world, making it easier to make international comparisons between different markets.
Bloomberg said the launch of the indices would allow clients to “streamline their operations” and help reduce costs.
The indices are also rules-based, which makes it easier for clients to understand how the indices are constructed. Stone compared this to other indices, where there may be a committee exercising “expert discretion” to determine which firms might remain in an index.
“Ours is pure rules,” Stone said. “There’s no committee that’s sitting down and saying whether or not we want that to go in”.
Stone said the ambition was for Bloomberg indices to be competitors with major domestic providers, like the FTSE 100 in London or DAX in Frankfurt, but said that was a long-term target.
“Right now, we’re trying to get out there, that we have the capability to do this, that we can provide these benchmarks,” she said.