Indexation is an investment strategy designed to achieve the returns of a given weighted index, thereby minimising the relative performance risk that investors could face in actively managed strategies. We prefer the term indexation over the typical industry description of passive investing because index tracking requires the following decisions to be actively managed:

  • Treatment of corporate actions
  • Treatment of cash flows
  • Management of rebalancing
  • Portfolio construction process.
Traditional index investing encompasses tracking a market capitalisation weighted index (which is a good proxy of the overall market), but given academic and technological developments, indexation now encompasses both traditional index investing and alternatively weighted indices, more commonly known as smart-beta or factor investing.  

Our Investment Process

Our investment process was developed in 2001 within the context of the South African equity market (which exhibits less liquidity relative to larger developed markets). This drove us to develop an investment process which enables efficient index tracking of South African indices as well as the more illiquid Frontier Market indices. We can therefore apply our investment process to almost any index globally, and in particular, smart-beta indices covering notoriously illiquid niche markets. The table below lists the range of capabilities which we currently manage.

Indexation Solutions 

We can tailor or customise any standard index or add a risk management overlay in order to meet our client’s specific investment objectives.

Trusted by some of South Africa’s largest and most respected professional investors to deliver returns in line with their chosen benchmarks, the Indexation capability within Old Mutual Customised Solutions prides itself in offering our clients a highly personalised and dynamic investment management service.  Give us a call to see how we can “Do Great Things” for you.