About Our Ratings
Finding the best indices that meet your investment needs can be a daunting task. There are millions of indices in all shapes and sizes, but not all of them are worth buying. Many indices have a short-lived track record; some are over-engineered; some contain significant over-exposures, and some may have hidden fees.
The objective of our ratings is to help investors understand how an index operates and identify its key strengths and weakness via critical metrics. The Index Standard® has no affiliation with any index providers, and we don’t provide buy, hold, or sell signals. Instead, we offer our unbiased opinion to help you compare different indices, ETFs and annuities so you can decide what is best for you.
The Index Standard® Ratings
The Index Standard® Ratings have six rankings in the descending order of Platinum, Gold, Silver, Copper, Neutral, and Watch.
ETF & Index Ratings
The Index Standard® evaluates each index against the most appropriate benchmark, and all indices are evaluated at the same time to ensure consistency and fairness. We put the indices through our rigorous model in seven categories which we deem critical to index construction:
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Transparency
Explore the “small print” such as independence, rules transparency and hidden fees; also the index’s adherence to IOSCO principles.
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Robustness
Analyze diversification, index parameters and tradability in stressed markets.
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Risk
Examine an extensive array of risk metrics to determine how risky the index is.
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Efficiency
Determine the index’s ability to balance off risk and return attributes.
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Returns
The index is analyzed through metrics such as annualized returns, skew, and kurtosis to assess the stability of returns.
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Attractiveness
Quantify the current level of attractiveness and the future potential.
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Capital at Risk
Examine value at risk and drawdowns to identify potential unknown risks that may hinder performance.
The Index Standard® evaluates each index against the most appropriate benchmark, and all indices are evaluated at the same time to ensure consistency and fairness. We put the indices through our rigorous model in seven categories which we deem critical to index construction: