How can we help you to benchmark and access digital assets? 

FTSE Russell’s index expertise can help

Kristen Mierzwa

Head of Digital Assets, Index Investments Group • Global ETF's

Investors face a challenge in navigating the new and fast-changing world of digital assets. There are few barriers to entry and a lack of consistency in selecting and classifying tokens. FTSE Russell’s index expertise can help.

The words “traditional” and “innovative” don’t obviously go together. But they describe how FTSE Russell is working in digital assets.

This market is volatile and prone to big bull and bear cycles, meaning clients need help to navigate the asset class.

We've been involved in digital assets for what is a relatively long time: we signed our partnership agreement with Digital Asset Research in 2019.

So many people have seen that crypto-native firms can go under from one day to the next. They want to have a relationship with someone they can depend upon.

What our counterparts tell us they really like about FTSE Russell is that “You guys are here to stay, we know that you’ve made a big commitment to this space and we have seen your ability to innovate.”

Earlier this year, we completed our ISAE 3000 audit. We apply the same kind of rigour in digital asset index construction that we would use in the Russell US index series or the FTSE UK index series.

And that means best-in-class operations and governance. Our governance rules meant we were able to screen out FTX as one of our pricing providers, for example.

FTSE Russell is one of the world’s leading index firms, with access to all the major asset classes, such as commodities, fixed income, equities and digital assets.

And that puts us in a unique position: no-one else can quicky and easily design a long/short product using the FTSE 100 and bitcoin, for example.

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Navigating the plumbing of the financial system

We help our clients navigate the plumbing of the financial system. We have relationships with everyone from regulators, central banks and exchanges to consultants, traders, asset managers and custodians.

We work with other data providers like Bloomberg and FactSet. For digital asset firms who may not have experience connecting to the legacy system, we've got all the pipes established. And that's a big deal for them.

Some of our indexing experience is helpful when applied to digital assets. FTSE Russell’s five-day index pro forma or indicative review files, issued ahead of the rebalances, help our clients prepare their positions.

Crypto-native index firms don’t always offer those kinds of preview files. In fact, issuing and running an index isn’t so straightforward. You must get it right first time. We operate in a very detail-oriented world, where every basis point matters.

Our clients need to understand how our digital asset indices work and we try to make it easy for people by being transparent. We spend a lot of time cleansing data and ensuring it is top-notch. That takes time and it involves infrastructure that’s expensive.

For traditional financial firms using our indices and benchmarks to access digital assets, we help them to pre-empt the due diligence steps they would otherwise have to make.

We apply the same kind of rigour in digital asset index construction that we would use in the Russell US index series or the FTSE UK index series.

Kristen Mierzwa

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