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Ex-JP Morgan man launches free indices after FTSE fee rage

by Annabelle Williams on Nov 06, 2012 at 08:14

Ex-JP Morgan man launches free indices after FTSE fee rage

A number of industry veterans are challenging the supremacy of paid-for indices with the creation of a not-for-profit venture, the Freedom Index.

The company, which aims to provide free indices for wealth managers, is to launch UK and US benchmarks before Christmas. The Freedom Index will begin with basic starter indices based on each market’s top 50, 100, 250, 500 and 1,000 stocks, plus all cap indexes. All indices will be market capitalisation weighted. 

There are also further country indices in the pipeline, and firms will be able to submit their own bespoke benchmarks to an ‘index committee’, which will verify the accuracy of the data and include the indices for public use on the website.

The venture is the brainchild of Carl Bacon, previously director of risk control and performance at F&C Investment Management, who also worked as head of performance (Europe) at JP Morgan Investment Management.

Bacon said he had long felt that basic index information should be freely available, and the cost of purchasing of mainstream index data was prohibitive for smaller firms.

‘A good benchmark should be investible, accessible and relevant to the strategy. The accessibility is not available at the moment. Smaller managers simply can’t afford to buy the data, they can’t construct portfolios and that’s simply not appropriate,’ Bacon argued.

‘I really believe this is to the industry’s benefit.’

He is encouraging donations to fund the project and has already received £50,000 from supporters.

Earlier this year Wealth Manager reported that FTSE Group had approached several small and medium-sized investment firms and asked for sums of up to £40,000 to quote FTSE indices in client literature.

The charges sparked outrage and led several firms to abandon FTSE indices altogether.

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