The Swiss bank, SEBA has announced the launch of its investment solutions and a new index for cryptocurrencies named SEBAX.
The SEBA Crypto Asset Select Index (SEBAX) describes itself as dynamic. And a risk-optimized index to invest efficiently in the crypto asset market.
The designers of the index claim they examined the inefficiencies of the emerging crypto asset market and sort ways to proper solutions. Hence, SEBAX seeks to address the common pitfalls of traditional market-weighted indices. Also, to improve diversification significantly.
The Swiss bank partnered with European index administrator, MV Index Solutions and Gentwo Digital to make the new index project a reality. MV Index Solutions reportedly aided the launch process of the index. Consequently, Gentwo Digital carried out the implementation of the strategic requirements of carving out the first investment project.
What the index entails
The new SEBAX index monitors 5 selected cryptocurrencies. They include Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC). As well as, Stellar Lumens (XLM) and Ethereum Classic (ETC).
Besides, within the SEBA index, each cryptocurrency has different weights. BTC holds a significant weight of 48%. Concurrently, Ethereum holds 28% and Litecoin — 18%. Also, Stellar and Ethereum Classic both enjoy 3%.
Daniel Kuehne, SEBA Bank AG asset management commented on the development. He said: “With our investment solutions we want to offer investors the highest possible security. As well as, strengthen their confidence in the new, complex market environment of cryptocurrencies.”
Daniel also mentioned that the product and the company’s investment expertise help clients enjoy the new potential of digital asset classes with familiar rules from the existing financial world.
SEBA Crypto Asset Select Index (SEBAX), a proprietary index of SEBA Bank AG. The index’s methodology reportedly stands on three key elements.
Firstly, the index claims that qualitative filters exist which aids the selection of eligible universe with emphasis on safety, technical reliability, and tradability. The eligible universe consists of at least five constituents and there’s continuous supervision.
Secondly, the index’s structure accommodates quantitative rules, which allocate optimal weight to each constituent based on a modified risk-parity approach. The approach limits concentration into single digital assets and ensures optimal diversification.
Third, the index boasts of a monthly rebalancing system that resets the weights of the constituents to their dynamic target allocations. The system execution follows defined price-fixing rules.
To remind, the Swiss cryptocurrency exchange, Smart Valor launched staking services for proof-of-stake (POS) technology. The move created an amazing opportunity for Dash customers.