State Street Global Markets plans to launch what appears to be the first fixed-income flows index. The index will show how much is bought and sold on a daily basis in sovereign bonds for up to 14 developed countries, including the U.S. and the U.K., according to Shafiq Ebrahim, team leader of the investor behavior research and development group. For example, the index will list how much is being bought and sold in a typical day for Treasuries and U.K. gilts. He said he is not aware of any existing such indicators run by other index providers.
This index would differ from existing fixed-income indices in recording flows rather than prices for securities. The flows indicator would be based on fixed-income assets held in custody by State Street and could help investors predict short-term interest rates, Ebrahim said. While the index will only reflect the assets under State Street's custodial control, it will still be fairly representative of how institutional investors are changing their allocations, Ebrahim said. The index should be released by the end of the year and will join similar products in equities and foreign exchange, he said.