Markit, announced the forthcoming launch of the Markit iBoxx Liquid USD Convertible Bond Index (CVBX) on …...
September 23, 2009. The CVBX is an index designed to provide investors with exposure to the broad US convertible bond market.
The index consists of 100 securities (bonds and preferred securities) selected from the bonds with the largest face value outstanding at inception. Additionally, the constituents in the index are weighted to meet individual security, issuer and sector limits to ensure broad market coverage. It will be tradable using standardized cash-settled forwards on specific series (CVBX1, CVBX2 etc.) and a new series will be created every six months to ensure liquidity.
Stephan Flagel, Managing Director and Head of Indices at Markit, said: “As the global economy recovers and investors seek new opportunities, the Markit iBoxx Liquid USD Convertible Bond Index will offer investors access to a liquid market for securities based on convertible bonds. We expect the CVBX to have a distinct impact on the convertible bond segment through an increase in liquidity and improved transparency in this exciting market.”
The CVBX will be accompanied by the Markit iBoxx Liquid USD Delta-Hedging Stock Index (CVEX), a delta-hedged total-return stock index consisting of long stock positions equal to the initial delta of each bond in the corresponding CVBX series at inception. It will be tradable using standard equity swaps. The CVEX will be rebalanced monthly and the index will roll every six months.
Source: ETFWorld.co.uk – Markit
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