Syntax™, a division of Locus Analytics, has created a new class of equity indices — Syntax Stratified Indices ™. These indices use the Locus Functional Information System (FIS)™ to identify and diversify Related Business Risks.
Syntax’s approach uses a well-known statistical method called stratification to diversify investment risk by controlling exposure to groups of functionally similar companies that should react similarly to negative market events. Functional stratification identifies and weights these groups of companies according to the underlying economic functions that drive companies’ long-term earnings. This methodology helps to mitigate the unintended, adverse effects of overweighting related businesses that regularly arise. Syntax Indices are designed to protect investors from the impact of negative-earning surprises and, by extension, result in higher, more consistent long-term performance.
Through this methodology, Syntax has built family of Stratified Indices™ that cover different risk categories and geographies. Syntax Indices launched its Stratified Indices in 2010 alongside a series of investment funds that track Syntax Stratified Indices. Since its foundation, Syntax has continually broadened the scope of its family of indices to encompass multiple geographic regions, such as Europe and Asia, and thematic universes, like real assets, infrastructure, and socially responsible investment. Learn more at: syntaxindices.com