State Street Global Markets launches Systemic Risk index

By Melissa Kory

Cleveland, Oct. 14 - State Street Global Markets announced the launch of its Systemic Risk index, which measures the U.S. equity market's vulnerability to market shocks and describes the degree to which macro risk factors can drive stock returns.

The index provides a daily measure of fragility and can help investors manage potential market risk in portfolios. The components of the index, covering the U.S. equity market, are made up of 60 industrial sectors.

"In today's market, investors are continually looking for new ways to manage risk in their portfolios," Will Kinlaw, managing director and head of portfolio and risk management research, said in a news release. "State Street's Systemic Risk index is designed to provide institutional investors with an early indication of fragility within the U.S. market so that they can adjust their strategies accordingly and maximize returns even in a difficult market environment."

The index was developed by State Street Associates in collaboration with Windham Capital Management LLC.

"Shifts in this index have coincided with many global financial crises, making it a very valuable tool for varying equity exposure in the U.S. market," Mark Kritzman, a senior partner at State Street Associates and president and chief executive officer of Windham Capital Management, said in a news release.

State Street Global Markets is the investment research and trading arm of State Street Corp., a Boston-based holding company.

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