NEW YORK — Bloomberg Indexes today unveiled the Bloomberg Dollar Spot Index, providing investors a new way to assess, trade or invest in the value of the dollar against major global currencies. WisdomTree Investments, an exchange-traded fund (ETF) provider and asset manager, is the first to license the index as a benchmark for ETFs.
The Bloomberg Dollar Spot Index represents developed and emerging market currencies with the most liquidity and the largest U.S. trade flows. The ten currencies represented in the Index include many absent from traditional indexes, such as leading U.S. trading partners China, South Korea and Mexico, as well as the highly liquid Australian dollar.
Rebalanced annually with data from the Federal Reserve Bank and the Bank of International Settlements, the Index provides a dynamic representation of global trade flows and liquidity measures.
“The value of the U.S. dollar against global currencies is a critical metric for traders and investors. For more than 30 years, traditional U.S. dollar benchmarks have been static and tracked against a limited number of developed world currencies,” said Srikant Dash, Head of Bloomberg Indexes. “The Bloomberg Dollar Spot Index is more representative, dynamic and diversified than existing benchmarks, and we are pleased that WisdomTree will be offering exposure to the Index in an ETF structure.”
The Index is calculated throughout the trading day using foreign exchange rates generated independently by Bloomberg.
“The non-centralized way currency is traded creates indexing, benchmarking and investing challenges for traders, managers and currency investors,” said Larry Tabb, Tabb Group’s CEO and Founder. “Creating a benchmark index for the dollar allows traders and money managers to benchmark effectively, and currency investors the ability to better understand performance.”
The Bloomberg Dollar Spot Index is tracked via real-time ticker BBDXY. There is also a total return index (BBDXT) that assumes investment of collateral returns in local markets using one month forward implied yields, and an inverse total return index (BBDXI) that tracks a short position in the U.S. dollar inclusive of funding costs. Real-time index analysis is available to all Bloomberg Professional service subscribers at BDXY <GO>.
About Bloomberg Indexes
Bloomberg Indexes provides global, independent indexes for the fixed income, commodity and currency markets, which have historically lacked transparent benchmarks. Bloomberg Indexes meets the needs of investors and product issuers with transparent, accessible and solution-orientated benchmarks backed by Bloomberg’s technology, vast datasets, institutional distribution and media properties. To learn more about Bloomberg Indexes visit www.bloombergindexes.com. All subscribers to the Bloomberg Professional service can access Bloomberg Indexes information at INDEX <GO>.
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