New York (HedgeCo.net) – Dow Jones Indexes has launched the Dow Jones RBP U.S. Directional Allocation Index, a gauge that automatically allocates weights among other indexes that reflect distinct viewpoints on the U.S. market.
Constructed as an “index of indexes,” the new gauge reallocates among an “aggressive” index, a “defensive” index and a “market” index—while also allowing the possibility to allocate fully to a cash component—based on an automated system that uses economic and market indicators as inputs.
“With today’s launch we’ve further supplemented the toolkit available to those seeking sophisticated measures of the U.S. market,” said Michael A. Petronella, President, Dow Jones Indexes. “The Dow Jones RBP U.S. Directional Allocation Index is the first index of its kind seeking to account for the current market environment.”
The allocation mechanism used in the new index’s methodology utilizes a “moving average crossover system,” as it is known, to generate signals for rebalancings by comparing moving averages of economic and market indicators.
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