Invstr launches cryptocurrency index using risk-parity methodology


Investing app Invstr has launched a Cryptocurrency Index, currently comprising 18 carefully selected cryptocurrencies, to make it even easier for everyday investors to follow the markets.

The index includes a range of digital asset categories, including asset, payment and utility tokens. Their weights in the index are calculated according to their respective market volatility rather than their market capitalisations and will be dynamically adjusted quarterly. Invstr will only add new cryptocurrencies to the index once they have displayed a determined level of price maturity.
 
Invstr has analysed the benefits of holding cryptocurrencies in a diversified portfolio. This analysis demonstrated that a modest exposure to cryptocurrencies in a diversified portfolio can both improve the return of the portfolio as well reduce the volatility of its returns.
 
In choosing appropriate weightings for the index, the Invstr Crypto Index departs from traditional market-capitalisation weighting methodologies and uses instead the volatility of each of the constituent parts.
 
Invstr CEO Kerim Derhalli says: “Retail investors want to know whether they should be invested in cryptocurrencies and what the impact of that investment will be on their portfolios. Traditional indices measure impact on the asset class not an investor’s portfolio. If you are a large fund manager you want to know what impact you will have on the market when you enter or exit an asset class. This is not a relevant consideration for smaller investors who want to know what the impact will be on their portfolios. The Invstr Crypto Index addresses this by using weightings that optimise risk-reward based on the volatility of the constituent assets”.    
 
The Invstr Crypto Index, which will be freely available to Invstr app users, will help investors conveniently track the price fluctuation of the crypto sector. App users can also easily compare the price performance of specific cryptocurrencies against the overall index.
 
The instruments that make up the Invstr Crypto Index have been carefully selected and will be reviewed quarterly to allow for rebalancing; the addition of new and stable crypto assets; and the removal of suspended or distorted cryptocurrencies.
 
The index includes: Bitcoin, Bitcoin Cash, Bitcoin Gold, Dash, EOS, Ethereum, Ethereum Classic, IOTA, Litecoin, Monero, Neo, NEM, OmiseGo, Qtum, Ripple, TenX, Verge, Zcash.
 

specialreports
other gfm publications
GFM corporate logo