Increasing demand for weighted indexes

Demand for fundamentally weighted indexes has traditionally been an institutional phenomenon, while the retail structured products space has only shown scant interest. Market participants, however, say the indexes can produce pure alpha plays, so increased retail demand is inevitable. Matt Cameron reports

There is an increasing feeling of optimism among both index providers and structured product issuers that retail investors will soon realise the benefits of affording fundamentally weighted indexes a sizeable share of their portfolio allocation. Fundamental indexes - otherwise known as wealth-weighted indexes - have existed in the institutional market for a number of years and have captured an impressive share of the ETF market, but they have yet to make an impact in the retail structured