Qontigo to Release Index Building Platforms

Qontigo, a new company formed from the merger of Axioma and Deutsche Börse’s Stoxx and Dax, will roll out new indices and index-building platforms in the next year.

The company is focusing on creating a factor investing suite that will feature a set of factor indices and a platform it calls iStudio that allows clients to create and backtest custom indices including creating custom environmental, social, and governance (ESG) indices. These will be built upon Axioma’s analytics.

Sebastian Ceria, founder of Axioma and CEO of Qontigo, says the company will leverage the data analytics expertise of Axioma and combine it with the Stoxx and Dax indices.

“[We’ll] start building products together that we were not able to before because we are more fully integrated together in data and analytics,” Ceria says. “We have the basics, with cross-selling, with our complementary client bases, and with our more comprehensive offering. Finally, we will leverage the skillsets that each have built. We’re more of a software company; they’re more of an operations/content production company.”

He says they expect to release these indices and platforms within the next six to 12 months.

Factor indices are standard indices based on risk factors Axioma already tracks but Ceria says eventually they will be able to offer more customization. Risk profiles and other data Axioma collects will also be baked into the two index-building platforms, eliminating additional connections for analytics. 

Qontigo was formed after the merger of data analytics platform provider Axioma with Deutsche Börse’s two indices—Stoxx, which covers a variety of asset classes, and the exchange’s German economy index Dax—in September this year. Deutsche Börse is its largest shareholder. The company will retain brand names for Axioma and Stoxx for its analytics and index products.

The company will offer its mutual clients a more comprehensive set of products, along with the planned new indices rolling out soon, Ceria says. This will include Axioma’s suite of risk and portfolio management applications.

Ceria says the larger goal of the group is to deeply integrate the use of analytics, as provided by Axioma, in the creation and updating of indices.

“There’s a recognition that indexing products is evolving from very traditional market exposure and capitalization weighted to any exposure. In order to build those indices, you need analytics and sophisticated data that comes from an analytics provider,” Ceria says.

He says more analytical, factor-driven investing is growing because of market elements such as modernization, shrinking margins, increased regulation and consolidation.