Thematic Investing and Thematic Index

Thematic Investing as the name suggests aims on identifying macro-level trends.  Understanding the trend is a major part of any business. Trends can be defined as a sudden or gradual shift in any situation. It may be under fashion, education or styling. Thematic Investing works in this part for your business. It works on those underlying investments that may provide benefits from the materialization of the macro-level trend.

How is thematic investing better than other forms of investing?

Unlike other forms of investing, thematic investing covers a good number of sectors and pick companies that are relevant to this sector and matches the theme. Areas covered by thematic investing.

There are some basic thematic investing areas, these areas include: 

Environmentalism and environmental technology

Gaming

Healthcare

Robotics and automation

Infrastructure 

Luxury brands and

Water distribution

What is the Thematic Index?

The representation of the performance of companies that are associated with any long-term trend or any kind of structural trends that investors are inclined towards in order to gain power or dominance in the market in the future is called Thematic Index. The Thematic Index offers an alternative framework for analyzing the opportunities that are available for investments. It identifies the emerging macroeconomic and geopolitical trend which is structural and transformative in nature. 

Keys to Megatrends

With the change in the trends of the world the investors demand to stay updated with the changing dynamics hence, it is necessary to carefully read and prepare the thematic index and learn about the thematic investment. Some of the key points that may help you create a megatrend or features that are must in megatrends are stay up to the point in thematic objectives: for example, if the thematic index is robotics then the objective of the index should be to study the performance of the benefits from the use of a robot by any company. Have a global coverage. Should be scalable and flexible.

Source:   https://indexcalculations.tumblr.com/post/612452799226216448/thematic-investing-and-thematic-index

Different Types of Index

What is a Custom Index?

Before knowing further details on any topic let's first understand what Custom Index is. The Custom Index is a way of creating a non clustered index on a single index or on multiple or composite indexes, in an entity. It is beneficial in improving the performance of the querying process. The custom indexes calculate traditional market cap-weighted and alternatively weighted equity indexes. 

The Advantages of the Custom Index

It provides broad coverage to reflect a specific benchmark or product requirement transparency and a replicable index can be designed with more rigorous calculation. Data provided are reliable. Many companies that provide custom indexes have global support that provides a cross-functional Custom Index team. Most of the custom indexes calculated by the companies are automatic and depends on the production system. Hence, the data is true and reliable. 

The Custom Index can be used to avoid the misfit of the benchmark, by using an index that more accurately reflects your investment strategy. Social investment strategies gain a benchmark. You can manage your currency via a custom index.

What is Robotics Index?

The main definition can be explained by the objective of the Robotics Index. Basically, the Robotics Index aims to represent the benefit or the potential of the company through increased acceptance and adoption of robots.  Robotics Index includes companies which have high exposure to some technical or robotics-related activities namely:

Robots 

Artificial Intelligence

Automation

Industrial robots

Autonomous robots and many more.

What is the Development Index?

Different countries have different capita income. The Development Index is a statistic index of education and life expectancy as well as per capita income that are necessary to mark any country on with their rank in the four tiers of human development. The Development Index emphasis on people and their capability and makes them the prior criteria for assessing the development of any country.

Source:   https://indexcalculations.wordpress.com/2020/03/12/different-types-of-index/

Dividend and Smart Beta Indices

What is Smart Beta Indices?

Currency or money doesn't have the same value over time. They have to face rise and fall, and they are inversely proportional to the changes in the price level. This means with the rise in the price level, the value of money decreases. 

The index number is a technique that helps us measure different changes in a variable or any other of its characteristics concerning time. 

Lags in the Method

There are researches that State it to be a "not so good" a way to calculate the factors. This is because of the factor exposure that Smart Beta Indices provide varies greatly. Though, they are considered to be a good tool for gaining factor exposure. 

History of Smart Beta Indices

Smart Beta Indices were originally tossed by Harry Markowitz in his work on Modern Portfolio Theory. 

Index numbers are studies to observe the changes in the effects of such factors that can't be measured directly. 

What is Dividend Indices?

The to-date best method to espouse a dozen strategies for the generation of returns is the Dividend Indices. Hence depending upon the performance of the top 50 securities in the parent index, there are different dividend indices that are increased or maintained and ranked by their dividend yield. 

The measure of the best performing stock based on the dividend yield performance is known as the Dividend Indices. The content of indices can be any number of stocks, still, it is rarely above the count of 100.

Factors influencing stocks that are to be Chosen

There are different factors that influence the stocks to be chose 

Some of them are

Dividend per share

Dividend payout percentage rate and average daily trading volume. 

The main dividend indices are Dow Jones Us select dividend index

The S&P Global dividend opportunity index, that contains roughly above200 high yielding stocks 

S&P 500 dividend aristocrats index.

Source:   https://sites.google.com/site/indexcalculations/dividend-and-smart-beta-indices

Different Ways of Indexes

The term Index Maintenance is very important as well as essential to improve the database or to maintain the well being of the database. It is said by Brad McGehee that one step should be taken to enhance them or create indexes and also increase Index Maintenance. By using this maintenance is taken care along with the schedule to run. The process is been carried on by the use of the SQL server agent.

The indexes are also being maintained as well as performed well. Indexes can be rebuilt using certain syntax. The index that requires maintenance can be rebuilt and can be improved too. These rebuilds can be done via online as well as offline. These are also very useful.

Different Types of Indexes

The Index Provider has the work to calculate as well as distribute the stock and the indices. There are many rolls of an Index Provider. One of the major functions of them is that they help in classification and define the markets. The reason is that indices help in market representation. It also provides a benchmark for that sector or the market in the industry.

These providers have the capability to make money by licensing the indexes. This helps in investment firms and uses them to create financial products. These providers make a lot of money. They also make profits of more than 36%. There are providers that can also exchange their products that are to be traded.

There is a formula for Index Calculation. This calculation is very important for calculating indexes. Index Calculation is done by the Cost Inflation Index (CII). This calculation is increasing over the years. This is calculated to match the prices with the rate of inflation. This calculation varies and it may increase or decrease in different years. The data are calculated on the basis of base value and by utilising simple mathematics.