Solactive to serve as index calculation agent for first-of-its-kind tradable automotive valuation index
WASHINGTON, April 27, 2023 /PRNewswire/ — Fintech startup Exponential Exchange today announced Solactive as its calculation partner for an index designed to serve as a best-in-class industry wholesale pricing benchmark for used vehicles.
A leading provider of indexing solutions for the global investment and trading community, Solactive will use Exponential’s proprietary algorithms and industry-leading transactional wholesale data to calculate the index on a weekly basis. The resulting benchmark will be published on both Exponential’s and Solactive’s websites, and on various financial trading and analytics platforms after the index’s launch, which is expected later this quarter.
“With Solactive providing calculation and administration services for more than 25,000 indices for over 500 clients globally, we are excited to leverage their wealth of experience to ensure that our index is delivered in a secure and timely manner to the market participants that trade our products,” said Ryan Naughton, CEO of Exponential Exchange. “We look forward to working together to provide used vehicle indices that are tradeable in the derivatives markets, which is a game-changer for financial markets and auto industry participants alike.”
Exponential’s index will serve as a tradable asset that will enable large vehicle fleet owners – who might be exposed to significant asset risk should the value of their auto portfolio experience unexpected wholesale price fluctuations – to transfer portions of this exposure to buy-side market participants via futures contracts that are settled against the index.
As a result, Exponential’s products will provide a more efficient and cost-effective method for rental car companies, fleet owners, and large lease and loan portfolios to hedge for unexpected declines in the value of their vehicles. Conversely, auto insurers on the opposite side of this exposure will be able to use futures to hedge against increasing used vehicle values. Meanwhile, other buy-side market participants, such as speculators and hedge funds, will be able to gain exposure to an entirely new asset class: used vehicle market volatility.
“We are excited to partner with Exponential Exchange and leverage their next-generation financial tools to create a best-in-class wholesale pricing benchmark for used vehicles,” said Timo Pfeiffer, Chief Markets Officer at Solactive. “Our extensive experience in index calculation and administration combined with their expertise in fintech and automotive finance make for a powerful collaboration. Our partnership marks a significant milestone for both companies, and we look forward to continuing to deliver innovative solutions to the market tailored to our clients’ needs.”
About Exponential Exchange
Founded by a team with decades of expertise across fintech, derivatives design, data science, risk management, and automotive finance, Exponential Exchange is creating a series of next-generation financial tools designed to offer new levels of financial protection for participants in a variety of asset classes. These tools will allow third parties to assume a portion of their users’ exposure via derivatives that settle against Exponential-powered indices. Targeting asset classes that lack effective risk management tools, Exponential relies on robust sets of newly available data to create their tradeable financial instruments. The result is a powerful and innovative alternative to more expensive, less efficient versions of risk mitigation, offering new levels of financial assurance for hedgers, while unlocking new tradeable asset classes for speculators. Exponential’s launch product is designed for vehicle fleet owners looking to hedge against used vehicle market price volatility. For more information, please visit www.exponentialexchange.com and follow them at @exponentialexch on Twitter.
About Solactive
Solactive is a leading provider of indexing, benchmarking, and calculation solutions for the global investment and trading community. Headquartered in Frankfurt and, with offices in Hong Kong, Toronto, Berlin, and Dresden, Solactive innovates and disrupts the status quo as the partner of choice for our clients.
The unique blend of our 280 staff’s expertise in data, data science, financial markets, and technology enables our clients’ continued success through the delivery of a superior experience, unique customization capabilities, and the best value for money available in the industry. With more than 25,000 indices calculated daily, Solactive offers a full suite of solutions, including market leading ESG and thematic indices.
As at January 2023, Solactive served approximately 500 clients across the world, with approximately US$250 billion invested in products linked to our indices. Solactive is registered with ESMA as a benchmark administrator and is supervised by the BaFin.
Contact: [email protected]
SOURCE Exponential Exchange
