Yesterday, The NASDAQ OMX Group, Inc. (NDAQ) and Chaikin Analytics, LLC announced the launch of three NASDAQ Chaikin Power Indexes: the NASDAQ Chaikin Power US Large Cap IndexSM (NQULCHK), the NASDAQ Chaikin Power US Small Cap IndexSM (NQUSCHK), and the NASDAQ Chaikin Power US Dividend Achievers IndexSM (NQDACHK). At the heart of all three indexes is the Chaikin Power Gauge, a multi-factor quantitative model, that is the brainchild of visionary Marc Chaikin.
Q: What is your name and role?
A: Marc Chaikin, CEO & Founder of Chaikin Analytics
Q: How did you get into the industry?
A: I have always had a passion for evaluating stocks. I started out as a stockbroker and ended up spending over forty years on Wall Street as a trader, stock broker, technical and quantitative analyst.
Q: Please describe Chaikin Analytics.
A: Chaikin Analytics helps people who manage money make money. We distill a massive amount of data into actionable ideas based on an alpha generating quantitative model which helps investors make better investment decisions.
Q: The Chaikin Power Gauge is at the heart of the NASDAQ Chaikin Power Indexes. Please explain the Power Gauge methodology and what makes it unique.
A: The Chaikin Power Gauge is a remarkably accurate indicator of where a stock is headed over the next 3-6 months. It’s based on an unbiased, proprietary 20-factor model that combines fundamental, technical and sentiment factors into a rating that indicates a stock’s probability to over- or under-perform the market in the intermediate term. This methodology, coupled with a defined set of rules and criteria applied in a systematic and consistent manner, creates the NASDAQ Chaikin enhanced alpha indexes.
Q: Why did you decide to launch indexes?
A: Extending the Chaikin methodology to provide alpha to indexes, in addition to the stocks and ETFs we cover in Chaikin Analytics, was the next logical step in meeting the needs of the marketplace. Enhanced alpha products, such as the NASDAQ Chaikin Power Indexes, represent the next generation of product innovation. These indexes combine the best traits of smart beta and actively managed ETFs with enhanced performance by narrowing existing indexes down to their most promising constituents. By partnering with an innovative, market-leading, global index provider such as NASDAQ OMX Global Indexes, asset managers and investors around the world will now have access to these unique, enhanced investment strategies Q: What is most significant or noteworthy about each of the new indexes that you would like both asset managers and investors to know?
A: The NASDAQ Chaikin Power Indexes are equal weighted and represent the most promising constituents culled from the parent NASDAQ indexes. Because the Chaikin Power Gauge identifies the most promising constituents within the NASDAQ indexes, the expectation is that these new indexes will deliver enhanced performance.
Q: How should the individual investor consider these indexes?
A: Individual investors interested in enhanced alpha products can track the performance of the first three NASDAQ Chaikin Power Indexes here:
- NQULCHK NASDAQ Chaikin Power US Large Cap Index
- NQUSCHK NASDAQ Chaikin Power US Small Cap Index
- NQDACHK NASDAQ Chaikin Power US Dividend Achievers Index
Individual investors can speak with their financial advisor about any investable product NASDAQ OMX offers in this category and are encouraged to visit us at www.chaikinpowertools.com to learn more about Chaikin Analytics, the Chaikin Power Gauge and our various products.
Q: What led you to partner with NASDAQ OMX?
A: Investors are increasingly demanding liquidity and transparency in addition to profitability. NASDAQ OMX is a leader in using proven technologies that provide transparency and insight for navigating today’s global capital markets. It was an ideal partnership to combine the Chaikin methodology with NASDAQ OMX to create these enhanced alpha indexes.
Q: Many who have collaborated with NASDAQ on indexes have followed up with investable products. Are there any in your future?
A: Based on the enhanced returns that we expect these three indexes to deliver, we anticipate that a number of ETF creators and advisors interested in offering separately managed accounts will license the NASDAQ Chaikin Power Indexes. These first three indexes will be followed by additional products to satisfy the needs of ETF creators, advisors and their clients.