Universes
Vinter’s Full, Institutional and Custom Universe
Introduction
The asset universe lists all possible index constituents. It is a crucial building block in designing an index or creating an investment strategy. Every Vinter index methodology contains a text on the index construction, and almost every index construction starts with defining the asset universe. This document describes the rules for these universes. The three most commonly used Vinter asset universes are Full, Institutional, and Custom. We created each asset universe for a distinct purpose.
Full: By virtue of being a regulated Benchmark Administrator under the EU Benchmarks Regulation, we had to create a rules-based asset universe.
Institutional: It speeds up the time to market for issuers of exchange-traded funds and products (ETFs and ETPs).
Custom: It simplifies rebalancing for our customers
Vinter Full Universe
We created the Vinter Full Universe because we had to design strict rules for which assets are eligible in our regulated indexes. By being a regulated Benchmark Administrator under the EU Benchmarks Regulation (EU BMR), our eligibility criteria adhere to this regulation and the IOSCO principles for financial benchmarks. Both of these regulatory frameworks intend to protect investors.
The Vinter Full Universe consists of all assets that meet Vinter’s eligibility criteria. These criteria include a minimum market capitalization of USD 500 million, a daily trading volume above USD 20 million, and a price history of at least 90 days. We list all criteria in the Benchmark statement hosted on www.compliance.vinter.co As of 2023-04-01 crypto assets are eligible as constituents if at the review date, they:
are a cryptographically secured digital bearer instrument;
are not index tokens, stablecoins, or pegged to another asset such as currencies or commodities;
are not an ongoing Initial Coin Offering;
are not deemed a security, fraudulent, or banned by a public financial regulatory authority with jurisdiction over the constituent or its wrapper;
are not alleged to be a security or fraudulent by a public financial regulatory authority with jurisdiction where a financial instrument ought to be listed with the constituent as underlying;
are supported by the industry including market makers, custodians, and regulated exchanges;
can be deposited to and withdrawn from at least two eligible exchanges;
are freely traded and can be freely held for the foreseeable future;
have a daily trading volume that exceeds USD 20 million;
have at least 90 days of historical price data;
allow for cold storage;
have a market capitalization above USD 500 million;
trade against a G10 currency (AUD, CAD, EUR, JPY, NZD, NOK, GBP, SEK, CHF, USD);
are not designed to be private; and
trade on eligible exchanges.
A list of all assets in the Vinter Full Universe is available in the Vinter API.
Vinter Institutional Universe
We created the Vinter Institutional Universe to speed up the time to market for issuers of exchange-traded funds and products (ETFs and ETPs). Without a pre-defined asset universe, the asset manager must find out which crypto assets (i) are eligible for listing on stock exchanges, (ii) can be safely held in custody by reputable custodians, and (iii) can be quoted by market makers. We have solved the first problem of building an investment strategy by publishing a list of assets with institutional support.
The Vinter Institutional Universe is a subset of the Vinter Full Universe, consisting of assets that have support from a selection of institutional service providers. The Vinter Institutional Universe only contains assets supported by the selected
stock exchange,
market maker, and
custodian.
For an asset to be in the Vinter Institutional Universe, it must
be eligible for listing on the SIX stock exchange,
be quoted by the market maker Flow traders, and
be able to be stored in custody by Copper.
We select the service providers using the following rules.
Among the publicly listed exchange-traded products (ETPs) tracking a Vinter index, select the product with the highest end-of-year assets under management.
On the website, factsheet, final terms, or prospectus of said ETP, list which stock exchange(s) where the ETP was listed first. If it was listed on a single stock exchange, select it. If it was listed on multiple stock exchanges, select the stock exchange with the most transparent and simple listing rules (if we cannot distinguish the transparency or the simplicity, we select the stock exchange with the most supported assets).
List all firm(s) said ETP uses for market making. Select the one with the most supported assets if it's multiple providers. If it’s a single provider then select it.
List the firm(s) said ETP uses for crypto custody. Select the one with the most supported assets if it's multiple providers. If it’s a single provider then select it.
As of 2023-01-01, this process resulted in the following selections.
The HODLX ETP issued by 21Shares, which tracks the HODLX index by Vinter.
HODLX was first listed on the SIX stock exchange.
Flow traders is the market maker, according to the product documentation.
Copper and Coinbase custody are the custodians, according to the product documentation. After comparing their two websites, we select Copper as they had the longest list of supported assets.
We update the list of service providers yearly. We update the supported assets based on this list of providers quarterly, starting in January. Use the Vinter API to see which assets are currently in the Vinter Institutional Universe.
Vinter Custom Universe
We created the Vinter Custom Universe to simplify rebalancing for our customers. Suppose the custodian that an ETF issuer has contracted cannot custody a certain asset. In that case, this asset should not be an index constituent. For practical purposes, we remove assets lacking support from a custom set of market makers, custodians, and other necessary service providers. Removing unsupported assets simplifies the rebalancing process.
A Vinter Custom Universe starts with the Vinter Institutional Universe as a template, and then it allows for customization. The most common requirement is to customize the service providers. This means that we interpret the rule that an asset is “supported by the industry including market makers, custodians, and regulated exchanges” as the particular service providers the customer has access to. In practice, this often means the service providers they have contracted. Further, Vinter’s technology allows for the customization of other requirements, including the thresholds on size, volume, and price history. Rarely, however, do we see a need to edit these thresholds.
On a technical level, the Vinter Custom Universe is similar to the Vinter Institutional Universe. Both universes are a subset of the Vinter Full Universe. In the custom universe, our customer selects the service providers based on the contractual arrangements. In the institutional universe, Vinter selects the service providers based on the rules in this document.
Licensing
The Vinter Full and Institutional Universe are available under the Creative Commons Attribution-NoDerivatives 4.0 International Public License. For full terms visit https://creativecommons.org/licenses/by-nd/4.0/legalcode.
You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use. Attribute “Source: vinter.co” at all times, including a hyperlink to https://vinter.co/ If you remix, transform, or build upon the material, you may not distribute the modified material.
You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits. No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.
API
The current list of all assets in the Vinter Institutional Universe are available in the Vinter API. Request an API key by visiting vinter.co.
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