Today, September 17th 2017, TASE launches 6 new Tel-Bond maturity indices. Following the launch of the new indices, TASE will calculate 20 Tel-Bond indices, eight of which, launched this year. In total, TASE has launched 10 new indices since the beginning of the year.
Following are the new indices:
Tel-Bond CPI Linked Maturity Indices
- Tel-Bond CPI Linked 0-3 Years - This index will include bond series, which are included in the Tel-Bond CPI Linked Index, and whose weighted time to maturity is between 0-3 years.
- Tel-Bond CPI Linked 3-5 Years - This index will include bond series, which are included in the Tel-Bond CPI Linked Index, whose weighted time to maturity is between 3-5 years.
- Tel-Bond CPI Linked 5-15 Years - This index will include bond series, which are included in the Tel-Bond CPI Linked Index, whose weighted time to maturity is between 5-15 years.
The weight limit for each bond series included in each of the indices will be 6%. A single issuer will hold no more than four bond series in each index (maximum 20% weight limit for a single issuer).
Tel-Bond Shekel Maturity Indices
- Tel-Bond Shekel 0-3 Years - This index will include bond series, which are included in the Tel-Bond Shekel Index, and whose weighted time to maturity is between 0-3 years.
- Tel-Bond Shekel 3-5 Years - This index will include bond series, which are included in the Tel-Bond Shekel Index, and whose weighted time to maturity is between 3-5 years.
- Tel-Bond Shekel 5-15 Years - This index will include bond series, which are included in the Tel-Bond Shekel Index, and whose weighted time to maturity is between 5-15 years.
The weight limit for each bond series included in each of the indices will be 6%. A single issuer will hold no more than four bond series in each index (maximum 24% weight limit for a single issuer).
Due to the basic threshold criteria of the Tel-Bond Shekel and the Tel-Bond Fixed Rates indices, they will comprise of high rated bond series (A- to AAA). A time to maturity is calculated as the average time to maturity in each bond. This is done in accordance with the standard practice of calculating time to maturity in installment bond series.
Launching six indices with varying maturity dates meets a wide variety of investment needs:
- Strategic investors - Maturity indices are expected to comprise a fixed component in investment portfolios, in accordance with the investment policy of the debt component.
- Tactical investors - Maturity indices are expected to help extend or shorten the average duration of bond portfolios, in accordance with the varying needs and the periodic investment philosophy.
- Meeting varying investment needs – The sought-after maturity date might change over time. In certain periods, long-term bond portfolios are more popular, while in other periods, short-term bond portfolios are more sought-after. Launching indices with different maturity dates is expected to meet the varying market needs.
- Benchmark instruments to help managing liquidity – The new indices are expected to help investment committees determine a benchmark for managing the liquidity of the debt component in the investment portfolios.
- Risk premium assessment Instruments – The yield spread between the Tel-Bond indices and their governmental equivalents, based on their time to maturity, will provide yet another instrument for risk premium assessment of corporate bonds on the yield curve.
In Addition, TASE launches 4 new Government bonds Indices:
Two CPI Linked GOV bonds indices
- CPI-Linked, Gov. Bonds, 5+ Years - The index includes all government bonds linked to the consumer price index with time to maturity over 5 years.
- CPI-Linked, Gov. Bonds, 10+ Years – The index includes all government bonds linked to the consumer price index with time to maturity over 10 years.
Two Non Linked fixed interest GOV bonds indices
- CPI-Linked, Gov. Bonds, 5+ Years - The index includes all non-linked government bonds paying fixed interest that are listed on the exchange with time to maturity over 5 years and under 10 years.
- CPI-Linked, Gov. Bonds, 10+ Years – The index includes all non-linked government bonds paying fixed interest with time to maturity over 10 years.
