New index to gauge securities lending, short selling

Analytics firm Data Explorers and Markit, a financial information services provider, created a new index that reflects sector-level investor sentiment derived from securities lending and short-selling information.

The Markit Data Explorers U.S. Sector Sentiment Index can be used for portfolio benchmarking and the development of index-linked products such as index mutual funds, exchange-traded funds, structured products and index futures and options, Markit said in a news release.

Stephan Flagel, managing director and head of indexes at Markit, said in an interview that the index, also called Markit DX, is the second of several alternative indexes the firm plans to release. In June, Markit announced plans to release a series of climate-change investment indexes that aim to provide insight into companies’ greenhouse gas emissions and climate change management strategies.

“We don’t consider ourselves a niche player, but there are alternatives to broader indices (such as the S&P 500),” he said.

Mr. Flagel said the Markit DX index will serve as a basis for banks and ETFs to launch new products.