Callan indexes, we hardly miss them - and the Callan staff won't miss them much, either.
Callan Associates Inc., San Francisco, discontinued its Callan Broad Market index and its family of subindexes as of Dec. 31.
"They've become redundant," said Ronald D. Peyton, Callan president, said. "There is no continuing need to produce them. There are now commercially available indexes ... that serve the purposes we originally structured our indexes for." When Callan began its benchmarks 12 years ago, indexes "didn't segment the market as they do today," he added.
The move "won't affect clients," said Ivan Cliff, Callan director-operations. Clients hadn't been using the Callan indexes very much in recent years, he added; most of them use the Russell and Standard & Poor's indexes.
The Callan indexes, which were created as an in-house research tool to help evaluate client portfolios, comprised only U.S. domestic equities and segmented the market into large-cap, midcap, small-cap subindexes and the microcap index, Mr. Cliff said.
"We never meant them to be a money-making proposition," he said. "We never marketed them or licensed them for futures contracts or attempted to manage money against them."
The Callan Microcap index did, however, have fans among the Prudential Securities Inc. team, which produces the Prudential "Benchmark Study," a semiannual analysis of indexes.
Steven DeSanctis, director of small-cap research at Prudential in New York, said he's disappointed the index is being discontinued. "I think it is a pretty good benchmark, (an asset class) where you don't have a lot of competition." Now there will be only two microcap indexes, he said: the CRSP 9/10, produced by the Center for Research in Securities Prices, Chicago, and the Wilshire Microcap index, produced by Wilshire Associates Inc., Santa Monica, Calif.
Mr. DeSanctis said he asked Callan about continuing the microcap index, but to no avail.
Discontinuing the benchmarks "was a decision on where you want to best use your operational resources for clients," Mr. Cliff said.