RBS launches Tradable UK Small Cap Index


RBS launches Tradable UK Small Cap Index

The Royal Bank of Scotland plc (RBS) announced today the launch of the RBS HGSC (Tradable) Index which comprises up to 200 companies in the bottom 10 per cent of the UK stock market by capitalisation and aims to track the "RBS HGSC Benchmark Index".

Economic Analysis

04 April 2011

Apiramy Jeyarajah, RBS Global Banking and Markets, Custom Indices said: "Over the last 20 years a large number of UK small and mid cap investors have been benchmarking against the RBS HGSC Benchmark Index. By leveraging our experience in the structuring and trading of innovative rules based indices we are delighted to offer investors access to this well known benchmark via liquid and investible products."

The RBS HGSC Benchmark Index was launched in early 1987 as part of the family of Hoare Govett Smaller Companies Indices designed by Professors Elroy Dimson and Paul Marsh of London Business School in conjunction with RBS. This extensive family of Indices provides the definitive measure of performance of low capitalisation companies.

Commenting on the new Index Stephen Ford, Head of UK Mid Market Equities, at RBS Global Banking and Markets, said: "Over the full back-history, the RBS HGSC has beaten the return on the FTSE All- Share by 3.4% per year. Following another year of strong returns in 2010, we see the potential for continued outperformance for small and mid-cap stocks during 2011. Restructuring benefits, coupled with strong balance sheets and top line appreciation, should continue to underpin earnings upgrades over the course of 2011 and consequently we anticipate another year of outperformance against the UK main market."

Professors Elroy Dimson and Paul Marsh of London Business School commented: "Despite the outstanding long-run performance of small and mid-cap stocks, many investors remain underweight. Some wish to avoid holding large numbers of positions, while others are concerned about monitoring costs and liquidity. The new RBS HGSC (Tradable) Index will help investors to achieve their target weightings via a well diversified portfolio, and to modify their exposure whenever they wish." RBS has a long track record in index creation with in excess of 500 indices across all asset classes and investment styles. RBS both develops its indices in-house and partners with dedicated research and index-designing experts to create innovative rules based indices. The indices can be embedded into a variety of wrappers such as capital protected notes, exchange traded certificates and funds.

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+44 20 7085 5712

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