| The Markit TRX indices are total return swap indices referencing originally rated AAA CMBS securities issued since late 2005. |
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| Product summary: |
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| Markit owns and administers the TRX indices, which include the TRX.NA and the TRX.II. Both indices are tradable tools allowing investors to gain exposure to cash CMBS via TRS contracts. The liquidity and standardization of TRX index contracts allow investors to accurately gauge market sentiment around the asset-class, and to take short or long positions accordingly. |
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| Key benefits: |
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| Multiple market-maker platform with proven track record in synthetic asset-backed indices, particularly CMBS via the Markit CMBX index |
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| Index brings standardization to the total return cash market, previously offered by individual dealers |
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| Allows investors to take positions cash bond spread movement only as opposed to credit risk via CDS indices |
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| Standardization is a consistent theme, ranging from the selection of reference obligations to contract documentation to availability of payments amounts. All are calculated and posted monthly |
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| Markit TRX.NA suits a variety of investors looking for diversified CMBS exposure including asset managers, hedge funds, prop trading desks, and asset originators |
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| Markit TRX.II utilizes the TRX.NA contract structure and has a flexible portfolio definition with a re-balancing mechanism, allowing it to include post 2010 CMBS issuance |
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| Key functions: |
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| Standardized basket of CMBS reference obligations investors can use to gain exposure to asset class |
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| Index utilizes consensus cash CMBS spreads, prices, and durations to determine index levels |
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| Daily composite levels at the index and constituent level allow for market participants to track movements in CMBS market sentiment |
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| Markit provides a free PV calculator to market participants to enhance the liquidity and transparency around the index |
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