Markit Group Ltd., the London index provider, has discontinued its iBoxx Euro ABS 50 Index, citing flaws in its design and a lack of trading of asset-backed securities.
"The index never traded as successfully as we expected, possibly due to its design," Stephan Flagel, Markit's managing director and head of indexes, said in a telephone interview Monday. "Together with the decline of trading of asset-backed securities, this led us and our partners to discontinue. It's no longer as relevant as it was at the time we launched."
The composition of the index was updated every quarter, which may have been too often, Mr. Flagel said. The index, which tracked Europe's 50 most-traded triple-A-rated asset-backed securities, was also too broad for investors as it spanned mortgage-backed securities and collateralized loan obligations, he said.
The index was started in February 2006 by International Index Co. Ltd., which Markit bought in November 2007. Markit and the 13 investment banks that provided prices stopped publishing the index on June 17.
Markit is partly owned by 16 banking companies, including Citigroup Inc. and UBS AG. It was founded in 2001 by executives of Toronto-Dominion Bank.