Nasdaq has launched a tool to help companies understand America's hottest investment product

  • Nasdaq launched passiveIQ to help clients better understand the passive investing market.
  • Exchange-traded products, one of the hottest passive investment products, saw combined US assets hit $US3.3 trillion in November.
  • The service gives corporations a better understanding of what ETFs and indexes they and their competitors are included in.

Money has been flowing into passive investments at an explosive clip and now Nasdaq has a product that seeks to help companies make sense of the market.

Exchange-traded funds, one of the hottest passive investment products, saw combined US assets hit $US3.3 trillion in November, a roughly $US900 billion single-year increase, according to Investment Company Institute data. As such, it is just as important for publicly traded companies to understand what is moving markets in ETFs and other passive investment vehicles as it is for them to know what’s going on with their stock price.

“With one-third of all mutual fund and ETF assets under management now in passive index funds, the need for an analytics-based solution with actionable insights on passive index trends has never been greater,” Stacie Swanstrom, executive vice president and head of Nasdaq Corporate Solutions, said.

PassiveIQ, which the exchange group’s Corporate Solutions unit recently launched, seeks to provide a one-stop platform with insights into those passive markets. Companies can use those insights to potentially get into a certain index or ETF. With more and more money flowing into ETFs, such a move could expose companies to more capital.

The product functions similarly to a search engine for exchange traded products and indexes, allowing users to see which ones they and their competitors are included in. It will soon provide users with insights into why a company may or may not be included in an index.

Kristen Pross, global head of the IR Intelligence division of Nasdaq Corporate Solutions, told Business Insider corporations tend not to notice this side of the market, but it is of equal importance.

“A lot don’t know why they’re in the index, or what indexes they are in,” Pross said.

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