January 21, 2008 – 9:53 am
An asset-backed securities index is a credit derivative instrument with asset-backed securities as an underlying.
On January 17, 2006, CDS Indexco and Markit launched ABX.HE, a synthetic asset-backed credit derivative index, with plans to extend the index to other underlying asset types other than home equity loans. ABS indices allow investors to gain broad exposure to the subprime market without holding the actual asset-backed securities.
