DACS was created in response to the significant growth in terms of the number and types of digital assets offered in the market and the realization that traditional classification standards used for equities and other asset classes could not be adapted accurately to classify digital assets. While DACS is unique to digital assets, it will serve many of the same functions as classification systems used for traditional asset classes. Among other things, DACS provides the market with a transparent and standardized method to determine sector and industry exposure, facilitates portfolio attribution analysis, and will help pinpoint investment opportunities.
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How is DACS helpful?
DACS can help investors identify investment opportunities by industry across digital assets. It can also be instrumental in evaluating the impact of sector trends on a portfolio, analyzing sector contributions to performance, and measure sector exposures versus benchmarks and peers.
Lastly, it can help portfolio managers build well-defined sector focused and sector rotation strategies, and further attribute returns and risk by industry group and industry to best manage the sector strategies.
How does CoinDesk Indices determine what digital assets to classify?
CoinDesk Indices currently targets to classify the top 500 digital assets by market capitalization.
How is a digital asset classification assigned?
The classification is determined based on the business description of the digital asset which is most often found on the digital asset’s public website. Based on this information, the digital asset will be assigned to the most appropriate Industry within DACS.
Does CoinDesk Indices expect to make changes to the DACS structure?
The structure of DACS will be reviewed periodically and require modifications as the digital asset landscape continues to evolve. Any material changes to DACS will be announced prior to implementation and CoinDesk Indices believes market feedback will be critical to the evolution of DACS.
Does CoinDesk Indices offer indices covering DACS?
In creating DACS, CoinDesk Indices’ initial focus was to create a robust and comprehensive classification standard that accurately reflects the digital asset space and develop appropriate definitions for each level of the structure to provide transparency. This allowed CoinDesk Indices to classify a universe of digital assets into an appropriate Industry. The creation of DACS is a critical step to building reliable and transparent indices.
CoinDesk Indices believes that creating indices based on DACS is a critical next step and plans to begin producing indices according to appropriate index methodologies.