Consultancy and appraiser firm Ascend has launched the first aircraft investment index to benchmark the rewards and risks of aircraft leasing against those of other industries.
The Ascend Aircraft Investment Index (AAII) measures the total returns in investing in the most popular large jets of more than 20 years of age.
Institutions with aircraft equity positions will now be able to benchmark their investments against other asset classes. The AAII can also model and validate active portfolio investment strategies, using Ascend's returns data as well as explain investment in aircraft leasing, using standard investment terminology.
The AAII demonstrates achievable annual core returns of 6.2% for the 1991-2012 period, when paired with a return volatility of 5.7%.
Source: Ascend, May 2013
This unique tool leverages Ascend's expertise in market lease rates and aircraft valuations. It is already used by major financial institutions to help their investment decisions by demonstrating the favourable risk-reward profile of aircraft investing and the low or negative correlation aircraft investing has had with other asset classes.
AAII can assist in raising equity capital - particularly as an education tool to newer aviation investors.