Turkey’s main stock exchange, Borsa Istanbul, will begin to calculate leveraged and short indices from the start of April.

The new products aim to replicate the payoff of daily short and long investment strategies.

Investors can use the charts as benchmarks for the creation of ETFs and other passive investment products.

They also allow investors hedge existing exposures without the need to short individual stocks or use derivatives.

MSCI and FTSE Russell are the major creators of short and leverage indices.

Borsa Istanbul went live with Nasdaq’s trading, clearing, settlement and index calculation technology at the end of 2015.

Short indices incorporate stock borrowing costs, reflecting the actual investment process of managers who use short selling strategies.

In a statement on Monday, Borsa Istanbul said that its short indices work on the basis that a short position is obtained by borrowing equities in an underlying index, selling them short, and investing the funds generated in repo. 

The index, therefore, is equal to the sum of the return on lending and the return on the reference index.