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darwinexblogJul 22, 2025 12:00:00 PM2 min read

INDX: Return and Risk Objectives

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Understanding what INDX is Made of

To understand the return and risk objectives of Darwinex Index (INDX), it’s essential to first understand what lies beneath it.

INDX is a portfolio composed of trading strategies available on the Darwinex and Darwinex Zero platforms. Each of these strategies is powered by trading signals from trading accounts. From these accounts, we create an investable asset known as a DARWIN, a strategy with a fixed and standardised risk level.

This fixed risk is aligned with the historical risk of the S&P 500, meaning that every DARWIN contributing to INDX operates under the same volatility framework. This uniformity is key to building a balanced and predictable portfolio.

 

A Diversified and Uncorrelated Engine

Most of the strategies within INDX operate both long and short across a wide range of instruments:

  • FX, Futures and CFDs: Because of this, they’re generally uncorrelated, not only with the broader financial markets, but often with each other.

This means that INDX is not built to follow the same trends or cycles as the equity markets. Instead, it provides exposure to a completely different return stream. That said, there may be occasional and temporary correlations, particularly with assets like equity indices or gold but these are the exception, not the rule.

In essence, INDX offers a low-correlation alternative to traditional portfolios, making it an attractive tool for diversification.

INDX Risk Framework

The target risk level of INDX is defined by a monthly Value at Risk (VaR) of 6.5% at 95% confidence. This is comparable to the long-term historical volatility of the S&P 500.

What does this mean in practice?

  • In 5% of months, INDX could experience losses greater than 6.5%.

  • In another 5% of months, it could produce returns greater than 6.5%.

By design, INDX mirrors the risk of traditional equity markets while seeking to deliver returns from completely different sources.

 

Who is INDX For?

INDX is suited to investors who:

  • Want to diversify their portfolios beyond stocks, bonds and crypto.

  • Seek equity-like returns but from alternative, uncorrelated sources.

  • Are comfortable with a maximum drawdown of 15%–18%, in exchange for the chance to earn annual returns between 0% and 25%.

 

It’s important to note that success with INDX requires a long-term mindset. Temporary drawdowns are not signs of failure, they are normal and expected given the portfolio's risk profile. Investors who are prepared for this can benefit from the long-term potential of an actively managed, diversified and risk-controlled trading strategy portfolio.

Stay tuned for more insights from the Darwinex Labs team as we continue to refine and improve INDX. 

Thanks for reading us, 
Your Darwinex Team

 

Legal Disclaimer:
Your capital is at risk.
This content is provided for informational purposes only and does not constitute financial or investment advice.