European index provider Stoxx, a joint venture between Down Jones, Deutsche Börse and SWX, has launched the Dow Jones Stoxx Strong Style indices, which are designed to represent accur
European index provider Stoxx, a joint venture between Down Jones, Deutsche Börse and SWX, has launched the Dow Jones Stoxx Strong Style indices, which are designed to represent accurately the performance of the most style-pure companies in Europe and the eurozone.
The series, which complements the existing Dow Jones Stoxx Style index family, consists of six indices that designed to underlie investment products such as exchange-traded funds, mutual funds and other investment vehicles.
The Dow Jones Stoxx Strong Growth 20 Index, the Dow Jones Stoxx Strong Value 20 Index, the Dow Jones Euro Stoxx Strong Growth 20 Index and the Dow Jones Euro Stoxx Strong Value 20 Index include companies with the highest value and the highest growth scores respectively as determined by six factors – two projected, two current and two historical.
Index components are weighted by their growth or value score. The Dow Jones Stoxx Strong Style Composite 40 Index and the Dow Jones Euro Stoxx Strong Style Composite 40 Index offer a combination of the two style indices for Europe and the eurozone.
‘The Dow Jones Stoxx Strong Style Indexes are the newest additions to our alternative weighting index family,’ says Stoxx managing director Lars Hamich. ‘The special characteristic of this new index series is the weighting according to the respective value or growth score.
‘This weighting marks another innovative step in our effort to provide investors with measurements tools for dynamic and distinctive segment. They allow market participants to further diversify their portfolios, taking advantage of returns from the strongest value and growth companies in Europe and the eurozone.’
The Dow Jones Stoxx Strong Growth 20 Index and the Dow Jones Euro Stoxx Strong Growth 20 Index have an annualized performance of 16.32 per cent and 14.25 per cent since inception on September 30, 2001. The indexes have outperformed the Dow Jones Stoxx 50 Index and the Dow Jones Euro Stoxx 50 Index by 13.64 per cent and 8.89 per cent respectively during the same time frame.
The Dow Jones Stoxx Strong Value 20 Index and the Dow Jones Euro Stoxx Strong Value 20 Index have an annualized performance of 14.62 per cent and 16.12 per cent since inception on September 30, 2001. The indexes have outperformed the Dow Jones Stoxx 50 Index and the Dow Jones Euro Stoxx 50 Index by 11.94 per cent and 10.76 per cent respectively during the same time frame.
The Dow Jones Stoxx and Euro Stoxx Strong Style Composite 40 indices have posted annualised performance of 15.59 per cent and 15.43 per cent respectively since their inception on September 30, 2001.
The Dow Jones Stoxx Strong Growth 20, Stoxx Strong Value 20 and Strong Style Composite 40 indices are derived from the Dow Jones Stoxx TMI Style Index, while the Dow Jones Euro Stoxx Strong Growth 20, the Strong Value 20 Index and Strong Style Composite 40 indices use the Dow Jones Euro Stoxx TMI Style Index as the underlying index universe.
The Dow Jones Stoxx Strong Growth 20 and Strong Value 20 and the Dow Jones Euro Stoxx Strong Growth 20 and the Strong Value 20 indexes cover the highest scoring stocks in each style category in Europe and the eurozone.
The six factors applied to define a stock’s style category consist of projected price/earnings ratio, projected earnings growth, trailing P/E ratio, trailing earnings growth, price/book ratio and dividend yield. The factors are condensed into a single style score measuring the style purity of the company, and the weight of a company in the index is based on its growth or value score.
The Dow Jones Stoxx Strong Style indices are reviewed on an annual basis in September; weighting factors are kept constant between reviews. Price and total return indexes are calculated in euros and US dollar. Daily historical data are available back to September 30, 2001, with a base value set at 1,000.
