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Dow Jones Indexes launches Global Select Dividend Index


Dow Jones Indexes has launched the Dow Jones Global Select Dividend Index, which measures the performance of the 100 leading dividend-paying companies worldwide.

Dow Jones Indexes has launched the Dow Jones Global Select Dividend Index, which measures the performance of the 100 leading dividend-paying companies worldwide. The index is designed to underlie investment products such as exchange-traded funds, mutual funds and other investment vehicles and complements the existing Dow Jones and Dow Jones Stoxx Select Dividend Indexes series.

‘Interest in our innovative and highly successful select dividend index series for the US, the eurozone, Europe and Asia is growing consistently,’ says Dow Jones Indexes president Michael A. Petronella. ‘Our select dividend index series already underlies 17 exchange-traded funds globally.

‘The Dow Jones Global Select Dividend Index enables market participants to take advantage of the returns of the top dividend-yielding companies globally with components being weighted according to their dividend yield, not by their market capitalisation.’

The index universe of the Dow Jones Global Select Dividend Index is defined as all component companies of the 24 developed-market country indexes in the Dow Jones Global Indexes family, which cover approximately 95 per cent of their underlying market capitalisation.

To be eligible for inclusion in index, a component stock must have a positive, historical, five-year dividend-per-share growth rate and a dividend-to-earnings-per-share ratio of no more than 60 per cent for US and European companies, and 80 per cent for all other countries. The component must also have a minimum three-month daily average trading volume of USD3m.

Each company’s weight in the index is based on its indicated annual dividend yield. The indicated annual dividend yields for all components are totalled, and each component’s weight is equal to its dividend yield contribution. The weight of individual components in the new indexes is restricted to 10 per cent in order to prevent the index from being dominated by a single high dividend-paying stock.

The index is reviewed annually in December. Price and total return indexes are calculated in US dollars, and daily historical index values are available back to December 31, 1998, with a base value set at 100.

The Dow Jones and Dow Jones Stoxx Select Dividend Indexes series is based on the concept of the Dow Jones U.S. Select Dividend Index, which was launched in November 2003 in response to the increased interest of US investors in companies issuing dividends after US tax rates on dividends were lowered.

The series consists of the Dow Jones Stoxx Select Dividend 30 Index, the Dow Jones Euro Stoxx Select Dividend 30 Index, the Dow Jones Stoxx Nordic Select Dividend 20 Index, the Dow Jones Stoxx EU Enlarged Select Dividend 15 Index, Dow Jones Stoxx Americas Select Dividend 40 Index, Dow Jones Stoxx Asia/Pacific Select Dividend 30 Index, the Dow Jones Stoxx Global Select Dividend 100 Index, the Dow Jones Select Dividend Indexes for Asia, Asia/Pacific, Australia, Canada, EPAC, France, Germany, Italy, Japan, the Netherlands, Spain, Sweden, the UK and US as well as the Dow Jones SWX Select Dividend 20 Index.

Dow Jones Indexes develops, maintains and licenses indices for use as benchmarks and as the basis of investment products. Best known for the Dow Jones Industrial Average, it is also co-owner of the Dow Jones Stoxx indices, and together with Wilshire Associates, provides the Dow Jones Wilshire Global Index family, which covers more than 12,000 securities in 59 markets. Dow Jones Indexes also maintains a number of alternative indices, including measures of the hedge fund and commodity markets.

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