European index provider Stoxx has licensed the Dow Jones Euro Stoxx 50, Dow Jones Stoxx Strong Growth 20, Dow Jones Stoxx Strong Value 20 and Dow Jones Stoxx Strong Style Composite 40 indi
European index provider Stoxx has licensed the Dow Jones Euro Stoxx 50, Dow Jones Stoxx Strong Growth 20, Dow Jones Stoxx Strong Value 20 and Dow Jones Stoxx Strong Style Composite 40 indices to ETFlab Investment, a subsidiary of German asset manager Deka, to underlie four exchange-traded funds listed on Deutsche Börse’s Xetra trading platform.
ETFlab Investment, which has also launched a fund based on Germany’s Dax stock market index, has become the ninth ETF provider in the XTF segment of the Frankfurt exchange, boosting its position as Europe’s leading trading venue for exchange-traded index funds.
‘With today’s listing, we are pleased to welcome a new issuer, ETFlab, which has opted for a listing on Europe’s top ETF platform in terms of turnover and liquidity,’ says Rainer Riess, a managing director in Deutsche Börse’s cash market development department.
The ETF offering on Xetra currently comprises 315 ETFs from db x-trackers, EasyETF, ETFlab, iShares, Lyxor, Market Access, PowerShares, UBS Exchange Traded Funds and Xmtch, with an average monthly trading volume of more than EUR9bn billion.
This is the first time that the Dow Jones Stoxx Strong Style indices have been licensed to underlie ETFs. The Dow Jones Euro Stoxx 50 Index is the most widely used underlying index for European ETFs in terms of assets under management. The management fee is 0.65 per cent for the DJ Stoxx index ETFs and 0.15 per cent for the ETFlab DAX and ETFlab DJ Euro Stoxx 50 funds.
‘The Dow Jones Stoxx Strong Style Indexes are uniquely weighted by growth or value score,’ says Werner Bürki, chairman of the Stoxx supervisory board. ‘With their alternative weighting scheme, these indices enable investors to further diversify their portfolios and take advantage of returns of the strongest growth and value companies in Western Europe, while the Euro Stoxx 50 allows investors to participate in sector leaders of the eurozone.’
ETFlab chief executive Andreas Fehrenbach says: ‘By launching these ETFs, we offer our investors the opportunity to invest in important benchmarks such as the Dow Jones Euro Stoxx 50. Alternatively, investors can appreciate outperformance against traditional benchmarks by investing in ETFs that follow innovative index concepts such as the Dow Jones Stoxx Strong Style Indexes.’
Launched on June 4 last year, the Strong Style indices seek to represent the performance of the most style-pure companies in Western Europe, covering the highest scoring stocks in each style category.
The Strong Growth 20 and Strong Value 20 indices comprise companies with the highest growth and value scores respectively, and are weighted by their growth or value score. The Strong Style Composite 40 Index combines both style indices for Western Europe.
Six factors are applied to define a stock’s style category of which two factors are projected, two current and two historical: projected price/earnings ratio, projected earnings growth, trailing P/E ratio, trailing earnings growth, price/book ratio and dividend yield. The six factors are condensed into a single style score measuring the style purity of the company. The weight of a company is then based on its growth or value score.
Launched in February 1998, the Euro Stoxx 50 Index aims to provide a blue-chip representation of supersector leaders in the eurozone covering Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.
As of April 1, the Strong Growth 20 Index had returned 84.66 per cent since its launch date of September 30, 2001. Over the same period, the Strong Value 20 Index is up 66.86 per cent, the Strong Style Composite 40 Index 76.04 per cent and the Euro Stoxx 50 10.05 per cent.