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Dow Jones Indexes and Brookfield Asset Management launch infrastructure index series


Dow Jones Indexes and Brookfield Asset Management, an asset manager focused on property, power and infrastructure assets, have launched the Dow Jones Brookfield Infrastructure Indexes, a g

Dow Jones Indexes and Brookfield Asset Management, an asset manager focused on property, power and infrastructure assets, have launched the Dow Jones Brookfield Infrastructure Indexes, a global index series designed to serve as benchmarks of companies that own and operate infrastructure assets such as toll roads, pipelines and ports.

The new index family includes a composite index and sub-indices for four regions and eight sectors. The Dow Jones Brookfield Infrastructure Indexes includes benchmark indices to gauge active infrastructure portfolios as well as blue-chip indices that can underlie financial products.

‘As the global infrastructure industry continues to expand in response to increasing population and demographic shifts, there is a greater demand among investment professionals for high-quality benchmarks that accurately reflect this burgeoning asset class,’ says Michael A. Petronella, president of Dow Jones Indexes.

‘The Dow Jones Brookfield Infrastructure Indexes can be used by institutional investors as measurement tools to gauge the performance of their infrastructure portfolios. The indices also can be customised to meet the needs of market participants who are interested in specific areas, such as electricity transmission or toll road companies.’

Kim G. Redding, head of Brookfield’s infrastructure securities platform says: ‘This is an exciting time in the evolution of infrastructure as an asset class. Investor interest and investment opportunities have increased dramatically in recent years, fuelled by the enormous need for infrastructure across the globe and shrinking government budgets, the traditional source of funding for these assets.

‘From an investment perspective, infrastructure assets offer a combination of predictable and growing cash flows, inflation-linked revenue and a low correlation to traditional asset classes.’

The new index series comprises the Dow Jones Brookfield Global Infrastructure Index, the Dow Jones Brookfield Global Composite Index, which includes master limited partnerships, regional sub-indices for the Americas, Europe, Asia/Pacific and the world outside the US,  eight global sector sub-indices, and the Dow Jones Brookfield Infrastructure MLP Index, which tracks MLPs only.

To be eligible for inclusion in the indices, a company must have a minimum float-adjusted market capitalisation of USD500m as well as a minimum three-month average daily trading volume of USD1m, and securities also must be domiciled in a country with a liquid market listing.

More than 70 per cent of cash flows must be derived from the development, ownership, lease, concession or management of infrastructure assets in the following sectors; airports, toll roads, ports, communications, electricity transmission and distribution, oil and gas storage and transportation, and water. Also eligible are diversified companies that derive at least 70 per cent of their cash flow from infrastructure assets as well as investment funds with a primary focus on infrastructure investments.

The Dow Jones Brookfield Infrastructure Indexes are reviewed quarterly in March, June, September and December. The indexes are calculated in price and net total return, in US dollars, euros, Canadian dollars and Australian dollars. Estimated daily back-tested history is available back to December 31, 2002; the performance of the Dow Jones Brookfield Global Infrastructure Index for the five years to July 11 was 15.05 per cent.

Best known for the Dow Jones Industrial Average, Dow Jones Indexes is also co-owner of the Dow Jones Stoxx indices (it owns Stoxx in partnership with Deutsche Börse and Swiss Exchange) and together with Wilshire Associates it provides the Dow Jones Wilshire Global Index family, which is anchored by the Dow Jones Wilshire 5000 and covers more than 12,000 securities in 61 markets. Dow Jones Indexes also maintains various alternative indices, including measures of the hedge fund and commodity markets.

Brookfield Asset Management has some USD95bn in assets under management and is co-listed on the New York and Toronto Stock Exchanges.

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