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Van Eck launches ETF based on new Dow Jones GCC Titans 40 Index


Dow Jones Indexes has launched the Dow Jones GCC Titans 40 Index, which measures the performance of 40 component stocks traded in the five of the six Gulf Co-operation Council member state

Dow Jones Indexes has launched the Dow Jones GCC Titans 40 Index, which measures the performance of 40 component stocks traded in the five of the six Gulf Co-operation Council member states – Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates – that are accessible to foreign investors.

The index has been licensed to asset manager Van Eck Global as the basis for an exchange-traded fund, the first time that a pure GCC index has been licensed to underlie an ETF.

‘The Dow Jones GCC Titans 40 Index is the next step in our efforts to build a family of GCC indexes,’ says Dow Jones Indexes president Michael A. Petronella. ‘On July 1 we launched the first indices in this series, the Dow Jones GCC and Dow Jones Islamic Market GCC indices.

‘As part of the Titans index family, this index represents the biggest and most liquid investible blue-chip stocks for the GCC region and facilitates investor participation in an important world market.’

Van Eck Global principal Jan van Eck adds: ‘The Gulf region is one of the world’s fastest growing and most sought-after markets. The countries are seeking to diversify away from energy and to develop their financial markets.’

Last week Dow Jones Indexes launched the Dow Jones Africa Titans 50 Index, a pan-African index that measures the stock performance of 50 companies that are headquartered in or generate the majority of their revenues in Africa. This index also has been licensed to Van Eck Global as the basis for the Market Vectors Africa Index ETF.

The Dow Jones GCC Titans 40 Index is weighted by float-adjusted market capitalisation. Weights of individual stocks are capped at 8 per cent in each country, with a maximum of 15 companies per country without an additional cap on country weights. To be eligible for inclusion in the index, stocks must have an average daily trading volume of USD1m million.

Eligible securities are ranked by float-adjusted market capitalisation, with the top three companies in each of the five countries being automatically selected as index components. Additional constituents are selected top-down from the pool of all remaining companies until the limit of 40 is reached.

The index is calculated in US dollars and reviewed annually in June. During quarterly reviews, float factors and shares are updated and eligible IPOs are added, replacing the smallest index components.

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.

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