Dow Jones Indexes and Brookfield Asset Management Inc have announced the launch of the Dow Jones Brookfield Emerging Markets Infrastructure Index.
The index aims to represent companies in emerging market countries that are owners and operators of infrastructure assets. This index has been licensed along with the Dow Jones Brookfield Global Infrastructure Index, to ETF Securities, a global leader in commodity exchange traded products. The indexes will serve as the basis for two UCITS (Undertakings for Collective Investment in Transferable Securities Directives) -compliant exchange traded funds on the ETF Exchange platform.
“Extending our infrastructure index family with the addition of an emerging market sub-index clearly demonstrates continued investor interest in growing countries,” says Michael A Petronella, President, Dow Jones Indexes. “With our associates at Brookfield Asset Management, Dow Jones Indexes is pleased to provide reliable infrastructure indexing products in areas that directly respond to market demand.”
Craig Noble, Managing Director of Brookfield’s global listed infrastructure securities platform, says: “Infrastructure investment opportunities within emerging markets represent an important and growing component of the listed infrastructure asset class. Basic infrastructure needs, such as clean drinking water, safe roads, and the reliable availability of electricity are lacking in many high growth markets and act as a drag on overall economic activity and quality of life. Increasingly the private sector is playing a role in building and expanding infrastructure in these countries.”
To be eligible for inclusion in the index, 50% of a company’s estimated cash flows must be derived from infrastructure assets, which include: airports, toll roads and rail; ports; communications; electricity transmission and distribution; oil and gas storage; transportation; and water. The company must have the majority of its assets in an emerging country with a liquid market listing, have a minimum float-adjusted market capitalisation of USD100 million, and a minimum three-month average daily trading volume of USD300,000 per day. For countries with significant barriers to direct foreign investment, Dow Jones Indexes may opt to include Depository Receipts or other types of offshore listings in the index. A company will be removed from the index if its stock becomes illiquid or has more than 15 non-trading days during the previous quarter.
The Dow Jones Brookfield Emerging Markets Infrastructure Index is weighted based on float-adjusted market capitalisation; individual components are capped at 10% on a quarterly basis. The index composition is reviewed quarterly in March, June, September and December. The index is also reviewed on an ongoing basis to account for corporate actions such as mergers, de-listings or bankruptcies.
The index, calculated in net total return, is disseminated in real time in US dollars and euros, and end of day in Australian dollars and Canadian dollars. All sub-indexes are disseminated end of day in US dollars, Euros, Australian dollars and Canadian dollars. Back-tested historical index values are available daily back to December 31, 2002, the date at which the index base date is set at 1000. The Dow Jones Brookfield Emerging Markets Infrastructure Index was first calculated on July 29, 2010.