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Dow Jones Indexes adds three US large-cap ‘style’ indexes, one US dividend-focused index


Dow Jones Indexes has added four new indexes to its family of Dow Jones RBP Indexes. The new series of includes three US large-cap ‘style’ indexes of growth and value stocks — the Dow Jones RBP US Large-Cap Growth Index and the Dow Jones RBP US Large-Cap Value Index — as well as an index that blends growth and value: the Dow Jones RBP US Large-Cap Core Index. The other new index is the Dow Jones RBP US Dividend Index, the first within the Dow Jones RBP Index family to utilize dividends to select and weight companies.

Large and actively traded securities are selected to the indexes in part based on their RBP, or Required Business Performance, probabilities. These proprietary probabilities are calculated by taking a reverse discounted cash flow approach to indicate the likelihood that a public company will deliver the business performance necessary to support its current stock price.

“We are extremely pleased to add these four new indexes to the growing Dow Jones RBP Index family,” says Michael A Petronella, President, Dow Jones Indexes. “By strengthening an already-robust index family, Dow Jones Indexes again demonstrates its ability to deliver innovative measurements that market players can strategically employ in their efforts to seek value.”

The Dow Jones RBP Indexes are built upon rules-based analytics –which include RBP probability scores supplied by Transparent Value.

Julian Koski, Managing Director and Co-Chief Executive Officer of Transparent Value, says: “Our collaboration with Dow Jones Indexes continues to produce creative indexing opportunities. By applying the RBP Methodology in constructing the four new indexes, we have provided investors with access to a set of unique indexes spanning the market’s most popular style categories.”

Each of the new indexes measures 100 US stocks. Equities in the Dow Jones RBP US Large-Cap Growth and the Dow Jones RBP US Large-Cap Value Indexes are selected using RBP probabilities and components from the Dow Jones US Large-Cap Growth Total Stock Market and the Dow Jones US Large-Cap Value Total Stock Market Indexes. The Dow Jones RBP US Large-Cap Core Index measures 50 growth and 50 value stocks based on their style scores and RBP probabilities within their respective universes.

The Dow Jones RBP US Dividend Index consists of large-cap and mid-cap stocks selected on indicated dividend yield and RBP probabilities, and are drawn from all component stocks of the Dow Jones US Large-Cap Total Stock Market Index and the Dow Jones US Mid-Cap Total Stock Market Index at the time of the semi-annual review, respectively.

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