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STOXX index licensed to iShares for ETF product

Author: Margie Lindsay

Source: Hedge Funds Review | 09 Oct 2009

Categories: Indexes

Topics: United States, Europe, Asia-Pacific, Equity, Deutsche Börse, Exchange traded funds (ETF)

The Dow Jones STOXX Global Select Dividend 100 Index has been licensed to iShares to serve as the basis for an exchange-traded fund (ETF). The ETF will be available on Deutsche Börse.

The component weightings of the Dow Jones STOXX Global Select Dividend 100 Index follows a methodology based on dividend yield rather than the traditional market capitalisation weighting. This allows market participants to access the performance of high-dividend paying global companies. The indexes provide exposure to single countries and specific regions.

Launched at the end of February 2007, the index comprises the 100 highest dividend-yielding stocks worldwide. It consists of 40 stocks from the Americas and 30 stocks each from Europe and Asia/Pacific. As of October 8, 2009, the index was up 28.59% for the year.

To be eligible for inclusion in index, a company must have a positive historical five-year dividend-per-share growth rate and a dividend-to-earnings-per-share ratio of less than or equal to 60% in Europe and the Americas and 80% in Asia/Pacific in the current year or be a previous component.

The weight of individual components is restricted to 15%. The index is reviewed on an annual basis in March. Price and total return indexes are calculated in euro and US dollar.

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