LONDON, Aug. 2, 2011 (GLOBE NEWSWIRE) -- Dow Jones Indexes, a leading global index provider, today announced the launch of the Dow Jones Islamic Market RBP U.S. 50 Index, a unique gauge designed to measure the largest 50 U.S. stocks ranked by RBP® probabilities supplied by Transparent Value, LLC that have first passed the screens for Shari'ah compliance.
RBP®, which stands for Required Business Performance, is calculated by Transparent Value by taking a reverse discounted cash flow approach to determine the future business performance required by a company to support its current stock price. RBP® probabilities measure the likelihood that a company can deliver the required business performance identified by applying the methodology over specified time periods.
The Dow Jones Islamic Market RBP U.S. 50 Index is the latest addition to the Dow Jones RBP series of quantitative strategy indexes offered by Dow Jones Indexes and Transparent Value LLC, a New York-based asset management and financial information services company. The Dow Jones RBP Indexes are built upon patent-pending proprietary rules-based analytics supplied by Transparent Value.
"The Dow Jones Islamic Market RBP U.S. 50 Index demonstrates how we were able to effectively build on our existing relationship with Transparent Value alongside our success and experience with the Dow Jones Islamic Market Index family to produce a truly innovative market measure," said Michael A. Petronella, President, Dow Jones Indexes.
Julian Koski, Managing Director and Co-Chief Executive Officer of Transparent Value, said: "By merging Shari'ah-compliance with RBP's methodology, the Dow Jones Islamic Market RBP U.S. 50 Index offers institutional investors a unique investment tool. This new index is the latest example of the Dow Jones RBP Index family's commitment to deliver creative measurements of world markets."
The index universe represents approximately the top 90% of U.S. stocks by float-adjusted market capitalization; it includes all the companies within the Dow Jones U.S. Large-Cap Index and the Dow Jones U.S. Mid-Cap Index.
To be eligible for inclusion in the Dow Jones Islamic Market RBP U.S. 50 Index, components must pass Dow Jones Indexes' proprietary screens used in the Dow Jones Islamic Market Index methodology. Those screens prohibit companies from engaging in business lines including alcohol, tobacco, pork-related products, conventional financial services, defense/weapons and certain types of entertainment; companies must also pass Shari'ah financial screens by reporting ratios of less than 33% in: debt over market capitalization, cash plus interest-bearing securities over market capitalization, and accounts receivables over market capitalization. An independent Shari'ah Supervisory Board counsels Dow Jones Indexes on matters related to the compliance of index-eligible companies.
After these initial screenings, stocks are selected based on RBP®'s methodology applied over specified time periods. Beta and momentum are also used as selection criteria, aiming to mitigate systemic and behavioral volatility.
The Dow Jones Islamic Market RBP U.S. 50 Index components are weighted by their RBP® probabilities. The index is reviewed quarterly; calculation began on January 8, 2010. Estimated back-tested daily historical index values are available back to December 31, 1998, with a base value set at 1000.
The Dow Jones Islamic Market RBP U.S. 50 Index is the fifth addition to the Dow Jones RBP Indexes family in 2011. In April, three large-cap "style" indexes of growth and value stocks were launched, in addition to the series' first index to utilize dividends to select and weight companies.
Beginning with the 1999 introduction of its Dow Jones Islamic Market Indexes series, Dow Jones Indexes has been a pioneer in providing Shari'ah compliant indexes. In 2011 alone, Dow Jones Indexes has been named "Best Islamic Index Provider" by Islamic Business & Finance; "Islamic Index Provider of the Year in Asia" by Asia Asset Management; and "Best Shari'ah Compliant Index Provider of the Year" by Global Finance.
Journalists may e-mail questions regarding this press release to media@djindexes.com.
About Dow Jones Indexes
Dow Jones Indexes (www.djindexes.com) is a leading full-service index provider that develops, maintains and licenses indexes for use as benchmarks and as the basis of investment products. Best-known for the Dow Jones Industrial Average, Dow Jones Indexes offers more than 130,000 equity indexes as well as fixed-income and alternative indexes, including measures of hedge funds, commodities and real estate. Dow Jones Indexes employs clear, unbiased and systematic methodologies that are fully integrated within index families. Dow Jones Indexes is part of a joint venture company owned 90 percent by CME Group Inc. (www.cmegroup.com) and 10 percent by Dow Jones & Company, Inc. (www.dowjones.com), a News Corporation company (Nasdaq:NWS) (Nasdaq:NWSA) (ASX:NWS) (ASX:NWSLV) (www.newscorp.com).
About Transparent Value
Transparent Value, LLC (www.transparentvalue.com) is an asset management and financial information services company. Transparent Value, LLC offers customized asset management solutions and a suite of decision support tools that are based on its proprietary Required Business Performance® (RBP®) methodology to investors worldwide. "Transparent Value®," "RBP®" and "Required Business Performance®" are registered trademarks of Transparent Value, LLC or one of its subsidiaries. Transparent Value, LLC is a subsidiary of Guggenheim Partners, LLC.
"Dow Jones®," "Dow Jones Indexes," "Dow Jones Islamic Market RBP U.S. 50 Index" and all other index names listed above are service marks of Dow Jones Trademark Holdings LLC ("Dow Jones"), and have been licensed for use by CME Group Index Services LLC ("CME Indexes"). Investment products based on the Dow Jones Islamic Market RBP U.S. 50 Index is not sponsored, endorsed, sold or promoted by Dow Jones, CME Indexes or their respective affiliates and none of Dow Jones, CME Indexes and their respective affiliates make any representation regarding the advisability of investing in such products. Inclusion of a company in any of the Dow Jones Islamic Market RBP U.S. 50 Index does not in any way reflect an opinion of Dow Jones, CME Indexes or any of their respective affiliates on the investment merits of such company. None of Dow Jones, CME Indexes or any of their respective affiliates is providing investment advice in connection with these indexes.
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The Dow Jones Islamic Market RBP U.S. 50 Index was first published on January 8, 2010. All estimated daily historical closing prices prior to that date are based on back-testing (i.e., calculations of how the index might have performed in the past if it had existed). Back-tested performance information is purely hypothetical and is solely for informational purposes. Back-tested performance does not represent actual performance, and past performance is not indicative of future results.