LONDON, Sept. 13, 2011 (GLOBE NEWSWIRE) -- Dow Jones Indexes today announced it will expand its Dow Jones Islamic Market Index series by launching the Dow Jones Islamic Market Global Select Dividend Index, a gauge that measures the stock performance of leading dividend-paying companies in developed countries that pass rules-based screens for Shari'ah compliance.
Measuring the performance of 100 of the highest dividend-yielding stocks from the Dow Jones Islamic Market World Index, the index will serve as a benchmark and an underlying instrument for investment products such as mutual funds and exchange-traded funds (ETFs).
"The Dow Jones Islamic Market Global Select Dividend Index is a unique barometer that addresses two market trends: increasing interest in dividend-paying companies and the growth of Shari'ah-compliant investments," said Michael A. Petronella, president, Dow Jones Indexes. "Given that Dow Jones Indexes has been a leader in benchmarking each of these areas for years, it should come as no surprise that we are the first to offer a dividend-focused index for those who seek to adhere to Islamic investment guidelines."
On a related note, the Dow Jones Islamic Market Global Select Dividend Index has been licensed to IPM Informed Portfolio Management, a leading European systematic investment manager, to serve as a basis for its Shari'ah-compliant investment vehicle.
Dow Jones Indexes, a leading global index provider, was a pioneer in Islamic market indexing, launching its first Shari'ah-compliant index in 1999. Today, Dow Jones Indexes offers thousands of Islamic market indexes, including regional, country, and sector indexes, as well as more specialized measures. A five-member independent Shari'ah Supervisory Board advises Dow Jones Indexes on the methodology of the Dow Jones Islamic Market 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.
Dow Jones Indexes is also a leader in the dividend-index space: it was the first major index provider to offer a dividend-based index – the Dow Jones U.S. Select Dividend Index. In addition to the Dow Jones U.S. Select Dividend Index, several other indexes in the Dow Jones Select Dividend Index family are licensed as the basis for ETFs.
Eligible for the Dow Jones Islamic Market Global Select Dividend Index are developed-market stocks within the Dow Jones Islamic Market World Index that pass screens for dividend quality and liquidity. A company must:
- pay a current dividend;
- have a previous-year dividend-per-share ratio that is greater than, or equal to, its five-year average annual dividend-per-share ratio;
- have a five-year average payout ratio of less than, or equal to, 60% for U.S. and European companies; or less than, or equal to, 80% for all other countries; and
- have a minimum three-month, average daily trading volume of US$3 million.
In keeping with the methodology for the Dow Jones Islamic Market Indexes, the index excludes companies that are involved in the following lines of business: alcohol, pork-related products, conventional financial services, defense/weapons and entertainment. Companies must also pass financial ratio screens that need to be less than 33% in:
- total debt, divided by trailing 24-month average market capitalization;
- cash plus interest-bearing securities, divided by trailing 24-month average market capitalization; and
- accounts receivables, divided by trailing 24-month average market capitalization.
From the list of eligible stocks, the top 100 by dividend yield are selected to the Dow Jones Islamic Market Global Select Dividend Index, subject to buffers designed to limit turnover.
The index composition is reviewed annually in December. Back-tested historical data have been calculated daily back to December 31, 1998, the date at which the index base value is set at 100. The index is calculated in price return and total return.
Component weightings are assigned based on dividend yield, subject to caps that limit weightings.
Journalists may e-mail questions regarding this press release to media@djindexes.com or call Dow Jones Indexes' press office.
The Dow Jones Islamic Market Global Select Dividend Index was first published on August 29, 2011. 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.
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).
"Dow Jones®", "Dow Jones Indexes", "Dow Jones Islamic Market Global Select Dividend 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 Global Select Dividend Index are 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 Global Select Dividend 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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