|
Page 1 of 2
Wilshire Removes MLPs From Indexes …
Wilshire Associates recently announced it would be removing master limited partnerships (MLPs) from its indexes as of September 18, 2009, when its indexes are scheduled for a semiannual rebalance.
According to Wilshire, MLPs were first introduced to its stock indexes at the end of 1992 alongside real estate investment trusts (REITs) in order to achieve broad representation of the equity markets, rather than just the stock segments. However, recent evaluation of institutional investor use of MLPs has shown that they are a very small part of the vast majority of the portfolios that actually include them, Wilshire said, noting that just 10 percent of the portfolios surveyed hold MLPs. REITs will still be included in the Wilshire 5000 and its subindexes.
… And So Does DJ, Along With Some Other Changes
Dow Jones Indexes, which comarketed its indexes in a joint partnership with Wilshire until earlier this year, also has moved to remove MLPs from some of its Dow Jones Total Stock Market indexes. That is just one of several changes taking place.
The firm is removing all publicly traded partnerships, a category that includes MLPs and limited liability corporations (LLCs) from the index series as of December 21, 2009. This basically translates into the removal of nearly 90 companies with a total of $80 billion in market capitalization from the DJ TSM indexes, with the change occurring in stages.
In another methodology change, “red chip” stocks―will no longer be included in the indexes as Hong Kong companies. Instead they will be classified as Chinese companies, beginning September 21, 2009, in the Dow Jones Global indexes and the DJ TSM indexes. The DJ Global TSM Index has roughly 70 such companies, which are collectively worth about $139 billion.
Dow Jones Launches Economic Stimulus Index
In May, Dow Jones Indexes rolled out the Dow Jones U.S. Economic Stimulus Index. The passage of the American Recovery and Reinvestment Act of 2009 will likely bring billions of dollars to companies operating in certain sectors, and the intention of the index is to track the effects of those funds on the economy.
The index comprises 50 stocks from six targeted segments of the economy: construction & materials, alternative energy, energy grid, environment, technology and telecom/Internet. Stocks are chosen based mainly on size and screened for liquidity, with the number of components from a particular segment selected based on how much it is designated to receive in stimulus funds.
AlphaShares Launches China VIX
AlphaShares LLC rolled out the AlphaShares Chinese Volatility Index, also known as the “CHIX,” in early July.
Like the CBOE’s S&P Volatility Index, it tracks the implied volatility of index options, but rather than options on the S&P 500, it follows options on the FTSE/Xinhua China 25 Index and the Hang Seng Index, the two major blue-chip benchmarks covering China’s markets that represent equities available to foreign investors.
And like the VIX, the CHIX is designed to gauge investor sentiment—the higher it goes, the more fear and uncertainty felt by investors in the equities of the two underlying indexes. AlphaShares says the CHIX averaged a level of 55.84 for the 12 months ended June 30, 2009, while VIX averaged a reading of 40.54.
FTSE And Value Partners Debut China Value Index
In July, FTSE Group and Value Partners Index Services Limited rolled out the FTSE Value-Stocks China Index. The 25-stock index tracks Chinese value stocks—including H-shares and red chips—listed on the Stock Exchange of Hong Kong.
The index selects its components based on Value Partners’ proprietary methodology for evaluating value stocks, which considers “valuation, quality, and contrarian criteria,” according to a Value Partners executive. It is designed to underlie investable products.
FTSE Rolls Out Enviro Classifications, Indexes
A new series of products from FTSE aims to help investors tap into increasing global concern about the environment and issues such as climate change by highlighting the quickly expanding “low carbon economy.”
In addition to an environmental markets classification system that categorizes environmentally focused companies into sectors and subsectors based on their business activities, the series includes seven indexes:
• FTSE Environmental Opportunities UK Index
• FTSE Environmental Opportunities UK AIM Index
• FTSE Environmental Opportunities US Index
• FTSE Environmental Opportunities Japan Index
• FTSE Environmental Opportunities Europe Index
• FTSE Environmental Opportunities Asia Pacific Index
• FTSE Environmental Opportunities Asia Pacific ex Japan Index
The FTSE Environmental Opportunities indexes only include companies that derive at least 20 percent of their business from environmentally focused activities, such as energy efficiency, pollution control or water and waste management, among other categories.
|
Previous Page
