Nasdaq expands index business with purchase of Mergent Dividend Achievers

Nov 7th, 2012 | By | Category: ETF and Index News

The Nasdaq OMX Group, the exchange operator, has acquired the index business of Mergent, including Indxis, in a deal that enhances the group’s position in the booming world of financial market indexing.

Nasdaq expands index business with purchase of Mergent Dividend Achievers

Nasdaq’s acquisition of Mergent’s indexing business significantly enhances the exchange operator’s position in the fast-growing indexing market.

Mergent is an established boutique index provider, as well as a supplier of business and financial data on global publicly listed companies. However, the firm is perhaps best known for its Dividend Achievers Indexes, a popular index family that tracks companies with strong long-term dividend growth.

Indices from within this family are tracked by a number of exchange-traded funds (ETFs), including the hugely successful Vanguard Dividend Appreciation ETF (VIG), the world’s largest dividend ETF by assets under management, and the PowerShares High Yield Equity Dividend Achievers Portfolio ETF (PEY), both listed on the NYSE Arca.

The Vanguard fund, which has assets of over $10 billion, including approximately $2 billion pulled in this year, tracks Mergent’s Dividend Achievers Select Index. This index is based on a subset of the provider’s Broad Dividend Achievers Index and follows US-listed companies that have increased their annual regular dividends for at least the past 10 consecutive years and have met specific liquidity screening criteria.

With this acquisition, Nasdaq OMX Global Indexes will become one of the largest providers of dividend-themed indices based on benchmarked assets and will further enhance its index offering capabilities and services. Assets under management of ETFs licensed by Nasdaq OMX Global Indexes are expected to increase 30% as a result of the acquisition.

Commenting on the acquisition, John Jacobs, Nasdaq OMX Executive Vice President, said: “As the investment landscape continues to evolve, we see the increased need for indexes to provide rules-based and transparent benchmarks for dividend- and income-themed investments.”

He added: “Nasdaq OMX is continually motivated to provide the most robust index benchmarks for all asset categories and is excited to bring in the leading benchmarks of dividend indexes under the Nasdaq OMX index umbrella. Nasdaq OMX looks forward to continuing the Mergent’s long-held tradition of developing indexes in the income space.”

Jonathan Worrall, Mergent CEO, added: “This is a powerful combination of market leadership and innovation. Our industry-leading indexes and calculation business coupled with Nasdaq OMX’s track record of developing innovative and transparent portfolios of indexes will deliver better benchmarks and tools for product sponsors, investors and other market participants.”

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