STOXX unveils new global blue-chip index

Sep 4th, 2012 | By | Category: ETF and Index News

STOXX, a leading global index provider, has announced the introduction of the STOXX+ Global Max Traded 200 Index. The new index applies an advanced set of screens to ensure that only the largest and most frequently traded companies worldwide are included, while at the same time offering a wide global diversification.

STOXX unveils new global blue-chip index, the STOXX+ Global Max Traded 200 Index

The newly launched STOXX+ Global Max Traded 200 Index is dominated by US blue-chip companies, including Apple, the index’s largest constituent with 4.9%.

The STOXX+ Global Max Traded 200 Index is geared towards active trading purposes and has been designed to act both as a proper benchmark for actively managed funds, and to underlie exchange-traded funds (ETFs) and other investable products.

“The STOXX+ Global Max Traded 200 Index is the newest addition to our suite of sophisticated index concepts which are branded STOXX+. The new index offers market participants an innovative and rules-based tool to participate from the performance of the 200 most traded companies worldwide,” said Hartmut Graf, chief executive officer, STOXX.

“By splitting the global equity market into three time zones and including a fixed number of companies from each of those, the index also ensures high global diversification,” added Graf.

To be included in the STOXX+ Global Max Traded 200 Index, companies must pass a set of screens. To enhance liquidity and tradability of the new index, the index universe – the STOXX Global Total Market Index – is screened for a minimum free-float market capitalisation of €5 billion, as well as a three-month average daily trading value of at least €25 million.

Next, all countries, and thus the companies listed there, are grouped into three major time zones to ensure the representation of global companies and high diversification in the index. For each of the three time zones, the top 50 companies by three-month average daily trading value are selected as index components. The remaining 50 stocks are selected by maximum three-month average daily trading value only, irrespective of their time zone.

The STOXX+ Global Max Traded 200 Index is reviewed annually in September and rebalanced quarterly. It is weighted by free-float market capitalisation, and single index components’ weights are capped at 10% at each quarterly rebalancing. All companies on the relevant selection list, as well as IPO stocks, are also reviewed for fast entries and fast exits at this time. The index is available in price, net and gross return versions, and is calculated in Euro and US Dollars. Daily history is available back to September 30, 2002.

As at launch, the index’s top five constituents are Apple (4.9%), Exxon (3.2%), Microsoft (1.9%), Chevron (1.7%) and General Electric (1.7%). The Technology sector contributes 17.6%, while the Oil & Gas, Banks and Healthcare sectors also have significant weights. From a country perspective, the index is dominated by American companies, which comprise 61.2%. The UK is next, providing 9.2% of constituents, while Japan and Switzerland also have sizable representations.

Since the company’s debut in 1998, STOXX has established itself among the top-tier of index providers, alongside firms such as MSCI, FTSE and S&P Dow Jones. While STOXX’s global indices have been gaining traction, the provider is perhaps still best known for its leading European equity indices: the EURO STOXX 50, the STOXX Europe 50 and the STOXX Europe 600.

The company has been hugely successful underpinning ETFs. In Europe about 40 different ETFs track the flagship EURO STOXX 50 index, making it one of the most widely-tracked indices, while three of the top ETFs in Europe and 30% of all assets under management are also based on STOXX indices.

In total, some 18 ETF providers currently license STOXX indices, including many of the industry’s biggest players such as iShares, SPDR, db X-trackers, Lyxor, Amundi, UBS, Credit Suisse and Source. One of the most recent launches has been the Lyxor ETF EURO SMARTIX iSTOXX 50 Equal Risk (ERC FP), which debuted in June. This ETF tracks the recently launched EURO iSTOXX 50 Equal Risk Index, an index that spreads the overall risk of the portfolio equally between the index’s 50 components.

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