STOXX has launched the iSTOXX World Select Index to access three major world markets through one index.
The index basket combines the EURO STOXX 50, STOXX USA 50 and STOXX Japan 50 indices to access three major world markets through one index – and is designed to underlie exchange-traded funds and other investable products, as well as to be used to benchmark global equity portfolios.
STOXX chief executive Hartmut Graf explained: “Derivatives and structured products that offer global equity exposure often combine different indices for the Euro zone, U.S. and Japanese markets.
“With the launch of the iSTOXX World Select Index we offer market participants an innovative index basket to access three blue-chip indices for major, global markets. The added advantage of this basket is that the underlying indices follow the same consistent and transparent methodology, and are therefore highly compatible."
Within the iSTOXX World Select Index basket, the exposure is equally distributed among the three underlying indices.
As a result, the over-influence of US companies that typically occurs in global indices that are weighted by market capitalization, is reduced. Within each underlying index, the respective components are weighted according to their free float market capitalization.
The composition of the underlying indices is reviewed annually in September, and rebalancing takes place quarterly in March, June, September and December.
The iSTOXX World Select Index is rebalanced quarterly and weights of the three components are brought back to equal allocations. This takes place at the same time of the underlying index rebalancing.
The composition of the index is not reviewed, as the basket is always comprised of the same three indices. In the case that other indices might need to be included, additional index version would be made available.
The new index is available in price, gross and net return versions in Euro, and price and net return versions in US Dollar Daily. History is available back to 28 December, 2001.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till