A fund tracking US companies with the highest dividend yields is set to launch by the end of the year.
The exchange traded fund will be based on the Dow Jones Select Dividend Index, a 50-strong list chosen from the DJ US Total Market Index.
Dow Jones is hoping the new index will profit from recent US tax changes. Ridgely Walters, senior director of client development/sales Americas, said: "With new lower US tax rates on dividends, more investors are becoming interested in companies issuing them."
The DJ Select Dividend Index is reviewed every December. Components and weightings are available at www.djindexes.com.
Each company"s weight in the Dow Jones Select Dividend Index is based on the amount of its indicated dividend. The annual dividends for all components are totalled, and each component"s weight is equal to its dividend contribution.
To be eligible for inclusion in the index, a component must have a positive historical five-year dividend per share growth, an average five- year dividend pay out percentage rate less than or equal to 60% and an annual average daily dollar trading volume greater than $1.5m. Components that pass these criteria are then ranked by dividend yield, and the top 50 components of the Dow Jones US Total Market Index are selected for the Dow Jones Select Dividend Index.
Dow Jones is a global provider of investable indexes, including the Dow Jones Averages, the Dow Jones Global Titans, the Pan-European Dow Jones STOXX Indexes, the Dow Jones Asian Titans 50, the Dow Jones Sector Titans 30 and the Dow Jones Country Titans Indexes. Dow Jones Indexes is part of Dow Jones & Company.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till