Dow Jones has launched value and growth indices tracking the stocks of six European countries. Th...
Dow Jones has launched value and growth indices tracking the stocks of six European countries.
The indices measure the performance of the two investment styles in France, Germany, Italy, the Netherlands, Sweden, and the UK.
When classifying a stock as value or growth, Dow Jones Indices uses a six-factor model that includes: projected price-to-earnings ratio; projected earnings growth; trailing earnings growth; trailing price-to-earnings ratio; price-to-book ratio; and dividend yield.
Companies that do not exhibit strong growth or value characteristics do not qualify for the index and are considered neutral stocks.
Growth stocks typically demonstrate higher revenue, sales, profit and cash flow and are more likely to reinvest profits than pay dividends.
Value stocks, on the other hand, tend to have relatively low price-to-earnings and price-to-book ratios and are more likely to pay dividends.
The indices are a subset of the existing regional Dow Jones STOXX Value and Growth indices that were launched on 18 July 2001. To be included in the European country style indices, a company must be a member of the Dow Jones STOXX Total Market Index.
The Dow Jones/STOXX family of indices already includes growth and value indices for the US, Canada and Europe.
Global value and growth indices are under consideration.
Dow Jones Indexes is a global provider of investable indices, including the Dow Jones Averages, the Dow Jones Global Titans 50, the Pan-European Dow Jones STOXX indices, the Dow Jones Asian Titans 50, the Dow Jones Sector Titans 30, the Dow Jones Country Titans indices. Dow Jones Indexes is part of Dow Jones & Company.
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