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FTSE Group (“FTSE”) has licensed Sweden’s largest pension fund, AP3 to use the FTSE GWA Europe Index. AP3 is the first European pension fund to adopt the wealth weighted indices for a portfolio of SEK 2 billion. The FTSE GWA indices combine the wealth weighted methodology created by Global Wealth Allocation (GWA), and FTSE’s world-class indexing skills.
The FTSE GWA Europe Index contains the same stocks as the FTSE Developed Europe Index but the weightings are based upon company wealth, rather than by market capitalisation. The FTSE GWA Europe Index uses three variables: net profit, cash flow and book value. Analysis of the FTSE GWA Europe Index shows a 22.3% higher return over a five-year period beginning September 2001 when compared to the FTSE Developed Europe Index over the same period.
Imogen Dillon Hatcher, Managing Director, FTSE Europe said, “The FTSE GWA Index Series is an exciting platform which offers an alternative approach to cap-weighted indexing. We are delighted that AP3 has decided to use the FTSE GWA Europe Index to manage an initial portfolio of SEK 2 billion.”
David Morris, CEO, Global Wealth Allocation Limited said, “GWA has a long history of building and implementing wealth weighted portfolios that began in 1998. This partnership with FTSE provides clients with an important innovation. The FTSE GWA Index Series offers diversification to cap-weighted indexing, which many institutions rely upon exclusively to handle the high capacity requirements of their core portfolios. We are so pleased with this important first step taken by AP3.”
The GWA Index Series is also used by global pension fund, State Street Global Advisors (SSgA) who track the FTSE GWA Developed Index. Further information about the FTSE GWA Index Series is available at www.ftse.com/gwa.
About FTSE
FTSE Group is a world-leader in the creation and management of indices. With offices in Beijing, London, Frankfurt, Hong Kong, Madrid, Paris, New York, San Francisco, Boston, Shanghai and Tokyo, FTSE Group services clients in 77 countries worldwide. It calculates and manages the FTSE Global Equity Index Series, which includes world-recognized indices ranging from the FTSE All-World Index, the FTSE4Good series and the FTSEurofirst Index series, as well as domestic indices such as the prestigious FTSE 100. The company has collaborative arrangements with the Athens, AMEX, Cyprus, Euronext, Johannesburg, London, Madrid, NASDAQ and Taiwan exchanges, as well as Nomura Securities and Xinhua Finance of China. FTSE also has a collaborative agreement with Dow Jones Indices and has developed a single sector classification system for global investors.
FTSE indices are used extensively by investors world-wide for investment analysis, performance measurement, asset allocation, portfolio hedging and for creating a wide range of index tracking funds. Independent committees of senior fund managers, derivatives experts, actuaries and other experienced practitioners review all changes to the indices to ensure that they are made objectively and without bias. Real-time FTSE indices are calculated on systems managed by Reuters. Prices and FX rates used are supplied by Reuters.
