Deutsche Börse extended its DAXplus strategy index family on Tuesday, adding the new DAXplus® Maximum Dividend Index. The Maximum Dividend Index charts the 20 companies represented in the HDAX® which will pay a dividend in the next six months and which have the highest expected dividend returns. This innovative dividend strategy is aimed at optimizing the dividend yield for investors.
The return is determined from the announced or estimated dividend amount and the closing price of the equity at the time of selection. The HDAX contains the equities of all 110 companies from the selection pool indices DAX®, MDAX® and TecDAX® and as a cross-sector index charts the largest equities from the Prime Standard.
To qualify for inclusion in the index, companies must have a free-float market capitalization of at least €1 billion and an average daily exchange turnover of €2 million within the last three months. If the number of companies meeting the criteria is below 20, the companies reporting the best dividend returns in the prior period are selected.
The weighting of the equities in the index is based on the expected dividend return. The higher the dividend return of a company, the higher its weighting in the index portfolio. The maximum weighting of a company at the time of adjustment is limited to 10 percent. The DAXplus Maximum Dividend Index is calculated as a price and performance index. Its composition is reviewed and adjusted every third Friday in November and May.
The DAXplus Maximum Dividend Index is the latest addition to the DAXplus strategy index family. Investors now have 14 different DAXplus indices with which they can track various investment strategies in a transparent, rule-based and cost effective manner. These include the ShortDAX and LevDAX indices for falling or rising prices respectively, and the Maximum Sharp Ratio or Minimum Variance indices, which are geared towards portfolio theory.
The ETF issuer ETFlab Investment GmbH, a subsidiary of DekaBank Deutsche Girozentrale, has also launched a DAXplus Maximum Dividend ETF on the new index, which is traded in the Deutsche Börse XTF segment (ISIN: DE000ETFL235). The new Exhchange Traded Fund charts the performance of the DAXplus Maximum Dividend Index. Dividends are being distributed.
