Ridgely Walters, senior director of client development/sales Americas, Dow Jones Indexes, said,"With new lower U.S. tax rates on dividends, more investors are becoming interested in companies issuing dividends. The Dow Jones Select Dividend Index allows investors to track these companies and to participate in the return on income of the highest-yielding stocks in the U.S."
Dow Jones Indexes expects to license the first exchange-traded fund based on the Dow Jones Select Dividend Indexes by the end of the year.
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 payout percentage rate less than or equal to 60% and an annual average daily dollar trading volume greater than $1.5 million. Components that pass this criteria are then ranked by dividend yield, and the top 50 components of the Dow Jones U.S. Total Market Index are selected for the Dow Jones Select Dividend Index. Each company's weight in the Dow Jones Select Dividend Index is based on the amount of its indicated dividend. The indicated annual dividends for all components are totaled, and each component's weight is equal to its dividend contribution.
The Dow Jones Select Dividend Index will be reviewed on an annual basis in December. Components and weightings will be available starting November 3 on the web site www.djindexes.com.
Dow Jones Indexes is a premier global provider of investable indexes, including the Dow Jones Averages, the Dow Jones Global Titans 50, 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, which publishes the world's most vital business and financial news and information.
In addition to Dow Jones Indexes, Dow Jones & Company (NYSE: DJ; dowjones.com) publishes The Wall Street Journal and its international and online editions, Barron's and the Far Eastern Economic Review, Dow Jones Newswires and the Ottaway group of community newspapers. Dow Jones is co-owner with Reuters Group of Factiva, with Hearst of SmartMoney and with NBC of the CNBC television operations in Asia and Europe. Dow Jones also provides news content to CNBC and radio stations in the U.S.
