STOXX Limited, a leading provider of innovative, tradable and global index concepts, today announced the launch of the EURO iSTOXX High Dividend Low Volatility 50 Index, which measures the top 50 stocks in the EURO STOXX Index based on high dividend yield and low volatility. The index has been licensed to Invesco PowerShares to underlie an exchange-traded fund (ETF) available as of today on London Stock Exchange and will be cross-listed at other European exchanges in the coming months.
“By tracking the performance of stocks with the highest yields and relatively low price fluctuations, the EURO iSTOXX High Dividend Low Volatility 50 Index offers investors an innovative way to gain exposure to Eurozone companies and further enhance their smart-beta index strategies,” said Hartmut Graf, chief executive officer, STOXX Limited.
Bryon Lake, Head of Invesco PowerShares – EMEA, said: “We’re proud to have partnered with STOXX, and we believe the new EURO iSTOXX High Dividend Low Volatility 50 Index has the potential to provide a simple strategy combining two factors to access outcome-oriented Eurozone equity exposure. As recent asset flows have shown, dividend strategies and low volatility strategies are two of the most popular factors used as smart-beta investments. By combining the high dividend and low volatility screens, this presents an opportunity for the best of both worlds for Eurozone equity exposure.”
The selection universe for the EURO iSTOXX High Dividend Low Volatility 50 Index is defined as all stocks in the benchmark EURO STOXX Index. All companies in the EURO STOXX Index are screened for their 12-month historical volatility and 12-month historical dividend yield. Stocks are ranked in descending order based on their 12-month historical dividend yield, and the top 75 are selected for further screening, with a maximum of 10 companies per country. The companies are then ranked according to their 12-month historical volatility in ascending order, and the top 50 stocks are selected for the index. The index is capped at a 3 percent maximum weighting per component.
The EURO STOXX Index represents a variable number of large, mid and small-cap stocks of 12 Eurozone countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. It is a subset of the benchmark STOXX Europe 600 Index.
The EURO iSTOXX High Dividend Low Volatility 50 Index is price weighted according to components’ 12-month historical dividend yield. It is available in price, net and gross return versions and calculated in euro and US dollar. The index is reviewed quarterly in March, June, September and December. Historical data is available back to Mar. 22, 2004.
Please visit www.stoxx.com for further information.