The Shanghai Stock Exchange (SSE) and China Securities Index Co., Ltd. (CSI) have recently announced that the SSE Sector Equal Weight Index Series will be officially launched on August 18, 2010. The Series will reflect the overall performance of the stocks of companies in different sectors on Shanghai securities market, and provide the tracking targets for indexation investment products. The base day of the indices is December 31, 2003, with the base point of 1,000.
According to the compilation scheme, the constituent selection method of the SSE Sector Equal Weight Index Series is the same as that of the SSE Sector Index Series. However, in terms of the weight method, the weight of each secondary sector in the ten SSE Sector Equal Weight Indices equals that of its free-float market capitalization. Besides, the equal weight method is adopted for the stocks in the secondary sectors. Meanwhile, a weight upper limit of 10% for a single stock is required for the indices with over 10 constituents.
It is learnt that the Index Series is strategic sector indices developed with joint efforts and at the request of Hua An Fund Management Co., Ltd. (Hua An). Adopting the equal weight method in the secondary sectors, the Series not only preserve the original sector distribution features of the indices but also reduce the influence of the heavyweight stocks on the indices. The introduction of the SSE Sector Equal Weight Indices will further enrich the index resources on Shanghai market and provide investors with more angles of view and investment tools. It is learnt that Hua An is devoted to the development of the ETF products of the SSE Sector Equal Weight Indices.
