BME Creates The IBEX 35® Short Index - It Will Start To Be Disseminated In Real Time The First Week Of May.

Bolsas y Mercados Españoles (BME) has created a new tradeable index called IBEX 35® SHORT, which tracks the inverse performance of the IBEX 35® CON DIVIDENDOS (IBEX 35® Total return) index, which includes dividend payments. The real time calculation and dissemination of both indices will start the first week of May.

IBEX 35® CON DIVIDENDOS is a total return index, that is, it incorporates changes in share prices, dividend payments and other types of shareholder remuneration. The index thus reflects the effect these payments have on a portfolio that tracks IBEX 35® index. The index’s constituents, calculation and adjustment criteria are the same as those used for the IBEX 35® index but it is also updated to incorporate the payment of ordinary dividends.

The IBEX 35® SHORT index tracks the daily changes in the IBEX 35® CON DIVIDENDOS in the opposite direction, that is, if on a trading session the return on IBEX 35® CON DIVIDENDOS is positive, the return on IBEX 35® SHORT on the same trading session will be negative in a similar proportion. However, the formula for the calculation of IBEX 35® SHORT incorporates a risk-free, fixed income investment component, which is why the performance of this index is not perfectly symmetrical with that of the IBEX 35® CON DIVIDENDOS.

The IBEX 35® SHORT index is meant to act as an underlying asset for such financial products as certificates or exchange-traded funds (ETFs). The index offers investors the opportunity to use these instruments to hedge potential losses derived from a bear market.

Today BME opens the process for the selection of financial entities willing to create ETFs on the IBEX 35® SHORT index.