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Dow Jones Indexes, a leading global index provider, and Barron’s, America’s premier financial weekly magazine, today announced the launch of the Barron’s 400 Index which will track the performance of highly liquid U.S. stocks, highlighting America’s most promising companies as defined by fundamentals-related rules-based criteria.
The Barron’s 400 Index is a joint collaboration of Dow Jones Indexes and Barron’s, which are business units of Dow Jones & Company. Dow Jones Indexes intends to license the new index to underlie financial products such as mutual funds, exchange-traded funds and other investment vehicles. For Barron’s, the new index will provide additional subject matter for articles and analysis in the print publication and on Barron’s Online (http://www.barrons.com).
“The Barron’s 400 Index is the result of successful cooperation and teamwork between Dow Jones business units. We’ve combined our 10 years of proven expertise in building innovative, rules-based indexes with Barron’s excellent reputation as a trusted source of financial news and analysis to deliver this unique, leading-edge stock market indicator to the investment community,” said Michael A. Petronella, president of Dow Jones Indexes.
"The Barron's 400 relies on many of the barometers used by our writers in evaluating companies, and we feel that will help make it a highly successful index for market participants," said Ed Finn, president and editor of Barron's.
The index will be prominently featured at the top right of the Barron's Online homepage, along with other key market indexes. The site will also have a section, accessible from the homepage of Barron's Online, that includes more details about the index's performance and components.
To be eligible for inclusion, stocks are rated by fundamental criteria that measure companies’ profitability, cash flow and “growth” and “value” style characteristics. Fundamental analysis and rating of stocks is conducted by MarketGrader.com Corp., a research firm based in Coral Gables, Fla.
Stocks must then pass additional rules-based screens applied by Dow Jones Indexes: Securities must have a minimum float-adjusted market capitalization of $250 million USD, and at least 100 of the index’s 400 stocks must each have market capitalization of more than $3 billion USD. Companies must have reported quarterly or annual earnings results within six months prior to semi-annual reviews, and their stocks must have traded an average of at least $2 million daily for the preceding three months.
The top 400 stocks that meet these criteria are selected as components of the Barron’s 400 Index. Components are equal weighted and industries are capped at 20% of the index to ensure diversification. Real estate investment trusts (REITs) are ineligible for inclusion.
As of August 31, 2007, the estimated Barron’s 400 Index, based on back-tested data, is up 221.04% since its inception on December 31, 1997, while the Dow Jones Wilshire 5000 is up 59.25% in the same time period.
The index is reviewed semi-annually in March and September. Estimated daily back-tested history is available back to December 31, 1997. Back-tested performance information is purely hypothetical and does not represent actual performance. Past performance is not indicative of future results.
Index values will be published daily on the Dow Jones Indexes Web site (http://djindexes.com) and on Barron’s Online (http://www.barrons.com).
