S&P Europe 350 Low Volatility High Dividend Index Launched by S&P Dow Jones Indices

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Feb 04, 2014, 09:30 ET

NEW YORK, Feb. 4, 2014 /PRNewswire/ -- Combining the two well-known investment themes of low volatility and income, S&P Dow Jones Indices today announced the launch of the S&P Europe 350 Low Volatility High Dividend Index. The Index, which is designed to serve as a benchmark, measures the performance of 50 high yielding companies within the S&P Europe 350® that meet diversification, volatility, and tradability requirements.

The S&P Europe 350 is an equity index drawn from 17 major European markets, covering approximately 70% of the region's market capitalization. It is a unique index, designed to provide broad market exposure in Europe through an index that is efficient to replicate.

"The Low Volatility High Dividend framework used to create this Index is unique to S&P Dow Jones Indices and has already been applied to the S&P 500," says Vinit Srivastava, Senior Director at S&P Dow Jones Indices. "The innovative S&P Europe 350 Low Volatility High Dividend Index combines two investment themes, low volatility and high dividend, using price volatility to eliminate typical dividend traps. Historically, it has been found that high price volatility is a good indicator of companies in stress."

To be included in the S&P Europe 350 Low Volatility High Dividend Index, a stock must be a member of the S&P Europe 350. All stocks in the selected universe are ranked in descending order by their 90-day trailing dividend yield. The top 75 stocks with the highest dividend yield are then selected, provided that the number of stocks from each GICS® sector and country is capped at 15.

Using available price return data for the trailing 252 trading days leading up to each index rebalancing reference date, the realized volatilities of the 75 selected highest yielding stocks are calculated. The 75 selected highest yielding stocks are then ranked in ascending order by realized volatility. The top 50 securities with the lowest realized volatility form the S&P Europe 350 Low Volatility High Dividend Index, which is equally weighted.

For more information, please visit: www.spdji.com.

About S&P Dow Jones Indices
S&P Dow Jones Indices LLC, a part of McGraw Hill Financial, is the world's largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average™, S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of investors. More assets are invested in products based upon our indices than any other provider in the world. With over 830,000 indices covering a wide range of asset classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. To learn more about our company, please visit www.spdji.com.

Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC, a part of McGraw Hill Financial. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"). These trademarks have been licensed to S&P Dow Jones Indices LLC. It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (collectively "S&P Dow Jones Indices") do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices does not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.

SOURCE S&P Dow Jones Indices