Dow Jones Indexes Information
Dow Jones Indexes (DJI) was formed in 1997 as an entity within Dow Jones & Co. It produces, maintains, licenses and markets indexes as benchmarks and as the basis of investible products such as exchange traded funds (ETFs), mutual funds and structured products. The company currently has employees in 14 cities worldwide, including Princeton, NJ, New York, Boston, Chicago, Los Angeles, London, Frankfurt, Singapore, Hong Kong, Beijing, Mexico City, São Paulo, Santiago and Dubai (its latest office). Dow Jones is owned by News Corp.
An index follows a certain market and gives investors a single number to summarize its ups and downs. It is a means by which the world's institutional (and retail) investors can track a market without having to buy the underlying components. It is a convenient way for someone interested in a broad, narrow or extremely narrow group of securities to track them.
Pension funds and other money managers often use indexes as benchmarks. This means that "active" investors (those who pick various securities to buy and hold for their returns) track their own returns against a benchmark index (an index that typifies its market) to see if they are out- or under-performing that market. Investors who do not want to do this (those who buy into indexes or securities that use indexes as their basis) are called "passive" investors. They are known to link their portfolios to the broad market and to not try to outguess conventional market wisdom. Passive investors argue that almost no active investors can beat the overall markets in the long-term.[1]
Dow Jones' best known index is the Dow Jones Industrial Average, which was created in 1896. The oldest index in use is the Dow Jones Transportation Index, which was created in 1882 by Charles Dow, founder of The Wall Street Journal.
Contents |
Indexes
The DJI has over 130,000 indexes, though a lot of these are not used by many people. Most are equity (stock) indexes, but also fixed-income, futures, options, private equity, commodity, currency and other alternative asset class indexes. Dow Jones Indexes says that all its products are maintained according to clear, unbiased and systematic methodologies that are fully integrated within index families.
DJI has a faith-based and a socially responsible investing (SRI) indexes - a relatively new trend in investing. In 1999, it launched the world’s first Islamic index: The Dow Jones Islamic Market (DJIM) indexes. DJI opened an office in Dubai in April 2008 to expand its presence in the Gulf region.
DJI and SAM Group, launched the Dow Jones Sustainability Indexes in 1999, these indexes track performance of sustainability-driven companies around the world. There are currently 70 DJSI licensees held by asset managers in 16 countries to manage a variety of financial products, including active and passive funds, certificates and segregated accounts.
DJI partnered with AIG to create the Dow Jones-AIG Commodity Index. It tracks trades on futures contracts for physical commodities, like energy (petroleum, gas), precious metals (gold, silver), industrial metals (zinc, copper), grains (corn, wheat), livestock (pork bellies), among others. They are traded in a variety of currencies.
UBS Securities LLC has acquired AIG Financial Product Corp.'s commodity business as of May 6, 2009. As such, the Dow Jones-AIG Commodity Indexes have been re-branded as the Dow Jones-UBS Commodity Indexes effective May 7, 2009.
The Dow Jones Select Dividend Indexes reflects the performance of leading dividend-yielding stocks. It includes global and regional indexes. It was DJI's first fundamentals-driven index.
Dow Jones Indexes also does "specialty" indexes for specific markets or interests. It has the Dow Jones U.S. Economic Stimulus Index, the Olympic-inspired Dow Jones Summer/Winter Games, the race-car centric Dow Jones Formula 1 Index and the closely followed Dow Jones Luxury Index, among others.
Companies can also request that specific indexes be created to suit their clients' interest or for publicity purposes. This is popular with smaller asset management and public relations firms.
Recent history
In March 2008, Chicago Climate Exchange, Inc. (CCX), the world's first and North America's only voluntary, legally binding integrated greenhouse gas emissions reduction, registry and trading system, announced that Dow Jones Indexes and Sustainable Asset Management (SAM) had granted CCX a license for the Dow Jones Sustainability World (DJSI World) and Dow Jones Sustainability North America Indexes (DJSI North America). The contracts are listed on CCX's wholly – owned subsidiary Chicago Climate Futures Exchange (CCFE), the world's leading environmental derivatives exchange. They trade emissions credits and DJI makes the indexes that are based on them.
In July 2008, DJI partnered with Brookfield Asset Management (BAM) to develop the Dow Jones Brookfield Infrastructure Indexes. This index series was designed to serve as benchmarks of companies that own and operate key infrastructure assets, like toll roads, pipelines and ports.
DJI launches an average of one index or index family per week. It often creates an index for a specific event (i.e. Dow Jones 2008 Summer Games Index, launched December 2007), a specific market (Dow Jones Luxury Index, launched June 2008) or a very small market (Dow Jones Cyprus Titans 10 Index). In some instances it cooperates with other entities to create a custom index (Barron’s 400 Index, launched September 2007).
In July 2007, the Iowa Peace officers Retirement System has adopted the Dow Jones Wilshire Index Family (now called the Dow Jones Total Stock Market Indexes; see below). These indexes are popular benchmarks for pension funds looking to minimize risk and market exposure. They used the Dow Jones Wilshire 5000sm (now called the Dow Jones U.S. Total Stock Market Index), to benchmark its equity investment portfolio.
In August 2008, News Corp. Chairman Rupert Murdoch announced a new worldwide benchmark index – the Global Dow. It will comprise 150 stocks around the world that will include large companies in established markets, but also rising stars in emerging markets as well as companies specializing in new technologies. Murdoch made the announcement in Mumbai, India, emphasizing its global outlook.
Dow Jones Industrial Average historical data (along with several other major indexes) recently became available on a new website, www.djaverages.com. The company also has a widely-read quarterly newsletter called Insights that covers the industry. The current issue as well as back issues are available at http://www.djindexes.com/insights/.
In April 2009, Dow Jones rolled out the Dow Jones Total Stock Market (TSM) Indexes. They were designed to provide comprehensive coverage of the U.S. equity market. It's flagship index was intended to be the Dow Jones U.S. Total Stock Market Index, an all-inclusive measure composed of all U.S. equity securities with readily available prices. It is sliced according to stock-size segment, style and sector to create distinct sub-indexes that track every major segment of the market. DJI claims that the indexes were created and maintained according to an objective and transparent methodology with the fundamental aim of providing reliable, accurate measures of U.S. equity performance.[2]
On June 1, 2009, DJI changed the components of the famous benchmark Dow Jones Industrial Average. It cut Citigroup and GM - both of which were trading at or under $1 per share (and both of which, after receiving Federal bailout money, were practically government wards). They were replaced by insurance giant Travelers and IT pioneer Cisco Systems.
Later that month, Dow Jones Indexes announced a joint marketing agreement with LVA Indices (Chile,[3]) and Proveedor Integral de Precios (PIP) to create a new series of corporate and government fixed income indexes called Dow Jones Latixx Indexes [2]. It started with dozens of Mexican and Chilean bonds, with plans to move into Costa Rica, Peru, Argentina, Brazil, Colombia and Venezuela. If you go to its www.latixx.com website, then go to About Us, and then Video, there is a mini-infomercial in English. The Spanish version of the site has the same video in Spanish. The video is also up on Youtube: [3]. In February 2010, it added 22 new bonds from Chile and Mexico.
In July 2009, Javelin Investment Management created the first US-based Islamic ETF: JETS Dow Jones Islamic Market International Index Fund (JVS on the NYSE). It is based on the DJIM International Titans 100 Index.
Dow Jones Indexes was named Most Innovative ETF Index Provider 2009 for the Americas by exchangetradedfunds.com
In October 2009, the Dow Jones GCC Titans 50 Real Return Index became the basis for the first exchange traded fund (ETF) in the United Arab Emirates (UAE). The licensee is National Bank of Abu Dhabi (NBAD). The index measures the performance of 50 leading component stocks traded in the six Gulf Cooperation Council (GCC) member states: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates. [4]
That same month, DJI launched DJIM Greater China Index. It has been licensed to ETFs in Malaysia and other countries.
November 2009: Charles Schwab licensed five Dow Jones Total Stock Market (TSM) Size and Style indexes for exchange traded funds. It is "Chuck's" first proprietary line of ETFs.
In that same month, the Dow Jones Industrial Average was licensed by Simplex Asset Management in Japan to underlie an ETF. This is the first time the DJIA was licensed to a Japanese ETF. It launched in December 2009.
In January 2010, DJI announced that the Dow Jones Corporate Bond Index would serve as the basis of the first fixed-income exchange-traded note (ETN) available in Israel. This was the first time the index has been licensed as the basis for an exchange-traded product globally. The ETN is sponsored by Harel SAL, a subsidiary of Harel Finance, and is available on the Tel Aviv Stock Exchange (TASE).
In addition to the Dow Jones Corporate Bond Index, Dow Jones Indexes licensed the Dow Jones Brazil Titans 20 Index as the basis for an ETN that was listed at the TASE.
On February 10, 2010, Dow Jones and CME Group announced an agreement to form a joint venture to operate a global financial index services business. The definitive agreement is set to provide for CME Group to own 90% of the venture to which Dow Jones will contribute its Dow Jones Indexes business valued at $675 million. Dow Jones is expected to hold the remaining 10% and retain a key role in the management of the Dow Jones Industrial Average. CME Group will contribute a business which provides certain market data services said to be valued at $607.5 million to the joint venture. The new joint venture will also raise approximately $613 million in third-party debt which will be used to pay a $607.5 million distribution to Dow Jones.
The deal was expected to close in the 1st quarter 2010 since it passed regulatory clearance. [5]
On March 4, 2010, Dow Jones Indexes signed a memorandum with The Global Fund to Fight AIDs, Tuberculosis and Malaria to explore the creation of a family of indexes that could be licensed as the basis for investment products. The first is expected to be called the Dow Jones Global Fund 50 Index, which would most likely focus on Blue Chip stocks.
Both The Global Fund and Dow Jones Indexes hoped to benefit from this collaboration. The Global Fund wants to further strengthen its engagement with the private sector and bring to bear the power of financial markets to help its efforts around the world. The Global Fund is a leading multilateral financing organization in global health with commitments with more than US$19 billion to date. Dow Jones Indexes intended to add to its range of socially-conscious indexes that will complement its increasingly diverse range of products. [6]
On March 18, 2010, CME Group and Dow Jones Indexes officially launched the new joint venture (JV). CME Group has 90% ownership.
The new JV continued to create new products, such as the Dow Jones Contrarian Opportunities Index, which went live on April 8, 2010. It is a rules-based index that has a “contrarian” investment strategy focusing on companies with strong recent fundamentals but a lagging three-year-trailing return. The index has been licensed to Javelin Investment Management to underlie an exchange-traded fund (ETF) on the NYSE Euronext. It is the only index family that tracks the contrarian investing strategy.
On March 24, 2010, the Dow Jones UAE 25 Index, which measures the performance of the 25 of the largest and most liquid equity securities trading in the United Arab Emirates (UAE), came into being. It was licensed to National Bank of Abu Dhabi (NBAD) and underlies the first exchange-traded fund (ETF) in the UAE. The NBAD OneShare Dow Jones UAE 25 ETF was to be listed at the Abu Dhabi Stock Exchange as well.
Jamie Farmer was named Executive Director of DJI on April 18, 2010. He had been Senior Director of Global Index Operations and Head of Exchange Relationships.
The Dow Jones RBP Index added four new indexes on May 3, 2010. These indexes track "required business performance" of companies. It has three directional strategy indexes and one fundamentally weighted U.S. market index (Dow Jones RBP U.S. Large-Cap Aggressive Index, the Dow Jones RBP U.S. Large-Cap Defensive Index, and the Dow Jones RBP U.S. Large-Cap Market Index). They were created with Transparent Value, LLC, which is a Guggenheim Partners company. There is a video explaining the way that the methodology and the indexes work (http://www.youtube.com/watch?v=XDlJWCBl934 Dow Jones RBP Index video).
June 8, 2010 - DJI (now part of CME Group)launches Dow Jones CME FX$INDEX. It serves as the basis of a new futures contract (CME Group is the world leader in derivatives, including futures). The new index combines six currency futures and represents the relative value of the U.S. dollar versus six major currencies (the Australian dollar, British pound, Canadian dollar, Euro, Japanese yen, and Swiss franc).
The Dow Jones Long-Term Inflation Indexes were launched in July 2010. They measure Treasurys and TIPS to gauge the market's expectations on inflation. The indexes measure the difference between futures on 30 year TIPS and Ultra-Long bonds. They were chosen for their length, transparency and liquidity, according to the company's press release. They were developed in cooperation with Credit Suisse.
==Awards== http://press.djindexes.com/index.php/topic/awards/
- Sh. Mohammed Rashid Bin Makhtoum Award for Innovation in Islamic Finance (2003)
- CERT Award for Excellence in Islamic Finance (2004)
- Deloitte/KLIFF (Kuala Lumpur Islamic Finance Forum) Award for Special Contribution to Islamic Finance (2005)
- Failaka Islamic Fund Award for Best Contribution & Development to Islamic Funds (2005)
- Contribution to Islamic Capital Market Development (IIFF, 2006)
- Sh. Mohammed Rashid Bin Makhtoum Award for Contribution by Western Institution to Islamic Finance (2006)
- American Muslim Achievement Award (Islamic Center of Southern California, 2006)
- Best Individual Contribution to Islamic Finance (KLIFF, 2007)
- April 2006 - Dow Jones Indexes won Failaka Islamic Fund Awards 2005 for the Best Contribution to Growth & Development of Islamic Funds.
- November 2006 - Dow Jones Indexes was named "Index Provider of the Year, Asia" by the U.K.-based magazine Structured Products and based on the votes of an independent judging panel. The award recognizes Dow Jones Indexes' work in the index field.
- December 2007 - Dow Jones Indexes won the "Best Islamic Index Provider" category of the inaugural Master of Islamic Finance Awards by Terrapin Ltd. The award recognized the wide market acceptance of the Dow Jones Islamic Market Index series and Dow Jones Indexes’ leadership and commitment to providing benchmarks for Shari’ah-compliant stocks and bonds.
- June 2008 - Dow Jones Indexes was named the "Most Innovative ETF Index Provider of 2007" for the Americas at the 4th annual Global ETF Awards hosted by Exchangetradedfunds.com. Dow Jones Indexes won on the basis of unique index offerings such as the Dow Jones Islamic Market Indexes and Dow Jones – AIG Commodity Indexes.
- June 2008 - Dow Jones Indexes won two awards for its Dow Jones Islamic Market Index Family. Global Finance magazine named the global index provider "Best Shari'ah – Compliant Index Provider". The award will be conferred during an awards ceremony on October 13, 2008 at the National Press Center in Washington. Furthermore, Dow Jones Indexes received the "Global Recognition for a Financial Institution Award". The award was presented at the International Islamic Finance Forum in Dubai.
- December 2008 - Named "Most Outstanding Islamic Index Provider of the Year" at the 5th KLIFF Islamic Finance Awards 2008 held in Kuala Lumpur, Malaysia.
- January 2009 - Named the "Best Islamic Index Provider" by Islamic Finance News. The selection was made by a record 1,502 Islamic finance professionals worldwide.
- April 2009 - Named "Best Shari'ah-Compliant Index Provider" by Global Finance magazine for the second consecutive year.[4]
- June 2009 - Dow Jones Indexes was named Most Innovative ETF Index Provider 2009 for the Americas by exchangetradedfunds.com (web site of the Chicago Board Options Exchange). [www.exchangetradedfunds.com]
- December 2009- Named "Best Index Provider Shari'ah compliant Indexes" by Dubai-based Islamic Business & Finance magazine.
- January 2010- Named “Best Islamic Index Provider” in the Islamic Finance News (IFN) award poll for the third consecutive year.
- January 2010 - Asia Asset Management Awards 2009 names DJI winner of Index Provider of the Year in Asia.
- January 2010 - Wins "Index Provider of the Year in Asia" by Asian Asset Management magazine.
- May 2010 - Named "Best Shari'ah-Compliant Index Provider" by Global Finance magazine for the third consecutive year.
- August 2010 - Winner of KLIFF "Most Outstanding Islamic Index Provider" award
See also
- CME Group
- Chicago Climate Exchange
- Dow Jones Industrial Average
- Dow Jones
- News Corp.
- Global Dow
- Dow Jones Islamic Index
- Dow Jones Transportation Average
- Dow Jones Utility Average
- Dow Jones Sustainability Indexes
- The Global Fund
- Sustainable Asset Management (SAM)
References
- ^ Active Managers Are Getting Worse - Index Universe Article
- ^ http://www.djindexes.com/mdsidx/html/pressrelease/press-release-archive.html#20090401
- ^ http://www.lvaindices.com
- ^ http://www.djindexes.com/mdsidx/html/pressrelease/press-release-archive.html#20090427
External links
| This article's use of external links may not follow Wikipedia's policies or guidelines. Please improve this article by removing excessive and inappropriate external links or by converting links into footnote references. (July 2010) |
- CME Group corporate home page
- CME Group And Dow Jones Receive Clearance For Index Deal
- Dow Jones corporate site
- DJI public relations and articles
- DJI awards
- Dow Jones Industrial Average interactive history, trivia, research and statistics
- Dow Jones Indexes homepage
- Dow Jones Indexes quarterly Insights magazine online
- Dow Jones Indexes videos on YouTube
- SAM Group - Sustainability (socially responsible) investing
- Active Managers Are Getting Worse
- Global Dow launch
- Dow Jones Indexes Dubai office
- Chicago Climate Exchange
- Dow Jones Indexes press release
- UBS acquires AIG business unit
- Dow Jones Latixx home page on LVA site
- Spanish language Dow Jones Latixx video
- English language Dow Jones Latixx video
- Dow Jones Sustainability Indexes
- Dow Jones LATixx video on YouTube in both Spanish and English
- Winners of 5th Annual ETF Global Awards
- Dow Jones Sustainability Indexes
- Saudi newspaper announcement of DJ GCC Titans 50 Real Return being used in UAE
- The Global Fund website
- Dow Jones RBP Index family video on YouTube
- FX Dollar Index and Futures press release
){kind=link}
Categories: Dow Jones & Company | Financial services companies | American stock market indices
|