Euronext launches European family-run business index

Feb 24th, 2017 | By | Category: Equities

FACTOR INVESTING - THURSDAY 14TH JULY 2022 (08:15-11:30) - THE BERKELEY, LONDON Please join us for our annual factor investing breakfast briefing with participation from MSCI, FlexShares ETFs, Tabula and Professor Stefan Zohren, Deputy Director of the Oxford-Man Institute of Quantitative Finance. Please register now if you would like to attend.

Euronext has launched the Euronext Family Business Index, tracking the performance of 90 family-run companies listed across the four Euronext exchanges – Amsterdam, Paris, Lisbon and Brussels. The index has been designed to serve as the underlying reference for future investment products including ETFs.

Euronext launches European family-run business index

The Euronext Family Business Index tracks the performance of 90 family-run companies listed across the four Euronext exchanges – Amsterdam, Paris, Lisbon and Brussels.

To be eligible for inclusion, candidates must meet criteria defining family businesses as determined by Euronext. These include:

  • The physical person(s) who created the company, or the physical person(s) who acquired the company capital, or their spouses, parents or children or direct heirs of their children, have significant influence on the control of the business;
  • At least one representative of the family or relatives is formally involved in the governance of the company; and
  • The next generation guarantees control or shows a clear-cut intention to take over the company.

Each eligible constituent is assigned to one of three compartments: A, B or C – depending on market capitalization. The large-cap compartment A contains firms with more than €1 billion market value, compartment B contains firms with capitalizations between €150 million and €1bn, and compartment C contains firms with capitalizations of less than €150m. The methodology selects 30 constituents with the highest liquidity from each compartment, assigning a 50% weight to compartment A, 35% to compartment B, and 15% to compartment C. Each constituent is equally-weighted within its own compartment.

Euronext currently has 216 family businesses listed on its markets, together representing market capitalisation of €852bn. This includes 157 small and mid-size companies whose total market capitalisation comes to €31bn.

The index is similar to the recently launched Solactive Swiss Family Owned Companies Index (see: Solactive launches index tracking Swiss family owned companies) which also tracks the performance of family-run businesses but is focused on firms listed on the Swiss market.

Tags: , , , ,

Leave a Comment