Stoxx launches high dividend low volatility 50 index for new ETF

Jan 25th, 2016 | By | Category: ETF and Index News

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European index provider Stoxx Limited has launched a new high dividend, low volatility index that uses the top 50 stocks of the Euro Stoxx Index. The Euro iStoxx High Dividend Low Volatility 50 Index has been licensed to Invesco PowerShares to underlie an exchange traded fund that launched on the London Stock Exchange on 8 January 2015 and is due to be cross-listed on other European exchange in coming months.

Euro iStoxx High Dividend Low Volatility 50 Index licensed to Invesco PowerShares to underlie new ETF

Hartmut Graf, chief executive officer, STOXX Limited.

Hartmut Graf, chief executive officer, STOXX Limited, commented: “By tracking the performance of stocks with the highest yields and relatively low price fluctuations, the EURO iSTOXX High Dividend Low Volatility 50 Index offers investors an innovative way to gain exposure to Eurozone companies and further enhance their smart-beta index strategies.”

Bryon Lake, Head of Invesco PowerShares – EMEA, added: “We’re proud to have partnered with STOXX, and we believe the new EURO iSTOXX High Dividend Low Volatility 50 Index has the potential to provide a simple strategy combining two factors to access outcome-oriented Eurozone equity exposure. As recent asset flows have shown, dividend strategies and low volatility strategies are two of the most popular factors used as smart-beta investments. By combining the high dividend and low volatility screens, this presents an opportunity for the best of both worlds for Eurozone equity exposure.”

The methodology behind the index screens all eligible stocks (large, mid and small-cap stocks listed in Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain) according to their 12-month historical volatility and 12-month historical dividend yield. Firms are ranked in descending order based on their dividend yield and the top 75 are selected with a cap of 10 stocks per country. These stocks are subsequently ranked in ascending order according to their historical volatility and the top 50 stocks are selected for final inclusion. Constituents are weighted by their 12-month historical dividend yield while a 3 percent maximum weighting per component is used.

The index has been made available in price, net and gross return versions and calculated in euros and US dollars. It is reviewed quarterly in March, June, September and December.

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