FTSE Custom Index Created for New Vanguard Fund
November 16 2006 - 9:30AM
PR Newswire (US)
NEW YORK, November 16 /PRNewswire-FirstCall/ -- FTSE Group (FTSE),
the award-winning index provider, announced today that it has
created a custom benchmark to be used as the basis for the new
Vanguard(R) High Dividend Yield Index Fund. The new fund offers
both traditional investor shares and ETF shares. Product issuers
are increasingly using FTSE tradable indices as the basis for ETFs
and other indexed derivative products. In North America, FTSE
indices are already supporting a dozen ETFs in a range of asset
classes and sectors on exchanges such as NYSE, NASDAQ, the Toronto
Stock Exchange, and the ISE. Jerry Moskowitz, Managing Director,
FTSE Americas commented: "FTSE offers a range of innovative indices
covering the all important asset classes, sectors, and high
opportunity segments. Working with Vanguard to create this new
custom benchmark helps to demonstrate FTSE's skill in developing
index solutions in line with investor and product issuer needs."
The new Index consists of stocks that are characterized by
higher-than-average dividend yields, and is drawn from the US
component of the FTSE Global Equity Index Series (GEIS). Real
estate investment trusts (REITs), whose income generally do not
qualify for favorable tax treatment as qualified dividend income
(QDI) are removed, as are stocks that have not paid a dividend
during the previous 12 months. The remaining stocks are ranked by
annual dividend yield and included in the target index until the
cumulative market capitalization reaches 50% of the total market
cap of this universe of stocks. The index's methodology holds the
potential of durable high yields from solid companies, with lower
weightings to companies that have high yields because of low or
falling share prices. In addition, the index has the potential for
greater tax efficiency because of low turnover and a high
proportion of its dividends meeting the criteria for QDI. The
Vanguard High Dividend Yield ETF (AMEX:VYM), commences trading
today. More information about FTSE's suite of index products is
available at http://www.ftse.com/ Notes to Editors About FTSE Group
FTSE Group is leader in the creation and management of indexes and
related market data services. It is estimated that there are over
$2.5 trillion USD in assets under management globally using any of
the 60,000 FTSE indexes calculated daily for markets worldwide.
FTSE's flagship index, the FTSE Global Equity Index Series (GEIS),
covers 98% of the world's total investable market capitalization
and includes a broad range of traditional and alternative asset
class indexes such as multinationals, style, socially responsible
investment, real estate and hedge funds. Custom indexes are
designed and created regularly to meet a wide variety of investment
strategies for clients. FTSE also manages and calculates non-market
capitalization weighted indexes, which offer investors an
alternative way to benchmark performance. FTSE has partnered with
notable financial industry leaders in key regions to create unique
and innovative products for the investment community, including
NASDAQ, Dow Jones Indexes, NAREIT, and Research Affiliates (RAFI)
in the US; Xinhua Financial Network of China, Nikkei of Japan
(Nihon Keizai Shimbun, Inc), and the ASEAN stock exchanges in Asia;
and Euronext, the London Stock Exchange, EPRA, and Global Wealth
Associates in Europe. Partnerships with the Athens, Cyprus,
Johannesburg, Luxembourg and Madrid stock exchanges round out
FTSE's global coverage of markets worldwide. Real-time FTSE indexes
are calculated on systems managed by Reuters. Prices and FX rates
used are supplied by Reuters. About Vanguard The Vanguard Group,
headquartered in Valley Forge, Pennsylvania, is the nation's
second-largest mutual fund firm and a leading provider of index
investment vehicles. Vanguard manages more than $1 trillion in U.S.
mutual fund assets, of which more than $435 million is invested in
indexed portfolios. Vanguard offers more than 130 mutual funds to
U.S. investors, including 60 indexed fund and annuity portfolios,
and more than 40 additional funds in foreign markets. DATASOURCE:
FTSE Group CONTACT: For more information: FTSE Group: Lynne Sims,
FTSE Americas, +1-212-641-6168/+1-516-330-7474,
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