Wilshire, Dow Jones to Launch a New Group of Global Indexes

October 16, 2006 at 5:53 pm (Economics, Finance, Investment, US)

Good news for index funds and those investing in global markets. The new global indexes Wilshire and Dow Jones are cobbling are to meet needs from more and more investors who are increasingly eyeing emerging markets as havens to hedge their portfolios and, if possible, to collect more returns.

The new Dow Jones Wilshire Global Total Market Index, including more than 12,000 stocks in 56 countries and a float-adjusted market value of $33.6 trillion, will beat other two global indexes on capital value: MSCI All-Country World Index, which covers 2,772 stocks in 48 markets with a market value of $27.4 trillion, and the S&P Citigroup Global Equity Indices, which covers 10,446 stocks in 56 countries with a market value of $33 trillion.

 

 

From the Wall Street Journal

Wilshire, Dow Jones to Launch a New Group of Global Indexes

By Karen Richardson

 

With investors continuing to chase returns in global markets, companies that build stock indexes are ramping up their offerings.

In the latest instance, Wilshire Associates Inc., which compiles the DJ Wilshire 5000 Composite index, and Dow Jones Indexes, which compiles the Dow Jones Industrial Average, are teaming up to launch a new group of global indexes, in a bid to compete for business from international money managers who are the prime users of tools like these. Dow Jones & Co. is the publisher of The Wall Street Journal.

Several rival index providers are also rolling out new products, or making changes in their lineups. Next month, Standard & Poor’s Corp. plans to launch “growth and value” style indexes for emerging markets, which would enable investors to track the performance of companies in developing countries that fall into the categories of growth or value stocks. This month, S&P also started providing more historical performance and customized data for each country in its S&P Citigroup Global Indices, according to David Blitzer, managing director and chairman of S&P’s index committee.

Morgan Stanley‘s Morgan Stanley Capital International, meanwhile, is in consultation with its clients to change the methodology on its MSCI standard and small-cap indexes, including its All Country World Index.

Indexes like these are in pursuit of a booming business. In the year to date, more than $24 billion has flowed into global equity funds, while U.S. equity funds have suffered net outflows for much of the year. “Institutional investors are looking more these days overseas because the domestic markets just aren’t given the returns they need to keep their funding up,” says John Prestbo, executive director of Dow Jones Indexes.

Also driving the appetite for new indexes: the boom in exchange-traded funds. These products — which trade like shares on stock exchanges with prices that reflect the performance of underlying stock indexes — have soared in popularity among retail investors, and ETFs that track global markets are in particularly hot demand. Companies such as Barclays Global Investors and State Street Global Investors, which create ETFs, pay index-compilers licensing fees.

The new Dow Jones Wilshire Global Total Market Index will be a broadly comprehensive global stock index including more than 12,000 stocks in 56 countries and a float-adjusted market value of $33.6 trillion. (Float-adjusted indexes weigh their components based on the number of shares available to the public, rather than total shares outstanding.) Other broad-based indexes of this type include the rival MSCI All-Country World Index, covering 2,772 stocks in 48 markets with a market value of $27.4 trillion, and the S&P Citigroup Global Equity Indices with 10,446 stocks in 56 countries, and a market value of $33 trillion.

The new Total Market Index replaces the smaller Dow Jones World Index as the company’s global benchmark standard, but the World Index will continue to be offered as a product, says Mr. Prestbo. The S&P and MSCI determine by committee which changes are made in their indexes, whereas Dow Jones and Wilshire use published rules.

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2 Comments

  1. Vardis said,

    Sorry 😦

  2. wilshireLaw said,

    At the halfway of the bankruptcy hurricane comprehensive finished Los Angeles and the reside of Meridional California is Los Angeles insolvency attorney Michael Shemtoub and his Wilshire Law group Unit. As a California insolvency attorney who has served Southern Calif.

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