The index universe includes all global shipping companies that transport primarily goods and materials, and excludes those that carry only passengers, as well as those that have a minimum float-adjusted market capitalization below $150 million or a three-month average daily trading volume below $2 million. Among these, the top 25 – as ranked by indicated annual dividend yield – are selected for the index.
Funds in the index universe are also subject to buffers that aim to limit unnecessary turnover. The index is weighted by float-adjusted market capitalization. According to a news release, the weight of individual components in the index is capped at 20%, and components with weights of 4.5% or more are restricted in aggregate to 45% of the index. The index is reviewed annually in June; price and total return indexes are calculated in U.S. dollars.
The new index has been licensed to Guggenheim Funds, and will serve as the basis for that firm’s shipping exchange-traded fund (ETF).
“The Dow Jones Global Shipping Index is designed to include companies that are poised to benefit from the global business recovery,” said Michael A. Petronella, President of Dow Jones Indexes, in the announcement. “These same component companies are also in position to take advantage of growing emerging-market demand for commodities and other goods.”
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