NYSE Euronext launches high-dividend indices for European markets

The High Dividend indices will consist of stocks characterised by the highest dividend yields during the previous calendar year. The CAC High Dividend index comprises 20 stocks, the AEX High Dividend 12, and the BEL and the PSI indices 10 each.

They are calculated as total return indices; the dividends taken into account will be the normal dividends, less withholding tax, with the yield according to the price per share immediately before the ex-dividend date. Each index is constructed as a basket in which weightings are determined by the relative dividend yields, with each constituent capped at 15 per cent.

‘The launch of this family of high-dividend indices originates from increasing client demand,’ says Euronext Indices general manager Mark Adema. ‘They provide investors with additional opportunities to apply strategies using blue-chip indices as a basis.’

Philippe Hajali, director of equity derivatives at the NYSE Euronext group derivatives exchange Liffe, adds: ‘It is our intention to launch futures and options contracts on these high-dividend indices in the near future.

‘This will provide investors with even more trading opportunities and enable them to combine the risk management and leveraging benefits of derivatives with these innovative indices.’

The international derivatives business of Euronext, Liffe offers a range of global futures and options products made available to via its Liffe Connect trading platform. Derivatives on equities, interest rates, indices and commodities totalling more than EUR1.5trn is traded daily through Liffe, making it the world’s second largest derivatives exchange by transaction value.