Dow Jones Indexes has launched the Dow Jones Australia Select Dividend 30 Index that tracks the 30 highest dividend-yielding stocks in Australia.
The index is designed to serve as underlying for investment products such as mutual funds, exchange-traded funds (ETFs) and other investable products.
'Traditionally, Australian companies are known for high dividend payouts. The Dow Jones Australia Select Dividend 30 Index - with an annualized performance of 24.31% and a dividend yield of 5.04% since its inception on 31 December 1999 - offers international and domestic investors an attractive alternative to diversify their portfolios with returns from leading dividend-paying Australian companies,' says Lars Hamich, managing director of STOXX Ltd, the joint venture that is responsible for Dow Jones Indexes' business development in Europe, Asia, Australia, Africa and Middle East. 'The trend towards dividend-focused products and strategies is continuously growing and has become truly global.'
The index universe of the Dow Jones Australia Select Dividend 30 Index is defined as all companies in the Dow Jones Australia Index, which is part of the Dow Jones Global Indexes family. To be included in the index, companies must have a non-negative historical five-year dividend-per-share-growth-rate and a five-year payout ratio of less than or equal to 80%. The weights of individual securities in the Dow Jones Australia Select Dividend 30 Index are capped at 10%. The five largest companies in the index are Tishman Speyer Office Fund with a weighting of 6.43%, Transurban Group with a weighting of 6.08%, Macquarie Goodman Group with a weighting of 5.34%, Sims Group with a weighting of 4.99% and Westfield Group with a weighting of 4.57%.
The dividend yields used to select stocks for the Dow Jones Australia Select Dividend 30 Index have been adjusted to account for differing franking percentages. 'Franked' dividends are unique to Australian companies and are essentially the same as net dividends. Franking percentages may vary from company to company. For companies with 100% franked dividends, the dividend as declared is used. For companies with 0% franked dividends, a 30% corporate tax rate is applied to the dividend prior to calculation yield. For a company that has a franking percentage between 1% and 99%, a 30% corporate tax rate is applied only to the portion of the dividend that is not franked.
The index is reviewed annually in March. Daily historical index values are available from 31 December1999 in US and Australian dollars with a base value set at 100.
The Dow Jones Australia Select Dividend 30 Index further complements the Dow Jones and Dow Jones STOXX Select Dividend Index series, which consists of the Dow Jones US Select Dividend Index, Dow Jones STOXX Select Dividend 30 Index, Dow Jones EURO STOXX Select Dividend 30 Index, Dow Jones Europe Country Select Dividend Indexes for France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland and the UK, Dow Jones EPAC Select Dividend Index, Dow Jones Canada Select Dividend Index, the Dow Jones Asia/Pacific Select Dividend 30 Index, Dow Jones Asia Select Dividend 30 Index and Dow Jones Japan Select Dividend 30 Index.