Nasdaq Buys Mergent’s Dividend Index Business
October 31st, 2012 at 10:58am by John Spence
Nasdaq (NasdaqGS: NDAQ) on Wednesday said it will acquire the index business of Mergent, which oversees a family of dividend benchmarks, for an undisclosed sum.
The acquisition is notable for the ETF business because funds pegged to dividend-themed indices have been extremely popular with investors hungry for income and lower-risk strategies.
For example, Vanguard Dividend Appreciation ETF (NYSEArca: VIG) tracks the Dividend Achievers Select Index, which was created by Mergent. The benchmark follows U.S.-listed companies that have increased their annual regular dividends for at least the past 10 consecutive years. [Dividend ETF Yield Even More Critical in Sideways Markets]
Aside from managing indices, Mergent also supplies business and financial data on global public companies.
Nasdaq’s deal also includes Mergent’s Indxis business.
Mergent provides the the Dividend Achievers Indexes following companies with strong long-term dividend growth.
Mergent has been tracking companies with outstanding dividend records since 1979, according to a press release. Products based on the Dividend Achievers Indexes are offered by major investment management firms worldwide. Indxis is also an expert provider of index calculation services to a wide spectrum of clients in the financial services industry.
With this acquisition, NASDAQ OMX Global Indexes will become one of the largest providers of dividend-themed indexes based on benchmarked assets and will further enhance its custom index offering capabilities and services, the release said. Assets under management of ETFs licensed by NASDAQ OMX Global Indexes are expected to increase 30% percent as a result of the acquisition.
“As the investment landscape continues to evolve, we see the increased need for indexes to provide rules-based and transparent benchmarks for dividend- and income-themed investments,” said NASDAQ OMX Executive Vice President John Jacobs in a statement.
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