S&P Dow Jones Indices, one of the largest providers of indices for exchange traded funds, introduced a new a Europe index that emphasizes low volatility, dividend-paying stocks.
The S&P Europe 350 Low Volatility High Dividend Index tracks the 50 highest yielding companies from the S&P Europe 350 Index that meet certain diversification, liquidity and volatility requirements, according to a statement from S&P Dow Jones Indices.
“To be included in the S&P Europe 350 Low Volatility High Dividend Index, a stock must be a member of the S&P Europe 350. All stocks in the selected universe are ranked in descending order by their 90-day trailing dividend yield. The top 75 stocks with the highest dividend yield are then selected, provided that the number of stocks from each GICS® sector and country is capped at 15,” said the index provider.
The S&P 350 Europe Index covers 17 European markets and includes 70% of the region’s market cap. Top-10 holdings currently include Nestle, Novartis (NYSE: NVS) and HSBC (NYSE: HBC).
The $2.6 billion iShares Europe ETF (NYSEArca: IEV) is the ETF that tracks the S&P Europe 350 Index. The U.K. and Switzerland combine for almost 47% of IEV’s country weight.
S&P Dow Jones Indices did not say in the statement if the S&P Europe 350 Low Volatility High Dividend Index will soon be linked to an ETF.
However, the index provider last week introduced the S&P Emerging Markets Domestic Demand Index and within days, it was revealed the EGShares Emerging Markets Domestic Demand ETF (NYSEArca: EMDD) would track that index.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.