Products August 9, 2011

Dow Jones Launches Shipping Industry Index

Dow Jones Indexes has launched its Global Shipping Index, which measures the performance of twenty-five dividend-paying companies in the shipping industry.
Reported by

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. 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.  

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

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. “These same component companies are also in position to take advantage of growing emerging-market demand for commodities and other goods.” 

Products August 9, 2011

FRC Issues Report on TDF Trends

Retirement plan sponsors are selecting only specific parts of a target-date fund series, even though asset managers market the entire target-date fund series, according to a report from Financial Research Corporation (FRC) and Brightscope. 
Reported by

In the report, “Trends in Target-Date Portfolios on Recordkeeper Platforms,” FRC makes the argument that this trend will have broader implications for the target-date market, as it suggests that certain asset managers will face demand hurdles for their target-date funds that were previously unexpected.

FRC examined the asset composition of target-date funds in 50,000 401(k) plans, representing 90% of all 401(k) plan assets. It also assessed how recordkeepers and plan sponsors use target-date products and reviewed product distribution trends.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

Based on its findings, FRC offers actionable recommendations for firms seeking to grow their target-date product lines in the report.  FRC and Brightscope say that the analysis of how target-date funds are distributed by recordkeepers should assist industry observers and research consultants to better understand and assess the 401(k) platform segment, as well as help manufacturers position their product on recordkeeper platforms.

“To illustrate this trend, BrightScope data reveals that in one retirement plan, only five out of 12 funds in a target-date series were selected by the plan sponsor. When this trend plays out in the broader marketplace, it leads to varying asset levels across target-date categories. As seen in FRC’s data, 70% of target-date mutual fund assets are held in the five most popular fund categories: 2020, 2030, 2025, 2015, and 2040,” said Lynette DeWitt, author of the report. “We’ve known already that a few fund categories hold the largest assets, and now we understand why. We anticipate that the less popular funds in a series will remain open to maturity now, but target-date series in the future will be comprised of fewer funds.”

The report can be purchased through the FRC sales department by calling 866-532-8009.

«