Dow Jones Launches New Islamic Market Index

Dow Jones Indexes has licensed the Dow Jones Islamic Market International Titans 100 Index to Javelin Investment Management, an investment adviser registered with the Securities and Exchange Commission.

A press release said the blue-chip index will underlie the first Shari’ah compliant exchange-traded fund listed in the U.S.—the JETS Dow Jones Islamic Market International Index Fund (JVS)—available on the New York Stock Exchange July 1.

The Dow Jones Islamic Market International Titans 100 Index measures the stock performance of 100 leading ex-U.S. companies that have passed rules-based screens for Shari’ah compliance. To determine their eligibility for the Dow Jones Islamic Market Indexes, stocks are screened based on their industry type and their financial ratios.

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According to the press release, companies engaged in the following lines of business are excluded: alcohol, tobacco, pork-related products, financial services, defense/weapons, and entertainment. Also excluded are companies for which the following financial ratios are 33% or more: debt divided by trailing 12-month average market capitalization; cash plus interest-bearing securities divided by trailing 12-month average market capitalization; and accounts receivables divided by trailing 12-month average market capitalization.

Each component’s weight is capped at 10% of the index to avoid overweight of one single stock. The index composition is reviewed annually in June.


More information is available at www.djindexes.com.

 

New Securities Track Movement of U.S. Home Prices

Investors now have a chance to gain whether or not there is a recovery in the residential real estate market.

MarketWatch reported that investment manager MacroMarkets on Tuesday launched exchange-traded products on the NYSE Arca designed to track housing values. MacroShares Major Metro Housing Up (ticker: UMM) and MacroShares Major Metro Housing Down (DMM) are benchmarked to the S&P/Case-Shiller Composite-10 Home Price Index, which is a weighted measure of home price changes in the following metropolitan areas: Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, and Washington, D.C.

A MacroMarkets press release said WisdomTree Asset Management will provide educational and product support for the offerings.

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The MacroShares Major Metro Housing Up is designed to rise when U.S. housing prices climb. Its counterpart, MacroShares Major Metro Housing Down, profits when real estate values fall. The paired securities will feature a 300% leverage factor, MarketWatch reported.

Unlike most exchange-traded funds, the MacroShares do not invest directly in an underlying asset such as stocks, bonds or commodities futures. Instead, MacroShares are issued in pairs, and an equal number of shares for each fund are created. The funds invest in short-term Treasury securities and overnight repurchase agreements.

The paired trusts have a binding agreement to pledge assets to one another over time, based on the movement of housing prices. This transfer of Treasury securities back and forth between the funds changes their values and gives investors exposure to the direction of U.S. home prices, the news report said.

The structure resembles a see-saw as the assets are shuffled between the paired trusts, and has also been compared to total-return swaps, according to MarketWatch.


More information is available at

More information is available at www.macroshares.com.

 

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