STOXX announces equal weight version for China A 50 Index
24 May 2013
News, Asia, China
By Asia Asset Management
STOXX Limited has introduced the STOXX China A 50 Equal Weight Index, which represents the components of the recently launched STOXX China A 50 Index irrespective of their market capitalisation by weighing them equally. The new index is designed to underlie financial products such as exchange-traded funds (ETFs) or structured products.
“STOXX is not only committed to develop innovative index concepts, but also to apply new strategies to existing indices to offer market participants a broad set of superior benchmarks,” said Hartmut Graf, chief executive officer, STOXX Limited. “In the new STOXX China A 50 Equal Weight Index, the smallest companies are given the same weight as the largest companies, thus no small group of components dominates the index. This leads to a maximum diversification of China’s largest 50 A-shares.”
The STOXX China A 50 Equal Weight Index follows the same methodology as the STOXX China A 50 Index, except for the weighting process. In the new index, all components share an equal weight, which leads to an increased exposure to smaller index components. In the market capitalisation weighted STOXX China A 50 Index, the top ten components make up approximately 46% of the index, whereas in the equal weight index, this percentage decreases to approximately 20%. As relative weights shift over time, the index is rebalanced quarterly and weights are brought back to equal allocations.
The STOXX China A 50 Equal Weight Index is reviewed simultaneously with the STOXX China A 50 Index on an annual basis in September. The index is available in euro, US dollar, Hong Kong dollar and Chinese renminbi. Daily history is available back to December 22, 2003.
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