Dow Jones Indexes, a leading global index provider, today announced the launch of the Dow Jones Global Commodity Equity 100 Index, the flagship of a new index series that measures the stock performance of companies engaged in the exploration or production of both scarce and renewable commodities.
Commodity sectors represented in the Index include agriculture, energy, metals, precious metals and water.
In addition to The Dow Jones Global Commodity Equity 100 Index, the series includes four subindexes:
Dow Jones Global Equity Agriculture Index;
Dow Jones Global Equity Energy Index;
Dow Jones Global Equity Scarcity Index, which defines “scarcity” as natural resources that can’t be replenished; and.
Dow Jones Islamic Market Global Equity Commodity Index, which measures all companies in the parent index that pass the Shari’ah screens.
“As the world’s population climbs and emerging markets mature, the consumption of commodities -- many of which have finite supplies -- continues to increase,” said Michael A. Petronella, President, Dow Jones Indexes. “This development yields compelling market opportunities for investors looking to equities engaged in the business of commodities. With the Dow Jones Global Commodity Equity 100 Index series, investors can follow companies engaged in the business of commodities by utilizing a broad index or subsets focused on agriculture, energy or scarcity.”
Companies eligible for inclusion in the:
Dow Jones Global Equity Agriculture Index are those with businesses related to the production of agriculture commodities and can be classified into one of the following sectors: fertilizer, agriculture biotech, agriculture equipment and services, livestock, timber, palm oil and corn/wheat/soybeans.
Dow Jones Global Equity Energy Index are those with businesses related to the exploration and production of energy commodities and can be classified into one of the following sectors: crude and unleaded gas, oil equipment, services and distribution, natural gas and coal.
Dow Jones Global Equity Scarcity Index are those with business related to the exploration and production of scarce commodities and can be classified into one of the following sectors: crude and unleaded gas, natural gas, coal, iron and steel, aluminum, rare earth metals, other base metals, gold, other precious metals and water.
For the Dow Jones Islamic Market Global Equity Commodity Index, Shari’ah screens aim to remove companies in the following lines of business: alcohol, tobacco, pork-related products, conventional financial services, defense/weapons and entertainment. Also excluded are companies with financial ratios that are incompatible with Islamic investment principles.
The indexes are derived from the Dow Jones Global Total Stock Market Index, which represents 65 countries and covers more than 98% of the world's market capitalization. Only companies whose business is related to the exploration and production of commodities are eligible. Within each of five commodity sectors, the largest stocks are selected for the index based on their rankings based on float-adjusted market capitalization.
The indexes are weighted by float-adjusted market capitalization. Weights of individual components are capped at 10% of the broad index; individual sectors are capped at 33.33% of the index. Changes to index composition are made on an annual basis in December.