Uploaded byindexcalculation
251 views

Indxx Super Dividend Methodology May 2014

The Indxx Superdividend U.S. Low Volatility Index is a 50-stock equal-weighted index designed to measure the performance of U.S. companies with high dividend yields and low beta. The index includes securities that meet specific criteria regarding market capitalization, liquidity, public float, and dividend consistency, and undergoes annual reconstitution along with quarterly reviews for dividend policy changes. Corporate actions impacting index constituents, such as stock splits, acquisitions, and bankruptcies, are managed with specific adjustments to maintain the integrity of the index.

Embed presentation

Download to read offline
www.indxx.com Indxx SuperDividend U.S. Low Volatility Index Methodology INDXX, LLC has been granted a license by Global X Management Company LLC to use SuperDividendTM . SuperDividendTM is a trademark of Global X Management Company LLC. May 2014
2 Table of Contents Indxx SuperDividend U.S. Low Volatility Index......................................................................................3 Index Description....................................................................................................................................3 Selection Pool.........................................................................................................................................3 Index Creation Process.........................................................................................................................5 Corporate Actions.......................................................................................................................................6 Dividends.................................................................................................................................................6 Stock Split................................................................................................................................................7 Bonus Issue of Shares ..........................................................................................................................8 Rights Issue.............................................................................................................................................9 Spin Off..................................................................................................................................................10 Delisting.................................................................................................................................................11 Acquisition.............................................................................................................................................12 Merger....................................................................................................................................................13 Bankruptcy ............................................................................................................................................14 Temporary Delisting/Prolonged Trading Suspension.....................................................................15 Index Data .................................................................................................................................................16 Index Policy...............................................................................................................................................17 Disclaimer..................................................................................................................................................18
3 Indxx SuperDividend U.S. Low Volatility Index Index Description The Indxx SuperDividend U.S. Low Volatility Index is a 50-stock equal weighted index designed to measure the market performance of companies in the United States that have a high dividend yield and low beta. The index was incorporated on February 29, 2008. Selection Pool Market Capitalization Minimum market capitalization is set at US$ 500 million Liquidity • Minimum average daily turnover for 6 months has been set at US$ 1 million • The stock should have traded for at least 90% of the total trading days over the last 6 months in its respective stock exchange Domicile A US company, for index purposes, should have the following characteristics: • Domiciled in the US • Listed on any of the US stock exchanges Public Float Public float or free float should be at least 10% of the total shares outstanding for each member Beta Beta of each constituent with respect to its local country benchmark, should be less than or equal to 0.85 Dividend Yield Trailing 12 month dividend yield of all constituents should be in the range of 1% - 20%. Each constituent should have paid dividends consistently for the last 2 years and the current year dividend should be greater than or equal to 50% of the previous year. Security Type Common Stocks, Master Limited Partnership and REITs BDCs will not be considered for inclusion in the portfolio Weighting All constituents in the portfolios are equally weighted. Additionally, no one particular sector can have a weight greater than 25% and MLPs should not constitute more than 20% of the index.
4 Annual Reconstitution 1. Portfolio will be reconstituted once a year on the last business day in February (reconstitution day). On the selection day (five business days before reconstitution day), a new selection pool will be created. 2. All the existing index constituents, which appear in the top 200 companies, ranked by dividend yield in the selection pool (top 200), will be retained. 3. Existing index constituents that are not part of the top 200 are replaced by the companies with the largest dividend yield in the top 200, subject to sector and security cap. 4. Dividend forecast for selected constituents should be stable, i.e. there should be no official announcement as of the selection day, that dividend payments are likely to be cancelled or significantly reduced in the future. Quarter Rebalance Apart from the reconstitution, at the end of every quarter (five business days before the last trading day in May, August and November), the index components are screened for dividend cuts or an overall negative outlook concerning the companies’ dividend policy. A Company excluded during these quarterly reviews will be replaced by a company in the top 200 that is currently not an index member. This company will be given the same weight as the company that is deleted, calculated as on the trading day before the rebalancing takes place. In case more than one company is deleted, the cumulative weight of the companies is calculated and distributed equally among the replacements.
5 Index Creation Process A master list of the securities is initially prepared from the applicable Index Universe by applying the criteria of market capitalization and beta. All companies with (i) market capitalization below US$ 500 million and (ii) a beta of more than 0.85 are eliminated. The remaining companies are screened for turnover and companies with a 6-month average daily turnover of less than US$ 1 million are eliminated. Thereafter, the dividend yield for the remaining companies is calculated. All companies with dividend yields below 1% or above 20% are then removed to obtain a 'Selection List'. The Selection List is ranked according to dividend yield and checked for dividend consistency in the last 2 years. Companies which do not display consistent dividends are removed and public float for the remaining companies is checked. Companies, which do not have at least 10% of public float, are removed to arrive at the 'Selection pool'. The selection pool is ranked by dividend yield and top 200 companies are selected. To determine the initial composition, the companies in the selection pool are ranked in descending order according to their dividend yield. The 50 companies with the largest dividend yield on that day are chosen as index constituents. All constituents in the portfolios are equally weighted. Additionally, no one particular sector can have a weight greater than 25% and MLPs should not constitute more than 20% of the index. On the annual reconstitution day, existing index constituents, which are not part of the top 200 companies, will be replaced by the company with the largest dividend yield that is currently not an index member, subject to sector and security cap.
6 Corporate Actions Corporate actions (such as stock splits, dividends, spin-offs and rights offerings) are applied on the ex-date. The impact and adjustment of various corporate actions are discussed below. Dividends Meaning Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend. Dividends must be "declared" (approved) by a company’s Board of Directors each time they are paid. For public companies, there are four important dates to remember regarding dividends. 1. Declaration Date: Is the day the Board of Directors announces its intention to pay a dividend. On the declaration date, the Board will also announce Date of Record and Payment Date. 2. In-dividend Date: Is the last day, which is one trading day before the ex-dividend date, where the stock is said to be cum dividend ('with dividend'). 3. Ex-dividend Date: Is the day on which all shares bought and sold no longer come attached with the right to be paid the most recently declared dividend. Typically, its 2 trading days before the record date for U.S. securities. 4. Payment Date: Is the day when the dividend checks will actually be mailed to the shareholders of a company or credited to brokerage accounts. Impact on Index Dividends payments impact the total return index calculation. The price return index calculations as well as the number of shares remain unaffected. Adjustment in the Index Dividend payments will be reinvested in the total return index on the ex-dividend date. This means that going forward this additional money will be used to buy additional shares in the future.
7 Stock Split Meaning All publicly-traded companies have a set number of shares that are outstanding on the stock market. A stock split is a decision by the company's board of directors to increase the number of shares that are outstanding by issuing more shares to current shareholders. For example, in a 2-for-1 stock split, every shareholder with one stock is given an additional share. So, if a company had 10 million shares outstanding before the split, it will have 20 million shares outstanding after a 2-for-1 split. A stock's price is also affected by a stock split. After a split, the stock price will be reduced since the number of shares outstanding has increased. In the example of a 2-for-1 split, the share price will be halved. Thus, although the number of outstanding shares and the stock price change, the market capitalization remains constant. A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed. Impact on Index Stock splits impact the number of shares in both the total and price return indices. There is no impact on the index divisor. Adjustment in the Index Stock splits will be adjusted for in the total and price return indices on the ex- date. The number of shares will increase times the adjustment factor for the split. For example if a company has announced a 2-for-1 stock split, the adjustment factor for the same will be 2/1=2. The number of shares in this case will be multiplied by 2.
8 Bonus Issue of Shares Meaning A bonus share is a free share of stock given to current/existing shareholders in a company, based upon the number of shares that the shareholder already owns at the time of announcement of the bonus. While the issue of bonus shares increases the total number of shares issued and owned, it does not increase the value of the company. Although the total number of issued shares increases, the ratio of number of shares held by each shareholder remains constant. New shares are issued to shareholders in proportion to their holdings. For example, the company may give one bonus share for every five shares held. Impact on Index Bonus issue of shares impacts the number of shares in both the total and price return indices. There is no impact on the index divisor. Adjustment in the Index Bonus issue of shares will be adjusted for in the total and price return indices on the ex- date. The number of shares will increase times the adjustment factor for the bonus issue. For example if a company has announced a 100% bonus, the adjustment factor for the same will be 2 i.e. one bonus share for every one share held. The number of shares in this case will be multiplied by 2.
9 Rights Issue Meaning Rights issue is an invitation to existing shareholders to purchase additional new shares in the company. More specifically, this type of issue gives existing shareholders securities called "rights", which, will, give the shareholders the right to purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price. But until the date at which the new shares can be purchased, shareholders may trade the rights on the market the same way they would trade ordinary shares. The rights issued to a shareholder have a value, thus compensating current shareholders for the future dilution of their existing shares' value. Impact on Index Rights issue impacts the number of shares in both the total and price return indices. There will be an impact on the divisors in both the total and price return indices. Adjustment in the Index Rights issue will be adjusted for in the total and price return indices on the ex- date. However the adjustment for rights issue will take place only when the subscription price is less than the stock price on ex-date. The subscription price is the price at which the company gives its existing shareholders the right to purchase new shares.
10 Spin Off Meaning Spin off is the creation of an independent company through the sale or distribution of new shares of an existing business/division of a parent company. A spinoff is a type of divestiture. Businesses wishing to 'streamline' their operations often sell less productive or unrelated subsidiary businesses as spinoffs. The spun-off companies are expected to be worth more as independent entities than as parts of a larger business. In most cases, the parent company or organization offers support doing one or more of the following:  Investing equity in the new firm,  Being the first customer of the spin-out (helps to create cash flow),  Providing incubation space (desk, chairs, phones, internet access, etc.) or  Providing services such as legal, finance, technology, etc. Impact on Index Spin off impacts the divisors in both the total and price return indices. Adjustment in the Index The adjustment for spin off is done on a case to case basis. The Index Committee will decide on one of the following options based on internal research:  The parent company remains in the index and the spun off entity is deemed ineligible for inclusion  The parent company is deemed ineligible to remain in the index however, the spun off entity is deemed eligible for inclusion  Neither the parent company nor the spun off entity are eligible to be in the index. In this case the Index Committee will decide whether to liquidate the parent company in the index or replace it with the next best constituent according to the index methodology
11 Delisting Meaning Delisting refers to the practice of removing the stock of a company from a stock exchange so that investors can no longer trade shares of the stock on that exchange. This typically occurs when a company goes out of business, declares bankruptcy, no longer satisfies the listing rules of stock exchange, or has become a private company after a merger or acquisition, or wants to reduce regulatory reporting complexities and overhead, or if the stock volumes on the exchange from which it wishes to delist are not significant. Impact on Index Delisting of a security impacts the divisors in both the total and price return indices. Adjustment in the Index In the event a company is de-listed from the listed exchange, it will be removed from the index. The Index Committee will decide whether to liquidate the stock in the index or to replace it with the next best constituent according to the index methodology.
12 Acquisition Meaning A corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Acquisitions are often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company's stock or a combination of both. Acquisitions can be either friendly or hostile. Impact on Index Acquisition of a security impacts the divisors in both the total and price return indices. Adjustment in the Index In the event a company is acquired, it will be removed from the index. The Index Committee will decide whether to liquidate the stock in the index or to replace it with the next best constituent according to the index methodology.
13 Merger Meaning Merger is when two companies combine together to form a new company altogether. In other words, it is the combination of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. Impact on Index Merger impacts the divisors in both the total and price return indices. Adjustment in the Index In the event a company is merged, it will be removed from the index. The Index Committee will decide whether to liquidate the stock in the index or to replace it with the next best constituent according to the index methodology.
14 Bankruptcy Meaning Bankruptcy is a legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor (most common) or on behalf of creditors (less common). All of the debtor's assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy. Impact on Index Bankruptcy of a security impacts the divisors in both the total and price return indices. Adjustment in the Index In the event a company is Bankrupt, it will be removed from the index. The Index Committee will decide whether to liquidate the stock in the index or to replace it with the next best constituent according to the index methodology.
15 Temporary Delisting/Prolonged Trading Suspension Meaning A temporary delisting/trading suspension occurs when a security stops trading on the stock exchange for a certain time period. This usually occurs when a publicly-traded company is going to release significant news about itself. The suspension in trading for the affected security gives investors time to review the news and assess its impact. Impact on Index A temporary delisting/trading suspension of a security impacts the divisors in both the total and price return indices. Adjustment in the Index In the event a company is temporary delisted or trading suspension has taken place, it will be removed from the index. The Index Committee will decide whether to liquidate the stock in the index or to replace it with the next best constituent according to the index methodology.
16 Index Data Total Return Index Ordinary cash dividends are applied on the ex-date for calculating the total return index. “Special dividends” are those dividends that are outside of the normal payment pattern established historically by the issuing corporation. Whether a dividend is funded from operating earnings or from other sources of cash does not affect the determination of whether it is ordinary or special. “Special dividends” are treated as corporate actions with offsetting price and divisor adjustments; the total return index reflects both ordinary and special dividends. Price Return Index No dividends are applied to calculate the price return index.
17 Index Policy Index Committee Policy The Index Committee is responsible for setting policy, determining index composition, and administering the indices in accordance with the Indxx index methodology. The Index Committee reserves the right to use qualitative judgment to include, exclude, adjust, or postpone the inclusion of a stock. Continued index membership of a constituent is not necessarily subject to the guidelines provided in each of the Indxx index methodology. A stock may be considered for exclusion by the Index Committee on the basis of corporate governance, accounting policies, lack of transparency and lack of representation, despite meeting all the criteria provided in each of the Indxx index methodology. Announcements Announcements of additions and deletions of constituents, due to various corporate actions mentioned above, in the middle of the year will be decided by the Index Committee. This will be communicated to the client well ahead of time. Also important news items as well as corporate actions with respect to all the constituents of the index will be informed to the client on a weekly basis. Holiday Schedule The index is calculated when the U.S. equity markets are open. In situations where an exchange is forced to close early due to unforeseen events, the index will be calculated based on the closing prices published by the exchange, or if no closing price is available, the last regular trade reported for each stock before the exchange closed.
18 Disclaimer This methodology document and all information contained herein including, without limitation, all text, data, graphs, charts, visuals and theory (collectively, the “information”), were created by and is the sole property of Indxx, LLC. Redistribution, reproduction and/or photocopying of this document in whole or part is prohibited without written permission from Indxx. All information in this document provided by Indxx is impersonal and not tailored to the needs of any person, entity or group. None of the information constitutes an attempt at an offer to sell (or an attempt of an offer to buy), or a promotion or recommendation of, any security, product, investment vehicle or any trading strategy, and Indxx does not endorse, approve or otherwise express any opinion regarding any issuer, security, financial product, instrument, or trading strategy. None of the information, Indxx indices, models, other products or services contained herein is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and should not be relied on as such. A decision to invest in any investment fund or other vehicle should not be made based solely on information or statements contained in this document. Prospective investors are advised to make an investment in any such fund or other vehicle only after carefully considering the risks, fees and expenses associated with investing, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other vehicle. Historical data, analysis and performance of Indxx indices should not be taken as an indication or guarantee of any future performance. Indxx does not guarantee the accuracy and/or completeness of any Indxx index, any data included herein, or any data from which it is based, and Indxx shall have no liability for any errors, omissions, or interruptions therein. All information in these materials in provided “as is” and the content may change without notice. For more information on the index, please email info@indxx.com. Learn more at www.indxx.com.

More Related Content

PPTX
Chapter – 1 THEORY
byAnita Tongli
 
PDF
As20
byAMG, Inc.
 
PPT
MGT101 - Financial Accounting- Lecture 36
byBilal Ahmed
 
DOC
MBA Finance Project Report By Shobhit Jain.
byShobhit Jain
 
DOCX
Group Accounts
byWarui Maina
 
PDF
Holding Account Basics-M.com Level
byEkta Doger
 
PPTX
Chapter 14: Corporation Accounting
byTara Kissel, M.Ed
 
ODP
Economic Environment For Entrepreneurs From India
byDr. Trilok Kumar Jain
 
Chapter – 1 THEORY
byAnita Tongli
 
As20
byAMG, Inc.
 
MGT101 - Financial Accounting- Lecture 36
byBilal Ahmed
 
MBA Finance Project Report By Shobhit Jain.
byShobhit Jain
 
Group Accounts
byWarui Maina
 
Holding Account Basics-M.com Level
byEkta Doger
 
Chapter 14: Corporation Accounting
byTara Kissel, M.Ed
 
Economic Environment For Entrepreneurs From India
byDr. Trilok Kumar Jain
 

What's hot

PPT
Corporations
bymscuttle
 
PPT
Consolidation of accounts background
bysandesh mundra
 
PDF
3Q 2013 Earnings Conference Call Presentation
byinvestors_principalfinancial
 
DOCX
STR 581 Capstone Final Examination Part 2 - Studentehelp
bystudent ehelp
 
PPTX
Consolidation of accounts ifrs
bysandesh mundra
 
DOCX
Cf report
byShanta Mohanty
 
DOCX
Consolidated Financial Statements
byAvinash Chavan
 
DOCX
Balancing the Distribution of Income: Factors Affecting Decision Making with ...
byDavid Kyson
 
DOCX
Acc 573 Enhance teaching / snaptutorial.com
byHarrisGeorg44
 
PPTX
CIMA-F2-Consolidated Financial Statements
byKapp Edge Solutions Pvt Ltd
 
PDF
Solutions Manual for Advanced Accounting 11th Edition by Beams
byZiaPace
 
PPT
Retained earnings
byCzarina Patalod
 
PPTX
Consolidation of Accounts under IND-AS
bysandesh mundra
 
DOCX
Unit 345 cl
byHiren Mehta
 
PPTX
3. capital of company
byA. Pooja Narayan
 
PDF
The Principal Financial Group 101
byinvestors_principalfinancial
 
PPT
Capital Structure & Financial Leverage Analysis of Software Industry
byanujsurana
 
PPTX
Holding company sjv
byshailu_sinh
 
PPTX
Fi̇nance
byASLI BOZKURT
 
Corporations
bymscuttle
 
Consolidation of accounts background
bysandesh mundra
 
3Q 2013 Earnings Conference Call Presentation
byinvestors_principalfinancial
 
STR 581 Capstone Final Examination Part 2 - Studentehelp
bystudent ehelp
 
Consolidation of accounts ifrs
bysandesh mundra
 
Cf report
byShanta Mohanty
 
Consolidated Financial Statements
byAvinash Chavan
 
Balancing the Distribution of Income: Factors Affecting Decision Making with ...
byDavid Kyson
 
Acc 573 Enhance teaching / snaptutorial.com
byHarrisGeorg44
 
CIMA-F2-Consolidated Financial Statements
byKapp Edge Solutions Pvt Ltd
 
Solutions Manual for Advanced Accounting 11th Edition by Beams
byZiaPace
 
Retained earnings
byCzarina Patalod
 
Consolidation of Accounts under IND-AS
bysandesh mundra
 
Unit 345 cl
byHiren Mehta
 
3. capital of company
byA. Pooja Narayan
 
The Principal Financial Group 101
byinvestors_principalfinancial
 
Capital Structure & Financial Leverage Analysis of Software Industry
byanujsurana
 
Holding company sjv
byshailu_sinh
 
Fi̇nance
byASLI BOZKURT
 

Viewers also liked

PDF
TLE - Mechanical Drafting (Learning Module)
byMarkleen Guimbao
 
PDF
Project appraisal system at APSFC
bySharath Malkani
 
PDF
Thesis final (wilson 2009-080-085)
byUlfa Fitria
 
PDF
Project Proposal Guidelines
byProf. Erwin Globio
 
DOCX
Format thesis
byart baldelovar
 
PDF
Stores management and stock control
byGabriel Lubale
 
TLE - Mechanical Drafting (Learning Module)
byMarkleen Guimbao
 
Project appraisal system at APSFC
bySharath Malkani
 
Thesis final (wilson 2009-080-085)
byUlfa Fitria
 
Project Proposal Guidelines
byProf. Erwin Globio
 
Format thesis
byart baldelovar
 
Stores management and stock control
byGabriel Lubale
 

Similar to Indxx Super Dividend Methodology May 2014

DOCX
Stock split
byKaustubh Gupta
 
PDF
Untitleddocument
byvarsha nihanth lade
 
DOCX
Corporate Dividend policy
bytigerjayadev
 
PDF
How to select equity shares for investment in share market
byAshishAgarwal403
 
PPT
Stock Market indices
byDevdut Saha
 
PPTX
Common stock
byhafsa317
 
PDF
SECTION IV - CHAPTER 21 - Market Instruments , Data & The Technical Analyst
byProfessional Training Academy
 
PDF
SECTION IV - CHAPTER 22 - Equities
byProfessional Training Academy
 
PDF
The Differences of Abnormal Return and Trading Volume Activity in Cum-Dividen...
byAJHSSR Journal
 
PDF
Fundamentals of Corporate Finance. Chapter 17 Payout Policy. 1) Wh.pdf
byammanelectronic
 
PDF
Equity analysis valuation new notes
byXLO India Ltd.
 
PDF
S&P BSE Sensex
byabhipray
 
DOC
Corporate actions
byAnurag Prasad
 
DOCX
FIN571 Wk#4 Team Assignment – Video Transcript 1Concept Re.docx
bymydrynan
 
PDF
What is Dividend.pdf
byRishiChoudhary26
 
PPT
Indian Financial Market
byJohn Daniel
 
PPTX
TTCK_Chap4_ENG slide thị trường chứng khoán.pptx
bytrankhanh140104
 
PPT
(Financial Management )dividend policy.ppt
byAsmita Nagpal Bajaj
 
PDF
Exploring Index Effects - Tamas Toth
byTamas Toth, CFA
 
PPT
Dividend policy
byBerat Başat
 
Stock split
byKaustubh Gupta
 
Untitleddocument
byvarsha nihanth lade
 
Corporate Dividend policy
bytigerjayadev
 
How to select equity shares for investment in share market
byAshishAgarwal403
 
Stock Market indices
byDevdut Saha
 
Common stock
byhafsa317
 
SECTION IV - CHAPTER 21 - Market Instruments , Data & The Technical Analyst
byProfessional Training Academy
 
SECTION IV - CHAPTER 22 - Equities
byProfessional Training Academy
 
The Differences of Abnormal Return and Trading Volume Activity in Cum-Dividen...
byAJHSSR Journal
 
Fundamentals of Corporate Finance. Chapter 17 Payout Policy. 1) Wh.pdf
byammanelectronic
 
Equity analysis valuation new notes
byXLO India Ltd.
 
S&P BSE Sensex
byabhipray
 
Corporate actions
byAnurag Prasad
 
FIN571 Wk#4 Team Assignment – Video Transcript 1Concept Re.docx
bymydrynan
 
What is Dividend.pdf
byRishiChoudhary26
 
Indian Financial Market
byJohn Daniel
 
TTCK_Chap4_ENG slide thị trường chứng khoán.pptx
bytrankhanh140104
 
(Financial Management )dividend policy.ppt
byAsmita Nagpal Bajaj
 
Exploring Index Effects - Tamas Toth
byTamas Toth, CFA
 
Dividend policy
byBerat Başat
 

Recently uploaded

PDF
Best Top 3 Sites to Buy Google Reviews (5-Star & Non-Drop).pdf
byhttps://pvaallit.com/product/buy-google-5-star-reviews/
 
PDF
17 Guide to Buying Verified Binance Accounts in the US.pdf
byhttps://pvaisback.com/product/buy-old-gmail-accounts/
 
PDF
Kirill Klip GEM Royalty TNR Gold Lithium Presentation
byKirill Klip
 
PDF
Top 5 Trusted Websites to Buy Verified PayPal Accounts Safely in 2026
byUsaservicepoint
 
PDF
The threat to financial insitutions of quantum computing breaking all encrypt...
byChris Skinner
 
PDF
A Comprehensive Guide to Buy Verified PayPal Accounts in the US.pdf
byPremium Phone Verified Account Providers
 
PDF
How To Buy Verified Cash App Accounts - Secure Your Transactions.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
DOCX
Buy Verified PayPal Account Online_ A Comprehensive ....docx
byBusiness
 
DOCX
Best Top 7 sites to Buy Old Gmail Accounts (PVA & Aged).docx
byhttps://pvaallit.com/product/buy-google-5-star-reviews/
 
PPTX
Exterior Front Entry Door Design Trends, 2025–2026
bydoornmore
 
PDF
_Top 7 Mistakes to Avoid When Buying Google Ads Accounts.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
PDF
enterprise software is not dead and here is why
bywangbin26
 
PPTX
Finding Product-Market Fit in the Age of AI
byJeffrey Bussgang
 
PDF
_Top 7 Tips for Buying Verified PayPal Accounts.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
DOCX
Fast Delivery of Real Buy Twitter Accounts Available in 2026.docx
byBusiness
 
PDF
Vision.pdf TPR document on trusteeship and governance
byHenry Tapper
 
PDF
BendelPuertoRicoCubaGuyanaVenezuelaPetroleumRefineryPetrochemicalPetroAgroInd...
byOsaJOkundayeODMDFAAO
 
PDF
Equinox Gold - January Investor Presentation.pdf
byEquinox Gold Corp.
 
DOCX
How to Buy a Verified PayPal Account_ Step-by-Step Instructions.docx
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
DOCX
Buy Old Gmail Accounts USA – Instant Delivery Bulk Gmail.docx
byDigital Marketind and Business By PVAisBack.Com
 
Best Top 3 Sites to Buy Google Reviews (5-Star & Non-Drop).pdf
byhttps://pvaallit.com/product/buy-google-5-star-reviews/
 
17 Guide to Buying Verified Binance Accounts in the US.pdf
byhttps://pvaisback.com/product/buy-old-gmail-accounts/
 
Kirill Klip GEM Royalty TNR Gold Lithium Presentation
byKirill Klip
 
Top 5 Trusted Websites to Buy Verified PayPal Accounts Safely in 2026
byUsaservicepoint
 
The threat to financial insitutions of quantum computing breaking all encrypt...
byChris Skinner
 
A Comprehensive Guide to Buy Verified PayPal Accounts in the US.pdf
byPremium Phone Verified Account Providers
 
How To Buy Verified Cash App Accounts - Secure Your Transactions.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
Buy Verified PayPal Account Online_ A Comprehensive ....docx
byBusiness
 
Best Top 7 sites to Buy Old Gmail Accounts (PVA & Aged).docx
byhttps://pvaallit.com/product/buy-google-5-star-reviews/
 
Exterior Front Entry Door Design Trends, 2025–2026
bydoornmore
 
_Top 7 Mistakes to Avoid When Buying Google Ads Accounts.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
enterprise software is not dead and here is why
bywangbin26
 
Finding Product-Market Fit in the Age of AI
byJeffrey Bussgang
 
_Top 7 Tips for Buying Verified PayPal Accounts.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
Fast Delivery of Real Buy Twitter Accounts Available in 2026.docx
byBusiness
 
Vision.pdf TPR document on trusteeship and governance
byHenry Tapper
 
BendelPuertoRicoCubaGuyanaVenezuelaPetroleumRefineryPetrochemicalPetroAgroInd...
byOsaJOkundayeODMDFAAO
 
Equinox Gold - January Investor Presentation.pdf
byEquinox Gold Corp.
 
How to Buy a Verified PayPal Account_ Step-by-Step Instructions.docx
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
Buy Old Gmail Accounts USA – Instant Delivery Bulk Gmail.docx
byDigital Marketind and Business By PVAisBack.Com
 

Indxx Super Dividend Methodology May 2014

  • 1.
    www.indxx.com Indxx SuperDividend U.S.Low Volatility Index Methodology INDXX, LLC has been granted a license by Global X Management Company LLC to use SuperDividendTM . SuperDividendTM is a trademark of Global X Management Company LLC. May 2014
  • 2.
    2 Table of Contents IndxxSuperDividend U.S. Low Volatility Index......................................................................................3 Index Description....................................................................................................................................3 Selection Pool.........................................................................................................................................3 Index Creation Process.........................................................................................................................5 Corporate Actions.......................................................................................................................................6 Dividends.................................................................................................................................................6 Stock Split................................................................................................................................................7 Bonus Issue of Shares ..........................................................................................................................8 Rights Issue.............................................................................................................................................9 Spin Off..................................................................................................................................................10 Delisting.................................................................................................................................................11 Acquisition.............................................................................................................................................12 Merger....................................................................................................................................................13 Bankruptcy ............................................................................................................................................14 Temporary Delisting/Prolonged Trading Suspension.....................................................................15 Index Data .................................................................................................................................................16 Index Policy...............................................................................................................................................17 Disclaimer..................................................................................................................................................18
  • 3.
    3 Indxx SuperDividend U.S.Low Volatility Index Index Description The Indxx SuperDividend U.S. Low Volatility Index is a 50-stock equal weighted index designed to measure the market performance of companies in the United States that have a high dividend yield and low beta. The index was incorporated on February 29, 2008. Selection Pool Market Capitalization Minimum market capitalization is set at US$ 500 million Liquidity • Minimum average daily turnover for 6 months has been set at US$ 1 million • The stock should have traded for at least 90% of the total trading days over the last 6 months in its respective stock exchange Domicile A US company, for index purposes, should have the following characteristics: • Domiciled in the US • Listed on any of the US stock exchanges Public Float Public float or free float should be at least 10% of the total shares outstanding for each member Beta Beta of each constituent with respect to its local country benchmark, should be less than or equal to 0.85 Dividend Yield Trailing 12 month dividend yield of all constituents should be in the range of 1% - 20%. Each constituent should have paid dividends consistently for the last 2 years and the current year dividend should be greater than or equal to 50% of the previous year. Security Type Common Stocks, Master Limited Partnership and REITs BDCs will not be considered for inclusion in the portfolio Weighting All constituents in the portfolios are equally weighted. Additionally, no one particular sector can have a weight greater than 25% and MLPs should not constitute more than 20% of the index.
  • 4.
    4 Annual Reconstitution 1. Portfoliowill be reconstituted once a year on the last business day in February (reconstitution day). On the selection day (five business days before reconstitution day), a new selection pool will be created. 2. All the existing index constituents, which appear in the top 200 companies, ranked by dividend yield in the selection pool (top 200), will be retained. 3. Existing index constituents that are not part of the top 200 are replaced by the companies with the largest dividend yield in the top 200, subject to sector and security cap. 4. Dividend forecast for selected constituents should be stable, i.e. there should be no official announcement as of the selection day, that dividend payments are likely to be cancelled or significantly reduced in the future. Quarter Rebalance Apart from the reconstitution, at the end of every quarter (five business days before the last trading day in May, August and November), the index components are screened for dividend cuts or an overall negative outlook concerning the companies’ dividend policy. A Company excluded during these quarterly reviews will be replaced by a company in the top 200 that is currently not an index member. This company will be given the same weight as the company that is deleted, calculated as on the trading day before the rebalancing takes place. In case more than one company is deleted, the cumulative weight of the companies is calculated and distributed equally among the replacements.
  • 5.
    5 Index Creation Process Amaster list of the securities is initially prepared from the applicable Index Universe by applying the criteria of market capitalization and beta. All companies with (i) market capitalization below US$ 500 million and (ii) a beta of more than 0.85 are eliminated. The remaining companies are screened for turnover and companies with a 6-month average daily turnover of less than US$ 1 million are eliminated. Thereafter, the dividend yield for the remaining companies is calculated. All companies with dividend yields below 1% or above 20% are then removed to obtain a 'Selection List'. The Selection List is ranked according to dividend yield and checked for dividend consistency in the last 2 years. Companies which do not display consistent dividends are removed and public float for the remaining companies is checked. Companies, which do not have at least 10% of public float, are removed to arrive at the 'Selection pool'. The selection pool is ranked by dividend yield and top 200 companies are selected. To determine the initial composition, the companies in the selection pool are ranked in descending order according to their dividend yield. The 50 companies with the largest dividend yield on that day are chosen as index constituents. All constituents in the portfolios are equally weighted. Additionally, no one particular sector can have a weight greater than 25% and MLPs should not constitute more than 20% of the index. On the annual reconstitution day, existing index constituents, which are not part of the top 200 companies, will be replaced by the company with the largest dividend yield that is currently not an index member, subject to sector and security cap.
  • 6.
    6 Corporate Actions Corporate actions(such as stock splits, dividends, spin-offs and rights offerings) are applied on the ex-date. The impact and adjustment of various corporate actions are discussed below. Dividends Meaning Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend. Dividends must be "declared" (approved) by a company’s Board of Directors each time they are paid. For public companies, there are four important dates to remember regarding dividends. 1. Declaration Date: Is the day the Board of Directors announces its intention to pay a dividend. On the declaration date, the Board will also announce Date of Record and Payment Date. 2. In-dividend Date: Is the last day, which is one trading day before the ex-dividend date, where the stock is said to be cum dividend ('with dividend'). 3. Ex-dividend Date: Is the day on which all shares bought and sold no longer come attached with the right to be paid the most recently declared dividend. Typically, its 2 trading days before the record date for U.S. securities. 4. Payment Date: Is the day when the dividend checks will actually be mailed to the shareholders of a company or credited to brokerage accounts. Impact on Index Dividends payments impact the total return index calculation. The price return index calculations as well as the number of shares remain unaffected. Adjustment in the Index Dividend payments will be reinvested in the total return index on the ex-dividend date. This means that going forward this additional money will be used to buy additional shares in the future.
  • 7.
    7 Stock Split Meaning All publicly-tradedcompanies have a set number of shares that are outstanding on the stock market. A stock split is a decision by the company's board of directors to increase the number of shares that are outstanding by issuing more shares to current shareholders. For example, in a 2-for-1 stock split, every shareholder with one stock is given an additional share. So, if a company had 10 million shares outstanding before the split, it will have 20 million shares outstanding after a 2-for-1 split. A stock's price is also affected by a stock split. After a split, the stock price will be reduced since the number of shares outstanding has increased. In the example of a 2-for-1 split, the share price will be halved. Thus, although the number of outstanding shares and the stock price change, the market capitalization remains constant. A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed. Impact on Index Stock splits impact the number of shares in both the total and price return indices. There is no impact on the index divisor. Adjustment in the Index Stock splits will be adjusted for in the total and price return indices on the ex- date. The number of shares will increase times the adjustment factor for the split. For example if a company has announced a 2-for-1 stock split, the adjustment factor for the same will be 2/1=2. The number of shares in this case will be multiplied by 2.
  • 8.
    8 Bonus Issue ofShares Meaning A bonus share is a free share of stock given to current/existing shareholders in a company, based upon the number of shares that the shareholder already owns at the time of announcement of the bonus. While the issue of bonus shares increases the total number of shares issued and owned, it does not increase the value of the company. Although the total number of issued shares increases, the ratio of number of shares held by each shareholder remains constant. New shares are issued to shareholders in proportion to their holdings. For example, the company may give one bonus share for every five shares held. Impact on Index Bonus issue of shares impacts the number of shares in both the total and price return indices. There is no impact on the index divisor. Adjustment in the Index Bonus issue of shares will be adjusted for in the total and price return indices on the ex- date. The number of shares will increase times the adjustment factor for the bonus issue. For example if a company has announced a 100% bonus, the adjustment factor for the same will be 2 i.e. one bonus share for every one share held. The number of shares in this case will be multiplied by 2.
  • 9.
    9 Rights Issue Meaning Rights issueis an invitation to existing shareholders to purchase additional new shares in the company. More specifically, this type of issue gives existing shareholders securities called "rights", which, will, give the shareholders the right to purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price. But until the date at which the new shares can be purchased, shareholders may trade the rights on the market the same way they would trade ordinary shares. The rights issued to a shareholder have a value, thus compensating current shareholders for the future dilution of their existing shares' value. Impact on Index Rights issue impacts the number of shares in both the total and price return indices. There will be an impact on the divisors in both the total and price return indices. Adjustment in the Index Rights issue will be adjusted for in the total and price return indices on the ex- date. However the adjustment for rights issue will take place only when the subscription price is less than the stock price on ex-date. The subscription price is the price at which the company gives its existing shareholders the right to purchase new shares.
  • 10.
    10 Spin Off Meaning Spin offis the creation of an independent company through the sale or distribution of new shares of an existing business/division of a parent company. A spinoff is a type of divestiture. Businesses wishing to 'streamline' their operations often sell less productive or unrelated subsidiary businesses as spinoffs. The spun-off companies are expected to be worth more as independent entities than as parts of a larger business. In most cases, the parent company or organization offers support doing one or more of the following:  Investing equity in the new firm,  Being the first customer of the spin-out (helps to create cash flow),  Providing incubation space (desk, chairs, phones, internet access, etc.) or  Providing services such as legal, finance, technology, etc. Impact on Index Spin off impacts the divisors in both the total and price return indices. Adjustment in the Index The adjustment for spin off is done on a case to case basis. The Index Committee will decide on one of the following options based on internal research:  The parent company remains in the index and the spun off entity is deemed ineligible for inclusion  The parent company is deemed ineligible to remain in the index however, the spun off entity is deemed eligible for inclusion  Neither the parent company nor the spun off entity are eligible to be in the index. In this case the Index Committee will decide whether to liquidate the parent company in the index or replace it with the next best constituent according to the index methodology
  • 11.
    11 Delisting Meaning Delisting refers tothe practice of removing the stock of a company from a stock exchange so that investors can no longer trade shares of the stock on that exchange. This typically occurs when a company goes out of business, declares bankruptcy, no longer satisfies the listing rules of stock exchange, or has become a private company after a merger or acquisition, or wants to reduce regulatory reporting complexities and overhead, or if the stock volumes on the exchange from which it wishes to delist are not significant. Impact on Index Delisting of a security impacts the divisors in both the total and price return indices. Adjustment in the Index In the event a company is de-listed from the listed exchange, it will be removed from the index. The Index Committee will decide whether to liquidate the stock in the index or to replace it with the next best constituent according to the index methodology.
  • 12.
    12 Acquisition Meaning A corporate actionin which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Acquisitions are often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company's stock or a combination of both. Acquisitions can be either friendly or hostile. Impact on Index Acquisition of a security impacts the divisors in both the total and price return indices. Adjustment in the Index In the event a company is acquired, it will be removed from the index. The Index Committee will decide whether to liquidate the stock in the index or to replace it with the next best constituent according to the index methodology.
  • 13.
    13 Merger Meaning Merger is whentwo companies combine together to form a new company altogether. In other words, it is the combination of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. Impact on Index Merger impacts the divisors in both the total and price return indices. Adjustment in the Index In the event a company is merged, it will be removed from the index. The Index Committee will decide whether to liquidate the stock in the index or to replace it with the next best constituent according to the index methodology.
  • 14.
    14 Bankruptcy Meaning Bankruptcy is alegal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor (most common) or on behalf of creditors (less common). All of the debtor's assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy. Impact on Index Bankruptcy of a security impacts the divisors in both the total and price return indices. Adjustment in the Index In the event a company is Bankrupt, it will be removed from the index. The Index Committee will decide whether to liquidate the stock in the index or to replace it with the next best constituent according to the index methodology.
  • 15.
    15 Temporary Delisting/Prolonged TradingSuspension Meaning A temporary delisting/trading suspension occurs when a security stops trading on the stock exchange for a certain time period. This usually occurs when a publicly-traded company is going to release significant news about itself. The suspension in trading for the affected security gives investors time to review the news and assess its impact. Impact on Index A temporary delisting/trading suspension of a security impacts the divisors in both the total and price return indices. Adjustment in the Index In the event a company is temporary delisted or trading suspension has taken place, it will be removed from the index. The Index Committee will decide whether to liquidate the stock in the index or to replace it with the next best constituent according to the index methodology.
  • 16.
    16 Index Data Total ReturnIndex Ordinary cash dividends are applied on the ex-date for calculating the total return index. “Special dividends” are those dividends that are outside of the normal payment pattern established historically by the issuing corporation. Whether a dividend is funded from operating earnings or from other sources of cash does not affect the determination of whether it is ordinary or special. “Special dividends” are treated as corporate actions with offsetting price and divisor adjustments; the total return index reflects both ordinary and special dividends. Price Return Index No dividends are applied to calculate the price return index.
  • 17.
    17 Index Policy Index CommitteePolicy The Index Committee is responsible for setting policy, determining index composition, and administering the indices in accordance with the Indxx index methodology. The Index Committee reserves the right to use qualitative judgment to include, exclude, adjust, or postpone the inclusion of a stock. Continued index membership of a constituent is not necessarily subject to the guidelines provided in each of the Indxx index methodology. A stock may be considered for exclusion by the Index Committee on the basis of corporate governance, accounting policies, lack of transparency and lack of representation, despite meeting all the criteria provided in each of the Indxx index methodology. Announcements Announcements of additions and deletions of constituents, due to various corporate actions mentioned above, in the middle of the year will be decided by the Index Committee. This will be communicated to the client well ahead of time. Also important news items as well as corporate actions with respect to all the constituents of the index will be informed to the client on a weekly basis. Holiday Schedule The index is calculated when the U.S. equity markets are open. In situations where an exchange is forced to close early due to unforeseen events, the index will be calculated based on the closing prices published by the exchange, or if no closing price is available, the last regular trade reported for each stock before the exchange closed.
  • 18.
    18 Disclaimer This methodology documentand all information contained herein including, without limitation, all text, data, graphs, charts, visuals and theory (collectively, the “information”), were created by and is the sole property of Indxx, LLC. Redistribution, reproduction and/or photocopying of this document in whole or part is prohibited without written permission from Indxx. All information in this document provided by Indxx is impersonal and not tailored to the needs of any person, entity or group. None of the information constitutes an attempt at an offer to sell (or an attempt of an offer to buy), or a promotion or recommendation of, any security, product, investment vehicle or any trading strategy, and Indxx does not endorse, approve or otherwise express any opinion regarding any issuer, security, financial product, instrument, or trading strategy. None of the information, Indxx indices, models, other products or services contained herein is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and should not be relied on as such. A decision to invest in any investment fund or other vehicle should not be made based solely on information or statements contained in this document. Prospective investors are advised to make an investment in any such fund or other vehicle only after carefully considering the risks, fees and expenses associated with investing, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other vehicle. Historical data, analysis and performance of Indxx indices should not be taken as an indication or guarantee of any future performance. Indxx does not guarantee the accuracy and/or completeness of any Indxx index, any data included herein, or any data from which it is based, and Indxx shall have no liability for any errors, omissions, or interruptions therein. All information in these materials in provided “as is” and the content may change without notice. For more information on the index, please email info@indxx.com. Learn more at www.indxx.com.