Dow Jones EURO STOXX 50 Short Index and the Dow Jones EURO STOXX 50 Leveraged Index have been licensed to Commerzbank AG.
The indexes will serve as underlying for exchange-traded funds (ETFs) which start trading on XETRA. They linked to the performance of the Dow Jones EURO STOXX 50 Index and replicate a short and a leveraged investment strategy.
The Dow Jones EURO STOXX 50 Short Index replicates the inverse of the daily performance of the Dow Jones EURO STOXX 50 Index. A negative performance of the blue-chip index results in a positive performance of the Dow Jones EURO STOXX 50 Short Index, and vice versa. If the Dow Jones EURO STOXX 50 is up 5%, the Dow Jones EURO STOXX 50 Short Index is down -5% respectively. The cost of dividends and the benefit of earning interest are also taken into account in the index calculation.
The Dow Jones EURO STOXX 50 Leveraged Index replicates a leveraged investment strategy linked to the daily performance of the Dow Jones EURO STOXX 50 Index, i.e. a leverage factor of 2 is applied. If the Dow Jones EURO STOXX 50 is up 5%, the Dow Jones EURO STOXX 50 Leveraged Index is up 10% respectively. The cost of borrowing is also taken into account in the index calculation.
The Dow Jones STOXX Strategy index series is designed to track enhanced investment strategies and includes the Dow Jones EURO STOXX 50 BuyWrite Index, Dow Jones EURO STOXX 50 Leveraged, Dow Jones EURO STOXX 50 Short and the Dow Jones STOXX 600 Supersector Short Indexes as well as the VSTOXX.
“By licensing these indexes Commerzbank adds two key investment strategies to its range of European exchange-traded funds,” says Ricardo Manrique, chief executive officer, STOXX Ltd. “The Dow Jones EURO STOXX 50 Short Index enables market participants to achieve positive returns in downward markets whereas the Dow Jones EURO STOXX 50 Leveraged Index increases returns in bullish markets.”
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