Deutsche Boerse has expanded its index offering further with the DAXglobalWater Index – the first index launched by the company to track the worldslargest and most liquid companies from the water industry.
Deutsche Boerse has also launched seven new short indices, which investors can use as a hedge against falling prices in the emerging markets.
The DAXglobal Water Index contains companies from the water supply,irrigation and sewage disposal sectors that are traded on international stock exchanges. Each company represented in the index must generate at least 30% of its income in these sectors.
At present, the water index contains 26 companies, the three largest beingthe Spanish company Aguas Barcelona, Veolia Environnement from France and UTD Utilities from the UK. At 33%, UK stocks make up the largestpercentage of the index, followed by the USA, Malaysia, Spain, France and Hong Kong. A historical back-calculation of the indexs performance shows 32% for 2007 and 24% for 2006.
Selection criteria for the DAXglobal Water Index are market capitalizationand the average daily exchange turnover for the last six months. The index is calculated as a price and performance index in euros, US dollars and pounds sterling. The index composition is reviewed once a year. Rebalancing is undertaken on a quarterly basis.
Deutsche Boerse has also added seven new DAXglobal short indices to itsoffering. The performance of the short indices is directly opposed to thatof their counterparts: DAXglobal Asia, DAXglobal China, DAXglobal Emerging11, DAXglobal Russia, DAXglobal Russia+, DAXglobal BRIC and DBIX, which tracks Indian companies.
If, for example, the DAXglobal China Index falls by 5%, the DAXglobal China Short Index rises by 5%, and vice versa.Investors who anticipate a negative index performance for the respective markets can generate positive returns from these short indices.