NEW YORK, June 1, 2006 (PRIMEZONE) -- Dow Jones Indexes, a leading global index provider, today announced a change to the Dow Jones Target Date Index series, the first of its kind that seeks to measure the performance of balanced and multi-asset class portfolios with risk profiles that potentially become more conservative as the "target date" approaches. The Dow Jones Target Date Indexes (Global) and Dow Jones U.S. Target Date Indexes each comprise 10 indexes consisting of underlying equity, fixed income and Treasury Bill indexes (representing cash), with target (or expiration) dates set at five-year intervals out to 45 years.
The risk reduction methodology of the Dow Jones Target Date Index series will be extended by 10 years so that the index composition mix is adjusted to include a greater exposure to the risk relative to the equity market throughout the life of the index. Beginning today, the risk reduction methodology for each Dow Jones Target Date Index will start 35 years prior to the target date and be revised automatically on a monthly basis from a 90% exposure to the risk relative to the equity market to a 28% exposure on December 1 of the "target date" (or year). The indexes will not reach their most "conservative" level of including a 20% exposure to the risk relative to the equity market until 10 years after the target date.
Before today, the risk reduction methodology of the indexes also began at 35 years prior to the target date, but reached 20% exposure to the risk relative to the equity market by the end of the target year, at which point the level remained constant.
This change reflects Dow Jones' response to increasing demand by the investment community for a means to measure target-date products with both longer time horizons and greater equity representation. Since the original launch of the Dow Jones Target Date Indexes in April 2005, there has been tremendous growth in the target-date funds arena.
Each Dow Jones Target Date Index allocates among equity, fixed income and Treasury bill indexes on a monthly basis to measure predefined potential relative risk levels based on a fixed set of published rules. Each index within the global index series consists of a blend of nine Dow Jones equity indexes, four Lehman Brothers bond indexes (Lehman Brothers Government Bond Index, Lehman Brothers Corporate Bond Index, Lehman Brothers Mortgage Bond Index and Lehman Brothers Majors (ex U.S.) Index) and the Lehman Brothers One-to-Three Month T-bill Index as the cash component in different weightings depending on the target date. Each index within the Dow Jones U.S. Target Date Index series consists of a blend of six Dow Jones equity indexes, three Lehman Brothers bond indexes (named above, excluding Lehman Brothers Majors (ex. U.S.) Index) and the Lehman Brothers One-to-Three Month T-bill Index in different weightings depending on the target date.
Back-tested index history, index components and methodology for the Dow Jones Target Date Index series can be found at www.djindexes.com.
Journalists may e-mail questions regarding this press release to PR-Indexes@dowjones.com or contact Dow Jones Indexes/STOXX press office:
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About Dow Jones Indexes
Dow Jones Indexes is part of Dow Jones & Company, which publishes the world's most vital business and financial news and information. Dow Jones Indexes is a premier global provider of investable indexes, including the Dow Jones Averages and the Dow Jones Global, Regional, Country and Sector Titans Indexes and is co-owner of the Pan-European Dow Jones STOXX Indexes. Together with Wilshire Associates, Dow Jones Indexes markets and licenses the Dow Jones Wilshire index family, which includes the Dow Jones Wilshire 5000 and its size, style, and sector indexes. Dow Jones Indexes also offers a number of specialty indexes including hedge fund, commodity and credit derivative indexes.
In addition to Dow Jones Indexes, Dow Jones & Company (NYSE:DJ) (dowjones.com) publishes The Wall Street Journal and its international and online editions, Barron's and the Far Eastern Economic Review, Dow Jones Newswires, MarketWatch and the Ottaway group of community newspapers. Dow Jones is co-owner with Reuters Group of Factiva and with Hearst of SmartMoney. Dow Jones also provides news content to CNBC and radio stations in the U.S.
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