NEW YORK, March 11, 2008 (PRIME NEWSWIRE) -- Dow Jones Indexes, a leading global index provider, and Transparent Value LLC today announced the launch of the Dow Jones Required Business Performance (RBP) Index series. The new indexes measure the likelihood that a company can deliver the performance required to support its current stock price according to Transparent Value's proprietary RBP methodology. The Dow Jones RBP Large-Cap 130/30 Indexes, the first indexes in the series, use the RBP probability metrics to create 130/30 investment strategy indexes based on U.S. large-cap stocks.
"The Dow Jones RBP Indexes are part of the next generation of intelligent index design. The RBP approach uses an innovative methodology that serves as a superior basis for a 130/30 index. Developed by Transparent Value, the RBP method applies a unique, transparent and rules-based methodology to analyze stocks that complements Dow Jones Indexes' mission of providing the investment community with objective, rules-based indexes," said Michael A. Petronella, president of Dow Jones Indexes.
"We are excited to partner with Dow Jones Indexes to launch the Dow Jones RBP Indexes. We embrace a rules-based approach to investing just as Dow Jones Indexes does in developing indexes," said Julian Koski, co-founder of Transparent Value LLC. "The central idea behind the RBP methodology is to help investors objectively understand the valuation of publicly traded companies. We believe the fundamental investment question is not whether a company is under- or overvalued, but whether the management of that company can deliver the required business performance to support its stock price."
The Dow Jones RBP Indexes are quantitative strategy indexes developed and calculated by Dow Jones Indexes using rules-based, published analytics supplied by Transparent Value, LLC. The new indexes are designed to underlie financial products.
The index universe for the Dow Jones RBP Large-Cap 130/30 Index is defined as all stocks included in the Dow Jones Wilshire U.S. Large-Cap Index(sm)(1). RBP probability scores are calculated by Transparent Value for each of the 750 companies in the Dow Jones Wilshire U.S. Large-Cap Index. The 30 stocks with the highest RBP probability scores become components of the Dow Jones RBP Large-Cap Leading 30 Index. The 30 stocks with the lowest RBP probability scores become components in the Dow Jones RBP Large-Cap Lagging 30 Index. Components for the Dow Jones RBP Large-Cap Leading and Lagging 30 indexes are subject to a screen that requires components to have a three-month average daily trading volume of at least $2.5 million USD. The Dow Jones RBP Large-Cap 130/30 Index measures the performance of the 750 stocks in the Dow Jones Wilshire U.S. Large-Cap Index as well as an additional 30% long position in the Dow Jones RBP Large-Cap Leading 30 Index and 30% inverse exposure to the Dow Jones RBP Large-Cap Lagging 30 Index.
Also available are the Dow Jones RBP Large-Cap Growth 130/30 Index and Dow Jones RBP Large-Cap Value130/30 Index, which follow the same methodology as the broader index. They are derived from the Dow Jones Wilshire U.S. Large-Cap Growth Index(sm) and Dow Jones Wilshire U.S. Large-Cap Value Index(sm), respectively.
The Dow Jones RBP Large-Cap 130/30 Index, Dow Jones RBP Large-Cap Leading 30 Index and Dow Jones RBP Large-Cap Lagging 30 Index are rebalanced on a quarterly basis. The 750 stocks that make up the core of the index are weighted by float-adjusted market capitalization. Components in the leading/lagging sub-indexes are equal weighted. Back-tested estimated daily history is available back to December 31, 2004(2). For more information, please visit www.dowjonesRBP.com.
Journalists may e-mail questions regarding this press release to PR-Indexes@dowjones.com or contact Dow Jones Indexes/STOXX press office:
New York: +1-212-597-5720 Frankfurt: +49-69-29-725-290
For Transparent Value, please contact Brian Ruby, Vice President, ICR at 203-682-8268 or Brian.ruby@icrinc.com
Note to Editors:
About Dow Jones Indexes
A full-service index provider, Dow Jones Indexes develops, maintains and licenses indexes for use as benchmarks and as the basis of investment products. Best known for the Dow Jones Industrial Average, Dow Jones Indexes also is co-owner of the Dow Jones STOXX indexes, the world's leading pan-European indexes, and together with Wilshire Associates, provides the Dow Jones Wilshire Global Index family, which is anchored by the Dow Jones Wilshire 5000 and covers more than 12,000 securities in 59 markets. Beyond equity indexes, Dow Jones Indexes maintains a number of alternative indexes, including measures of the hedge fund and commodity markets. Dow Jones indexes are maintained according to clear, unbiased and systematic methodologies that are fully integrated within index families. www.djindexes.com
Dow Jones & Company (www.dowjones.com) is a News Corporation company (NYSE:NWS), (NYSE:NWS.A); (ASX:NWS), (ASX:NWSLV); (www.newscorp.com). Dow Jones is a leading provider of global business news and information services. Its Consumer Media Group publishes The Wall Street Journal, Barron's, MarketWatch and the Far Eastern Economic Review. Its Enterprise Media Group includes Dow Jones Newswires, Dow Jones Factiva, Dow Jones Client Solutions, Dow Jones Indexes and Dow Jones Financial Information Services. Its Local Media Group operates community-based information franchises. Dow Jones owns 50% of SmartMoney and 33% of STOXX Ltd. and provides news content to radio stations in the U.S.
About Transparent Value
Transparent Value (www.transparentvalue.com) is an asset management and financial information services company. Dow Jones publishes the Dow Jones RBP(r) Indexes in partnership with Transparent Value. These indexes serve as benchmarks and as the basis of investment products. We offer customized asset management solutions and a suite of decision support tools that are based on our proprietary Required Business Performance(r) (RBP(r)) methodology to individual investors and investment institutions worldwide.
The Dow Jones and Transparent Value logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4832
1 The Dow Jones Wilshire Indexes have been used in the Dow Jones RBP Indexes with the permission of Wilshire Associates Incorporated. However, the Dow Jones RBP Indexes are not sponsored or endorsed by Wilshire and Wilshire will not have any liability with respect thereto.
2 The Dow Jones RBP Large-Cap 130/30 Indexes were first published on March 11, 2008. All estimated daily historical closing prices prior to that date are based on back-testing (i.e., calculations of how the index might have performed in the past if it had existed). Backtested performance information is purely hypothetical and is solely for informational purposes. Backtested performance does not represent actual performance, and past performance is not indicative of future results.