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Tuesday, June 12, 2007

Dow Jones Switches Up Target Date Indexes

News summary by MFWire's editors

Dow Jones Indexes will change the emerging markets index component of its global Dow Jones Target Date Indexes. The Dow Jones Wilshire Emerging Markets Large Cap Index will be substituted for the existing index, which was custom-designed for the Dow Jones Target Date Index series. The change will take effect at the close of business on June 29.


Dow Jones Indexes, a leading global index provider, said it will change the emerging markets index component of its global Dow Jones Target Date Indexes, effective at the close of business June 29, 2007. The Dow Jones Wilshire Emerging Markets Large Cap Index(sm) will be substituted for the existing index, which was custom-designed for the Dow Jones Target Date Index series.

The Dow Jones Wilshire Emerging Markets Large Cap Index(sm), which is part of the Dow Jones Wilshire Global Total Market Index(sm), covers the largest stocks in 33 countries, compared to 14 in the index it is replacing. The Dow Jones Wilshire Global Total Market Index was launched in October 2006.

"This change represents a substantial improvement in the emerging markets module of our Dow Jones Target Date Indexes," said Michael A. Petronella, president, Dow Jones Indexes/Ventures. "We decided to include the Dow Jones Wilshire Emerging Markets Large-Cap Index because big stocks are far more liquid than small stocks. Additionally, large-cap stocks constitute the vast majority of holdings by emerging-market fund managers," he added.

The Dow Jones Target Date Indexes were introduced in 2005 and are designed as benchmarks for balanced and multiasset-class portfolios with risk profiles that become more conservative over time. The Dow Jones Target Date Indexes each comprise 14 indexes representing the equity, fixed income and cash asset classes. The global index series includes nine Dow Jones equity indexes, four Lehman Brothers bond indexes, and the Lehman one-to-three months T-bill index as the cash component.

The existing history of Dow Jones Target Date Indexes will be restated to reflect the change of the underlying emerging markets index.

The Dow Jones Target Date Indexes are the first total portfolio benchmarks against which returns of target date funds can be measured. Target date or lifecycle funds are rapidly growing in number and assets and are being offered to investors, particularly in 401(k) plans. Investors pick a fund with the target date closest to their anticipated retirement, and its asset allocation becomes progressively more conservative as that year approaches.

The methodology, as well as a full list of components including weightings and values of the Dow Jones Target Date Indexes, are available at www.djindexes.com.  

Edited by: Erin Kello


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