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Wednesday, November 14, 2012

Vanguard Licenses Two More FTSE Indexes

Reported by Chris Cumming

In a followup to Vanguard's [profile] much-covered decision to drop MSCI as its indexer, today FTSE announced that the funds giant has licensed two Canada indexes, to be used for two new Vanguard ETFs.

The indexes are the FTSE Canada High Dividend Yield Index and the FTSE Canada All Cap Real Estate Capped 25% Index. The ETFs will be listed on the Toronto Stock Exchange.

In September, Vanguard decided to part ways with longtime index provider MSCI in favor of FTSE and the University of Chicago's Center for Research in Security Prices.

The release follows.

FTSE Licenses Two New Canada Indexes to Vanguard

  New York, Toronto, 14 November 2012: FTSE Group (“FTSE”) has licensed the FTSE Canada High Dividend Yield Index and the FTSE Canada All Cap Real Estate Capped 25% Index to Vanguard as the basis of two new Exchange Traded Funds (ETFs) listed on the Toronto Stock Exchange. Both are part of a range of indexes designed to help Canadian investors benchmark unique segments of their equity market.  

The FTSE Canada High Dividend Yield Index comprises stocks that are characterized by higher-than-average dividend yields. The index constituents are drawn from the large, mid and small cap country component of the comprehensive FTSE Global Equity Index Series (GEIS), which covers 98% of the world’s investable market capitalization.   

The FTSE Canada All Cap Real Estate Capped 25% Index is a market-capitalization-weighted index representing the performance of Canadian REITS and Real Estate Operating Companies as classified by the Industry Classification Benchmark (ICB) System. It is part of a series that represent the performance of key Canadian industry sectors and employs capping to avoid over-concentration. The index is a subset of the FTSE Canada All Cap Index, a component of GEIS.   

“These indexes are designed to capture important diversification and yield opportunities,” said Jonathan Horton, President, FTSE North America and Head of the Exchange Traded Products service unit. “They offer market participants relevant tools to follow high dividend-yield-paying stocks and real estate within Canadian markets selected from our key benchmark indexes.”   

The new licenses follow the news last month that FTSE has been selected by Vanguard, one of the world’s largest asset management firms, as the index benchmark provider for six US-domiciled international equity index funds with aggregate assets of $170 billion. These funds are transitioning to benchmarks in the FTSE Global Equity Index Series, replacing MSCI.

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