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Thomson Reuters unveils new income index
Thomson Reuters has unveiled a new index that identifies the most sustainable earning and high dividend-yielding companies in Asia Pacific excluding Japan. The StarMine Quality Earners APAC ex-Japan Income Index offers not only greater total returns and higher income generation
The Asset 22 Oct 2014

Thomson Reuters has unveiled a new index that identifies the most sustainable earning and high dividend-yielding companies in Asia Pacific excluding Japan. The StarMine Quality Earners APAC ex-Japan Income Index offers not only greater total returns and higher income generation compared with a traditional Asia-Pacific index, but also lower volatility to help investors of exchange traded funds (ETFs) manage portfolio risk. StarMine's proprietary earnings quality model identifies those companies with the most reliable and persistent earnings over time, giving the index an edge over other similar indices, a company statement said.

 

This first-to-market index highlights Thomson Reuters ability to generate smart-beta indices using the data it manages. Such next generation indices are designed to add and remove stocks based on a rules-driven investment strategy.

 

The Thomson Reuters StarMine Quality Earners APAC ex-Japan Income Index can be licensed to issuers of ETFs and other investment products. It offers the benefit of industry leading quantitative stock selection models within an independent and transparent index, to give investors exposure to current and forecasted steady, profitable income-generating stocks. Unlike most earnings forecasts which respond solely on accruals, the StarMine Earnings Quality model also identifies companies with strong cash flows, high operating efficiency and strong track record of reported earnings meeting earlier projections.

 

"Investors in Hong Kong and the rest of Asia-Pacific are telling us they are looking for income stocks," said Stephan Flagel, head of indices, Thomson Reuters. We have access to an unrivalled set of cross-asset prices, analytical and evaluated data to use for proprietary and custom indices. Using our StarMine Earnings Quality model, not only can we identify the top earners at each point in time, but we can also tell which of these companies are the most reliable and likely to persist in being profitable."

 

The index uses a factor based on a company's dividend yield and StarMine Earnings Quality Score to determine top earners. The final 50 candidates are given an equal weighting in the index, and currently have an average market cap of US$7.7 billion. This results in about 30% higher returns and 30% lower volatility than a typical market capitalization weighted index for the same region, over the last 10 years.

 

 

 

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