Dow Jones Indexes said Thursday that its Dow Jones U.S. Select Dividend Index will be used as the basis for an exchange-traded fund that was expected to be introduced today on the Frankfurt Stock Exchange.
The fund was to be launched by Indexchange, a German investment company that specializes in exchange-traded funds. The index tracks the 100 highest-dividend-paying U.S. companies and is the first U.S. dividend-weighted index to underlie a European investment product.
In April, Stoxx Ltd. - a joint venture of Deutsche Boerse AG, Dow Jones & Co., and SWX Group - launched the first pan-European select dividend indexes. Shortly thereafter both the Dow Jones Stoxx Select Dividend 30 Index and the Dow Jones Euro Stoxx Select Dividend 30 Index were licensed as the basis for exchange-traded funds to European exchange-traded fund providers.
The Dow Jones U.S. Select Dividend Index was introduced in November 2003 as a response to increased investor interest in U.S. companies issuing dividends after a cut in tax rates.
