New STI Dividend Index to capture dividend returns of constituents

New index enables investors to view the expected dividends of its constituents and to create fresh investment opportunities.

Singapore Press Holdings (SPH), Singapore Exchange (SGX) and FTSE Group (FTSE) jointly announce the launch of the Straits Times Index (STI) Dividend Index on Monday, according to a SGX report.

The new STI Dividend Index represents the cumulative value of ordinary dividends paid by stock components of the underlying STI Index. Capturing returns in this way makes the index ideal for creating products like derivatives, tracker funds, Exchange Traded Funds and other structured products. This allows investors to take a view on the expected dividends of its constituents and to create new investment opportunities.

The index runs for a one-year period and is calculated from the first trading day of the calendar year and is reset after the last trading day of the calendar year. However, the underlying constituents will be reviewed in line with the STI and FTSE ST Index Series in March and September. The index value will be expressed in terms of index points using end of day pricing. The new STI Dividend index is launched with a value that is based on January 2010 data.

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