What Is the Dow Jones Asian Titans 50 Index?
The Dow Jones Asian Titans 50 Index is a market capitalization-weighted index of Asia-Pacific stocks designed to capture the blue chip leaders of the region. The stock universe is the Dow Jones Asia-Pacific Index.
The Dow Jones Asian Titans 50 Index is part of the Dow Jones family that produces the Dow Jones Industrial Average (DJIA), the second-oldest stock market index, and one of the most followed indexes in the world.
- The Dow Jones Asian Titans 50 Index is a market index of 50 blue chip Asia-Pacific stocks.
- The Index is made up of 25 Japan-based stocks and 25 non-Japan based stocks.
- The inclusion of stocks is based upon market cap, current net income, and current revenue.
- The Index is not as popular as the S&P Asia 50, which is marketed by the merged index company of both Dow Jones and S&P.
- The Dow Jones Asian Titans 50 Index is part of the same family that produces the popular Dow Jones Industrial Average (DJIA).
Understanding the Dow Jones Asian Titans 50 Index
The Dow Jones Asian Titans 50 Index is one of a family of Dow Jones Titan indexes. The most popular by far is the Dow Jones Global Titans 50 Index, which includes about 95% of the world’s developed and emerging markets companies by market capitalization. The 50 highest-ranking companies make the index for a given year, provided they earn revenue both domestically and internationally.
To create the Dow Jones Asian Titans 50 Index, Dow Jones first composes a list of the 50 largest Japan-based stocks and a separate list of the 50 largest non-Japan based stocks within Asia. The company then narrows each list to 25 stocks, based 60% on market capitalization criteria, 20% based on current net income, and 20% based on current revenue. The index represents an even split of 25 stocks from each region.
Dow Jones reconstitutes its Titan indexes annually, with quarterly weighting updates to account for changes in market capitalization in the member stocks.
Japan is often a large component of any Asia-Pacific index due to the maturity of its economy and stock exchange. The country dominates the top ranks of the Asian Titans 50 Index. In comparison, the economic influence of China is not represented as heavily, even though China is the world’s second-largest economy only to the U.S.
Dow Jones launched the index on Dec. 5, 2000. At the onset, it reflected 38% of the market capitalization of all stocks traded in the region. The larger Dow Jones Global Titans 50 Index first launched in 1999.
Popularity of the Dow Jones Asian Titans 50 Index
The Dow Jones Asian Titans 50 Index is not as heavily used as some other indexes because many investors tend to use indexes with more components. In addition, some tend to use country-specific indexes, as markets in China, for instance, tend to move differently than those in Japan. For regional indexes, some also choose indexes dominated by China.
Also of note, Dow Jones and S&P indexes merged in August 2012. The merged company still markets several Titan indexes under the Dow Jones name; however, the S&P Asia 50, which shares some similarities with the Dow Jones Asian Titans 50, is largely what the joint company markets today.
The S&P Asia 50 measures the performance of 50 leading, large blue chip companies from the four major Asian markets of Hong Kong, Korea, Singapore, and Taiwan. Interestingly, this index excludes China.
Dow Jones Asian Titans 50 Index vs. Dow Jones Industrial Average
The Dow Jones Asian Titans 50 Index does not compare in popularity to the Dow Jones Industrial Average (DJIA), which is considered to be an indicator of the overall health of the U.S. economy, and followed closely by global investors. It consists of 30 publicly-owned, blue chip companies in the U.S. that are listed on the New York Stock Exchange (NYSE) and the Nasdaq.
The companies on the DJIA change from time to time to reflect the changing economic landscape of the U.S. For example, the DJIA used to consist primarily of industrial and manufacturing companies but now includes many technology companies. Critics of the DJIA claim that it is not a good representation of the U.S. economy as it only includes 30 large, generally well-to-do, and safe companies.