What is the Dow Jones Asian Titans 50 Index
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.
To create the 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 spilt of 25 stocks from each region.
BREAKING DOWN Dow Jones Asian Titans 50 Index
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 World Index, which includes about 95% of the world’s developed and emerging markets by market capitalization. The 50 highest-ranking companies make the index for a given year, provided they earn revenue both domestically and internationally.
Dow Jones reconstitutes its Titan indexes annually, with quarterly weighting updates to account for changes in market capitalization in the member stocks. For some of the indexes, Dow limits the percentage each individual component represents in the index to prevent giving a single name undue influence.
Japan is often a large component of any Asia-Pacific index due to the maturity of its economy and stock exchange. This 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 December 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 series of funds first launched in 1999.
The index is based on a value of 100, beginning in December 1991.
Popularity of the Dow Jones Asian Titans 50 Index
As of June 2018, few investors use the Dow Jones Asian Titans 50 Index. 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.