Dow Jones has added four new indexes to its growing family of required business performance (RBP) indexes. The new indexes are designed to measure the likelihood that companies can deliver the performance required to support their current stock prices.
The three new strategy indexes are the Dow Jones RBP U.S. Large-Cap Aggressive Index, the Dow Jones RBP U.S. Large-Cap Defensive Index and the Dow Jones RBP U.S. Large-Cap Market Index.
Each index measures the performance of the 100 top U.S. large-cap stocks in the universe ranked by RBP probability.
A fourth index – the Dow Jones U.S. Large-Cap Total Stock Market Index – uses fundamental weighting to provide market participants with more rules-based information to help measure valuations. It has about 750 components.
"The strategy indexes licensed to Transparent Value LLC represent a brand new approach to indexing that combines the innovative RBP methodology with aggressive, defensive and neutral views of the market," said Michael Petronella, president designate of Dow Jones Indexes. "Dow Jones RBP Indexes are quantitative strategy indexes built upon rules-based analytics providing a powerful tool set for measuring and evaluating component company valuation."