REAL ESTATE – Index provider S&P has launched the Global Property 40 Index to provide exposure to 40 leading companies in the global real estate markets.
The index is made up of large, well traded, liquid companies from North America, Europe and the Asia Pacific Region, which are currently traded on established stock exchanges.
The index uses a unique size and liquidity-driven scheme, said S&P, that "provides a high degree of tradability to the less liquid property asset class".
Constituents are weighted by size subject to the constraint that no single stock can have a weight of more than 10% and the liquidity of the index basket must be more than $400m(€309m).
The stocks domicile is restricted to US, Canada, developed Europe, Singapore, Hong Kong, Japan, Australia and New Zealand. No more than 20 and no less than five stocks are selected from anyone region. Their total individual market cap must be above $1bn.
They must have a three-month daily average daily traded volume of above the liquidity threshold of $3m. There are also criteria requiring positive on earnings and dividend growth over three years.
The index is a subset of the S&P-Citigroup Global property Index, which inclides over 400 real estate stocks.
"This index, which follows the broad market acceptance of the S&P BRIC 40 index, is another example of our commitment to bring tradability to less liquid asset classes," said Srikant Dash, index strategist at S&P.