The Hindu Business Line : Dow Jones Global Titans 50 index posts 8.74 pc return

THE Dow Jones index, which has been chosen by the UTI- Street Street combine for its first product, has provided a cumulative price return of 8.74 per cent between October 1, 2003 and October 1, 2004. The index, which tracks a set of fifty mega corporations, has as its premise the enormous changes that have been taking place in the global market.

Such changes have led to an emergence of a new group of `global titans'. In Dow Jones parlance, the Microsofts, the Nestles, the Coca-Colas of the world have breached geographical boundaries to assume far greater roles.

The index, Dow Jones has pointed out, tries to serve as a benchmark for tracking the performance of the world's largest MNCs as a distinct asset class. Its fundamental objectives include high liquidity of the constituent securities and low turnover.

Many of the 50 index constituents (as on June 30, 2004) are well known in India. These include GE, Merck, AIG, HSBC, Samsung, Coca-Cola, Pepsi, Nestle, Siemens, Morgan Stanley and Walt Disney.

However, a few of the constituents do not have 10 per cent shareholding of an Indian company, as stipulated by the securities regulator.

For Dow Jones, the selection list covers the current set of 50 players plus the 50 largest non-component stocks (in terms of free-float market capitalisation). All names in the list are ranked by market cap, revenues and net profit. For each company, a final rank is calculated by weighing the market cap (ranked at 60 per cent), revenue (20 per cent) and net profit (20 per cent).