IndexFunds.com Staff

Big Board Launches Four New Indexes

The New York Stock Exchange today launched four equity indexes that track the performance of NYSE-listed stocks from broad market sectors.

The NYSE U.S. 100 index tracks the largest domestic stocks on the exchange and represents a total market cap of $6 trillion, or 47% of the of the total U.S. market.

The NYSE International 100 index contains NYSE-listed non-U.S. securities with a total market cap of $3.8 trillion, or 27.1% of the market cap of all international companies.

The NYSE World Leaders Index is a combination of the two above indexes and represents 36.7% of the market cap of all companies globally; while the NYSE TMT index is a sector benchmark that tracks global telecom, technology, and media companies.

The indexes will be rebalanced quarterly and are calculated and maintained by Dow Jones Indexes, according to the NYSE. The exchange has indicated previously that the indexes could be licensed for use in exchange-traded funds. The Big Board already trades several AMEX-listed ETFs and HOLDRs. The NYSE also lists the iShares S&P Global 100.

Morningstar refines sector classifications

After announcing sweeping changes to its star-rating system, Morningstar continues to add new complexity to its fund research. The Chicago fund-tracker introduced a new methodology designed to sniff out sector tilts within a portfolio.

"Portfolio diversification is often thought of in terms of market capitalization and investment style, yet sector diversification is just as essential," said Don Phillips, Morningstar managing director. "Now, [investors] can more readily see which funds would help diversify their positions and which would further overweight an existing concentration."

Phillips noted that managers can share market cap and style characteristics while still investing in different industry slices.

More information about the new classification system is available on a fact sheet (Adobe PDF) posted on Morningstar's website.