FTSE High Dividend Yield Indices

The FTSE All-World High Dividend Yield Index is designed to represent the performance of companies after implementing a forecast dividend yield ranking process. The index comprises stocks that are characterized by higher than average dividend yield based on the FTSE All-World Index, which is part of the FTSE Global Equity Index Series.

For more information about the FTSE All-World High Dividend Yield Index, including Index Rules, factsheets and constituents and weights, click here.

Other High Dividend Yield Indices calculated by FTSE

FTSE Group has worked with Vanguard to create a series of FTSE High Dividend Yield indices, which will serve as the basis for the High Dividend Yield Index Funds from Vanguard. Both traditional Investor shares and ETF shares will be available.

The indices consist of stocks that are characterized by higher than average dividend yields. The U.S. High Dividend Yield and the Canadian High Dividend Yield indices are based on the large, mid and small cap consituents of their respective country component of the FTSE Global Equity Index Series (GEIS). The ground rules for GEIS also form the basis for the management of the U.S. and Canadian High Dividend Yield Indices. The FTSE Australia High Dividend Yield Index is based on the FTSE ASFA Australia Index Series.

In general terms, real estate investment trusts (REITs), whose income generally do not qualify for favorable tax treatment are removed, as are stocks that are not forecast to pay a dividend during the next 12 months. The remaining stocks in each respective universe are ranked by annual dividend yield and included in the target index until the cumulative market capitalization reaches 50% of the total market cap of this universe of stocks.

The index methodology differs slightly between the U.S., Canada and Australia due to different tax treatments. The index methodology holds the potential of durable high yields from solid companies, with lower weightings to companies that have high yields because of low or falling share prices.

Further Information

For more information about the US, Canadian and Australian High Dividend Indices please contact Vanguard.