MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support tools worldwide, announced today that it is introducing the MSCI China A High Dividend Yield (HDY) Index. This new index includes stocks with a track record of sustainable and consistent dividend payouts and dividend growth. It can serve as a benchmark for investors targeting the high dividend yielding opportunity set within the flagship MSCI China A Index or as the basis for financial products such as exchange traded funds.
The MSCI China A HDY Index includes only securities that offer a higher-than-average dividend yield (i.e., at least 30 percent higher) relative to that of the parent index, the MSCI China A Index, and that pass dividend sustainability and persistence screens. In addition, MSCI screens out stocks that do not meet certain "quality" characteristics to exclude stocks with potentially deteriorating fundamentals that could force them to cut or reduce dividends. The MSCI China A HDY Index is calculated using free float-adjusted market capitalization weights.
“Dividends produced from the stocks in the MSCI China A Index have grown significantly—from RMB 12.95 billion in 2005 to RMB 94.7 billion in 2012,” said Theodore Niggli, MSCI Managing Director and Head of the Asia Pacific Index business. “Furthermore, we have seen close to a 110 percent increase in the number of dividend-paying companies in the MSCI China A Index since 2009. The MSCI China A High Dividend Yield Index offers a timely new index choice for clients interested in this subset of the China A-Share market.”