Dow Jones Indexes, BBVA jointly launch Dow Jones BBVA Eagles indexes series

Dow Jones Indexes and BBVA have jointly launched the Dow Jones BBVA EAGLEs Indexes series, which initially includes two market gauges each designed to measure the stock performance of 50 leading companies in emerging and growth-leading economies (EAGLEs), the two organizations announced today.

With projected GDP growth the primary factor considered, EAGLEs is defined as those economies whose contributions to world growth over the next 10 years are expected to match or exceed those of the six largest developed economies, excluding the U.S. According to BBVA Research, the world’s GDP will grow more than USD 41 trillion over the next decade (adjusted by purchasing power parity), from which the EAGLEs’ contribution will exceed 50%; G7 growth will only reach 14%.

The new indexes include the Dow Jones BBVA EAGLEs Index and the Dow Jones BBVA EAGLEs Optimized Index. By limiting the universe of represented markets, the latter gauge is designed to enhance the liquidity of the derivatives linked to the EAGLEs concept.

A Dynamic Concept

Constructed as a dynamic concept, EAGLEs countries are annually updated in the indexes based on evolving economic performance and conditions as reflected in BBVA Research forecasts. EAGLEs is not a closed group, nor is it linked to an acronym formed by a given set of countries; rather, its process allows for identifying key economies in the emerging markets universe, while warning about potential “fallen angels” in advance. Moreover, EAGLEs country selection is based on a time horizon — 10 years — that is shorter than most other country groups and more relevant for most investment decisions.

Countries currently represented in the Dow Jones BBVA EAGLEs Indexes include China, Indonesia, India, South Korea, Mexico, Taiwan, Brazil, Russia, Turkey and Egypt.

“The Dow Jones BBVA EAGLEs Indexes series offers representation of a unique set of emerging markets that are poised for growth,” said Michael A. Petronella, President, Dow Jones Indexes. “And, the EAGLEs’ dynamic country concept offers flexibility in dealing with emerging economies, unlike a static index which can find itself too exposed to country risk.”

Ricardo Laiseca, head of BBVA Global Markets, said: “The creation of the EAGLEs indexes is an important part of BBVA’s goal to develop and distribute innovative financial products. By placing liquidity and access to economies with the highest growth potential at its core, these dynamic indexes are specifically designed to address the needs of emerging markets’ investors.”

Clearly Defined Parameters

The EAGLEs concept also is more objective due to clearly defined parameters which state each country’s expected incremental GDP over the next 10 years must be greater than the one anticipated for the average of the G6 economies.  

The indexes include only U.S., E.U. and Hong Kong listings, with the aim of enhancing their liquidity and easing their replication by foreign investment firms. The indexes represent only the largest companies in the represented countries, and stocks must pass liquidity screens to be eligible for the index. Companies are selected and weighted to reflect the GDP-based EAGLEs country weightings. Company weights are restricted based on their liquidity.  

For more details on the index methodology, please click here for the Dow Jones BBVA EAGLEs Index and here for the Dow Jones BBVA EAGLEs Optimized Index.