The FTSE Global Sustainable Yield Index Series was designed to measure the performance of stocks of companies within various global countries and regions that exhibit relatively high and sustainable yields. And, while the FTSE Canada Sustainable Yield 150 10% Capped Index had a 4.68% annualized return over the last decade, the chart below illustrates the diverse set of index returns and standard deviations that were experienced by indexes capturing higher yielding stocks in many other global regions beyond Canada for the same time period.
FTSE Russell Index Returns as of March 31, 2016
FTSE Russell Index Volatility as of March 31, 2016
Brad Zucker, Senior Product Manager at FTSE Russell:
“The FTSE Global Sustainable Yield Index Series was developed to address the drawback in some high yield indexes that higher yielding stocks are included without reference to the likelihood that a dividend will be paid. FTSE Russell applies four stringent screens, with a focus on the financial and operating strength of prospective constituents, including those with strong balance sheets and the ability to generate cash flow. As a result, the indexes include a basket of securities in various global regions with relatively high and sustainable yields.”
Keith McLean, President & CIO, Sphere Investments:
“Canadian retail investors have one of the most acute cases of home country bias in the world, with approximately 55% of investments allocated to the domestic market, while Canada’s market only represents roughly 3.5% of the entire world market. These investors lack the portfolio diversification needed to survive periods of market uncertainty. The FTSE Global Sustainable Yield Index Series is a helpful tool for Canadian market participants looking to build a portfolio with blended global exposure, designed to provide access to various global countries and regions while not giving up return.”
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Views expressed by Brad Zucker and Keith McLean of Sphere Investments are as of April 28th and subject to change. These views do not necessarily reflect the opinion of FTSE Russell or the London Stock Exchange Group.
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No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this IDEA should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
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Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index returns shown may not represent the results of the actual trading of investable assets.