WSE Starts Calculation Of WIG20TR Index

19/11/2012

  • WSE will start to calculate and publish WIG20TR (WIG20 Total Return) index as of 3 December 2012
  • The index portfolio will be consistent with WIG20 but index calculation will include corporate actions such as issues of new shares with pre-emptive rights and dividend payments

The Warsaw Stock Exchange will calculate and publish the index WIG20TR as of 3 December 2012. Its composition will be consistent with the WIG20 index portfolio but it will be calculated by taking into account income from shares, in particular dividend and pre-emptive right income.

The rules of composition of the WIG20 index portfolio, the weights of index participants, modifications of the participant list (periodic and extraordinary modifications) will be the same as for WIG20. The differences between WIG20TR and WIG20 include the name, the publication mode, and the approach to corporate actions.

According to the exchange’s calculation of the value of the new index in the period from the end of 2004 to date, the value of WIG20 has increased by 20% in the last 8 years while WIG20TR has gained more than 70%. In 2012 alone, the index return was 10% and 17% respectively.

Figure 1: WIG20 v. WIG20TR

 

 

 

 

 

 

 

Source: WSE

“In the current reality of the global capital market, of which Poland is an integral part, it is increasingly difficult to achieve spectacular return rates in a short time horizon. Today, investments on the exchange must be considered in a longer perspective of 10 or 20 years. The creation of the new index WIG20TR by the Warsaw Stock Exchange is part of the trend followed in the past years by the most developed financial markets where a sharp increase in interest in passive funds has been observed. WIG20TR may become a benchmark for such funds on the domestic capital market,” said Ludwik Sobolewski, CEO of the Warsaw Stock Exchange.