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HNX launches first total return index
The Ha Noi Stock Exchange (HNX) on December 15 officially launched HNX30 Total Return Index (HNX30 TRI), which is the first-ever total return index calculated and introduced in Viet Nam.
The Index, calculated based on HNX30, which tracks the top 30 shares in accordance with the market value and liquidity of the Ha Noi bourse, aims to provide investors with another effective evaluation tool for investing in exchange-traded funds (ETFs), the exchange said in a press release.
The total return index is popular with global index providers such as MSCI, FTSE, international investment funds and especially passive ETF investment funds because it reflects returns more accurately than a price index.
HNX TRI tracks changes in the market price of the 30 stocks in the HNX30 basket, as well as follows the cash dividends of these stocks, assuming they are reinvested in the basket following this formula: Changes in HNX30 TRI = Changes in HNX30 + Effects of dividend of each HNX30 Index basket constituent.
The calculation of the Index is made with the assumption that the dividend is available on the ex-date and reinvested in the index basket at the end of the day preceding the ex-date. The dividend used in this calculation method is the total cash dividends of the stocks in the HNX30 Index basket.
Similar to the HNX30, the review index is annually evaluated during April and October. Any adjustment in the basket would be made and reflected in the respective stock price index.
The Ha Noi exchange has exerted efforts to diversify products in the market by introducing many new items recently, including HNX30, ETF SSIAM HNX30 managed by SSI Fund Management Co, HNXFF-Index and HNXLarge Cap. It also presented HNX-Midcap and HNX30.
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