NASDAQ Index Blog - Archive Posts for January, 2015

John Jacobs: Nasdaq's Own Legend of Indexing Retires Updated: 1/27/2015

December 31st marked the end of a year full of significant milestones for Nasdaq Global Indexes, and it also marked the end of an era at Nasdaq.

John Jacobs retired from his full-time role as Executive Vice President of Global Information Services for Nasdaq, after 30+ years with the company. His business accomplishments are countless. In fact, John was recently featured in Journal of Indexes as a “Legend of Indexing.” While he was a tremendous leader, industry visionary and consummate professional, it’s the personal side of John that his Nasdaq family will miss the most.

Whether providing poignant farewell speeches, energetic and comprehensive business updates, or watching him bounce the newborn of a staff member on his lap while recalling with candor and fondness hilarious stories of his own parental snafus, John is irreplaceable. He is one of those rare leaders that managed to balance the high demands of the capital markets with a personal touch.

While leading Nasdaq Global Indexes, John was responsible for all aspects of business development, including the creation and licensing of indexes in the U.S. and abroad. Under his direction, Nasdaq launched the NASDAQ-100 Index Tracking Stock, better known as ‘QQQ’, in 1999, one of the most successful financial products in stock market history. Throughout his tenure, John has overseen the creation of multiple index families, across asset classes, growing the index offering from a few dozen to more than 40,000, and has grown the index business to support more than 9,000 products, including 166 ETFs.

John also served as Chief Marketing Officer for Nasdaq from 2003 to 2013, and thus was often the welcoming face for guests ‘Ringing the Bell’ at the Nasdaq MarketSite. His entertaining stories include the Bell Ringing ceremony where he reminisced over a high-school year book with an ex-classmate of his older sister Kathie Lee Gifford, to chatting with Queen Latifah and Diane Keaton. His favorite guest was tennis star Roger Federer, mainly for his humbleness and kindness – traits John could equally claim as his own.

In addition to securing the Nasdaq brand name in daily markets lexicon, his broad range of experience includes management of Nasdaq's listings and compliance group, which reviews and processes all SEC documents and financial filings. Additionally, John was part of the team that garnered a "yes" vote from more than 5,000 NASD member firms to spin off Nasdaq, paving the way for Nasdaq to become a publicly-traded company.

John is a life-long Marylander, an alumnus of the University of Maryland and holds an MBA from Loyola University. He has taught Investment Banking and other graduate courses in the MBA programs at both Johns Hopkins University and Georgetown University. More importantly, he has been married 30 years to his wife Colleen, whom he met – you guessed it – at Nasdaq, with whom he has three children.

Throughout 2015, John will continue with Nasdaq, serving in the role of advisor and consultant. As a revered leader, respected colleague and genuine friend, we thank him for all of his hard work, dedication and the legacy he leaves behind.
 

Web Seminar Replay: The Nasdaq-100 Turns 30: Tracking Innovation in Large Cap Growth Updated: 1/23/2015

How well do you know the Nasdaq-100? With exchange-traded products tied to the index exceeding $50 billion, the Nasdaq-100 is one of the most widely tracked indexes in the world.

Our discussion addressed topics from our soon-to-be published white paper, such as how the NDX has changed over the last 30 years, how it compares to other broad benchmarks currently and historically, and the state of tradable products tied to the index.

Join John L. Jacobs, Senior Advisor, Nasdaq Global Information Services; Efram Slen, Research & Product Development Specialist, Nasdaq Global Indexes and Jeff Smith, Associate Vice President, Economic and Statistical Research, Nasdaq, for a 60-minute web seminar replay.

 

Watch the Replay here.

 

First Trust Value Line ® Equity Allocation Index Fund Switches Listing to Nasdaq Updated: 1/13/2015

New Investment Objective That Corresponds to the Nasdaq AlphaDEX(R) Total US Market Index
Nasdaq today announced that First Trust will transfer the First Trust Value Line® Equity Allocation Index Fund (Symbol: FVI) from NYSE Arca to be listed on The Nasdaq Stock Market® on or about Friday, January 9, 2015. The fund's new investment objective will seek investment results that correspond generally to the price and yield (before the fund's fees and expenses) of the Nasdaq AlphaDEX® Total US Market Index. The new fund will be referred to as the First Trust Total US Market AlphaDEX® ETF (Symbol: TUSA).
"We are excited to build our partnership with our good partners at First Trust through the transfer of the First Trust Value Line® Equity Allocation Index Fund to The Nasdaq Stock Market," said Jeffrey McCarthy, Head of ETP Listings at Nasdaq. "We will continue to provide issuers like First Trust with an end-to-end solution that provides ongoing support at every level including index licensing, listings opportunities, data offerings and trading services."
The Nasdaq AlphaDEX® Total US Market Index is designed to objectively identify and select stocks across market capitalizations (including large-cap, mid-cap and small-cap companies) that exhibit growth and value factors and appear to have the greatest potential for capital appreciation. It is a modified equal-dollar weighted index comprised of U.S. exchange-listed securities of companies with capital appreciation potential.

Vote for Nasdaq Global Indexes 2015 Most Innovative Index Provider Updated: 1/13/2015

Nasdaq Global Indexes is seeking your support in nominating us for a 2015 ETFExpress Global Award. If you're reading this, we hope you agree that Nasdaq has what it takes to be “The Most Innovative Index Provider of the Year.”

Your nomination will take less than 60 seconds with three simple steps:

  1. Go to the ETFExpress web site
  2. Choose #28 “The Most Innovative Index Provider”
  3. Type in the following:

Name of Firm: Nasdaq

Contact information of Firm: Indexes@Nasdaq.com

Short justification as to why you made this choice: We have listed below some of the reasons you might consider us for The Most Innovative Index Provider. Feel free to use these or provide your own reason.

  • Nasdaq is one of the only index providers to have products listed globally covering equities, commodities and fixed income.
  • ETPs based on Nasdaq indexes are listed in 16 countries, and Nasdaq is the first index provider to have its indexes linked to ETPs in China, India, and Iceland.
  • As of 2014 year-end, Nasdaq had 166 licensed ETPs globally with approximately $100 billion in assets under management. Twenty-seven new ETPs launched that track our indexes; of those, 26 were new launches and one was a benchmark switch. Currently, we are the underlying benchmarks for eight of the top ten largest ETP providers in the world.
  • The largest dividend ETF with just under $21B in assets under management tracks the Nasdaq Dividend Achievers Select Index.
  • In 2014, ETPs tracking the Nasdaq Biotechnology Index launched in Israel, Korea, and London.
  • Our foothold in Asia continues to grow. In November 2014, two ETFs tracking Nasdaq Indexes were launched by Bank of Montreal in Hong Kong, marking a new milestone of eight ETFs for us in the region.
  • This was also a marked year of expansion for our Smart Beta Indexes. Most notable is the expansion of our Nasdaq Buyback Achievers brand with five new ETFs based on that benchmark family launching this year. In addition, we recently announced plans to acquire Dorsey, Wright & Associates later this month. With the close of that transaction, Nasdaq will be one of the largest Smart Beta Index Providers in the world, based on AUM.

The deadline for nomination is January 15, 2015. Please CLICK HERE TO VOTE NOW.

Thank you for your support!

December 2014 Monthly Performance Report Updated: 1/9/2015

The Nasdaq Axioma Equity-Commodity Gold Index is December's top performer at 5.6% and the Nasdaq Commodity Natural Gas ER Index is the worst performer of December at -29.5%. Get a quick overview of Nasdaq Index performance data for our top 50 most watched indexes here.

Nasdaq to Acquire Dorsey Wright & Associates Updated: 1/5/2015

We are pleased to announce that Nasdaq will acquire Dorsey, Wright & Associates, LLC (DWA), a market leader in data analytics, passive indexing and smart beta strategies. DWA will add to Nasdaq’s robust index portfolio, bringing model-based strategies and analysis to support the financial advisor community, and further strengthening Nasdaq’s position as a leading smart beta index provider in the U.S. The deal is expected to close in the first quarter of 2015.

DWA will increase Nasdaq’s capacity for growth in the index business across asset classes and geographies, with substantial opportunities in index licensing. The combined group will bring together DWA’s 17 ETFs and Nasdaq’s 69 licensed smart-beta ETFs focused primarily on dividend and income strategies. As a result, Nasdaq Global Indexes will become one of the largest providers of smart beta indexes with nearly $45 billion in assets benchmarked to its family of Smart Beta indexes and more than $105 billion benchmarked to all Nasdaq Indexes.

"Our index business has been a strong growth area for Nasdaq over the last decade, and the acquisition of Dorsey Wright & Associates will further cement our position as a major player and industry innovator," said Adena Friedman, President of Nasdaq. “We are always looking for opportunities to expand Nasdaq’s index offering with quality products that deepen our relationships with the investing community. DWA provides a natural complement to our business and growth strategy.”

Subject to customary conditions and approvals, Nasdaq will acquire DWA for $225 million funded through a mix of debt and cash on hand. Nasdaq expects the acquisition will be accretive to the company’s earnings at closing, excluding transaction-related costs, and does not expect a material impact on Nasdaq’s financial leverage or capital return strategy. The acquisition will further support the company's efforts to deliver consistent and stable returns to shareholders.

"Smart Beta represents one of the fastest growing sectors within the ETF market," said Tom Dorsey, President, Dorsey Wright & Associates. “This deal will allow us to grow significantly, while continuing to create products and strategies that meet the needs of our clients.”

Nasdaq intends to fuel DWA’s growth strategy by accelerating product development, raising awareness of the DWA indexes and increasing the base of potential market participants through its global distribution network. Nasdaq’s ability to create innovative indexes, its long-term relationships with ETF providers, and DWA’s analytical capabilities and smart-beta models are expected to lead to new products in more asset classes, including fixed income, currencies and commodities, and facilitate international expansion of the DWA offerings, beginning in Canada and Europe.

Additionally, there are opportunities for Nasdaq technology to enhance DWA’s web-based advisor tools used to deliver DWA’s methodology into tactical asset allocation models. The enhancements will create more opportunities for financial advisors as the market continues to move toward model-based investing.

Historically, Nasdaq has a proven ability to bolster acquired companies’ index businesses by leveraging its distribution, technology and product generation capabilities. This is best exemplified by the acquisition of the index business of Mergent in 2012. In the two years since the deal was completed, the index business of Mergent has over-achieved its business targets and returns, resulting in licensed asset growth of 100 percent.

Friedman concluded, “We intend to integrate the DWA team with our broader Nasdaq organization, leveraging DWA’s research expertise and deep relationships with the financial advisor community, and we expect to generate revenue synergies by deepening DWA’s licensing relationships with the ETF sponsor community globally.”

For more information, please contact Rob Hughes, Nasdaq Vice President/Head of Index and Advisor Solutions.
 

NASDAQ® and NASDAQ® are registered trademarks of The NASDAQ Group, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither The NASDAQ Group, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding NASDAQ-listed companies or NASDAQ proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.

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