Nikkei 225 High Dividend Stock 50 Index is a stock index comprised of 50 high dividend yield stocks selected from the Nikkei 225 constituents. The index is calculated based on the "Dividend Yield Weight Method" which determines the each weight of the index constituent by the dividend yield, additionally taking into account the liquidity (trading value). As the method for weighting is different from the approaches such as price based weighing or market cap based weighting, the Nikkei High Dividend Yield 50 could be recognized as so called "Smart Beta" strategy index. Nikkei started the publication of the index from January 10th 2017.
The 50 issues are selected from the constituents of the Nikkei Stock Average (Nikkei 225).
Changes in constituents
The constituents are changed at the end of June (final business day) as a result of the Periodic Review once a year. Using the Nikkei’s forecasts on dividends, the stocks with higher expected dividend yields at the end of May (the same above) are chosen based on the selection rule of the Periodic Review. Although Nikkei extraordinarily remove stocks deleted from the Nikkei 225 and stocks whose expected dividends become zero, the new constituents will not be added for the removals and the number of the constituents will be back to 50 at the next Periodic Review.
The index is calculated by summing up the constituent share prices multiplied by the Weight Factors, and dividing the summation by the Divisor. The Divisor is just like the base market value for the market capitalization based index. The Weight Factor is determined by the Expected Divided Yields on the Base Date and the Liquidity Factors allocated based on the daily average trading values for the past one year, and the share prices on the Base Date. Although the Weight Factor remains unchanged in principle until the next Periodic Review, it will be adjusted in case of the stock split or reverse split, based on the ratio. Both of the Expected Dividend Yields and weights of the index are capped.
Base date etc.
The commencement date of the calculation is January 10th 2017, which has been retroactively calculated to December 28th 2001 with the level of 10000. The Nikkei 225 High Dividend Yield Stock 50 Index is calculated on an end-of-day basis.
Nikkei Stock Average (Nikkei 225)