NEW YORK and SANTA MONICA, Calif., August 11, 2005 — Dow Jones Indexes, a leading global index provider, and Wilshire Associates Incorporated, one of the world’s leading investment consulting, investment management and investment technology firms, today announced changes to the U.S. company definition for the Dow Jones Wilshire 5000 Composite Index.
Beginning with the September 2005 rebalance, the U.S. company definition for inclusion in the index will change to include corporations that, for business reasons, are technically based outside of the U.S. but are considered by the investment community to be headquartered in the U.S.
“The Dow Jones Wilshire 5000 Index will now include securities of firms that legally are located outside of the U.S., but for all intents and purposes are thought of by most investors as U.S. companies,” said Michael A. Petronella, president, Dow Jones Indexes/Ventures. “The 32 companies that currently would be added to the Dow Jones Wilshire 5000 using the new definition have a full-capitalization total market value of $130 billion. Approximately 65% of that is the combined market cap of the top three, which are Tyco Intl. Ltd. (NYSE:TYC), Ace Ltd. (NYSE:ACE) and Marvell Technology Group Ltd. (Nasdaq:MRVL).”
“As has been our practice historically, we are making adjustments that we feel are appropriate to the current investment environment,” said Dennis Tito, chairman and chief executive officer of Wilshire Associates, who spearheaded the development of the index in 1972. “By including the securities of firms that have relocated outside of the U.S. or were founded in other countries but have a significant presence within our nation, we’ve ensured that the scope of the domestic market — as perceived by investors — is included in the Dow Jones Wilshire 5000.”
Going forward, each company included in the Dow Jones Wilshire 5000 — including multinationals — is assigned to the country of its headquarters and primary market listing, which typically also match its country of incorporation. In cases where headquarters and primary market listing don’t match, such as where there is no readily accessible home-equity market or where a company is domiciled in one country solely for tax or regulatory purposes, the company will be analyzed on a case-by-case basis.