NEW YORK, March 21, 2006 — Dow Jones Indexes, a leading global index provider, and Wilshire Associates Incorporated, a global leader in investment technology, investment consulting and investment management, today announced the launch of global versions of their U.S. real estate indexes.
The Dow Jones Wilshire Global Real Estate Securities Index (RESI) and the Dow Jones Wilshire Global REIT Index are the first available members of the organizations’ soon-to-be-released global family of indexes. The new global indexes follow the same transparent, rules-based methodology that has long been respected in the U.S.
The Dow Jones Wilshire Global Real Estate Securities Index is a measure of the types of global real estate securities that represent the ownership and operation of commercial or residential real estate. The global index is an expansion of the original U.S. index, developed in 1991 by Wilshire Associates to serve as a proxy for direct real estate investment by institutions. Because actual real estate holdings are bought and sold infrequently, indexing the “market value” of these holdings is slow and problematic, while pension plans and other institutions need a more reliable and regularly available benchmark.
The Dow Jones Wilshire Global Real Estate Securities Index includes publicly traded securities of both real estate operating companies (REOCs) and real estate investment trusts (REITs). The Dow Jones Wilshire Global REIT Index is a subset of the Dow Jones Wilshire Global Real Estate Securities Index and is comprised only of those REITs and REIT-like securities in the larger index. While REITs dominate the publicly traded real estate securities market in the U.S., elsewhere in the world real estate operating companies are in the majority. However, as governments around the world seek to provide access to real estate investment there will be a growth trend in the availability of tax-transparent, REIT-like vehicles.
Also being launched today are the Dow Jones Wilshire exUS Real Estate Securities Index and the Dow Jones Wilshire exUS REIT Index. The U.S. and exUS indexes together make up the global indexes.
To be included in the indexes, an operating company or REIT must be an equity owner and operator of commercial or residential real estate and must generate at least 75% of its revenue from such assets or operations. It also must meet minimum requirements for market capitalization and liquidity. Securities of certain types of companies, such as those specializing in health-care facilities, are excluded, as are companies with more than 25% of their assets in direct mortgage investments. The reason for this exclusion is that factors other than real-estate supply and demand-such as interest rates and medical trends-influence the market values of these companies. The new indexes are weighted by float-adjusted market capitalization.
“As a significant first step in introducing our comprehensive global index family, we developed new real estate indexes to meet institutional investors’ needs for transparent, rules-based benchmarks,” said Michael A. Petronella, president, Dow Jones Indexes/Ventures. “Institutional investors can now rely on benchmarks that represent the real estate universe they seek to measure.”
“Real estate is an increasingly important strategic tool for institutional investors seeking to diversify their assets,” noted Dennis A. Tito, chairman and chief executive officer, Wilshire Associates, and creator of the original Wilshire 5000 Total Market Index. “It is only natural that managers and institutions are beginning to look beyond the United States for real estate opportunities. By extending the Dow Jones Wilshire REIT and RESI indexes globally, we will meet these evolving investor needs.”
About the Dow Jones Wilshire Index Family
The development of the global family of indexes, the rest of which will be available in the second quarter of 2006, marks a new phase of the Dow Jones-Wilshire relationship. The affiliation began in 2004 when Dow Jones and Wilshire co-branded and marketed the Dow Jones Wilshire family of indexes. Now, by extending the Dow Jones Wilshire methodology used in the U.S. internationally, the global indexes will provide unprecedented breadth, consistent global coverage, and objective and transparent rules.
Float-adjusted capitalization-weighted versions of the Dow Jones Wilshire 5000, 4500, RESI and REIT indexes were launched on May 1, 2004. The large-, small- and micro-cap indexes, as well as growth and value indexes, were launched March 14, 2005. The top 10 industries, as defined by the Industry Classification Benchmark system, were first published in August 2005, followed by the lower ICB hierarchy levels December 2005.
Dow Jones Wilshire indexes are available on market-data vendor platforms- many in real-time format-and on the Dow Jones Indexes (www.djindexes.com/totalstockmarket) and Wilshire Associates (http://www.wilshire.com) Web sites. The Dow Jones Wilshire 5000sm Composite Index is calculated and distributed by Dow Jones Indexes pursuant to an agreement between Dow Jones & Company and Wilshire Associates Incorporated.
About Wilshire Associates
Wilshire Associates is a leading global investment technology, investment consulting and investment management firm with four business units: Wilshire Analytics, Wilshire Funds Management, Wilshire Consulting, and Wilshire Private Markets. The firm was founded in 1972, revolutionizing the industry by pioneering the application of investment analytics and research to investment management for the institutional marketplace. Wilshire also is credited with helping to develop the field of quantitative investment analysis that uses mathematical tools to analyze market risks. All other business units evolved from Wilshire’s strong analytics foundation.
Wilshire developed the index now known as the Dow Jones Wilshire 5000sm Composite Index, the first asset/liability models for pension funds, the first U.S. equity style metrics work and many other “firsts” as the firm grew to more than 300 employees serving the investment needs of institutional and high net worth clients around the world.
Based in Santa Monica, CA, Wilshire provides services to clients in more than 20 countries representing in excess of 600 organizations with assets totaling more than $12.5 trillion. With eight offices on four continents, Wilshire Associates and its affiliates are dedicated to providing clients with the highest quality counsel, products and services. Please visit http://www.wilshire.com for more information.