Thomson Reuters gets into indexing as Dow Jones exits market

Ian Salisbury of Dow Jones Newswires writes about how Thomson Reuters has introduced a whole slew of new indexes of the markets at a time when rival Dow Jones & Co. is selling its index business.

Salisbury writes, “The company, which provides financial data terminals and owns the Reuters news service, on Monday launched 7,500 different stock indexes, largely designed to serve as benchmarks for narrowly defined industries in countries across the globe. The company already offers about 800 U.S. and foreign stock indexes, launched in November. In total, it will now track more than 8,000 different areas of the world-wide stock market.

“Slicing and dicing the market can be a handy tool for professional investors because it helps them see, at a glance, what’s behind market moves. For instance, if emerging-markets stocks surge, investors who can see those stocks broken down by industry can quickly tell whether the surge is due to, say, energy stocks or financial stocks. When each of those categories is also broken down by country, they can also see how much of the move is driven by Brazilian energy stocks or Russian energy stocks, and so on.

“Indexes are an increasingly popular basis for investments themselves, especially among overseas stocks, where a U.S. investor might be bullish on China’s economic prospects, but lacking in the confidence to pick individual Chinese stocks. Indexes are the basis for most exchange-traded funds, fast-growing securities popular with both traders and Main Street financial advisers.”

Read more here.