Shanghai Stock Exchange Revises Dividend Indices Series to Promote Value Investment and Meet Needs for Medium- and Long-term Asset Allocation

In March this year, the Shanghai Stock Exchange revised the SSE Dividend Index Compilation Plan, which attracted a lot of attention from investors and was well-received by the market. This time, the SSE further draws on the experience of revising the SSE Dividend Index and revises 32 index compilation plans, including the SSE 180 Dividend Index, to better meet the needs of investors for low-risk and stable-return investment, and guide the formation of long-term investment and value investment philosophy.

The investability and high dividend attributes of the revised dividend indices series have been further enhanced. On one hand, the sustainability requirements for cash dividends in the index sample have been improved, avoiding the problem of draining companies' ability to continuously pay dividend due to high dividend payment rate. The indices series include companies that are able and willing to pay dividend continuously, hence enhancing the continuity of dividends. On the other hand, the weight setting rules have been refined, setting a lower weight ceiling for samples with a total market cap of less than 10 billion yuan, which further enhances the investment capacity and liquidity of the index while maintaining the high dividend yield positioning of the index. Taking the CSI Dividend Index as an example, historical simulations have shown that the annualized return of the revised index has increased from 9.3% to 10.2% compared with the return before the revision. At the same time, the weight of small-cap companies decreases, reducing the difficulty of product operation. The dividend indices series will better help investors invest in the securities of listed companies with high dividends while meeting the requirements of diversification, stability and tradability, and will become a useful measure to meet market demand and serve investors.

Long-term and stable cash dividends are an important indicator for measuring the investment value of listed companies, as well as an important way for investors to obtain returns. Dividends have also become a decisive factor in the intrinsic value of listed companies. In recent years, under the premise of adhering to the concept of legal, comprehensive and strict supervision, the SSE has actively encouraged listed companies to pay cash dividends, guided listed companies to pay more attention to investor returns, strengthened the shareholder return mechanism, and promoted listed companies to continuously increase the level of cash dividends. No matter in terms of the number of companies that pay dividends, the total amount of cash dividends, or the proportion of listed companies that pay dividends in consecutive years, the SSE market plays an absolutely dominant role. In 2021, the total cash dividends of the SSE market account for 78.7% of the A-share market, and the proportion of listed companies with cash dividends in consecutive years and rising total dividends has gradually increased. In terms of sectors, in 2021, a total of 1,221 companies on the SSE main board have launched dividend plans, accounting for 84% of all profitable companies, with a total cash dividend of nearly RMB 1.48 trillion. While maintaining the quality of profitability, the STAR Market continues to reward investors through cash dividends and share repurchases. In 2021, a total of 331 companies on the STAR Market have launched dividend plans, accounting for 77% of all profitable companies, while the total amount of cash dividends reached RMB 29.4 billion. Up to now, dividend index products in the domestic market have amounted to about RMB 40 billion, the most heavily tracked strategy-product segment in the domestic market. Among them, products tracking SSE Dividend Index and CSI Dividend Index rank first and second in scale respectively, together accounting for about 75% of domestic dividend index products in scale.

The Methodology of SSE 180 Dividend Index And Other Dividend Indices Will Be Amended

The Methodology of CSI Dividend Index And Other Dividend Indices Will Be Amended