NYSE Retools Gold Miner’s Index

http://www.indexuniverse.com/sections/news/19566-nyse-retools-gold-miners-index.html

The NYSE Arca Gold Miners Index is undergoing a major revamp of its methodology, leading one analyst to offer cautionary words for advisors and investors alike.
Effective Sept. 20, the index is on one hand expanding its universe of securities to include non-U.S.-listed companies, and on the other it will begin excluding companies with less than $750 million in market capitalization from being considered for inclusion.
The index is also opening up its exposure to include the use of American depositary receipts and global depositary receipts as well as a “buffer zone” around the $750 million market-cap floor to reduce turnover during quarterly rebalances.
If a company’s market capitalization falls within a 2.5 percent range on either side of the upper or lower boundary of the index at the time of the reconstitution, it will remain in the index, according to NYSE Euronext.
“We wanted to expand the index’s universe and capture international companies not listed in the U.S. to better represent the gold mining industry,” said Dwijen Gandhi, managing director, global index and exchange-traded products at NYSE Euronext. “The market cap of $750 million is to avoid potential overlaps with junior miners.”