It's finally upon us. The much anticipated second Football INDEX Share Split is now just a week away and after all the speculation, details have now been fully confirmed. So let's run through those details, look at how the announcement has affected the market and going forward what this means for traders both new and old.
First up the actual mechanics of the Share Split.
It had been widely expected that we would see a factor of 4 share split, so it comes as something of a surprise to confirm the actual number is a factor of 3. But with details regarding the dividend changes (which we'll get to later), this actually makes a lot of sense.
With a factor of 4 share split, it would have made the top end very enticing, but at the lower end we would see players available for literally pennies. Meanwhile a factor of 2 would almost defeat the main objective of making the market more appealing to new investors as a whole.
So a factor of 3 is the mummy bear of this situation and should be 'just right' in terms of what best suits Football INDEX and traders alike.
It will make players like Neymar initially available for around £7.30 whilst those lower end players still offer tremendous value without being virtually given away. Overall, with the new dividend structure in place, we think this is a very good decision by Football INDEX and should appeal to everyone.
The new Football INDEX Dividend Payout Structure.
It was perhaps the new dividend structure that existing Football INDEX traders were most fearful of, rather than the actual share split factor. This was understandable due to the various sound bites and information in the lead up from Football INDEX that using whole pennies might not be feasible.
It comes then as a huge relief that dividends are not only all whole penny numbers but have actually been increased by 28% on average across the board! The most notable increase is for In-Play Dividends, where goals, assists and goalkeeper clean sheets are all 1p, whilst defender goals are now 2p. Indeed, in relative terms the 1p payout for assists represents a huge 200% increase!
Media dividends will now be 2p for 1st place on match days and 3p, 2p and 1p on Treble Media days.
You can see the full updated set of Match Day and Media dividends in the table below.
Another important piece of information released during the announcement is that from the start of next season, Media Rankings will be opened up to every player on the Index. It will be interesting to see if Football INDEX continue to split the players into 'Top 200' and 'Squad List' or merge them all into one giant list.
Whilst some traders might be wary of this change, it should be noted that only 7% of previous winners would have come from the Squad List had they been eligible. This means that Media magnets like Paul Pogba are still just as likely to be the top dogs - or should that be top Pog?
On the technical side, the share split will take place on 26 March 2019. The market will close at midnight until 12:00pm (update - this has been extended from the original time of 6:00am) during which time all behind the scenes changes will be made. When the market reopens at 6:00am, traders will see their portfolios showing as triple the number of futures, at a third of their original value.
After the announcement was made, the market responded by diving into the consistent dividend winners due to the increase in dividend payouts. Most notable was Lionel Messi, which considering he has already amassed 21 Top Forward wins, is not unexpected.