Growing Driverless Stock Index (D20) Reflects Dynamic Industry

The Driverless Transportation D20 Index has some notable changes to announce. First, three companies are being replaced in the index, making the D20 more international in scope. The basis for calculating the D20 Index also changed, moving to a dollar averaged approach.

The three new stocks in the D20 are:

1. Amsterdam-based TomTom (TOM2) is traded on the Amsterdam Stock Exchange. It replaces Nokia (NOK) which is selling its Here mapping division, its only business involved in driverless or connected vehicles. TomTom, known for its popular aftermarket GPS turn-by-turn directional devices for cars, has three units that are involved with driverless technology – the auto unit provides components such as maps, traffic and software to auto OEMs; the licensing group leverages maps, traffic and navigation content and services; and the telematics unit is dedicated to fleet management and vehicle telematics.
2. Ontario, Canada-based Magna International (MGA) is traded on the NYSE. It replaces the lightly-traded KVH Inc. (KVHI), a business that primarily delivers ISP services for hotels, resorts and ships. Magna has a large and growing electronics division which focuses on driver assistance systems, as well as systems to support power-train electrification. It manufactures electronic, electromechanical and mechatronic products, and provides software and hardware development.
3. Tokyo-based Renesas Electronics (TYO: 6723) trades on the Tokyo Stock Exchange. It replaces Iteris (ITI), a lightly-traded firm that provides intelligent transportation systems for municipalities. Renesas was formed through a merger of NEC Electronics Corp., and Renesas Technology Corp., (a joint venture of Hitachi and Mitsubishi Electric). Renesas Electronics is a semiconductor manufacturer that designs, develops, manufactures, sells and services microcontrollers for the automotive industry.

The D20 Index now has companies — TomTom in Amsterdam and Renesas in Tokyo — with stocks that are primarily listed on non-US exchanges and use foreign currencies for prices. To calculate the D20 and include these stocks, non-US stock prices (Euros and Japanese Yen) are converted to US dollars using a current conversion ratio. The values were: Euro – currently 1.136 dollars per Euro; and Japanese Yen – currently .00829 dollars per Yen.

CALCULATING THE INDEX

The basis for calculating the D20 Index has changed. Previously, the value of the D20 was calculated by using one share of stock from each of the 20 stocks in the index. With the new dollar-averaged approach, the index tracks the value of $1,000 invested in each of the 20 stocks. On August 28, 2015, the D20 started with roughly a total of $20,000 invested equally in the 20 stocks ($1,000 per company) in the D20 Index.

 

Name  

Symbol (As of 8/28/2015) Share Price Shares Currency Conversion Value BlackBerry Ltd BBRY $ 7.37 135.690 1.000 $ 1,000 BYD COMPANY LTD ADR BYDDY $ 8.44 118.480 1.000 $ 1,000 Continental AG (ADR) CTTAY $ 42.86 23.330 1.000 $ 1,000 Daimler AG (USA) DDAIF $ 80.70 12.390 1.000 $ 1,000 Delphi Automotive PLC DLPH $ 75.35 13.270 1.000 $ 1,000 Denso Corp (ADR) DNZOY $ 22.69 44.070 1.000 $ 1,000 Ford Motor Company F $ 13.73 72.830 1.000 $ 1,000 General Motors Company GM $ 29.01 34.470 1.000 $ 1,000 Google Inc GOOG $ 630.38 1.586 1.000 $ 1,000 Magna MGA $ 49.23 20.313 1.000 $ 1,000 Mobileye NV Amsterdam MBLY $ 56.42 17.724 1.000 $ 1,000 Nissan Motor Co., Ltd. (ADR) NSANY $ 18.31 54.620 1.000 $ 1,000 NVIDIA Corporation NVDA $ 22.73 43.990 1.000 $ 1,000 Tesla Motors Inc TSLA $ 248.48 4.025 1.000 $ 1,000 TomTom TOM2 € 8.97 100.010 1.115 $ 1,000 Visteon Corp VC $ 100.49 9.950 1.000 $ 1,000 VALEO SA (ADR) VLEEF $ 63.66 15.710 1.000 $ 1,000 Volkswagen AG (ADR) VLKPY $ 38.32 26.100 1.000 $ 1,000 Volvo AB (ADR) VOLVY $ 10.94 91.410 1.000 $ 1,000 Renesas TYO:6732 ¥ 708.00 168.008 0.00841 $ 1,000

Why the change? With the one-share approach, the stocks with the highest prices, i.e., Google, trading over $600, and Tesla, over $250, could swing the D20 wildly with just a small change in their pricing. The dollar-average approach means each company in the D20 now makes up about five percent of the index’s underlying value.

Why didn’t the D20 Index change radically when the basis switched? The D20 Index has always used a divisor, starting at 10.0 — all the stock prices were added up at the close of the trading day and divided by 10. To switch to the new dollar-average approach, the divisor changed so the new D20’s underlying value would match the old D20. On August 28, 2015, the closing stock prices were used to find the value of each of the two D20s, then the divisor for the dollar-averaged D20 was adjusted so it had the same value as the old D20. The new divisor is 134.27296.

On September 4, the revised D20 Index switched over to the three new stocks and the new divisor.

Visit the Driverless Transportation D20 Stock Index page to learn more about it and its component stocks.