S&P Tilt Index Series Launched By S&P Dow Jones Indices
NEW YORK, Oct. 25, 2012 /PRNewswire/ -- S&P Dow Jones Indices, the world's largest provider of financial market indices, announced today that it has launched the S&P Tilt Index Series. Covering the U.S. market, the indices are designed to tilt a given index towards securities with characteristics that are presumed desirable. The three tilt indices launched today are based upon the S&P 1500 ® which combines three leading indices, the S&P 500 ®, the S&P MidCap 400 ®, and the S&P SmallCap 600 ® to cover approximately 90% of the U.S. market capitalization. The index series has been licensed by S&P Dow Jones Indices to SSgA for the development of exchange traded products.
"The S&P Tilt indices are designed to tilt a given index towards a certain factor – value, momentum, or volatility - by overweighting some securities while underweighting others," says Vinit Srivastava, director of strategy indices at S&P Dow Jones Indices. "These indices offer investors three unique measures of gauging the performance of the S&P 1500 companies."
The three indices launched today as part of the S&P Tilt Index Series include:
- S&P 1500 Reduced Volatility Tilt Index: Weighted so that stocks with relatively low volatility are overweight relative to the S&P Composite 1500 and stocks with relatively high volatility are underweight. The Index is intended to provide diversified exposure to low relative volatility in the U.S. stock market.
- S&P 1500 Positive Momentum Tilt Index: Weighted so that stocks with relatively strong momentum are overweight relative to the S&P Composite 1500 and stocks with relatively weak momentum are underweight. The Index is intended to provide diversified exposure to positive relative momentum in the U.S. stock market.
- S&P 1500 Low Valuation Tilt Index: Weighted so that stocks with relatively cheap valuations are overweight relative to the S&P Composite 1500 and stocks with relatively expensive valuations are underweight. The Index is intended to provide diversified exposure to low relative valuation in the U.S. stock market.
Based on a selected quantitative attribute, the tilt for each of the indices within the S&P Tilt Index Series is achieved by ranking all constituents of the parent index, increasing the weights of stocks with a high ranking while decreasing the weights of stocks with a low ranking. The Index series maintains the constituents of the underlying index while adjusting constituent weights.
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