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S&P Launches Low Volatility, High Beta Versions of the S&P 500

15 AMERICA

Licenses Indices to PowerShares for Forthcoming ETFs….


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S&P Indices® announced that it is launching two new indices designed to provide market participants with unique measuring tools for specific stock characteristics within the S&P 500® – the world’s most followed stock market index with over $4.83 trillion benchmarked to it and over $1.1 trillion directly indexed.

The S&P 500 Low Volatility Index measures the performance of the 100 least volatile stocks in the S&P 500. The Index is designed to serve as a benchmark for low volatility or low variance strategies in the U.S. stock market. Constituents are weighted relative to the inverse of their corresponding volatility, with the least volatile stocks receiving the highest weights.

The S&P 500 High Beta Index will measure the performance of the 100 constituents of the S&P 500 that are the most sensitive to changes in market returns. It is designed to serve as a benchmark for investors with a bullish strategic or tactical view of the U.S. stock market. Constituents are weighted in proportion to their market sensitivity, or beta, with the highest-beta stocks receiving the highest weights.

Both the S&P 500 Low Volatility Index and the S&P 500 High Beta Index will serve as the basis for future PowerShares ETFs.

“We are pleased to announce these two additions to our family of alternatively-weighted indices,” says Craig Lazzara, senior director for U.S. equities at S&P Indices. “Both the S&P 500 Low Volatility and High Beta Indices allow investors to benchmark specific market segments, while also providing a basis for new investing and trading strategies.”

“We are extremely excited to bring these new products to market,” says Ben Fulton, Invesco PowerShares managing director of global ETFs. “We believe that a high beta portfolio allows investors to increase their exposure to the equity market without using leverage. In addition, we believe that a low volatility portfolio may offer protection in down cycles while still participating in upward trending cycles.

Both the S&P 500 Low Volatility Index and the S&P 500 High Beta Index are additions to a growing family of S&P alternatively weighted indices.

Source: ETFWorld –   S&P Indices®



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