S&P Dow Jones Indices announces launch of S&P Tilt Index Series

By Tali David

Minneapolis, Oct. 25 - S&P Dow Jones Indices LLC launched the S&P Tilt Index Series, according to a press release.

Covering the U.S. market, S&P said the indexes are designed to tilt a given index toward securities with characteristics that are presumed desirable. The three tilt indexes launched are based upon the S&P 1500, which combines three leading indexes, the S&P 500, the S&P MidCap 400 and the S&P SmallCap 600, to cover roughly 90% of the U.S. market capitalization.

The three indexes launched as part of the S&P Tilt Index Series include the following:

• 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; and

• 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 indexes 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 release said.

S&P Dow Jones is part of New York-based McGraw-Hill Cos, a resource for index-based concepts, data and research.

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