S&P Dow Jones consults on changes to high quality preferred index

New York, Oct. 12 – S&P Dow Jones Indices announced a consultation on possible changes to the S&P U.S. High Quality Preferred Stock index.

The proposal would weight issuers in the index equally and set a minimum number of issuers, according to an announcement from the company.

Specifically, weightings would be set using a methodology that gives each preferred stock issuer equal weight in the index and then the securities for each issuer would be given the same weight.

Currently, preferred stock issues are categorized as cumulative and non-cumulative and the cumulative group is given a 75% weight while the non-cumulative is assigned 25%.

Within each of these two categories, securities are then equally weighted.

Under the present rules, the maximum weight of each issuer is capped at 22.5% whenever the index is rebalanced.

In addition, S&P Dow Jones is proposing that if the number of issuers in the index falls below 20 the eligible universe would be expanded in order to include 20 issuers. There is currently no criterion relating to the count of issuers.

The consultation runs until Nov. 11.

S&P Dow Jones Indices is a New York-based provider of indexes, data and research.

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