As alternatively-weighted indices and the exchange traded funds that track those indices surge in popularity, more index providers are working to meet increased demand.
On Monday, S&P Dow Jones Indices unveiled two new factor-driven index offerings: S&P Low Beta indices and S&P Intrinsic Value Weighted indices.
Factor indices are strategy indices that seek to capture performance characteristics different from traditional cap-weighted benchmarks. SPDJI has been offering factor indices for years beginning with an equal weighted version of the S&P 500 in 2003, according to a statement issued by S&P Dow Jones Indices.
The new index families pull constituent companies from the S&P Global Broad Market Index (BMI). For example, the low beta index offerings are cap-weighted and contain 70% of the S&P Global BMI with the lowest beta, according to the statement.
Although U.S. stocks have raced to record highs, ETFs emphasizing low volatility and reduced beta remain popular with investors. Just this quarter, the PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV) has pulled in $186.3 million in new assets.