Growth, value stocks set for reshuffle as S&P adopts new rules
Reported by The Economic Times, not nibnow. We are not the publisher of this story, only the source is.
The rule change will reshape how about $375 billion of passive funds classify growth and value stocks, potentially altering investors' exposure and performance.
S&P Dow Jones Indices will soon change its rules for classifying growth and value shares. The new criteria will incorporate intangible assets, forward earnings, and free cash flow instead of relying on 12-month price momentum. These changes are expected to affect approximately $375 billion of passive funds linked to the index. FTSE Russell is also considering adjustments due to the dominance of technology companies.
S&P Dow Jones Indices creates widely used stock benchmarks; how it defines growth versus value determines the composition of index‑tracked funds, which many investors use for passive exposure.
- •Implementation timeline for the new classification rules
- •Rebalancing actions by large passive fund managers
- •Any announced adjustments by FTSE Russell in response to the changes