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Journal of Indexes

S&P Adds Indexes

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Standard & Poor's, which recently introduced its Global 1200 and related indexes (see Indexes, Jan.-Mar. 2000), has also created its own more-investable global benchmark, the S&PGlobal 100. The index was developed in collaboration with the New York Stock Exchange. The index committee that will oversee the index will include representatives of the New York Stock Exchange, the Tokyo Stock Exchange, and the Deutsche Börse as well as senior S&P investment strategists.

Launched in early February, the index consists of 100 stocks from the broader S&P Global 1200. The 100 components all derive a significant amount of revenue from outside their headquarters countries. Changes to the index's list of components will be made by the Index Committee in the case of mergers, takeovers and other corporate actions; S&P has stated that it expects the index's overall turnover to be low.

In 1999, FTSE International created a similar index, the FTSE Global 100, and Dow Jones launched the Dow Jones Global Titans, an index of 50 major multinational companies.

The new S&Pindex will be the basis for index-linked products traded on the participating exchanges, and already Barclays Global Investors has expressed interest in creating investment products linked to it. The NYSE has plans to create an exchange traded fund using the index, and it is expected that the fund will be picked up by the other two participating exchanges, making the fund the first ETF to trade on multiple exchanges.

In February, S&Palso announced it would take over the Australian Stock Exchange's index business as part of a 15-year deal on April 3. The exchange adopts the new S&P/ASX Benchmark Indexes, a series intended to replace the ASX's old set of indexes. The new series includes the All Ordinaries, which will now contain 500 companies rather than the 251 that it previously covered and which will represent almost 98% of the ASX's domestic capitalization; inclusion in the All Ordinaries will be based solely on market capitalization. The S&P/ASX 100, S&P/ASX 200, and S&P/ASX 300 represent 81.96%, 88.21% and 89.99% respectively of the ASX's domestic capitalization.

According to ASX representatives, the purpose of the agreement with S&P is to raise the profile of the ASX indexes on an international level.

 

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