S&P DJ Indices Launches Buyback Index

May 06, 2013

S&P Dow Jones Indices rolls out an index based on corporate buybacks.

S&P Dow Jones Indices today launched the S&P 500 Buyback Index, which is designed to measure the performance of the top 100 stocks with the highest buyback ratio in the S&P 500, offering an indexed way for investors to benefit from companies returning money to shareholders.

Buybacks, when companies buy back some of their stock, can be an important indicator of corporate health, Vinit Srivastava, senior director of Strategy Indices at S&P Dow Jones Indices, said today in a press release.

“Much like dividends, corporate buybacks is another method that companies use to return value back to shareholders,” Srivastava said in the release.

Apple made a splash last month when it decided to double its share buybacks to $100 billion. The program, which should be finished by 2015, puts money in shareholders’ pockets and would allow Apple to benefit from a higher share price.

The index’s constituents will include the 100 companies within the S&P 500 that have bought back the highest ratio of their own stock within the past 12 months.

S&P will equally weight the index, and will rebalance it quarterly.

 

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