NEW YORK, Jan. 5, 2012 /PRNewswire/ -- S&P Indices announced today the launch of the S&P Dynamic Rebalancing Risk Control Index Series, a collection of indices that seeks to provide greater stability and control over the level of risk typically associated with the underlying index. The new indices reflect leading S&P headline indices while offering investors an efficient, cost effective means of controlling risk by targeting a specific level of volatility.
The S&P Dynamic Rebalancing Risk Control Index Series currently includes the following indices:
- S&P 500® Dynamic Rebalancing Risk Control Index
- S&P SmallCap 600® Dynamic Rebalancing Risk Control Index
- S&P Composite 1500® Dynamic Rebalancing Risk Control Index
- S&P Latin America 40 Dynamic Rebalancing Risk Control Index
Direxion, a leading provider of liquid alternative investment solutions, has been licensed by S&P Indices to launch exchange traded funds based upon the four indices.
"By integrating a volatility control measure, the S&P Dynamic Rebalancing Risk Control Index Series provides a new level of innovation for investors looking to gain exposure to developed and emerging markets while controlling the level of risk typically associated with investing in these markets," says Alka Banerjee, Vice President at S&P Indices.
"We are excited about strengthening our relationship with S&P Indices as we bring rules-based ETFs to the marketplace that use volatility to determine underlying equity exposure," says Edward Egilinsky, Direxion's Head of Alternatives. "The financial community continues to seek ways to mitigate risk when investing in equities. These 'buy and hold' strategies are designed to capture upside market movements, while at the same time looking to minimize the overall downside risk associated with equity investing."
The S&P Dynamic Rebalancing Risk Control indices are designed with the goal of supporting investment products such as index funds, index portfolios, and index futures and options. Similar to the S&P Risk Control Indices, the S&P Dynamic Rebalancing Risk Control indices consist of a position in an underlying index and a position in 90-day T-bills. If the volatility level reaches beyond the desired threshold, the T-bill position is increased to maintain the target volatility. The Indices have the flexibility to make weighting adjustments on a daily basis; however, the exposure of T-bills and underlying index components are rebalanced at a minimum on a monthly basis.
For the full index methodology, please visit our web site at www.indices.standardandpoors.com.
About S&P Indices
S&P Indices, a leading brand of the McGraw-Hill Companies (NYSE:MHP), maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1.45 trillion is directly indexed to our indices, which includes the S&P 500, the world's most followed stock market index, the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, the S&P Global BMI, an index with approximately 11,000 constituents, the S&P GSCI, the industry's most closely watched commodities index, and the S&P National AMT-Free Municipal Bond Index, the premier investable index for U.S. municipal bonds. For more information, please visit: www.standardandpoors.com/indices.
It is not possible to invest directly in an index. S&P Indices does not sponsor, endorse, sell, or promote any S&P index-based investment product. This document does not constitute an offer of services in jurisdictions where S&P Indices or its affiliates do not have the necessary licenses. S&P Indices receives compensation in connection with licensing its indices to third parties.
SOURCE S&P Indices