S&P Dow Jones launches S&P 500 Low Volatility Rate Response index

By Tali Rackner

Norfolk, Va., April 8 – S&P Dow Jones Indices announced the launch of the S&P 500 Low Volatility Rate Response index, according to a press release.

The index is designed to measure the performance of the top 100 companies of the S&P 500 that have exhibited low volatility and are less sensitive to changes in interest rates.

The launch of this index further broadens S&P’s smart beta index offering and incorporates an event-driven factor into the widely followed S&P 500 Low Volatility index, the release said.

"With the backdrop of an anticipated rise in interest rates, the S&P 500 Low Volatility Rate Response index is designed to serve as the basis for an exchange-traded product that seeks to offer investors a way to protect a low-volatility portfolio from a long-term interest rate increase," senior director of strategy indexes Vinit Srivastava said in the release.

"The low volatility factor continues to be in high demand. By incorporating market events such as fluctuations in interest rates, this index provides market participants with another measure for their investment strategy."

The index has been licensed to Invesco Powershares for ETF development.

New York-based S&P Dow Jones Indices is a part of McGraw Hill Financial and provides index-based concepts, data and research.

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