S&P DJI new indexes track effects of spin-off, IPO, activist interest

By Wendy Van Sickle

Columbus, Ohio, Aug. 4 – S&P Dow Jones Indices launched three new indexes to measure performance of U.S. companies that have been spun-off, had initial public offerings or been targeted by activist investors, according to a press release.

The new indexes include:

• The S&P U.S. Spin-Off Index is designed to measure the performance of U.S. companies spun-off from a parent company within the past four years. It is based on the S&P U.S. Broad Market Index. At each monthly rebalancing, spin-offs that are added to the U.S. Broad Market Index and have a float-adjusted market capitalization of at least $1 billion are added to the index;

• The S&P U.S. IPO and Spin-Off Index calculates the performance of U.S. companies within the S&P U.S. Broad Market Index that have had initial public offerings or have been spun-off from a parent company within the past five years. The spin-offs must have a float-adjusted market capitalization of at least $1 billion as of the rebalancing reference date. The IPOs are subject to the same criteria but as of the close of their first day of trading; and

• The S&P U.S. Activist Interest Index measures performance of U.S. domiciled companies that have been targeted by activist investors within the past two years. It is an equal-weighted index based on the S&P U.S. Broad Market Index. Companies subjected to an activist investor campaign as determined by SEC Form 13D filings are added to the index, at each monthly balancing.

“Boards of American companies have become more active in pursuing spin-off opportunities and merger activity,” says Vinit Srivastava, senior director of strategy indices at S&P DJI, said in the release.

“Historically, spin-offs, IPOs and firms targeted by activist investors have generally outperformed the broad market as they uncover value and increase efficiencies. These three new indices, in addition to our existing S&P Merger Arbitrage Index, provide investors sophisticated and transparent benchmarks that reflect how these significant events impact a company’s performance.”

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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