Growth, value stocks set for reshuffle as S&P adopts new rules
The index provider will judge "value" partly on intangible assets, forward earnings and free cash flow, and stop using price momentum to rank growth stocks.
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S&P Dow Jones Indices is changing how it sorts companies into growth and value indexes, with effect from December 21.
Value will now take account of intangible assets such as research spending. Recent price gains will no longer count towards growth.
Funds tracking these indexes, worth at least $375 billion, will have to adjust their holdings, a Bloomberg Intelligence analyst estimates.