S&P Dow Jones Indices (S&P DJI) has announced the launch of the S&P US Spin-Off S&P US IPO and Spin-Off S&P US Activist Interest.
These three new indices broaden S&P DJI’s event driven index family which includes merger arbitrage indices.
The S&P US Spin-Off index is designed to measure the performance of US companies that have been spun-off from a parent company within the last four years.
It is based on the S&P US Broad Market Index (BMI). At each monthly rebalancing, spin-offs that are added to the US BMI and have a float-adjusted market capitalization of at least $1bn are added to the Index and remain in the Index for up to four years.
The S&P US IPO and Spin-Off index calculates the performance of US companies with in the S&P US BMI that have had initial public offerings (IPOs) or have been spun-off from a parent company within the last five years.
The spin-offs should have a float-adjusted market capitalization of at least $1bn as of the rebalancing reference date while the IPOs are subject to the same criteria but as of the close of their first day of trading.
The S&P US Activist Interest index measures the performance of US domiciled companies that have been targeted by activist investors within the last 24 months. It is an equal-weighted index based on the S&P US BMI. Companies subjected to an activist investor campaign as determined by SEC Form 13D filings are added to the Index, at each monthly balancing, and remain in the Index for a maximum of 24 months.
“Boards of American companies have become more active in pursuing spinoff opportunities and merger activity,” says Vinit Srivastava, senior director of Strategy Indices at S&P Dow Jones Indices.
“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.”