March 19, 2012
New York, March 19, 2012 – S&P Indices announced today the launch of the S&P GIVI™ (“S&P Global Intrinsic Value Index”), combining low volatility and an alternative weighting scheme that weights a stock by its calculated intrinsic value, rather than market capitalization.
S&P Indices has licensed the S&P GIVI (and its complete family of emerging market and developed sub-indices, a total of over 2000 indices across 46 countries and 7 currencies) to Goldman Sachs Asset Management (GSAM). Jim O’Neill, Chairman of GSAM, and Donald Mulvihill, Managing Director at GSAM, conceived the strategy and helped S&P Indices to develop this concept.
The S&P GIVI is constructed from the S&P Global BMI universe, a comprehensive, rules-based global index covering approximately 10,000 companies in 46 countries. Each stock in the S&P GIVI is weighted by its calculated intrinsic value. The intrinsic value of each stock is the sum of two components: the value of assets in place plus the value of growth opportunities.
To achieve its goal of low volatility, S&P GIVI excludes, for each country represented in the S&P Global BMI, the 30% of market capitalization with the highest beta. Remaining stocks are then weighted by a rules-based measure of intrinsic value, determined by book value and discounted projected earnings.
“The S&P GIVI provides investors with an alternatively weighted, low-volatility exposure to global equity markets,” says Alexander Matturri, Executive Managing Director at S&P Indices. “Alternatives to traditional market cap weighting are becoming increasingly important, as investors look beyond classic market beta for factors that influence performance and risk. The S&P GIVI combines exposure to two such factors - low volatility and intrinsic value - into one unique index.”
“Simplicity, transparency, diversification and low turnover were key goals in the index design,” says Jim O’Neill, Chairman of Goldman Sachs Asset Management. “GIVI’s methodology employs a passive strategy and the Index provides an alternative to market-cap weighted indices.”
The S&P GIVI is calculated in seven currencies: U.S. dollars (US$), Euros (€), British pounds (£), Japanese Yen (¥), Canadian dollars (C$), Australian dollars (A$), and Domestic Currency Return (DCR). The Index rebalances twice a year on the third Friday of March and September. Gross and net total return indices are calculated for all major components of the S&P GIVI.
The Index range will be expanded later this year to include a second all-country index, called Global Growth, that has a country weighting scheme designed to provide higher weights to growth markets, with the goal of an allocation that better matches global economic activity and opportunities.
For more information on the S&P GIVI, please visit www.standardandpoors.com/indices.
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.
About Goldman Sachs Asset Management
Goldman Sachs Asset Management is the asset management arm of The Goldman Sachs Group, Inc. (NYSE: GS), which manages $828 billion as of December 31, 2011. Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1988 and has investment professionals in all major financial centers around the world. The company offers investment strategies across a broad range of asset classes to institutional and individual clients globally. Founded in 1869, Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.
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.
For more information:
David R. Guarino
Goldman Sachs Asset Management
Weber Shandwick for Goldman Sachs Asset Management