S&P Dow Jones Indices Launches S&P GIVI China A-Share Index
NEW YORK, July 23, 2012 /PRNewswire/ — S&P Dow Jones Indices announced today the launch of the S&P GIVI(TM) China A-Share, the first index of its kind in the Chinese market to combine low volatility and an alternative weighting scheme that weights a stock by its calculated intrinsic value, rather than market-capitalization.
The S&P GIVI China A-Share index uses the methodology of the base S&P GIVI (“S&P Global Intrinsic Value Index”) which has been licensed by S&P Dow Jones Indices to Goldman Sachs Asset Management (GSAM).
Alexander Matturri, Chief Executive Officer of S&P Dow Jones Indices, said: “With the China Securities Regulatory Commission expanding quotas for foreign investment, investors will have greater opportunities to gain exposure to the China A-shares market which features some of the fastest growing companies in the world. The S&P GIVI China A-Share index presents a unique opportunity for investors to access and measure this important segment of the Chinese market. While we believe that market-capitalization indices will continue to play a critical and growing role in measuring markets worldwide, innovative concepts such as our GIVI indices, that combine different approaches to weighting securities within an index, will present an alternative approach for investors looking to diversify their portfolio beyond traditional market-cap weighting schemes.”
Jim O’Neill, Chairman of Goldman Sachs Asset Management, said: “Prompted by the global financial crisis, investors are seriously questioning their investment philosophy and considering new approaches to asset allocation. As China looks set to become the world’s biggest economy within the next 15 years, the S&P GIVI China A-Share index is, in my view, one of the most relevant benchmarks for investors to access China’s economic activities and growth opportunities.”
The S&P GIVI China A-Share index seeks to provide investors better risk adjusted exposure to the China A-Share market. Using the standard GIVI methodology, this Index combines two investment ideas – low volatility and intrinsic value weighting. The low volatility and value anomalies have been established both empirically and in academia and have gained prominence after the financial crisis as investors have sought equity exposure but at a lower level of risk. The S&P GIVI China A-Share index, through its unique methodology which combines these two factors, seeks to provide investors with higher risk adjusted returns compared to the benchmark, the S&P CITIC All Cap Index while maintaining a modest tracking error.
S&P Dow Jones Indices has licensed the base 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 Dow Jones Indices to develop this concept.
For more information, please visit: www.spindices.com.
 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.
About S&P Dow Jones Indices
S&P Dow Jones Indices LLC, a subsidiary of The McGraw-Hill Companies, Inc., is the world’s largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500(®) and the Dow Jones Industrial Average(SM), S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of institutional and retail investors. More assets are invested in products based upon our indices than any other provider in the world. With over 830,000 indices covering a wide range of assets classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. To learn more about our company, please visit www.spdji.com.
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About Goldman Sachs Asset Management
Goldman Sachs Asset Management is the asset management arm of The Goldman Sachs Group, Inc. (NYSE: GS), which manages $836 billion as of June30, 2012. 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.
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