S&P GIVI Global Growth Markets Tilt Index Launched by S&P Dow Jones Indices; Goldman Sachs Asset Management Launches Funds Based Upon GIVI Concept

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Sep 12, 2012, 09:30 ET

NEW YORK and LONDON, Sept. 12, 2012 /PRNewswire/ -- S&P Dow Jones Indices announced today the launch of a new index within the S&P GIVI™ family: the S&P GIVI Global Growth Markets Tilt index, which is designed to combine growth and value characteristics with a macroeconomic factor.

The S&P GIVI Global Growth Markets Tilt index is a combination of the base S&P GIVI indices which combine low volatility and alternative weighting schemes to weight stocks by their calculated intrinsic value (rather than market-capitalization) and the S&P GIVI GDP Weighted indices which apply alternate country weights derived from their gross domestic product.

Goldman Sachs Asset Management (GSAM) today announced that it has launched a number of UCITS funds based upon the GIVI concept which seek to track the performance of a specific S&P GIVI sub-index which S&P Dow Jones Indices has licensed (along with its complete family of GIVI Emerging and Developed markets sub-indices, a total of over 2,000 indices across 46 countries and seven currencies) to GSAM.

Alka Banerjee, Vice President of Global Equity Indices at S&P Dow Jones Indices, said: "The S&P GIVI Global Growth Markets Tilt indices are the first to combine country GDP growth characteristics with the economic weight of a company. A global GDP weighted index will typically overweight Emerging market stocks which tend to have lower market capitalization relative to their GDP. The S&P GIVI Global Growth Markets Tilt indices combine the GDP weighting with the GIVI methodology to allow investors to measure the Growth Markets using the GIVI framework."

Jim O'Neill, Chairman of Goldman Sachs Asset Management, said: "We see more and more investors looking beyond classic market beta for factors that influence performance and risk. There are several factors behind this development – not least the volatility that we have seen in recent years but also the rise and importance of the Growth Markets. In our view, it's time that new and innovative ways of managing money against differently constructed benchmarks are considered. The GIVI concept eliminates 30% of the stocks with the greatest historical volatility, and weights the remaining stocks by their estimated economic worth rather than on the basis of market cap. At GSAM, we believe this approach to constructing equity portfolios could help generate higher returns at a lower level of volatility and risk, than market cap weighted indices. We believe that this concept works across different asset classes and regions, and I'm delighted that from today investors can begin accessing this strategy through a range of global equity portfolios."

The base 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.

For more information on the S&P GIVI, please visit: www.spindices.com.

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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It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (collectively "S&P Dow Jones Indices") do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices does not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.

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 end June 2012. Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1989 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 financial services firm providing investment banking, securities and investment management services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.

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