13 Feb COTW: Growth and Value Indices
- The S&P 500 Value and S&P 500 Growth indices are two style indices designed to provide investors with exposure to the market’s value and growth segments, with constituents in the indices taken from the S&P 500. Each year, these indices are rebalanced. The 2022 annual rebalancing, which occurred on December 16 2022, saw record turnover, as market trends throughout the year impacted the style classification of many companies—resulting in notable changes in sector exposure in the Growth and Value indices.
- Notable changes in the S&P 500 Growth Index includes its exposure to Energy, which increased from 1.4% to 8.2%. Seven energy companies migrated completely from the S&P 500 Value Index to the S&P 500 Growth Index in 2022, with Exxon Mobil now ranked as the 6th largest constituent in the Growth index, and Chevron ranked 11th. Exposure to information technology in the Growth index dropped the most, declining by 8.7%.
- In the S&P 500 Value Index, the largest increases were in information technology, which increased by 6% to 16.7%. Some of the largest S&P 500 constituents shifted either completely or partially to the Value index, with notable names including Microsoft, which is now the largest weight in the Value index, and Amazon, which is now the third largest. Financials is now the largest sector of the Value index, consisting of 20.4%.
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