S&P launches quality ranking indexes and licenses to PowerShares

PowerShares has licensed S&P's High Quality Rankings Index

Standard and Poor's (S&P) has launched two quality rankings indexes to enable investors to monitor company performance by historical growth, stability of earnings and dividends.

The indexes are based on S&P's US benchmark S&P 500 index and are split into the S&P 500 High Quality Rankings Index and the S&P 500 Low Quality Rankings Index.

The High Quality Rankings Index has been licensed to Invesco PowerShares for an exchange-traded fund (ETF) and this coincides with Invesco PowerShares' decision to change five of its ETFs, retaining the investment strategy behind the ETFs but changing the underlying index in line with investor demand.

The PowerShares S&P 500 High Quality Portfolio replaces the PowerShares Value Line Timeliness Select Portfolio.

"We are always looking at our product line and we feel that these indexes better align with the interest and the feedback that we are getting, especially from financial advisers," explains Ed McRedmond, senior vice-president for institutional and portfolio strategies at Invesco PowerShares Capital Management in Wheaton, Illinois. "S&P is one of the leading index providers in the marketplace."

The ETFs are used mainly by retail investors as they provide asset allocation tools, while most institutional investors prefer to conduct their own asset allocation. The ETFs are marketed and distributed in the US. McRedmond says PowerShares does see investment from outside the US, but the lack of ETF trade reporting makes it difficult to tell exactly where investment is coming from.

S&P has also announced the expansion of its CDS Index family to include sector indexes, tracking the credit default swap market for a number of corporate credits, covering industry sectors for a specific country or globally.

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