14/02/11

By Andrew Holt

Standard & Poor's announced today that is has launched a new series of indices intended for investors with differing risk-reward profiles.

The S&P Balanced Equity and Bond Indices combine investable S&P measures of the core asset classes of equity and fixed income, with US Treasury pricing provided by BGCantor Market Data resulting in regularly rebalanced multi-asset indices.

The S&P Balanced Equity and Bond Indices are constructed with varying risk-reward profiles allowing investors a choice in the amount of risk embedded in the combined portfolio.

Each index in the Series is allocated a pre-defined weight of equity exposure, as represented by the S&P 500 Total Return Index, and bond exposure, as represented by the S&P/BGCantor 7-10 Year U.S. Treasury Bond Index.

The indices currently included in the series are as follows:

S&P Balanced Equity and Bond - Conservative Index. Long position in the S&P 500 Total Return Index (25% weight), and long position in the S&P/BGCantor 7-10 Year U.S. Treasury Bond Index (75% weight).

S&P Balanced Equity and Bond - Moderate Index. Long position in the S&P 500 Total Return Index (50% weight), and long position in the S&P/BGCantor 7-10 Year U.S. Treasury Bond Index (50% weight).

S&P Balanced Equity and Bond - Growth Index. Long position in the S&P 500 Total Return Index (75% weight), and long position in the S&P/BGCantor 7-10 Year U.S. Treasury Bond Index (25% weight).

"The diversification benefit of holding a portfolio of assets with low correlation is well documented," said Michael Kondas, associate director of Fixed Income Indices at S&P Indices.

"The launch of these new indices allows investors to potentially take advantage of the historically slight correlation in the returns of US equities and US Treasuries."

All of the indices included in the S&P Balanced Equity and Bond Index Series are rebalanced quarterly.

On the last trading day of February, May, August, and November, the weights of bond and equity exposure are returned to the pre-defined levels for each index in the series.