Ratings agency Standard & Poor’s (S&P) is launching a second series of risk control indices that the firm claims will control volatility while offering good yields.
The new indices use bonds rather than the cash component of S&P’s original risk control series and offer potentially better returns, without using leverage.
The S&P RC 2 series consists of four indices: one measures the top 500 US firms, another Europe’s top companies, another four key Asian economies and a final index tracks the BRICs (Brazil, Russia, India and China).
“By utilising a bond component, the S&P RC 2 index series allows investors in US equities, Eurozone stocks or emerging markets to potentially benefit from higher yield without compromising on volatility control,” said Alka Banerjee, vice president of strategy and global equity indices at S&P Indices.
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