S&P Dow Jones Indices Adds Intangibles and Cash Flow to Growth and Value Rules

S&P Dow Jones Indices adopted new rules for sorting equities into growth and value styles, adding intangible assets, forward earnings and free cash flow while dropping 12-month price momentum, changes that take effect before the market open on December 21. Business News Today reported the decision followed a recent consultation.

What S&P Dow Jones Indices Changed

The index provider will add intangible assets, forward earnings and free cash flow to the factors that define whether a company is cheap relative to its share price, according to a statement issued Friday. At the same time, 12-month price momentum will be dropped as a criterion for ranking a company's growth potential. The new rules take effect at the annual reconstitution before the market open on December 21.

The changes are poised to force index-tracking funds to adjust holdings to match the new constituents. Bloomberg Intelligence analyst James Seyffart estimated at least $375 billion of passive funds are tied to the affected gauges.

S&P's decision follows a long debate over whether conventional value measures still work. Researchers and money managers have argued that part of value's long slump reflected flaws in the metrics, especially price-to-book. The adjustment is meant to account for spending on research and other internally developed assets that accounting rules usually treat as expenses rather than balance-sheet assets. Critics say this makes intellectual-property-heavy companies look expensive and can keep them out of value indexes.

S&P Dow Jones Indices' Recent Index Moves

S&P Dow Jones Indices is a global index provider and division of S&P Global that licenses benchmark indices including the S&P 500 and Dow Jones Industrial Average to asset managers, ETF issuers, derivatives exchanges and wealth platforms, according to akta.pro company records. The same records show a February 2026 product launch with Lincoln International, the S&P Lincoln Senior Debt Index Series, comprising U.S. and European indices tracking fair value of direct lending investments across fund clients.

Earlier S&P Dow Jones Indices Actions

S&P Dow Jones Indices launched the S&P SmallCap 600 Dividend Aristocrats index in April 2026, completing the U.S. core series of S&P Dividend Aristocrats Indices, Seeking Alpha reported. HKEX launched the S&P 500 & HKEX Tech 100 Index on 30 September 2026, a co-branded benchmark allocating 60% to the HKEX Tech 100 and 40% to the S&P 500, rebalancing quarterly, Fxnewsgroup reported. Cboe and S&P Dow Jones Indices extended their exclusive licensing agreement for S&P 500 options through 2051, PR Newswire reported.

FTSE Russell Consultation Deadline

FTSE Russell is reconsidering the 50/50 split between growth companies and value stocks in its benchmarks due to the dominance of technology giants in the market. That consultation ends December 11.