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The Markets August 23, 2007
S&P Sets Index Sights on the 'Stars'
Standard&Poor’s has launched two indexes providing investors with exposure to the top stock picks of Standard&Poor’s Equity Research analysts in Europe and the United States.
Reported by Fred Schneyer
The S&P U.S. STARS Index and the S&P Europe STARS Index are designed to measure the performance of stocks within the S&P Composite 1500 (U.S. STARS) and S&P Europe 350 (Europe STARS) currently ranked 5-STARS or 4-STARS out of five by Standard & Poor’s Equity Research Services, an S&P news release explained.
The announcement said U.S. and European equities ranked 5-STARS/”Strong Buy” or 4-STARS/”Buy” by Standard & Poor’s Equity Research Services analysts are expected to outperform the S&P 500 and S&P Europe 350, respectively.
S&P said while both indexes are comprised primarily of 5-STARS stocks, they may also include 4-STARS stocks when certain conditions warrant. Both indexes are equal-weighted, with constituents reviewed and re-weighted every month.
Under proprietary STARS (Stock Appreciation Ranking System) methodology, S&P equity analysts rank stocks according to their individual forecast of a stock’s future total return potential versus the expected total return of a relevant benchmark based on a 12-month time horizon, the company said.
More information about S&P STARS is at www.equityresearch.standardandpoors.com.