IN THIS LIST

Real Estate from an Index Perspective: Discovering Your Real Estate Benchmark

FAQ: The S&P 500® LinkUp Jobs Indices

Factoring in Changing Market Conditions

S&P MARC 5% Index

TalkingPoints: Introducing the S&P Global SmallCap Select Index Series

Real Estate from an Index Perspective: Discovering Your Real Estate Benchmark

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John Welling

Director, Global Equity Indices

S&P Dow Jones Indices

INTRODUCTION

Indices have long played an important part in measuring the real estate market and the array of offerings illustrates the varied needs of market participants.  This paper highlights the role of various real estate indices offered by S&P DJI, how they differ from each other, and how they cater to the diverse needs of real estate investors.

S&P DJI REAL ESTATE INDICES

Our diverse offerings allow investors to measure the performance of listed real estate companies in a variety of ways.

Dow Jones Select Real Estate Securities

The Dow Jones Select Real Estate Securities Indices (RESI) are cut from the S&P Global BMI and are designed to serve as a proxy for direct real estate investment.  These indices measure approximately USD 24.3 billion[1] in passive AUM and exclude companies whose performance may be driven by factors other than the value of real estate.  

  • Key Attributes: 75% of revenue must be derived from the ownership and operation of real estate; there is a minimum float-adjusted market cap of USD 200 million; mortgage companies and a majority of specialized real estate companies are excluded.

  • Key Indices:

           o Dow Jones Global Select RESI

           o Dow Jones Global ex-U.S. Select RESI

           o Dow Jones U.S. Select RESI

           o Dow Jones U.S. Select REIT Index

Dow Jones Real Estate

The Dow Jones Real Estate Index seeks to track the performance of real estate investment trusts (REITs) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies, capturing approximately USD 5.0 billion[1] in passive AUM.

Dow Jones Green Real Estate

The Dow Jones Green Real Estate Indices include the same constituents as the corresponding Dow Jones Select RESI, however, company weights are modified to tilt each index toward stronger performers according to GRESB’s real estate ESG assessment.  

  • Key Attributes: The same constituents as the Dow Jones RESI, but weights are tilted to reward higher-performing ESG constituents.

  • Key Indices:

            o Dow Jones Global Green RESI

            o Dow Jones Global Ex-U.S. Green RESI

            o Dow Jones U.S. Green REIT Index

            o Dow Jones Japan Green RESI

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FAQ: The S&P 500® LinkUp Jobs Indices

  1. What are the S&P 500 LinkUp Jobs Indices? The S&P 500 LinkUp Jobs Indices are economic indicators of labor demand. Updated weekly, they are designed to measure changes in the global job listings posted by companies in the S&P 500 and its sectors, including subsidiaries.

The series includes the following indices:

Headline:

Sectors:

  • S&P 500 LinkUp Jobs Energy Index
  • S&P 500 LinkUp Jobs Materials Index
  • S&P 500 LinkUp Jobs Industrials Index
  • S&P 500 LinkUp Jobs Consumer Discretionary Index
  • S&P 500 LinkUp Jobs Consumer Staples Index
  • S&P 500 LinkUp Jobs Health Care Index
  • S&P 500 LinkUp Jobs Financials Index
  • S&P 500 LinkUp Jobs Information Technology Index
  • S&P 500 LinkUp Jobs Communications Services Index
  • S&P 500 LinkUp Jobs Utilities Index
  • S&P 500 LinkUp Jobs Real Estate Index

  1. Who is LinkUp? LinkUp is a data-driven job search company tracking job openings sourced directly from employer websites. LinkUp aggregates (“scrapes”) data on a daily basis directly from employer websites to track over 3.9 million jobs from over 50,000 companies.

For more information about LinkUp, please refer to their website at https://www.linkup.com/.

    1. How can the S&P 500 LinkUp Jobs Indices be used? The purpose of these indices is to provide new insights into the S&P 500 and macroeconomic trends in the U.S. and the global market. Institutional and retail investors can use the indices to inform their investment decisions as they use other key economic indicators such as interest rates, gross domestic product, and the unemployment rate.
    2. How do these indices compare to other publicly available employment measures? Around a dozen private firms and government agencies provide U.S. labor market data. Some of these companies aggregate underlying job listing data while others develop labor market analytics through the use of survey or payroll data. The S&P 500 LinkUp Jobs Indices, however, represent a unique and valuable dataset relative to other employment measures.

Payroll and survey data focus on existing (filled) jobs and therefore tend to be backward looking. Other job listing datasets lack consistent, controlled collection and calculation processes and are subject to a range of issues including expired jobs, duplicate listings, and job board “pollution” such as scams, fraud, freelance postings, or expired or stale postings.

LinkUp’s job listings are sourced exclusively from company websites and refreshed daily, which mitigates collection and control issues and results in a more timely, forward-looking indicator than surveys or payrolls.

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Factoring in Changing Market Conditions

While factor risk premia are well-established tools for altering the risk/return characteristics of a portfolio, knowing which factor is best suited for a particular environment can prove challenging. Enter the S&P Economic Cycle Factor Rotator Index, a rules-based factor rotation strategy designed to adapt to changing market conditions based on key market signals.

Factoring in Changing Market Conditions: Exhibit 1

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S&P MARC 5% Index

Global capital markets are constantly fluctuating, so it’s crucial to mitigate the impact of unexpected dips. S&P Dow Jones Indices, the leading provider of market indices for use in insurance products, has created a diversified multi-asset index that uses an innovative design to manage market volatility.

The S&P MARC 5% (Multi-Asset Risk Control) Index seeks to provide multi-asset diversification within a simple risk weighting framework, tracking three underlying component indices that represent:

– Equities: S&P 500®

– Commodities: S&P GSCI Gold

– Fixed Income: S&P 10-Year U.S. Treasury Note Futures

How Does the S&P MARC 5% Index Work?

In low-volatility environments, the S&P MARC 5% Index risk control mechanism increases market exposure to riskier assets by increasing the allocation to the Index (up to a leveraged position of 150%).

TalkingPoints: Introducing the S&P Global SmallCap Select Index Series

Contributor Image
Michael Orzano

Head of Global Exchanges Product Management

S&P Dow Jones Indices

Could incorporating earnings quality and liquidity improve risk/return in small-cap equities?

  1. Why is the S&P Global SmallCap Select Index Series being introduced now?

Prior research has demonstrated that profitability matters for small-cap companies in the U.S.1 The S&P SmallCap 600®—which includes earnings eligibility criteria— has outperformed the broader Russell 2000 Index by 2% annualized since its inception 24 years ago. Our new S&P Global SmallCap Select Index Series extends our research to global equity markets where we have found that a similar effect exists. By screening out unprofitable small-cap companies from the benchmark, we can improve risk-adjusted returns, while introducing relatively minimal tracking error (see Exhibit 1).

2. What are the key benefits of the S&P Global SmallCap Select Index Series?

Improved Long-Term Total Returns: Excluding companies without a track record of generating positive earnings has historically led to improved long-term performance in global small-cap equities. The indices have typically outperformed in down cycles and underperformed slightly in up cycles.

Reduced Risk: The indices have provided a smoother ride in the small-cap space. Volatility, beta, and drawdowns have been lower relative to conventional small-cap benchmarks.

Low Tracking Error: The indices have historically had low tracking error relative to conventional small-cap benchmarks.

Enhanced Liquidity: By eliminating the 20% least liquid and 20% smallest securities in each country, the index liquidity profile is improved, without introducing any significant geographic biases.

3. What indices are included in the S&P Global SmallCap Select Index Series?

We currently offer the regional indices shown in Exhibit 2. However, we are continuing research on additional regional and country indices and can expand this concept to other markets based on client demand.

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