S&P Dow Jones Indices has expanded its factor-based indices in South Africa with the launch of the S&P GIVI South Africa Indices.

The series is the first of its kind in the dynamic South African market to combine lower volatility with a factor-based weighting scheme that weights a stock by its calculated intrinsic value, rather than market capitalization.

Vinit Srivastava, Senior Director of Strategy Indices at S&P Dow Jones Indices, said: “We have seen a growing interest in factor-based indices in the South African market and this launch adds to our line-up of such indices, which includes the Low Volatility, Dividend Aristocrats, and the headline GIVI indices.”

“The S&P GIVI South Africa Indices provide an alternatively weighted approach that innovatively incorporates a low volatility strategy. The index suite opens the door to potential product development based on the index series, and is another milestone for S&P DJI in South Africa since the company opened its local office in September 2013,” he said.

As the latest additions to S&P DJI’s renowned S&P GIVI (Global Intrinsic Value Index) line-up, the S&P GIVI South Africa Indices seek to provide investors with a better risk adjusted measure to the South African equity market.

The suite applies the standard GIVI methodology, which combines two important investment ideas – low volatility and intrinsic value weighting.

Under this umbrella is a cluster of four indices that provide more precise measures of market segments: S&P GIVI South Africa Top 50, S&P GIVI South Africa Industrials, S&P GIVI South Africa Financials and S&P GIVI South Africa Resources.

S&P DJI launched the S&P GIVI South Africa Composite in April of this year.