Widely regarded as the best single gauge of the U.S. equities market, the S&P 500 includes 500 leading companies in leading industries o the U.S. economy. The S&P 500 Inverse index is designed to provide the inverse performance of the S&P 500 representing a short position in the index.
When investors hold a short position they must pay dividends and interest for borrowed stock. In the S&P 500 Inverse index, the return of the S&P 500 is reversed and is based on the total return of the index so that dividends and price movements are included. While the costs of borrowing the securities are not included in the calculation, there is an adjustment to reflect the interest earned on both the initial investment and the proceeds from selling short the securities in the S&P 500. These assumptions reflect normal industry practice.
Index constituents exhibit the following characteristics:
Market Coverage – Approximately 75% of the U.S. equities market
Weighting – Market capitalization
Market Capitalization – Minimum of US$ 5 billion
Public Float – At least 50%
Reconstitution – As needed basis
Index Governance and Policy
This index is maintained by the S&P Index Committee, whose members include Standard & Poor's economists and index analysts. It follows a set of published guidelines and policies that provide the transparent methodologies used to maintain the index.
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