S&P 500 Value Index
Direct answer: The S&P 500 Value Index measures the value-style portion of the S&P 500 using book value to price, earnings to price, and sales to price ratios. In the standard series, partial overlap with Growth is allowed: a security can be partially allocated to both styles simultaneously.
How the Value Index is constructed
The methodology uses three value factors for each security in the S&P 500 parent: (1) book value to price, (2) earnings to price (12-month trailing), and (3) sales to price. S&P DJI computes a Value Score for each S&P 500 security and assigns an allocation factor from 0 to 100 percent. Weights are float-adjusted market-cap proportional within the allocated portion. The scores are recalculated annually with a quarterly review.
Partial overlap with the Growth Index
Unlike a pure-value/pure-growth split, the standard S&P 500 style series allows a security to sit partly in both indices at the same time. A company with intermediate-spectrum characteristics may contribute some float-adjusted market cap to the Value Index and some to the Growth Index concurrently. Membership is therefore a dated allocation, not a permanent label.
What the Value label means and does not mean
A Value allocation means the security ranked high on book-value-to-price, earnings-to-price, and sales-to-price at the last reconstitution. Low ratios can result from depressed prices relative to healthy fundamentals, but they can equally reflect deteriorating fundamentals. The Value label does not confirm undervaluation; company-level research still applies.
Relationship to the S&P 500 family
The S&P 500 Value Index derives its universe entirely from the S&P 500. Changes to the parent index (additions, removals, or reclassifications) flow through to the Value Index at the next applicable reconstitution. For the complete Growth and Value comparison, see the S&P 500 Growth and Value Index Family hub.
Frequently Asked Questions
What is the S&P 500 Value Index?
A rules-based sub-index of the S&P 500 capturing securities with high book-value-to-price, earnings-to-price, and sales-to-price ratios. Companies can be partially allocated to both Value and Growth simultaneously.
How often is the S&P 500 Value Index rebalanced?
Annually with a quarterly review, matching the S&P 500 Growth Index schedule.
Does being in the Value Index mean a stock is undervalued?
No. A Value allocation means the security had high value-factor scores at reconstitution. Low price ratios can reflect healthy fundamentals priced conservatively, or they can reflect deteriorating fundamentals. Independent fundamental analysis is still required.