S&P becomes master of the inverse

S&P has launched the S&P 500 Inverse Index, which is designed to act as a short position barometer and offer the inverse performance of the S&P 500 and is the first to be launched as a part of S&Ps family of leveraged and inverse indexes.

The return of the index has an inverse relationship with the total return of the S&P 500 which includes both dividends and price movements. 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. “There are a number of reasons for the launch of the inverse index,” says Srikant Dash, head of global research and design at S