S&P to Introduce New Market Index of Midsized Stocks
NEW YORK -- Standard & Poor's Corp. said it will introduce a stock-market index for medium-sized companies smaller than most of those contained in the S&P 500 stock index.</br></br>The new S&P Midcap Index will contain at least 300 stocks and perhaps as many as 500, each with stock-market capitalization (stock-market values) of between $500 million and $2 billion, S&P said. The number and names of the middle-capitalization stocks in the index will be disclosed in about a month, when S&P plans to begin computing the new index daily.</br></br>The idea of a mid-cap index isn't new; several money-management firms already offer investment products designed to track the performance of medium-sized stocks. Chicago-based ANB Investment Management Co., for example, introduced its MidCap Fund in 1985 and manages $1 billion for clients using its index.</br></br>But S&P's success in establishing the 34-year-old S&P 500 as a benchmark index for larger stocks may spill over to the midcap sector with the introduction of an index bearing S&P's name. "In terms of significant investor interest, what people said they would love to see us do is a mid-cap index," said Elliott Shurgin, an S&P vice president.</br></br>An estimated $250 billion currently is invested in so-called index funds designed to mimic the performance of a basket of stocks, most often the S&P 500. But the very popularity of S&P 500 indexing has led some investors to pay greater attention to other segments of the stock market, including medium-sized stocks, and more recently, small stocks.