Neutral impactEconomy
S&P set to change how it classifies US growth and value stocks
CNBC-TV18 1 hr ago·24 Oct 2026, 6:35 am
S&P Dow Jones Indices is overhauling its methodology for classifying US equities into growth and value categories. The change, effective December 21, 2026, will remove momentum as a factor for growth stocks and introduce free cash flow as a key metric for value stocks. This shift aims to better align the indexes with how investors actually evaluate company performance.
For investors, this update will alter the composition of major benchmark funds tracking these categories. As the criteria for what constitutes a 'value' or 'growth' stock change, the underlying holdings of index funds and ETFs will also shift. This can impact the risk and return profiles of passive investment strategies.
Investors should monitor how the new criteria filter the market. The move signals a focus on fundamental financial health and cash generation over short-term price trends. Tracking the performance of these updated indexes will be essential for understanding how the broader market landscape evolves under the new classification system.
Excerpt from CNBC-TV18
Published On Oct 24, 2026 | 12:04 IST Last Updated On Oct 24, 2026 | 12:05 IST S&P Dow Jones Indices is updating its US growth and value stock classifications. Changes include dropping share price momentum for growth assessments and adding free cash flow and adjusted book value for value assessments. The revised rules…Read the original at CNBC-TV18
Key takeaways
- Category: Economy.
- Assessed as a significant, market-relevant update.
Why it matters
A meaningful update worth tracking. Use the price and stock snapshot to gauge how the market is responding.
