Investing veterans believe only skilled financial analysts will be able to appreciate how S&P has divided up its S&P 500 Index with the new measurements. While the new "style" index is a little different from the S&P 500, the "pure style" indexes basically parses out all those stocks in the index that are pure growth and pure value. If, in fact, a stock is neither true growth nor true value, it does not make a "pure style" index.
However, David Blitzer, the managing director and chairman of the index committee at Standard & Poor's, said he believes the pure-play indexes will appeal to investors, professional and retail alike. "Someone who really wants to focus on growth is not concerned about stocks that are left out in the middle. [The new indexes] allow the pension fund manager or the individual investor to see if that growth fund they bought really is delivering the essence of growth, the kind of performance they expect from, say, a large-cap growth fund."
But critics believe individual, long-term buy-and-hold investors would be too hasty to abandon their old standby indexes investments and embrace the new indexes, noting that the new indexes remain untested. As Larry Swedroe of
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