Standard & Poor's has licensed its new S&P 500 High Quality Rankings index to underlie a PowerShares ETF.
The index provider has also unveiled the S&P 500 Low Quality Rankings index as part of its new range.
Both the indices allow investors to benchmark company quality, measured by historical growth and stability of earnings and dividends.
S&P applies its Quality Rankings methodology to determine the stocks selected to constitute the indices. This method measures the long-term growth and stability of a company's earnings and dividends, spanning the most recent 10 years.
While the High Quality index provides exposure to the highset quality stocks in the S&P 500, ranked A- and above, the Low Quality index consists of S&P 500 stocks ranked B to C.
The Low Quality benchmark excludes companies in reorganization, ranked D, or liquidation.
S&P vice president of strategy indices Steve Goldin says there is increasing demand for indices which differentiate between company quality, as measured by their growth and stability of earnings and dividends.
He says this demand is due to the polarization of views within the market, which is divided between opportunity and uncertainty.
He adds: "Through our Quality Rankings framework, we have provided earnings and dividend rankings on US common stocks since 1956."
The indices will be rebalanced on a quarterly basis.
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