S&P Style Index Methodology to Update This December
Investors in S&P index-based funds may see portfolio composition changes starting December 21.
Updated on Oct. 24, 2026 in Investing
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S&P Dow Jones Indices is updating the methodology for its U.S. style indexes, including the S&P 500, to change how companies are classified as value or growth. These changes take effect on December 21, 2026, and will alter the composition of index-based portfolios for many retail investors.
Why it matters
Updating the factors used to define growth and value stocks can change the asset allocation within investment funds that track these benchmarks. Investors should be aware that these methodological shifts may lead to different portfolio weightings in their accounts by year-end.
The new methodology affects six index families, including the S&P 500 and S&P SmallCap 600, by adjusting how growth and value scores are calculated. These changes replace or remove metrics like 12-month share-price momentum and book value-to-price that were used in the previous framework.
The players
S&P Dow Jones Indices
A global provider of financial market indices that underpins many popular exchange-traded funds and index mutual funds held by individual investors.
The details
The growth scoring framework will stop using 12-month share-price momentum but will continue to factor in three-year sales per share growth. For the value framework, S&P is replacing book value-to-price with an intangibles-adjusted measure and adding free cash flow-to-price and earnings-to-price metrics. Certain financial and real estate sectors will remain exempt from the free cash flow-to-price factor calculation.
Timeline
December 4, 2026: Pro-forma files with revised classifications will be released.
December 21, 2026: The methodology changes will take effect before the market opens.
Money Landscape
This move represents an update to the S&P 500 index methodology, which serves as the benchmark for trillions of dollars in U.S. investment assets. Such changes are periodically necessary to reflect evolving accounting practices and market dynamics for growth and value categorization.
Investors holding index-tracking funds should watch for potential changes in the value or growth composition of their accounts after December 21. If you have concerns about how these reclassifications shift your specific risk profile, consult with a qualified financial professional.
The takeaway
The methodology shifts will alter how the market identifies value and growth stocks starting in late December. Review your portfolio's exposure to style-based indexes to ensure it remains aligned with your long-term investment goals.
Further reading
For more on how index changes affect your portfolio, see our guide on Investing.
Source note: This article includes information reported by TokenPost.
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