Barclays has teamed up with Fortune magazine in a bold step to muscle in on S&P as the world leader in tracking the biggest US companies.
Fortune, which is owned by Time Inc, already creates the Fortune 500, an annual list of the biggest American companies. The Fortune 500 index with Barclays will track the performance of those firms in an effort to rival the S&P 500, currently the most widely followed measure of US corporate performance.
The index family will launch in July, tracking the 500 largest companies that operate in the US by revenue in the latest fiscal year.
Barclays figures show the firms will represent two-thirds of US GDP, with $12 trillion in revenues and $890bn in profits.
The index will try to stand out from its main rival by giving equal weight to each company, in contrast to the S&P 500 which is weighted by market capitalisation. That would mean the movement of the Fortune 500 index will be more sensitive to the performance of smaller companies than the S&P 500.
London’s blue-chip FTSE 100 index is market capitalisation-weighted, while the Dow Jones Industrial Average, the longest-running and most famous index tracking US companies, is price-weighted.
Dupe Adeyemo, a director at Barclays, said: “The companies that comprise the Fortune 500 are some of the strongest, highest revenue generators in the US and we believe that market participants will benefit from exposure to these companies through the investable indices that we are creating.”
Barclays already has an index business, tracking equities around the world as well as bonds and interest rate swaps, but it will now try to use the Fortune brand to draw more attention in the US.
Alan Murray, Time chief content officer, said: “At Time Inc, we are always looking for smart ways to enhance our brands and the Barclays Fortune 500 family of indices could not be a more natural extension for our iconic list that investors closely follow.”