Diverging methodologies: Indexes differ because of 'the stuff in the middle'.(Frontlines)(Brief Article)

Pensions & Investments, July, 2005 by Crawford, Gregory

Byline: Gregory Crawford Performance is in the eye of the beholder. At least, it was in the second quarter, when growth stocks in the S&P 500 index returned just 0.1% in the quarter ended June 30, while growth stocks in the Russell 200 index returned 2.1%. And in the value category, S&P 500 stocks returned 2.6%, while Russell 200 stocks returned 0.3%.

A report by Ronald J. Surz, president and chief executive officer of PPCA Inc., San Clemente, Calif., said the discrepancy can be attributed to different methodologies the index companies use to construct their indexes. "There are degrees of value and growth, so some growth stocks are more aggressive growth than others and some value stocks are deeper value than others,'' Mr. Surz wrote in the report. "And...