While we’re on the topic of indices containing alpha (see Tuesday’s posting), check out this “alpha producing” index launched last Friday by S&P.   

In a move sure to sow confusion among passive investors, S&P says it’s new “Dividend Opportunities Index” (index methodology).  In a press release announcing the launch, Tim Eisenhauer, VP of Standard & Poor’s Index Services says:

“The launch of these two indices underscores Standard & Poor’s commitment to producing alpha generating strategy indices with a methodology designed to provide returns over and above traditional benchmark indices…”

As first blush, these indices seem to produce something pretty special.   But is it alpha?  Here is a chart from the fact sheet:

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