On Dec 21 2026, S&P Dow Jones will drop share‑price momentum from its growth assessment and inject free‑cash‑flow‑to‑price into its value framework. The move will reshape the S&P 500 Growth and Value listings.
Previously, growth stocks weighed earnings change, sales growth, and 12‑month price momentum. Momentum accounted for a third of the composite score; removing it means earnings and sales will now dominate.
The value framework shifts too: the book‑value‑to‑price ratio is replaced by an intangibles‑adjusted book‑value‑to‑price, and the earnings‑to‑price ratio will combine trailing and forward one‑year earnings. A free‑cash‑flow‑to‑price ratio is added as the fourth value factor.
Free‑cash‑flow rules exclude real‑estate, banks, insurance, and other financial services. Those sectors will continue to be evaluated with the traditional value factors.
ETF managers and index‑funds will see their holdings shift ahead of the December 21 reconstitution. Index‑tracking funds may need to adjust positions in mid‑December to avoid mis‑weighting penalties.