A new set of UK value and growth indices, launched by FTSE International and using a 'style' methodology developed by the Frank Russell Company begin this month.

The new indices will divide the ex-isting FTSE 350, FTSE 250 and FTSE 100 into value and growth stocks and are intended to allow better performance evaluation, helping pension funds avoid changing managers by placing too great store by past performance while failing to consider style.

The value indices include stocks with lower than average price-to-book values and represent value-orientated portfolios, with stocks that are often valued lower because intrinsic value is not recognised. The growth indices reflect the remaining stock where price is high relative to book value. Some companies will be assigned proportionately to both style groups to reflect stock that has both growth and value characteristics.