What is the S&P/TSX 60 Index?

The S&P/TSX 60 Index is a stock market index that represents leading and reputable stock issuing companies in Canada. It is called the S&P/TSX 60 Index because it symbolizes the 60 large stock companies with the largest market capitalizations. This index reflects the performance, stock values as well as the market data for these top companies. The index is also a representation of the Canadian component of Standard & Poor's flagship S&P Global 1200 Index, it gives equity exposure to investors and also exposes them to the ideal market capitalizations.

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How Does the S&P TSX 60 Index Work?

The S&P/TSX 60 Index is part of the S&P/TSX index series that provides the portfolio of leading equity companies. Investment decisions are critical to investors as all of them want to make good choices. There are certain qualities investors look out for before they decide on the type of assets to invest in as well as the amount of funds to invest. Investment managers often require a portfolio or index of large companies in the Canadian equity market so as to know their strength in market capitalization. The S&P/TSX 60 Index addresses this by giving an index which contains the profile and an efficient portfolio image of leading companies in the Canadian equity market. There are certain criteria that a company must meet before they are enlisted in the S&P/TSX 60 Index. Below is a highlight of these criteria;

• The securities or companies must be under the Canadian federal, provincial, or territorial jurisdiction. Only companies that are domicile in Canada can be included in the S&P/TSX 60 Index.
• Only large companies or securities with large market capitalization are considered in the index.
• The stocks or securities must be in the S&P/TSX Composite Index.
• Actively or regularly traded stocks can also be included in the S&P/TSX 60 Index.
• For a stock or company to be considered, it must be a good representation of a particular sector.