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S&P/TSX 60 Index Definition
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 symbolises 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.
A Little More on What is the S&P TSX 60 Index
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.
References for S&P/TSX60
Academic Research on S&P/TSX 60 Index
Cleaning a passive index, Milevsky, M. A., Aziz, A., Goss, A., Comeault, J., & Wheeler, D. (2006). Journal of Portfolio Management, 32(3), 110.
Positive feedback trading in stock index futures: International evidence, Salm, C. A., & Schuppli, M. (2010). International Review of Financial Analysis, 19(5), 313-322.
Detection of momentum effects using an index out-performance strategy, Meade, N., & Beasley, J. E. (2011). Quantitative Finance, 11(2), 313-326.
Testing weak-form market efficiency on the TSX, Shiller, I., & Radikoko, I. (2014). Journal of Applied Business Research, 30(3), 647.
S&P Dow Jones Indices, Revenue, G. (2016).
Implied volatility indices–a review, Siriopoulos, C., & Fassas, A. (2009).
The pricing and performance of leveraged exchange-traded funds, Charupat, N., & Miu, P. (2011).
Equal Weight Indexing-Seven Years Later, Dash, S., & Zeng, L. (2010).
Exchange-traded funds in bullish and bearish markets, Wong, K. H., & Shum, W. C. (2010). Applied Economics Letters, 17(16), 1615-1624.
Measuring persistence in stock market volatility using the FIGARCH approach, Bentes, S. R. (2014). Physica A: Statistical Mechanics and its Applications, 408, 190-197.
Examining the Performance of a Value Investing Heuristic: Evidence from the S&P/TSX 60 from 2001-2011, Otuteye, E., & Siddiquee, M. (2012).
TSX Index Revisions and Corporate Performance, Zhao, L. (2008).