S&P Dow Jones Indices Updates Market Capitalization Eligibility Criteria

Introduction

On January 2, 2025, S&P Dow Jones Indices (“S&P DJI”) announced a significant update to the market capitalization eligibility criteria for companies being added to the S&P Composite 1500 Indices. These changes, set to take effect immediately, will impact the composition of the S&P 500, S&P MidCap 400, and S&P SmallCap 600 indices.

Previous vs. Updated Market Capitalization Eligibility Criteria

Here is a comparison of the previous market capitalization eligibility criteria and the updated criteria:

Previous Criteria:

• US$ 18.0 billion or more for the S&P 500
• US$ 6.7 billion to US$ 18.0 billion for the S&P MidCap 400
• US$ 1 billion to US$ 6.7 billion for the S&P SmallCap 600

Updated Criteria:

• US$ 20.5 billion or more for the S&P 500
• US$ 7.4 billion to US$ 20.5 billion for the S&P MidCap 400
• US$ 1.1 billion to US$ 7.4 billion for the S&P SmallCap 600

These updated market capitalization ranges will be reviewed quarterly and adjusted as necessary to reflect current market conditions and ensure the indices accurately represent the market.

Impact on Individuals

Individual investors who track the S&P 500, S&P MidCap 400, and S&P SmallCap 600 indices may see changes in the composition of these indices as a result of the updated market capitalization eligibility criteria. Companies that no longer meet the new criteria may be removed from the indices, while new companies that meet the updated criteria may be added.

Global Impact

The update to the market capitalization eligibility criteria by S&P Dow Jones Indices could have far-reaching effects on the global financial markets. As the S&P indices are widely used as benchmarks for the broader market, changes in their composition can impact investor sentiment, market performance, and overall market dynamics.

Conclusion

The updated market capitalization eligibility criteria set forth by S&P Dow Jones Indices signal a proactive approach to maintaining the relevancy and accuracy of the S&P 500, S&P MidCap 400, and S&P SmallCap 600 indices. These changes reflect the dynamic nature of the market and the need for periodic adjustments to ensure the indices continue to serve as reliable benchmarks for investors.