The S&P 500 index (or Standard & Poor’s 500 Index) includes 500 of the top US companies in leading industries.
The index is weighted by market capitalisation, which refers to a company’s total number of outstanding shares multiplied by its share price.
The S&P 500 index, which was created in 1957, is considered to be an excellent proxy to the US stock market performance.
It was also the first US market capitalisation-weighted stock market index.
According to Standard & Poor’s, as of 31 January 2020, the S&P 500 index had 505 index constituents to be exact. This may come as a surprise to investors who have always believed that the index only has 500 stocks.
To be added to the S&P 500 index, a company must meet the following criteria:
It must be a US company; The market capitalisation must be US$8.2 billion or higher; It...
