Understanding the S&P 60: A Comprehensive Guide

 The S&P 60 is a stock market index that tracks the performance of 60 large-cap companies listed on the Toronto Stock Exchange (TSX). It is a subset of the broader S&P/TSX 60 Index, which serves as a benchmark for Canadian equities. The S&P 60 is designed to represent the leading sectors of the Canadian economy, providing investors with exposure to top-performing companies in industries such as financial services, energy, mining, and technology.

In this guide, we will explore:

  1. What is the S&P 60?

  2. Key Features of the S&P 60

  3. How is the S&P 60 Calculated?

  4. Top Companies in the S&P 60

  5. Benefits of Investing in the S&P 60

  6. Comparison with Other Indices (S&P 500, TSX Composite)

  7. How to Invest in the S&P 60

  8. Risks and Considerations

  9. Future Outlook of the S&P 60

  10. Conclusion

1. What is the S&P 60?

The S&P 60 is a market capitalization-weighted index that includes 60 of the largest and most liquid stocks traded on the Toronto Stock Exchange (TSX). It is maintained by S&P Dow Jones Indices and is widely used by investors to gauge the performance of Canada’s top corporations.

The index is a subset of the S&P/TSX Composite Index, which includes over 200 companies. The S&P 60 provides a more concentrated view of Canada’s equity market, making it a popular choice for index funds, ETFs, and institutional investors.

2. Key Features of the S&P 60

  • Market Capitalization-Weighted: Larger companies have a greater impact on the index’s performance.

  • Diversified Sectors: Includes financials, energy, materials, industrials, and technology.

  • Liquidity: Comprises highly liquid stocks, making it easier for investors to trade.

  • Rebalanced Quarterly: The index is reviewed and adjusted to ensure it remains representative of the market.

3. How is the S&P 60 Calculated?

The S&P 60 is calculated using a float-adjusted market capitalization method. This means:

  • Only freely tradable shares are considered (excluding locked-in shares).

  • Each company’s weight depends on its market value relative to the total index.

  • The index value is adjusted for dividends, stock splits, and corporate actions.

The formula for index calculation is:

Index Value=∑(Price of Stock×Number of Shares)Divisor

Index Value=

Divisor

∑(Price of Stock×Number of Shares)

​

The divisor ensures continuity in the index value despite corporate actions.

4. Top Companies in the S&P 60

The S&P 60 includes Canada’s blue-chip stocks, such as:

Company

Sector

Weight (%)

Royal Bank of Canada (RY)

Financials

~10%

Toronto-Dominion Bank (TD)

Financials

~9%

Shopify (SHOP)

Technology

~6%

Enbridge (ENB)

Energy

~5%

Canadian National Railway (CNR)

Industrials

~4%

Barrick Gold (ABX)

Materials

~3%

(Note: Weights may vary based on market conditions.)

The financial sector dominates, accounting for ~35% of the index, followed by energy (~20%) and materials (~15%).

5. Benefits of Investing in the S&P 60

A. Diversification

  • Exposure to multiple sectors reduces risk.

B. Stability

  • Large-cap companies are generally less volatile than small-cap stocks.

C. Liquidity

  • High trading volumes make it easy to enter and exit positions.

D. Dividend Income

  • Many S&P 60 companies pay consistent dividends (e.g., banks, utilities).

E. Passive Investment Options

  • ETFs like iShares S&P/TSX 60 Index Fund (XIU) track the index.

6. Comparison with Other Indices

Index

Region

Number of Stocks

Key Features

S&P 60

Canada

60

Focuses on large-cap Canadian stocks

S&P 500

U.S.

500

Broad U.S. market exposure

TSX Composite

Canada

200+

Covers all major TSX-listed companies

Dow Jones Industrial Avg. (DJIA)

U.S.

30

Price-weighted, blue-chip U.S. stocks


  • The S&P 60 is more concentrated than the TSX Composite but less diversified than the S&P 500.

  • It is heavily influenced by commodity prices (oil, gold) due to Canada’s resource-based economy.

7. How to Invest in the S&P 60

A. ETFs (Easiest Method)

  • iShares S&P/TSX 60 Index ETF (XIU) – The most popular ETF tracking the index.

  • BMO S&P/TSX 60 Index ETF (ZCN) – Another low-cost option.

B. Index Funds

  • Many mutual funds replicate the S&P 60’s performance.

C. Direct Stock Purchases

  • Investors can buy individual stocks from the index.

8. Risks and Considerations

A. Sector Concentration Risk

  • Heavy reliance on financials and energy can lead to volatility.

B. Commodity Price Dependence

  • Oil and gold prices significantly impact the index.

C. Currency Risk

  • For international investors, CAD fluctuations affect returns.

D. Limited Growth Exposure

  • Fewer tech stocks compared to the S&P 500 or NASDAQ.

9. Future Outlook of the S&P 60

  • Energy Transition: As Canada shifts toward renewable energy, the index may see changes.

  • Tech Growth: Companies like Shopify could increase the tech sector’s weight.

  • Global Economic Factors: Interest rates, inflation, and trade policies will influence performance.

10. Conclusion

The S&P 60 is a key benchmark for Canadian large-cap stocks, offering investors a balanced exposure to the country’s leading companies. While it has sector concentration risks, it remains a stable and liquid investment option, especially for those seeking dividend income and long-term growth.

For investors looking to gain Canadian market exposure, ETFs like XIU provide an easy and cost-effective way to track the S&P 60. However, diversification with U.S. or global indices is recommended to mitigate risks.

Would you like recommendations on S&P 60 ETFs or a deeper analysis of its top holdings? Let me know how I can help!

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