Understanding the S&P 60: A Comprehensive Guide

 The S&P 60 is a stock market index that tracks the performance of 60 leading publicly traded companies in Canada. It is a subset of the broader S&P/TSX 60, which is part of the S&P Global Index family. The index is designed to represent the Canadian equity market and is widely used by investors, fund managers, and analysts to gauge the health of Canada’s largest corporations.

In this article, we will explore:

  1. What is the S&P 60?

  2. Key Features of the S&P 60

  3. How the S&P 60 is Calculated

  4. Top Companies in the S&P 60

  5. Investing in the S&P 60

  6. Benefits and Risks of the S&P 60

  7. Comparison with Other Indices

1. What is the S&P 60?

The S&P 60, officially known as the S&P/TSX 60 Index, is a stock market index that includes 60 of the largest and most liquid companies listed on the Toronto Stock Exchange (TSX). It was launched in 1999 and is maintained by Standard & Poor’s (S&P), a leading global index provider.

The index serves as a benchmark for Canadian equities and is often used as the basis for exchange-traded funds (ETFs), mutual funds, and other investment products.

2. Key Features of the S&P 60

  • Market Capitalization-Weighted: The index is weighted based on the market capitalization of its constituents, meaning larger companies have a greater impact on the index’s performance.

  • Diverse Sector Representation: The S&P 60 includes companies from various sectors such as financials, energy, materials, technology, and healthcare.

  • Liquidity Focus: Only highly liquid stocks are included, ensuring ease of trading.

  • Quarterly Rebalancing: The index is reviewed and rebalanced quarterly to ensure it remains representative of the Canadian market.

3. How the S&P 60 is Calculated

The S&P 60 is calculated using a float-adjusted market capitalization methodology, which means only shares available for public trading are considered. The formula is:

Index Value=∑(Price of Stock×Number of Shares×Free-Float Factor)Divisor

Index Value=

Divisor

∑(Price of Stock×Number of Shares×Free-Float Factor)

​

  • Free-Float Factor: Adjusts for shares that are not publicly traded (e.g., insider holdings).

  • Divisor: A normalization factor to maintain index continuity after corporate actions (e.g., stock splits, dividends).

4. Top Companies in the S&P 60

The S&P 60 includes some of Canada’s most prominent companies, such as:

Company

Sector

Notable Business

Royal Bank of Canada (RY)

Financials

Banking & Financial Services

Shopify (SHOP)

Technology

E-commerce Platform

Enbridge (ENB)

Energy

Oil & Gas Pipelines

Barrick Gold (ABX)

Materials

Gold Mining

Thomson Reuters (TRI)

Industrials

Media & Information

These companies play a significant role in Canada’s economy and influence the index’s movements.

5. Investing in the S&P 60

Investors can gain exposure to the S&P 60 through:

A. ETFs Tracking the S&P 60

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

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

B. Mutual Funds

Several Canadian mutual funds replicate the S&P 60’s performance.

C. Direct Stock Purchases

Investors can buy individual stocks from the index.

D. Index Funds

Passive funds that mirror the S&P 60’s composition.

6. Benefits and Risks of the S&P 60

Benefits:

✅ Diversification – Exposure to Canada’s top 60 companies across sectors.
✅ Liquidity – Easy to buy and sell due to high trading volumes.
✅ Low-Cost Investing – ETFs tracking the index have low expense ratios.
✅ Stability – Large-cap companies tend to be less volatile than small caps.

Risks:

❌ Concentration Risk – Financial and energy sectors dominate (~40% of the index).
❌ Limited International Exposure – Focused only on Canadian companies.
❌ Market Volatility – Economic downturns can impact index performance.

7. Comparison with Other Indices

Index

Coverage

Number of Stocks

Key Differences

S&P 60

Canada (Large-Cap)

60

Focuses on top Canadian firms

S&P/TSX Composite

Canada (Broad Market)

200+

Covers all TSX-listed stocks

S&P 500

U.S. (Large-Cap)

500

Tracks top U.S. companies

MSCI Canada

Canada (Global Perspective)

Varies

Includes Canadian stocks for global investors

The S&P 60 is ideal for investors seeking Canadian large-cap exposure, while the S&P/TSX Composite offers broader market representation.

Conclusion

The S&P 60 (S&P/TSX 60) is a crucial index for investors looking to track Canada’s largest and most influential companies. With strong sector diversity, high liquidity, and multiple investment options (ETFs, mutual funds, and direct stocks), it serves as a reliable benchmark for the Canadian equity market.

However, investors should be aware of its sector concentration risks and consider diversifying with international indices like the S&P 500 or MSCI World for a balanced portfolio.

Would you invest in the S&P 60? Let us know your thoughts!

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