Standard & Poor’s will continue to provide a parallel index that will be identical to the current Composite, but that will exclude Income Trusts. This index will have the same level of support and real-time availability that exists for the Composite today. Standard & Poor’s will not include Income Trusts in the large-cap S&P/TSX 60 Index. The S&P/TSX Composite Index, including Income Trusts, will be regarded as the broad benchmark index for the Toronto Stock Exchange (TSX). In the coming months, Standard & Poor’s intends to identify and confirm any new rules that will be required to govern the inclusion of Income Trusts in the Composite, in consultation with market participants. It is likely that trusts will be added to the Composite by mid-year.
“The decision to include Income Trusts in the Composite, while continuing to offer a version of the index that excludes trusts, reflects Standard & Poor’s ongoing adaptation to the marketplace as it changes, as well as our commitment to providing quality products that reflect the diverse needs of Canadian investors,” said Steve Rive, Vice President of Canadian Index Services at Standard & Poor’s.
“As Income Trusts have become a significant component of retail and institutional investing activity, Standard & Poor’s is ensuring the benchmark Index represents the broadest interests of our various constituents," said Richard Nesbitt, CEO of TSX Group. "Under Standard & Poor's guidance, the evolution of the index business ensures that relevant needs of market participants are addressed in the domestic and global capital markets.”
The fastest growing segment of the Canadian equity marketplace, there were 175 Income Trusts listed on the TSX at December 31, 2004, with a market capitalization of over $118 billion. Trusts now represent 8% of the total market capitalization of the TSX.
Evolution of the S&P/TSX Composite Index
The precursor of the current Composite, the TSE 300 Composite Index was launched in early 1977. It had 14 groups designed to conform to the Standard Industrial Classification system used by Statistics Canada, and contained 43 sub-groups. In 1998, the TSE partnered with Standard & Poor’s leading to the creation and subsequent management of a series of new indices by Standard & Poor’s for Canadian equities including the S&P/TSE 60 Index, the S&P/TSE Canadian MidCap Index and the S&P/TSE Canadian SmallCap Index, the TSE 300 Capped Index, the S&P/TSE 60 Capped Index, and the introduction of GICS (Global Industry Classification Standard) Sector Indices.
About the S&P/TSX Composite Index
The S&P/TSX Composite is the premier indicator of market activity for Canadian equity markets
since its launch in 1977. With approximately 95% coverage of the Canadian equities market, it is
the primary gauge for Canadian-based, TSX-listed companies. It addresses the needs of
investment managers who require a portfolio benchmark characterized by sufficient size and
liquidity. The size of the S&P/TSX Composite and its broad economic sector coverage has made
the S&P/TSX Composite Index the primary benchmark for Canadian pension funds and mutual
market funds.
About Standard & Poor’s
Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's
foremost provider of independent credit ratings, indices, risk evaluation, investment research, data
and valuations. With 6,000 employees located in 21 countries, Standard & Poor's is an essential
part of the world's financial infrastructure and has played a leading role for more than 140 years in
providing investors with the independent benchmarks they need to feel more confident about their
investment and financial decisions. For more information, visit www.standardandpoors.com.
