The S&P 505 Replaces the S&P 500?


The S&P 500 index is often used as a measurement of the overall performance of the stock market and also as a benchmark against which investors and fund managers’ performance is evaluated.

A press release from the S&P Dow Jones Indices reported a change to how multiple share classes in U.S. indices are treated for some companies.

Previously companies with more than one class of common stock were represented only once in the index.

Under the new method, companies that issue a second publicly traded share class may have more than one share line in the index (if they meet the liquidity and size criteria), but the index will still only be comprised of 500 companies.

Currently two companies, Google Inc., and Discovery Communications Inc. already have 2 share class lines in the S&P 500 index).

It’s anticipated that 3 more companies will have additional class lines added to the S&P 500: Comcast Corp., Twenty-First Century Fox Inc., and News Corp.

This change is intended to track the overall market more clearly.

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