S&P Global to Update Market Cap Criteria for Composite Indices Effective July 2025
- S&P Dow Jones Indices will revise market cap criteria for the S&P Composite 1500 Indices, effective July 1, 2025.
- Minimum market caps will increase for the S&P 500, MidCap 400, and SmallCap 600 indices to reflect market conditions.
- S&P Global aims to enhance index relevance and investor confidence through ongoing updates and historical data availability.
### S&P Dow Jones Indices to Revise Market Capitalization Criteria for 2025
S&P Dow Jones Indices (S&P DJI) announces a significant update to its market capitalization eligibility criteria for the S&P Composite 1500 Indices, which will take effect on July 1, 2025. This revision is designed to adapt to current market conditions by increasing the minimum unadjusted market capitalization thresholds across its indices. Specifically, the minimum market cap for the S&P 500 will rise from $20.5 billion to $22.7 billion, while the S&P MidCap 400 will see its threshold go from $7.4 billion to $8.0 billion. Additionally, the S&P SmallCap 600 will increase from $1.1 billion to $1.2 billion. These adjustments reflect S&P DJI's aim to capture companies that fall within the 85th percentile for the S&P 500, the 85th-93rd percentiles for the S&P MidCap 400, and the 93rd-99th percentiles for the S&P SmallCap 600 based on a three-month average of cumulative market capitalizations.
To qualify for inclusion in these indices, companies must also meet a new requirement: their float-adjusted market capitalization (FMC) must be at least 50% of the respective index's minimum market capitalization threshold. This added criterion is intended to ensure that only companies with substantial public float are considered for entry, thereby enhancing the overall quality and performance of the indices. Importantly, the changes will only affect new additions; companies already listed in the indices will not be removed solely for failing to meet the new thresholds unless other factors warrant such action. This approach allows existing members to maintain their positions while aligning new entrants with updated market standards.
S&P DJI plans to conduct quarterly reviews of these market capitalization thresholds to ensure they remain relevant in an evolving economic landscape. Historical market cap ranges dating back to 2007 will be made available in an updated U.S. Indices methodology document. This proactive stance reaffirms S&P DJI’s commitment to providing a robust and relevant set of indices that reflect market dynamics, thus allowing investors to make informed decisions based on reliable data.
In other developments, S&P Global continues to enhance its role as a leading provider of index-based data and research. The company's updates to the S&P Composite 1500 Indices highlight its adaptability to changing economic environments and its focus on ensuring that indices accurately reflect market conditions. This commitment is essential for maintaining investor confidence and promoting efficient market functioning.
Moreover, as S&P Global navigates these changes, it solidifies its position as the largest global resource for index-related information, further emphasizing its historical significance since the inception of the first index in 1884 by Charles Dow. The upcoming adjustments not only strengthen the credibility of S&P DJI's indices but also underscore the organization's ongoing innovation in asset class measurement and analysis.