The Globe and Mail reports in its Tuesday, Sept. 10, edition that the
S&P Dow Jones Indices is adding Kirkland Lake Gold when it rebalances the S&P/TSX 60 on Sept. 23 and removing Husky Energy. The Globe's David Milstead writes that Kirkland Lake is up about 75 per cent this year, while Husky has declined by about 33 per cent.
The S&P/TSX 60 is not simply composed of the 60 best-performing stocks on the Toronto Stock Exchange, nor is it the five dozen most valuable companies. Instead, Mr. Milstead explains that there are a handful of complex rules governing membership, and one of them, regarding sector balancing, suggested that the committee might have added Air Canada to the ranks -- and delete either Bombardier or SNC-Lavalin Group to do so.
A lot of Canadian mutual-fund and ETF money is tied to either the S&P/TSX Composite Index, which has 239 members, or the 60, which is selected from the Composite membership.
Membership in the 60 can be seen as a proxy for becoming a
Canadian blue-chip stock.
The news on Friday came earlier than expected and was not accompanied by any details on the coming quarterly rebalancing of the Composite itself, which also takes place Sept. 23.
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