S&P 600 Index

The S&P 600 Index is an equity index representing 600 small-sized companies in various industries. The S&P 600 Index is also called the S&P SmallCap 600 Index. The S&P 600 Index was launched in 1994. The S&P 600 Index is a benchmark for evaluating the investment potential of profitable small companies. Although the S&P 600 Index is not as liquid as its counterpart, the Russell 2000 Index, the S&P 600 Index is more selective in which company can be included which results in an index with stronger and more viable companies. The S&P 600 Index represents about 3% of the entire U.S. equity market. The S&P 600 Index is weighted by market capitalization. The S&P 600 Index includes small-cap stocks with a market capitalization ranging from about US$300 million dollars to about US$2 billion. To be included in the S&P 600 Index, a company must be a US company with strong financials (i.e. as reported earnings must be positive for 4 quarters in a row). An S&P 600 Index company must have good liquidity. An S&P 600 Index company must also be an operating type of company (i.e. no holding companies for example but REITs are allowed). The S&P 600 index is calculated by Standard and Poor’s in accordance with published specifications. The S&P 600 Index is reconstituted on an as-needed basis by S&P economists, index experts, and members of the SP Index Committee. In 2005, Standard and Poor’s developed sub-indices to the S&P 600 Index. The S&P 600 sub-indices are part of the SP/Citigroup Style index series. The S&P 600 sub-indices are listed as S&P Composite 600/Citigroup growth and value indices and S&P Composite 600/Citigroup pure growth and pure value indices. Various Exchange-traded Funds (ETF) (i.e. iShares S&P SmallCap 600 Fund) and mutual funds offer investment vehicles to trade the S&P 600 Index.

Cite Term

Definition Sources