Stocks

Capped Indices

An important concept in finance is market capitalization, which refers to the total value of a company's outstanding shares. In the world of indices, there are certain criteria that are used to determine the weight of each constituent. One such criteria is the maximum relative weight, which sets a limit on the percentage that any one constituent can hold in the index. For example, the S&P/TSX Capped Composite and Capped 60 indices have a maximum relative weight of 10% for each constituent, while the sector indices have a maximum of 25%. This ensures a balanced representation of companies within the index.

Related terms

Investment Advisor

Understand the meaning and definition of Investment Advisor in the context of stock market, trading, and investments.

MORE
Stop Order

Understand the meaning and definition of Stop Order in the context of stock market, trading, and investments.

MORE
Good For the Day

Understand the meaning and definition of Good For the Day in the context of stock market, trading, and investments.

MORE
Explore other categories
Open Free Demat Account!
Join our 3.5 Cr+ happy customers