Direct Answer
The S&P Latin America 40 is a rule-based measurement of top 40 leading blue-chip companies across Latin American markets, maintained by S&P Dow Jones Indices. Like every index it owns nothing: it is a number produced by applying a published weighting formula to a selected list of companies, revised on a schedule the provider sets.
What this index covers
The S&P Latin America 40 covers top 40 leading blue-chip companies across Latin American markets, within the Latin America market. S&P Dow Jones Indices defines which securities are eligible, how they are selected from that pool, and how much each one contributes to the published number.
The name states a target of 40 companies. A target is not a guarantee of the exact count on any given day: corporate actions, dual share classes and pending additions all move the real number around it.
How constituents are weighted
Constituents are weighted by float-adjusted market capitalization, using an investable weight factor between 0 and 1 for the publicly available shares of each company. The index is computed with the divisor methodology.
The weighting method is the single biggest driver of how an index behaves. Two indexes covering the same market can diverge for years purely because they weight differently, which is why comparing index levels without knowing the method tells you very little.
What qualifies for inclusion
Large companies from Brazil, Chile, Colombia, Mexico and Peru, drawn from the S&P/IFCI country indices and chosen by the Index Committee. Each country's eligible universe is ranked by cumulative float-adjusted market cap: stocks may be added within the top 40% and dropped at 80% or beyond. Liquidity, country balance and GICS sector balance are also weighed, and developed market listings are preferred.
Eligibility rules are the part of an index most readers never look at and the part that decides what it can possibly measure. A screen that excludes a whole sector, or admits only one listing venue, shapes the result far more than any day of trading does.
How long a listing must exist first
An IPO is added only when an appropriate vacancy occurs and after proven liquidity for at least six months. An exception may be made for extraordinarily large global offerings where expected trading volume justifies inclusion.
A seasoning rule is why a large new listing does not appear in an index the week it starts trading. It is a deliberate lag, and it means an index can under-represent a fast-growing part of the market for months at a time.
When the membership is revised
There is no annual or semiannual reconstitution. Composition changes typically occur only when a vacancy is created by a merger, acquisition or delisting, and the Index Committee reviews country and sector representation quarterly.
Reconstitution is the one date an index changes shape by design rather than by price. Funds tracking it have to trade toward the new membership, which is why the schedule matters to anyone holding the tracker rather than only to the provider.
The rule that surprises people
Additions are generally made only to fill a vacancy, so the membership can drift from the size and liquidity ranking between replacements instead of being refreshed on a fixed date.
References
- S&P Dow Jones Indices: S&P Dow Jones Indices: S&P Latin America 40 Methodology, as published 2023. Every rule described on this page is taken from this document.
Current S&P Latin America 40 constituents
S&P Dow Jones Indices publishes and licenses the S&P Latin America 40 constituent list. Swoopr does not republish it here. The provider's own page is the authoritative source for current membership and weights.
Related reading
- All stock market indexes: how indexes are built, weighted and revised.
- Emerging Markets indexes: others covering the same region.
- Index concentration: measuring how much of an index sits in its largest holdings.
- Index rebalancing and inclusion effects: what happens to a stock when index membership changes.
Frequently Asked Questions
Who maintains the S&P Latin America 40?
S&P Dow Jones Indices maintains the S&P Latin America 40 and publishes the methodology document that defines its eligibility and weighting rules.
What does the S&P Latin America 40 measure?
It measures top 40 leading blue-chip companies across Latin American markets. The index is a calculated number applying a weighting formula to a selected list of companies, and it holds nothing itself.
Where can I see the current S&P Latin America 40 constituents?
S&P Dow Jones Indices publishes the current constituent list. Swoopr does not republish it, because index providers license constituent data and Swoopr holds no such licence.