Barclays Global Investors Canada Limited (Barclays Canada) today announced the implications for the iShares CDN MidCap Index Fund (XMD) of recent methodology changes by Standard and Poor’s.

As recently announced by S&P, the methodology used to calculate the S&P/TSX small cap index will be changed to create a more appropriate Canadian benchmark of small capitalization equities and income trusts. In conjunction with these changes, S&P will restructure the S&P/TSX midcap index (used by XMD) to make it more modular with the S&P/TSX 60 index and the S&P/TSX composite index and will change the name of the S&P/TSX midcap index to the S&P/TSX completion index.

This index will contain the constituents of the S&P/TSX composite index that are not in the S&P/TSX 60 index. These changes provide iShares investors with more opportunities to structure their exposure to the broad Canadian equities market.

As a result of these changes, which are expected to be effective on March 16, XMD’s investment objective will continue to be to replicate, to the extent possible, the performance of the renamed S&P/TSX completion index, net of expenses, and it will revise its portfolio holdings to reflect the adjusted coverage of the index when the announced changes occur. The legal name of XMD will change to iShares CDN S&P/TSX Completion Index Fund.

“We think the S&P restructuring of the major indexes will give investors a better ability to express a particular view on the Canadian market,” says Heather Pelant, head of business development, exchange traded products at Barclays Canada. “And, with our iShares market-cap based ETF line up you can effectively take advantage of these new methodologies.”

The S&P/TSX smallcap Index will exist as a separate index from the S&P/TSX composite index family. The new methodology is modeled on Standard & Poor’s suite of global indices with respect to liquidity and other inclusion criteria.