The free-float of a listed company may change frequently over time. China Securities Index Co., Ltd. adopts the classification method in calculating the CSI 300 index to keep the stability of the index, namely, a weighted proportion is granted to the total capital stock of A shares based on the proportion (free-floating proportion) of the free-floating capital stock to the total capital stock of A shares to keep the relative stability of the capital stock for index calculation.
Free-floating proportion = free-float/total capital stock of A shares
Adjusted capital stock = total capital stock of A shares×weighting proportion
The classification method of the CSI 300 Index is shown in the following table:
|
Free-floating proportion (%) |
≤10 |
(10,20] |
(20,30] |
(30,40] |
(40,50] |
(50,60] |
(60,70) |
(70,80) |
>80 |
|
Weighting proportion (%) |
Free-floating proportion |
20 |
30 |
40 |
50 |
60 |
70 |
80 |
100 |
Classification examples
|
Stock |
Stock A |
Stock B |
Stock C |
|
Total capital stock of A shares |
100,000 |
8,000 |
5,000 |
|
Non-floating capital stock |
91,000 |
4,500 |
900 |
|
Free-float = Total capital stock of A shares - Non-floating capital stock |
9,000 |
3,500 |
4,100 |
|
Free-floating proportion = Free-float/Total capital stock of A shares |
9.0% |
43.8% |
82.0% |
|
Weighting proportion |
9.0% |
50% |
100% |
The classification technique is adopted to keep the relative stability of the capital stock for index calculation in case of the slight change of the constituent company’s capital stock and to effectively reduce the tracking cost due to the frequent change of capital stock.
Source: China Securities Index Co., Ltd.
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