Economy
How are USA 500 Stocks Selected?

While USA 500 may include only a small section of publicly traded firms, there is no doubt that it is one of the most important indices in the United States stock market.
Approximately 500 companies in the S&P 500 make over 80% of the stock’s total value on the market. Therefore, it is an important indicator of how the local market is performing.
If you target trading USA 500 stocks, one of the main questions that you might have in your mind is, “How are the companies selected to join the exclusive list?” Everything comes down to meeting a number of rules set by the committee of investors, and we are going to look at some of them:
Market Capitalization
USA 500 was created to represent the largest companies in the US. So, size is an important parameter. The notion of “size” in the stock market means the selected company’s stock value or the total value of its shares (market capitalization).
Take the example of Apple Inc., an American multinational technology firm headquartered in Cupertino, California. In 2018, Apple made history as the first US firm to reach one trillion dollars in market capitalization, but Amazon’s and Microsoft’s also crossed the one trillion-mark by the end of the first quarter of 2019. By the close of September 2020, Apple’s shares were trading at about $115.
Another example is Coca Cola. The company has over 4.3 billion shares, which were trading at $41.9 by early October, meaning that its total market capitalization is about $180.1 billion.
The minimum market capitalization can move up or down, but the current number is $8.1 billion. Of course, this figure was way lower about 10 years ago, and you can expect it to continue increasing in the future.
Profitability
When investors look for stocks, they put a lot of emphasis on profitability. This is why USA 500 and USA 30 indices give a lot of weight to the selected firm’s profitability.
To gauge the profitability of a company, there are two methods that are used; checking the profitability of the firm over the last one year (four quarters) and in the most recent quarter.
However, how profitability plays is very dynamic. In theory, if a company loses $200 million in the first three quarters of a year and then makes a profit of $700 million in the third quarter, it would still be considered profitable.
When considering profitability, companies that have just gone public are required to show their trading history for the past 12 months. This means that if you have just concluded an IPO, it is impossible to immediately hop into the USA 500 Index, even with a high market capitalization.
A Company’s Liquidity and Float should be Easy to Check
The goal of USA 500 is to correctly track the companies with large capitalization that you can invest in. In addition to large capitalization, firms that are only owned by a few individuals (closely held) or those with little trading volume (thinly traded) are disqualified. So, here is how this rule is applied.
To get your company into the S&P 500, your business is required to have more than 50% of its stocks being traded on the stock exchanges. This is a correct assertion because a company with 60% of the shares owned by the founder is more private than another firm where owners only hold 40%.
Besides a firm being publicly owned, it also needs to be liquid to join the S&P 500 index. To achieve this, the company is required to have a trading volume of more than 100% and to have traded no less than 250,000 shares in the previous six months. This implies that if a company has two billion shares, all of them must be traded every year.
Most of the top-rated companies in the US meet these requirements with ease, and it is the reason why they are always on the list or get their way back after falling off.
Companies that Get Free Pass into the USA 500
From the requirements that we have listed above, it is clear that they are pretty stringent, but there are some companies that get a free pass. These are the stocks that are part of other top-rated indices, such as the S&P MidCap 400 and S&P SmallCap 600. These stocks are exempted from the rules of float, profitability, and liquidity.
The argument for exempting these stocks is that if your company is already part of the exempted indices, it will have met most of the requirements for listing on S&P 500. Therefore, if you have a company and want to get your way into the S&P 500, one of the methods is joining the exempted indices.
Some Companies Cannot Get into the USA 500
Notably, S&P 500 only considers standard incorporations and REITs (real estate investment trusts), so other forms of companies falling outside the two categories are excluded. For example, companies with exotic structures, such as master limited partnerships (MLPs) and business development companies (BDCs) are excluded. Limited liability companies, exchange-traded funds (ETFs), and closed-end funds (CEFs) are also excluded.
S&P Goes beyond the Rules!
Notably, meeting the basic rules to join S&P 500 is not enough to join the index! The index committee must also give the nod for your company to join as a way of filtering firms that might want to take advantage of the index.
The active involvement of the index committee makes S&P 500 more active compared to others. For instance, Russel 100 only requires a company to meet the rules without subjecting it to an active committee.
When the USA 500 index committee strategically adds or removes stocks, it helps to ensure that the index does not differ significantly from what is happening on the market.
To get a company to get listed on the index, therefore, it must be performing well and maintain an upward trend on the market to impress the committee.
In this post, we have looked at the stringent rules that companies need to meet to get listed on the USA 500 Index. So, if you are a new trader, USA 500 companies can be a good consideration.
Economy
FAAC Disbursement for April 2025 Drops to N1.578trn

By Aduragbemi Omiyale
The amount shared by the federal government, the 36 state governments and the 774 local government areas of the federation from the Federation Account Allocation Committee (FAAC) in April 2025 from the revenue generated last month declined by N100 billion, Business Post reports.
This month, FAAC disbursed about N1.578 trillion to the three tiers of government, lower than the N1.678 billion distributed in March 2025.
In a communiqué by the Director of Press and Public Relations in the Office of the Accountant-General of the Federation (OAGF), Bawa Mokwa, it was stated that the N1.578 trillion comprised statutory revenue of N931.325 billion, Value Added Tax (VAT) revenue of N593.750 billion, Electronic Money Transfer Levy (EMTL) revenue of N24.971 billion, and an Exchange Difference revenue of N28.711 billion.
The money was shared after deducting N85.376 billion as cost of collection and N747.180 billion as total transfers, interventions and refunds from the total gross revenue of N2.411 trillion generated by the nation last month.
It was explained that gross statutory revenue of N1.718 trillion was received for March 2025 versus N1.653 trillion received in February 2025, and gross revenue of N637.618 billion was available from VAT compared with N654.456 billion a month earlier.
As for the distribution of the N1.578 trillion, FAAC said it gave the federal government N528.696 billion, the states N530.448 billion, the local councils N387.002 billion, and the benefiting states N132.611 billion as 13 per cent of mineral revenue.
It disclosed that on the N931.325 billion statutory revenue, the federal government received N422.485 billion, the state governments got N214.290 billion, the LGAs were given N165.209 billion, and the oil-producing states went away with N129.341 billion.
Further, from the N593.750 billion VAT revenue, the national government got N89.063 billion, the state governments received N296.875 billion, and the local councils got N207.813 billion.
In addition, from the N24.971 billion EMTL, the central government was given N3.746 billion, the state governments got N12.485 billion, and LGAs shared N8.740 billion.
Economy
Nigeria, South Africa Sign Agreement to Boost Mining

By Adedapo Adesanya
Nigeria and South Africa have signed a Memorandum of Understanding (MoU) to boost mining cooperation, focusing on investment, knowledge exchange, and technology transfer.
The agreement was signed in Abuja by the Solid Minerals Development Minister, Mr Dele Alake, and South Africa’s Mineral Resources, Mr Gwede Mantashe.
A statement on Wednesday said the MoU was part of efforts to strengthen ties under the Nigeria–South Africa Bi-National Commission framework.
It noted that the deal sets out specific areas of collaboration alongside defined implementation timelines for joint activities and engagements in the mining sector.
“Both ministers pledged ongoing engagement to advance intra-African trade and implement practical steps outlined in the agreement,” it said.
The ministers also expressed optimism that the renewed partnership would significantly strengthen the mining industries of both countries through shared expertise and innovation.
Key highlights include capacity building in geological methods using UAVs and applying spectral remote sensing technologies for mineral exploration and mapping.
Other areas cover geoscientific data sharing via the Nigeria Geological Survey Agency, training in mineral processing, and value-addition initiatives.
The MoU also supports capacity building in elemental fingerprinting with LA-ICP-MS and joint exploration of agro and energy minerals within Nigeria.
Mr Alake restated that bilateral cooperation holds promise for industrialisation, employment generation, and sustainable economic development across the African continent.
“The agreement on geology, mining, and mineral processing will foster knowledge exchange, promote investment, and encourage regional integration,” Mr Alake stated.
He reiterated Nigeria’s focus on developing its mining sector, noting mutual benefits through mineral wealth and South Africa’s technological expertise.
According to Mr Alake, this synergy will attract investments, build skills, and help diversify Nigeria’s economy for long-term growth and stability.
Mr Mantashe, on his part lauded the agreement, noting that it will be crucial to South Africa, as well as promote cooperation between the two African nations.
Economy
ARM-Harith Secures £10m to Unlock Nigerian Pension Funds

By Modupe Gbadeyanka
About £10 million has been injected into ARM-Harith’s Climate and Transition Infrastructure Fund (ACT Fund) to unlock local institutional capital for climate infrastructure.
The leading African private equity firm received the financial support from the United Kingdom-backed FSD Africa Investments (FSDAi) to unlock nigerian pension funds and catalyse local capital for infrastructure.
It was gathered that 75 per cent of the FSDAi facility would be provided in local currency, a first-of-its- kind approach specifically designed to mitigate the impact of foreign exchange (FX) volatility for pension funds.
This structure is expected to unlock an additional £31 million in pension fund contributions, nearly five times the participation achieved in ARM- Harith’s first fund.
The investment from ARM-Harith and FSDAi introduces an innovative solution to allow Nigerian pension funds to address a longstanding challenge in infrastructure equity finance: the ability to invest while receiving early liquidity.
By enabling predictable interim distributions during the early phases of investment, this innovative facility directly addresses a key barrier that has historically deterred domestic institutional capital from entering the asset class.
“For too long, domestic pension funds have remained on the sidelines of infrastructure equity due to liquidity constraints and heightened perception of risk.
“We are proud to have collaborated with FSDAi to design a pioneering solution that reduces risk for pension funds while delivering both early liquidity and long-term capital growth.
“This is a global first—a groundbreaking private sector-led solution that could fundamentally change how infrastructure equity is financed—not just in Nigeria, but across Africa,” the chief executive of ARM-Harith, Ms Rachel Moré-Oshodi, said.
Also, the Chief Investment Officer of FSDAi, Ms Anne-Marie Chidzero, said, “We are thrilled to collaborate with ARM-Harith to showcase how risk- bearing capital from a market-building investor like FSDAi can be strategically structured to unlock domestic institutional capital. This approach strengthens Africa’s financial markets and facilitates capital allocation towards sustainable, green economic growth across the continent.”
On his part, the British Deputy High Commissioner in Lagos, Mr Jonny Baxter, said, “The UK government, through its bilateral and investment vehicles is committed to continue to support the country’s financial sector — developing domestic capital markets as a means of financing priority sectors and driving economic development.
“Local currency capital helps mitigate the impact of foreign exchange volatility, narrows the financing gap, supports diversification into new asset classes and into climate- related projects and social sectors – while providing long-term funds to growing businesses.”
-
Feature/OPED5 years ago
Davos was Different this year
-
Travel/Tourism9 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz2 years ago
Estranged Lover Releases Videos of Empress Njamah Bathing
-
Banking7 years ago
Sort Codes of GTBank Branches in Nigeria
-
Economy2 years ago
Subsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking2 years ago
First Bank Announces Planned Downtime
-
Sports2 years ago
Highest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn
-
Technology4 years ago
How To Link Your MTN, Airtel, Glo, 9mobile Lines to NIN