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.
