Calculation of the new TOPIX will begin in October, with 650 companies subject to possible addition or removal. The article also explains the groups of candidates for addition and removal and related investment ideas, providing extensive details on the final stage of the reform.
Calculation of the new TOPIX will begin in October. Stocks with low free-float market capitalization will be removed, while stocks from the Standard Market and Growth Market are also expected to be added, increasing market participants' attention. The reform is positioned as the final stage of TSE reform.
The current TOPIX covers all stocks on the TSE Prime Market, with approximately 1,550 constituents and total assets tracking the index of approximately ¥160 trillion.
The main points of the reform are threefold: (1) changing to an annual rebalancing system, (2) expanding eligible stocks to the Standard Market and Growth Market, and (3) including the top 97% by free-float market capitalization. The first rebalancing is scheduled for the end of October based on the monthly average share prices in August 2026. Thereafter, rebalancing is expected to take place every year at the end of October based on the end-August reference date.
Free-float market capitalization refers to the market capitalization of shares in circulation, excluding holdings by parent companies and founding families and strategically held cross-shareholdings. Ahead of the launch of the new TOPIX, the next page is scheduled to introduce details of the new TOPIX, investment ideas using events and companies attracting attention as candidates for addition or removal, as points for individual investors to watch.