Shares of Ace Ltd. soared nearly five percent on Friday after the news that the company is to be readmitted to the Standard & Poor's 500 Index.

The global property and casualty insurer, which has substantial operations in Bermuda, was picked to replace Millipore Corp. in the most widely used benchmark of US equities.

Ace was removed from the S&P 500 in 2008 after it moved its holding company from the Cayman Islands to Switzerland and thereby lost its status as a "US company" under S&P's definition.

Its share price took a temporary hit at that time, as the many funds that track the S&P 500 were obliged to dump their Ace stock.

Since then, S&P has changed its rules, allowing Ace to once again become eligible for the index.

Late on Thursday, S&P announced Ace would be readmitted to its index of 500 leading US-listed companies after the close of trading on July 14.

The news had a positive impact in Friday trading on Ace's share price, which climbed $2.47, or 4.7 percent, to close on $54.69. At one stage, the stock traded at a 52-week high of $55.66. Around 18 million Ace shares traded, around six times the average volume over the past three months.

According to S&P, funds which attempt to track the S&P 500 Index manage around $1 trillion in assets. Their buying could result in a rally in Ace stock over the next few days.

S&P revised its definition of what constitutes a US company on May 11. Companies qualify if they file annual reports and aren't considered a foreign entity by the Securities and Exchange Commission; they have more fixed assets and sales in the US than anywhere else; the shares are listed by NYSE Euronext and Nasdaq OMX Group Inc in the US; and corporate governance is consistent with American practices.

The change allowed fellow global insurer XL Group to keep its place on the benchmark index following the move of its holding company from the Cayman Islands to Ireland earlier this month.