The GSPTSE/TSX Composite Index at the moment become the one of best-performing indices. While the DJIA was down minus 201 or down -0.56%, the TSX Composite was up plus 64.60 up 0.30% on an Investing.com report.
The TSX Composite Index is the Canadian’s Indices that represent about seventy percent of all market cap on the Toronto Stocks Exchange or TSX, which was before known as TSE.
Quoting to the Wikipedia page, TSX (Toronto Stocks Exchange) already listed more than 1500 companies, which replaces the TSE300 Index.
Contents
What does TSX Composite Index mean?
The TSX Composite Index is similar to the United States S&P500. This is a price index to track the average of the largest group of companies in Canada. There are about 250 companies that become the benchmark for determining the value of Indices.
The value of the S&P/TSX Composite Index is often used by investors as a barometer to measure how economic conditions in Canada are. Because it consists of the 250 largest public companies in Canada. The increasing value represents that Canada has improved the economy in the country.
Companies that are in the TSX Composite Index list must maintain a number of liquidity values to remain in the index list. If the Companies that cannot maintain a 0.4% market capitalization or whose share value is less than $1 will be removed from the list.
TSX Composite Index history
The S&P/TSX Composite Index was launched in 1977. Which provides the premiere indicator for investors in exploring stocks, particularly in Canada, via the Toronto Stocks Exchange. This exchange takes up a large portion of the entire equity market up to 95%, and covers more than half of Toronto’s stock market capitalization, accounting for up to 70%.
The TSX Composite Index has replaced the TSE 300 since 2022 to be exact 1 May. The TSE 300 itself is a Canadian stock market index useful to track 300 influential companies on the Toronto Stock Exchange. Launch in 1982, the Toronto Stock Exchange operates under a subsidiary of the TMX Group.
TSX Composite Index all-time high
The average value of the S&P/TSX Composite Index from year to year since its launch has increased gradually. The highest trading volume was reached in June 2008 with a volume of 6.39. And in 2019 it reached 6.36T.
The all-time high at the price level at the level of 21,796,199 occurred on November 16, 2021.
How many companies are on TSX Composite Index?
The TSX Composite Index consists of the 250 largest publicly traded companies from the more than 1500 companies on the Toronto Stock Exchange.
All the companies stand from various industrial sectors including finance, real estate, energy, and more.
Companies that are part of the TSX Composite Index must meet the eligibility factor.
Market Capitalization
In order to be included in the TSX index, at least a company must have 0.05% of the total market capitalization. The calculation uses the volume-weighted average price (VWAP). In addition, the minimum share price must be $ 1 which is more than three months, and the last three days before the quarterly review.
Liquidity
One factor eligibility, the companies must minimum Liquidity above 0.50 to be eligible for inclusion in the index.
Domicile
Companies eligible for inclusion in the Index list must also be Canadian companies and comply with Canadian law.
What are the 10 largest companies by market cap on the TSX?
Citing from Value Today, the top 10 companies in the TSX Composite Index are as follows: Data released September 2021 and updated January 2022.
Shopify
Shopify is the largest E-Commerce company in Canada. According to Value Today, the market capitalization in September 2021 is 190,100 billion USD, the January market value is 143,340 billion USD. But we get different data from Companiesmarketcap. which is Shopify’s market cap of $138.74 Billion in January 2022.
Total employees 5000 Shopify’s headquarter in Canada.
Website Shopify.com.
Royal Bank of Canada
This financial industry company has a market cap of 146,400 Billion USD in September 2021. The market value on January 2022 of 159,750 Billion USD was updated. Data from Companies market cap Royal of Bank of Canada in January 2022 reached $167.18 Billion.
Website https://www.rbcroyalbank.com/personal.html
Toronto Dominion bank
It is also one of the leading companies in the financial sector, with a market capitalization of 118,220 Billion USD in September 2020. The market value as of January 2022 is 144,320 Billion USD.
Website: https://www.td.com/ca/en/about-td/
Brookfield Asset Management
Companies engaged in the financial investment industry in particular real estate, asset management, renewable energy, infrastructure, and private investment. Based on the report, the company in September 2021 noted market capitalization up to 87,110 Billion USD with a market value as of January 2022 reaching 89,968 Billion USD.
Canadian National Railway Company
This company operated in the transportation of goods by train. Based in Canada, and has a market cap of 83,116 Billion USD as of September 2021. Market value January 2022.
Website: https://www.cn.ca/en/
Enbridge
This is a company focused on the industrial sector, mainly in the oil and gas industry. Market value updated January 2022, has reached Market Value 82,219 Billion USD.
Website: https://www.enbridge.com/
Bank of Nova Scotia
It seems that the investment company is developing well in Canada, it is also a financial investment company, showing growth in September reaching a market capitalization of around 75,020 Billion USD. Market value in January 2022 up to 87,963 Billion USD.
Website: https://www.scotiabank.com/global/en/global-site.html.
Bank of Montreal
Being one of the companies specializing in the banking and finance industry, Bank of Montreal employs more than 40 thousand people, with a market capitalization of USD 64,522 Billion as of September 2021.
Website: https://www.bmo.com/main/personal.
Tomson Reuters Corporation
It is a multi-media company that offers news and media services, has a market cap of up to 57,960 Billion USD as of September 2021.
Website: https://www.thomsonreuters.com/en.html.
Canadian Imperial Bank of Commerce
And again this is a company serving in banking, and finance, reaching market cap in September 2021 until 51,764 Billion USD.
Website: https://www.cibc.com/.
TSX Composite Index sector breakdown
The TSX Composite break down in the classification has factors such as size and the Global Industry Classification Standard. Highlights include the S&P/TSX Composite Index Family, S&P/TSX SmallCap Index, S&P/TSX Income Trust Indices, and S&P/TSX Capped Sector Indices.
How is TSX Composite Index computed?
The model or method of calculating the TSX Composite Index is based on the methodology applied to the S&P Dow Jones Index. By assigning weights to measure the underlying importance of each regulated index.
Any changes to or deviation from this methodology are made at the sole discretion and discretion of the S&P Dow Jones Index so that the index continues to achieve its goals.
For weighting calculations, this method uses float-adjusted market capitalization data. Its mean depends on the stock price and the number of shares available to the public.
Does the TSX Composite Index include dividends?
The S&P/TSX Composite index is usually only used to track economic performance based on calculations by Canada’s largest companies. However, it doesn’t provide a whole picture of market performance.
Because it measures price changes but ignores dividends. Meanwhile, dividends are one of the important points of return for investors.
The TSX Composite Index’s annual return is based on changes per point and in percent. The amount of annual return is not always the same from year to year.
Sometimes the result is negative and sometimes it gives a high percentage return. From Wikipedia records, the return in 2019 was the highest after the previous year dropped thousands of points.
How to buy the TSX Composite index?
The most likely way to buy the TSX Composite index is to find a broker that supports access to TSX, at least to be able to buy TSX stocks. Find among the brokers with the lowest fees.
After finding a suitable broker, the next step is to open an account with that broker. Usually, there is a form on a special page to start registering. Follow the existing procedures, if you have to comply with KYC you need to send the required documents.
Next, you need the money to buy stocks, so fund your account to start buying shares in TSX. This may require a fee of a certain value. For American citizens usually with American depositary receipts (ADRs) which usually provide a large market cap including Canadian corporations.
Where to buy TSX stocks, including through Wealthsimple Trade brokers or Scotia Itrade or other options at CIBC Investor’s Edge.
What makes up the TSX Composite index?
There are 250 largest companies in Canada that made up the TSX Composite Index. Which for inclusion in the list, companies must meet the criteria. So the possibility of one company replace to another and a company in the index is less than 250 companies.
In general, TSX has sector and product categories. It is split into energy, mining, technology, life sciences, Clean Technology, and diversified industry.
Companies included in the TSX Composite index include Advantage Oil & Gas Ltd, Barrick Gold Corp, Air Canada, Aurora Cannabis Inc, Atco Ltd Cl I NV, and many others. You can find a list of TSX Composite indexes made up here.
S&P/TSX Composite Index historical prices
The price trend of the S&P/TSX Composite index in 2021 actually experienced a long rally even though the world was still gripped by the Omicron variant. This means that Canada’s largest companies are in good shape during the year.
The current price refers to the Tradingview Chart at the level of 21357.56.
In the last ten years of history, the price of TSX still tends to be up and down, but it was the lowest price as a support point in the range of 6000.
To get a more complete historical price, you can find it on Yahoo Finance or on the WSJ website and also Investing.com.
S&P/TSX Composite Index live price Tradingview
Final thought
The TSX Composite Index is useful for investors to track shares of Canada’s largest companies. This is often a reference for investors in investing in the country.
A good index and high performance, giving hope that the investment can grow well and increase the portfolio.
TSX is Canada’s largest exchange headquartered in Ontario.
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