The S&P/TSX Composite Index, also known as the Toronto Stock Exchange Index, is the primary stock market index in Canada. It measures the performance of the largest companies listed on the Toronto Stock Exchange (TSX) and provides a benchmark for the Canadian stock market. The S&P/TSX Composite Index has been calculated annually since 2000, and its yearly returns provide insight into the historical performance of the Canadian stock market.
The following table shows the yearly returns of the S&P/TSX Composite Index from 2000 to 2020:
| 2000 | -11.14% |
| 2001 | -13.08% |
| 2002 | -21.03% |
| 2003 | 35.28% |
| 2004 | 12.48% |
| 2005 | 19.15% |
| 2006 | 14.68% |
| 2007 | 7.53% |
| 2008 | -36.13% |
| 2009 | 35.33% |
| 2010 | 11.06% |
| 2011 | -10.21% |
| 2012 | 7.25% |
| 2013 | 9.51% |
| 2014 | 5.79% |
| 2015 | -10.11% |
| 2016 | 15.52% |
| 2017 | 15.02% |
| 2018 | -11.93% |
| 2019 | 14.83% |
| 2020 | -23.45% |
Example Calculation Let’s take the year 2019 as an example. In 2019, the S&P/TSX Composite Index had a return of 15.0%. If an investor had invested $100,000 in the index at the beginning of the year, their investment would have grown to $115,000 by the end of the year.
Pros and Cons of the S&P/TSX Composite Index Yearly Returns
Pros:
- The S&P/TSX Composite Index provides a benchmark for the Canadian stock market, making it easier for investors to compare the performance of individual stocks with the overall market.
- The S&P/TSX Composite Index includes the largest and most established companies listed on the Toronto Stock Exchange, making it a representative sample of the Canadian economy.
- The yearly returns of the S&P/TSX Composite Index provide historical context for the performance of the Canadian stock market and can help investors make informed decisions about their investments.
Cons:
- The S&P/TSX Composite Index only includes companies listed on the Toronto Stock Exchange, which may not represent the performance of the entire Canadian economy.
- The S&P/TSX Composite Index does not account for dividends or other forms of income received from investments, which can significantly impact an investor’s total return.
- The historical returns of the S&P/TSX Composite Index are not a guarantee of future performance and should not be used as the sole basis for investment decisions.
What Is The S&P/TSX Composite Index?
The S&P/TSX Composite Index is a stock market index that reflects the performance of the largest companies listed on the Toronto Stock Exchange (TSE) in Canada. It is calculated and maintained by S&P Dow Jones Indices, a subsidiary of S&P Global. The index includes around 250 companies from various sectors such as financials, energy, consumer goods, and technology, making it a broad and representative measure of the Canadian stock market. The value of the index is based on the prices of its constituent stocks, with changes in the index reflecting changes in the overall market.
Investors use the S&P/TSX Composite Index as a benchmark to gauge the performance of Canadian equities, and it is widely followed by Canadian investors. The index is considered an important barometer of the Canadian economy and is used to make investment decisions. Investment products, such as exchange-traded funds (ETFs), are also designed to track its performance, providing investors with an easy way to invest in the Canadian stock market.
In conclusion, the S&P/TSX Composite Index is a valuable tool for investors looking to understand the performance of the Canadian stock market and make informed investment decisions. By tracking the performance of the largest and most representative companies listed on the Toronto Stock Exchange, it provides a comprehensive overview of the Canadian economy and its prospects for growth.