S&P/TSX Composite Index 2025: Market Cap Over $3.32 Trillion – How to Invest & Top Stocks

What Is the S&P/TSX Composite Index?

The S&P/TSX Composite Index is a capitalization-weighted stock index representing approximately 225 of the largest publicly traded companies on the Toronto Stock Exchange (TSX), Canada's premier stock market. Serving as the Canadian counterpart to the U.S. S&P 500, it reflects the overall health of Canada's economy.

Key Highlights

• Tracks about 250 leading Canadian public companies.
• Acts as a primary gauge of Canadian economic performance.
• Companies must meet stringent liquidity and market cap criteria to remain included.
• As of early 2024, the index’s market capitalization exceeds $3.32 trillion CAD.
• Offers investable exposure mainly via ETFs and mutual funds.

Understanding Its Structure

Managed by S&P Dow Jones Indices, the S&P/TSX Composite captures roughly 80% of the TSX’s total market capitalization. Financials dominate, making up about one-third of the index, followed by sectors like energy, materials, industrials, and information technology. Altogether, it includes 11 sectors such as Communication Services, Utilities, Consumer Staples, and Health Care.

Being capitalization-weighted, larger companies have a greater impact on the index’s performance, similar to the methodology used by the S&P 500 and Nasdaq Composite.

Eligibility Criteria for Companies

To be part of the index, companies must maintain a minimum market cap representing 0.04% of the index and meet liquidity thresholds measured by trading volume over the past year. Stocks priced below $1 for extended periods are removed. Additionally, firms must be Canadian by incorporation, primary TSX listing, regulatory filings, and substantial business presence within Canada.

The maximum weight any single stock can hold is capped at 10% to ensure diversification.

Top 10 Components in 2024

The leading constituents by market capitalization include major Canadian banks, energy giants, and technology firms. The index undergoes quarterly rebalancing in March, June, September, and December to reflect market changes.

How to Invest in the S&P/TSX Composite Index

Investors can gain exposure either by purchasing individual stocks—though this is complex due to the number of constituents—or more practically through ETFs. Popular options include the iShares S&P/TSX 60 Index ETF (TSX: XIU), holding the 60 largest companies, and capped composite ETFs like iShares S&P/TSX Capped Composite Index (TSX: XIC) and BMO S&P/TSX Capped Composite Index (TSX: ZCN), which limit individual stock weightings to 10% to reduce volatility.

Mutual funds such as the Scotia Canadian Equity Index Fund also track the S&P/TSX Composite for diversified exposure.

History of the S&P/TSX Composite

The index evolved from the TSE 300, launched in 1977. After S&P assumed control in 2002, it was renamed to its current form. Originally dominated by resource companies, the index has gradually shifted toward financials, which now constitute over 30% of the index. Despite market downturns like during the 2020 COVID-19 pandemic, the index has shown strong recovery and growth, hitting an all-time closing high of 22,087 on March 29, 2022.

TSX Listing Costs

Listing fees on the Toronto Stock Exchange range from $10,000 to $200,000 depending on the company’s market value. For the TSX Venture Exchange, fees range from $10,000 to $70,000.

Number of Stocks in the Index

The S&P/TSX Composite generally includes between 230 and 250 stocks, with 225 constituents recorded in Q1 2024.

What Does It Mean When the TSX Index Rises?

When the TSX is reported as "up," it typically refers to the S&P/TSX Composite Index increasing in value, indicating broad gains among Canada's largest publicly traded companies and reflecting positive investor sentiment in the Canadian equity market.

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