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S&P/TSX Composite Index

Reviewed by Athena | Updated on Oct 05, 2020

Catalogue

Introduction

S&P/TSX Composite Index is a Canadian Index, which tracks the performance of listed companies on the Toronto Stock Exchange (TSX). It has replaced the TSE 300 index. There are over 250 companies included on this index.

The Toronto Stock Exchange is Canada’s largest stock exchange and is made up of over 1,500 companies. The S&P/TSX Composite Index is to Canada what the S&P 500 index is to the United States of America.

Eligibility Criteria

To be included in the index, companies will need to maintain the eligibility criteria listed below:

  • Market Capitalisation - The security will need to ensure that their market capitalisation represents a minimum weight of 0.05% of the index. In addition to this, the share price of the security cannot stand at less than $1 Canadian dollar over the past three months, and over the three days prior to review by the exchange. If the security does not meet these conditions, it will be removed.

  • Liquidity - For each member of the index, the number of transactions, as well as the trading volume in dollars, should be at least 0.025% of the trading volume of all eligible securities. Further, a single company cannot exceed 25% of the total trading volume.

  • Domicile - The company will need to be registered under Canadian laws.

Sectors Comprising the S&P/TSX Composite Index

As of September 2019, about 30% of companies listed on the index are companies from the energy sector. These companies are engaged in the businesses of oil, mining, natural gas, and forest products.

Other major sectors that comprise the index include financial services, real estate, industrial goods, and technology, making up over 35% of the index. Healthcare and utilities constitute 10% of the index.

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