The S&P/TSX Indices
For two decades, S&P Dow Jones Indices and the Toronto Stock Exchange (TMX) have partnered to bring local and global investors the most-relied-upon benchmarks of Canadian market performance. Today, we offer a full suite of indices spanning a range of asset classes and strategies that underlie numerous ETFs and other index-linked investment products.
The Flagship Indices
At the forefront of the expansive S&P/TSX Index Series are the S&P/TSX 60 and S&P/TSX Composite. As the most widely quoted benchmark for the Canadian equity market, the S&P/TSX Composite is the broadest index in the S&P/TSX family and serves as the basis for a wide variety of sub-indices including, but not limited to, income trust indices, capped indices, GICS® sector indices, and factor indices. On the other hand, the S&P/TSX 60 is designed to be representative of the sector composition of the broad Canadian equity market, while including a limited number of large and liquid constituents.
An Integral Part of the Canadian Landscape: The S&P/TSX Composite
The Index Behind the Product Matters
The S&P/TSX indices not only benefit from S&P Dow Jones Indices’ capabilities as the world’s largest independent index provider, but also leverage TMX’s local Canadian expertise. While many Canadian equity indices used in the market are simply country slices of global benchmarks, and therefore take the perspective of foreign investors, the S&P/TSX indices are designed specifically for Canadians. Why is that important? Canada has foreign ownership limits that affect several industries, such as telecommunications, broadcasting, transportation, and real estate, and imposing these limits unnecessarily constrains the investment opportunity set, impacting the characteristics and performance of an index.
Source: S&P Dow Jones Indices LLC, FTSE Russell. Data as of Sept. 30, 2019. Index performance based on gross total return levels in CAD. Graphs are provided for illustrative purposes. Past performance is not an indication or guarantee of future results.
The Active vs. Passive Debate in Canada
Index investing is gaining traction around the world in large part thanks to growing evidence that it’s difficult for active managers to outperform their benchmarks over long periods. The trend has held true in Canada, where more than 88% of Canadian equity funds underperformed their respective benchmarks over the 10-year period ending June 2019.
Find out what the SPIVA® Canada Scorecard has to say about the performance of active funds vs. the performance of their S&P/TSX benchmarks, including the S&P/TSX Composite and S&P/TSX 60, over short- and long-term periods.
The S&P/TSX SmallCap Select provides an investable index for the Canadian small-cap market. The index is float-adjusted and market-cap-weighted, and was developed with industry input to serve as a benchmark for those with small-cap exposure in the Canadian equity market. TMX serves as the distributor of both real-time and historical data for this index.Learn more
The S&P/MX International Cannabis Index is designed to measure the performance of cannabis companies trading on the TSX, TSX Venture Exchange (TSX-V), New York Stock Exchange (NYSE), or Nasdaq.Learn more
Make connections between sought-after market exposures and licensed products linked to S&P/TSX Indices.
These products are widely available, easy to buy and sell, and designed to meet a variety of investment goals. The funds’ issuers, sometimes referred to as sponsors, are financial services companies. Some of these firms concentrate on either ETFs or index managed funds, while others offer both types of products. While index managed funds have been on the market almost twice as long as ETFs, there are now almost twice as many ETFs as index managed funds globally. Even with the rapid expansion of ETFs in Canada, the first ETF listed in the world in 1990—which now tracks the S&P/TSX 60—remains the largest ETF in Canada with over CAD 8.5 billion in assets under management.
View the list of ETFs based on S&P/TSX indices.
Options exchanges and futures exchanges offer contracts on market indices, such as S&P/TSX 60 Index Options and S&P/TSX 60 Futures. While these derivative products differ in some important ways, they are similar in that they allow investors—both retail and institutional—to hedge or to speculate on the level of the underlying index on the date when the contract expires, which is specified in the contract.
Structured products pay interest only at maturity, subject to terms that vary substantially from product to product. Commercial and investment banks issue a variety of index-linked structured products based on the S&P/TSX indices.
Structured products can range from the fairly conservative to the highly speculative and extremely complex. At one end of the scale, there are structured products that offer principal protection and income generation, though limited return. At the other end, some of the products offer the potential for greater return but at the risk of being exposed to significant leverage.
This variety makes structured products potential diversification tools for high-net-worth investors and asset managers. Structured products are also seen as tools for enhancing returns.
Learn more about how we work with the TMX to produce Canadian indices for local and international investors.