{"id":111971,"date":"2021-11-19T11:39:00","date_gmt":"2021-11-19T16:39:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=111971"},"modified":"2022-11-21T09:49:28","modified_gmt":"2022-11-21T14:49:28","slug":"canadian-indices-vs-u-s-indices-2","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/stocks\/canadian-indices-vs-u-s-indices-2\/","title":{"rendered":"Canadian Indices vs. U.S. Indices"},"content":{"rendered":"\n<p id=\"h-the-premier-stock-index-in-canada-is-the-s-p-tsx-60-index-while-south-of-the-border-the-american-markets-arguably-have-three-premier-indices-the-dow-jones-industrial-average-the-s-p-500-and-the-nasdaq-100\">The premier stock index in Canada is the S&amp;P\/TSX 60 Index*, while south of the border, the American markets arguably have three premier indices: the Dow Jones Industrial Average, the S&amp;P 500<sup>\u24c7<\/sup>, and the Nasdaq-100.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-index-overviews\"><a><\/a>Index Overviews<\/h2>\n\n\n\n<p>All four major North American stock indices are designed to perform the same task: tracking the performance of the largest companies listed on one or more exchanges. Here is a quick look at the four indices:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The S&amp;P\/TSX 60 Index tracks the performance of 60 large cap companies listed on a Canadian exchange.<\/li><li>The Dow Jones Industrial Average tracks the performance of 30 diversified large cap companies listed on either the NYSE or the Nasdaq exchange.<\/li><li>The S&amp;P 500 Index tracks the performance of 500 large cap U.S.-listed companies.<\/li><li>The Nasdaq-100 Index tracks the performance of 100 large cap companies listed exclusively on the Nasdaq exchange.<\/li><\/ul>\n\n\n\n<p>Companies listed on a Canadian exchange can be included in an American index, as is the case with gold miner Newmont Corporation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-canadian-stock-index\"><a><\/a>Canadian Stock Index<\/h2>\n\n\n\n<p>Global investors have many reasons to be interested in investing in the ETF that tracks the S&amp;P\/TSX 60 Index. Most notably, the Canadian index includes exposure to a combination of multinational behemoths and domestic-focused companies.<\/p>\n\n\n\n<p>For example, Shopify helps e-commerce stores worldwide with their online businesses, and Rogers Communications is a telecommunications giant that benefits from a very favourable protectionist environment in Canada.<\/p>\n\n\n\n<p>The largest Canadian companies do not benefit from the same glamour and media attention as American companies do. However, the companies included in the Canadian index are industry giants in their own right, and they provide investors exposure to various markets and strong growth opportunities that are backed by one of the world\u2019s strongest middle classes.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-case-for-american-indices\"><a><\/a>The Case for American Indices<\/h2>\n\n\n\n<p>Investors across the world may want exposure to one or more of the American stock indices through an ETF because it includes some of the world\u2019s greatest corporate success stories. Apple, for example, pioneered and revolutionized the global music and smartphone industries, while Amazon changed the way we shop, no matter where we live in the world.<\/p>\n\n\n\n<p>Each of the three major indices is designed to fulfill a slightly different role in an investor\u2019s portfolio. The Dow Jones, for example, does not include the largest companies &#8211; rather it is more diversified across multiple sectors. The S&amp;P 500 Index is considered more diversified, as it includes hundreds of companies.<\/p>\n\n\n\n<p>Lastly, the Nasdaq-100 index is strictly tech-focused and offers no diversification outside of the technology industry.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-canada-vs-usa-is-there-a-winner\"><a><\/a>Canada vs. USA: Is There a Winner?<\/h2>\n\n\n\n<p>Comparing the four indices is a useful exercise for determining which one showed the highest levels of growth over one year and five years. Here is how each index performed (as of November 19):<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>S&amp;P\/TSX 60 Index: Up 29% over one year, up 48% over five years.<\/li><li>S&amp;P 500 Index: Up 29% over one year, up 115% over five years.<\/li><li>Dow Jones Industrial Average: Up 20% over one year, up 90% over five years.<\/li><li>Nasdaq-100 Index: Up 36% over one year, up 240% over five years.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-conclusion-we-have-a-winner-of-sorts\"><a><\/a>Conclusion: We Have a Winner &#8211; of Sorts<\/h2>\n\n\n\n<p>Based solely on past performance over a five-year period, the tech-dominated Nasdaq-100 index has proven to be the superior index. But as always, one must remember that past performance is never a guarantee of future results.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted on October 13, 2021 &#8211; <a href=\"https:\/\/blog.tmx.com\/markets\/canadian-indices-vs-us-indices\">Canadian Indices Vs. U.S. Indices<\/a><\/p>\n\n\n\n<p>Copyright <sup>\u00a9<\/sup> 2021 TSX Inc. All rights reserved. Do not copy, distribute, sell or modify this document without TSX Inc.\u2019s prior written consent.&nbsp; This information is provided for information purposes only. Neither TMX Group Limited nor any of its affiliated companies guarantees the completeness of the information contained in this publication, and we are not responsible for any errors or omissions in or your use of, or reliance on, the information.&nbsp; This publication is not intended to provide legal, accounting, tax, investment, financial or other advice and should not be relied upon for such advice.&nbsp; The information provided is not an invitation to purchase securities listed on Toronto Stock Exchange and\/or TSX Venture Exchange.&nbsp; TMX Group and its affiliated companies do not endorse or recommend any securities referenced in this publication.&nbsp; TMX, the TMX design, The Future is Yours to See., Toronto Stock Exchange, TSX, TSX Venture Exchange, TSXV and Voir le futur. R\u00e9aliser l\u2019avenir. are the trademarks of TSX Inc.&nbsp; All other trademarks used herein are the property of their respective owners.<\/p>\n\n\n\n<p>* The S&amp;P\/TSX 60 Index (in this paragraph, the \u201cIndex\u201d) is the product of S&amp;P Dow Jones Indices LLC or its affiliates (&#8220;SPDJI&#8221;) and TSX Inc. (&#8220;TSX&#8221;). Standard &amp; Poor&#8217;s\u00ae and S&amp;P\u00ae are registered trademarks of Standard &amp; Poor&#8217;s Financial Services LLC (&#8220;S&amp;P&#8221;); Dow Jones\u00ae is a registered trademark of Dow Jones Trademark Holdings LLC (&#8220;Dow Jones&#8221;); and TSX\u00ae is a registered trademark of TSX. SPDJI, Dow Jones, S&amp;P, their respective affiliates and TSX do not sponsor, endorse, sell or promote any products based on the Index and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions or interruptions of the Index or any data related thereto.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>All four major North American stock indices are designed to perform the same task. Here is a quick look at the four indices.<\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[14,18,6,8,9,22,26,3],"tags":[444,4247,829],"contributors-categories":[13731],"class_list":{"0":"post-111971","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-etfs","7":"category-macro","8":"category-north-america","9":"category-region","10":"category-securities","11":"category-stocks","12":"category-text-articles","13":"category-traders-insight","14":"tag-canada","15":"tag-indices","16":"tag-united-states","17":"contributors-categories-toronto-stock-exchange"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Canadian Indices vs. U.S. Indices | Traders&#039; Insight<\/title>\n<meta name=\"description\" content=\"All four major North American stock indices are designed to perform the same task. 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