Most unfussy investors don’t spend a lot of time thinking regarding Canada’s stock market. They might be curious about market fluctuations and mutual funds, but ask any of them about the 2 sectors that make up most of the market, and you will probably get a blank stare.
Regardless of your level of investment, it is not bad idea to know a few things regarding the TSX, Canada’s biggest stock market. So here is a rundown of things you probably don’t know about Toronto Stock Exchange.
There’re so many companies to select from in Canada:
Canada consists of 2 main exchanges: the TSX and the TSXV. The Toronto Exchange is intended for firms with over $7.5 million in net tangible assets; the TSX Venture Exchange is for firms with less than that.
In total there’re 3,985 firms indexed on the exchanges, 1,561 companies on the Toronto Stock Exchange and 2,424 companies on the TSX Venture Exchange. It is the Toronto Stock Exchange where you will discover Canada’s most renowned firms, like Suncor Energy and Research in Motion. The TSX Venture Exchange has smaller, generally unknown businesses.
The majority of Canadian market is concentrated in 2 sectors:
According to investment experts it isn’t a great idea to only invest in Canada. That is because our market is deeply weighted to merely 2 sectors: financials and energy. The whole market capitalization of the Toronto Stock Exchange is approximately $2.12 billion. Of that total, 22% is in financials, 23% in mining and eighteen percent in gas and oil. If you wish to be exposed to other business units, like healthcare or technology, you will need to invest somewhere else, such as in the U.S market.
The Toronto Stock Exchange has more than stocks:
It isn’t merely companies on the Toronto Stock Exchange – at the end of the previous year, 174 exchange-targeted funds were indexed as well. ETFs (exchange-traded funds) trade precisely like companies do – they are basically stocks that track an index – which is why they are indexed on the Toronto Stock Exchange.
Between 2000 & 2010, the number of exchange-traded funds on the Toronto Stock Exchange grew by 4,250 per cent. Of the exchange-traded funds indeed, just over 20% are sector-specific funds, 20% are international, 16% are commodity exchange-traded funds and 16% are fixed income funds. Other exchange-traded funds include those that track the S&P/TSX Composite Index and currency exchange-traded funds.
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