For over a decade, the Canadian stock market has struggled to keep up with its southern neighbor, consistently underperforming against the S&P 500 and leaving investors questioning their loyalty to the TSX. Despite the historical prominence during the commodity supercycle, the TSX has failed to match the monumental bull market gains seen in the U.S., especially in the aftermath of the global financial crisis and the COVID-19 pandemic. This trend raises significant concerns for Canadian investors, heavily inclined towards home bias with an average of 52% of their stock holdings in domestic names.
Why the Persistent Underperformance?
Several factors contribute to the TSX’s lagging performance, including its composition and the global investor’s preference. The Canadian market, characterized by a heavy concentration in financials and resources, lacks the diversity seen in…
