Two very different markets
The S&P/TSX 60 holds sixty of Canada's largest listed companies and is heavily weighted toward banks, energy producers, pipelines and miners. The S&P 500 holds roughly five hundred U.S. companies, with technology, health care and consumer firms making up a much larger share. Their sector mixes are so different that they rarely behave identically, even over decades.
For a Canadian, owning only the TSX concentrates your portfolio in a handful of industries and one economy. Owning only the S&P 500 diversifies across sectors but introduces exchange-rate exposure and, in registered accounts, dividend withholding tax.
How the comparison is made fair
Both series are expressed in Canadian dollars with dividends reinvested, using the same start date, the same contribution schedule and the same inflation index. The S&P 500 is converted monthly with the USD/CAD rate; the TSX series is already in CAD. Changing one input at a time lets you isolate whether the difference came from the market, the currency or the timing of your deposits.
The TSX 60 series in this dataset is derived from an exchange-traded fund and, before late 1999, uses the broader TSX Composite as a stand-in, so very long TSX 60 comparisons are approximations.
Leadership rotates
Over the years since 2000, the leadership has flipped more than once. Commodities and financials powered Canadian stocks through the early 2000s, while a decade of dominant U.S. technology companies favoured the S&P 500 afterwards. A rising or falling loonie amplified or dulled these moves for Canadian holders of U.S. assets.
This rotation is the strongest argument against betting on either market alone. The Key facts table shows how large the gap ended up being for your chosen dates, and you can change the dates to watch the winner change.
Dividends and taxes
Canadian stocks have historically paid higher dividend yields than U.S. stocks, and Canadian dividends receive the dividend tax credit in a non-registered account. Inside a TFSA or RRSP that credit is irrelevant, while U.S. dividends may face a withholding tax in TFSAs. These details can matter more than a small gap in returns, so consider your account type when choosing.
Concentration, currency and diversification
The Canadian market represents only a small slice of global market value, yet many Canadians keep most of their equities at home because it feels familiar and avoids currency conversion. A portfolio that leans only on Canadian banks and resource companies can go through long stretches of weakness when those sectors struggle. Adding U.S. exposure brings technology and health care into the mix, at the price of exchange-rate swings.
The currency effect is not one-directional. A weaker loonie boosts the Canadian-dollar value of U.S. holdings, which has cushioned Canadian investors during several global sell-offs. A stronger loonie does the opposite. Compare the TSX and S&P 500 lines for the same window and ask how much of the gap you would attribute to companies, and how much to the exchange rate.
Using the result wisely
A backtest describes the past, not a promise. Home bias is not wrong, and neither is a global tilt; many investors hold both through a broad all-in-one ETF. Use this calculator to understand the tradeoffs, check how sensitive the answer is to the start date, and remember that costs and taxes will lower real-world outcomes.