During 2021, Canadian stocks posted their best annual performance in more than a decade amid a rebound in energy prices.
The benchmark S&P/TSX Composite Index rose 22% in 2021, its best annual performance since a 31% rise back in 2009.
The TSX was buoyed by a resurgence in energy stocks, which had underperformed for several years but rebounded in 2021 along with global crude oil prices as demand recovered from the global pandemic.
Despite its strong performance in 2021, the main Canadian stock index still underperformed its U.S. counterpart by about five percentage points. The benchmark S&P 500 Index rose 27% and posted 70 record highs over the course of 2021.
During the past year, Canadian energy, real estate and financial sectors outperformed the broader index, while only the healthcare sector declined due to falling cannabis stocks. Canopy Growth Corp. was the worst performer on the index after falling 65% in 2021.
By contrast, the S&P/TSX Composite Energy Index rose 42%, marking its best year since 2005 when it rose 61%. Energy companies dominated the top-performing stocks on the TSX in 2021, occupying eight of the top 10 spots.
The year 2021 also marked the largest positive net change for the TSX, which rose 3,789 points to 21,222.84 -- dwarfing the previous largest net gain of 2,758 points seen in 2009. The largest net change or percentage change ever was during the financial crisis of 2008 when the TSX Composite Index fell by 4,845 points, or 35%.
