NYSE Amex Composite Index: Meaning, History, Comparisons

What is the NYSE Amex Composite Index?

The NYSE Amex Composite Index is a capitalization-weighted index of the stocks and American depositary receipts (ADRs) that trade on the NYSE American exchange. This includes listed companies, real estate investment trusts (REITs), master limited partnerships (MLPs), and closed-end investment vehicles. The symbol for the NYSE Amex Composite Index is XAX.

Understanding the NYSE Amex Composite Index

Development and maintenance of the NYSE Amex Composite Index is handled by ICE Data Indices. The composition of the index includes all common stocks, ADRs, REITs, MLPs and closed-end investment vehicles that are listed on the NYSE American exchange. New companies are added after completing their initial public offering.

The NYSE Amex exchange has a long history of trading in the United States and has undergone several ownership changes. Listings on the exchange include global companies with small, mid, and large market capitalizations.

As of April 2021, the largest companies by capitalization included Imperial Oil (IMO), Cheniere Energy (LNG), B2Gold (BTG) and Seaboard (SEB). Market capitalization ranges from $18 billion all the way down to $10 million. The smallest companies in the index tend to rotate, as they grow larger or fail.

Because the NYSE Amex Composite Index is composed of mostly nano-, micro-, and small-cap stocks, the index is primarily used as a tool for seeing how small company stock prices are doing overall. During speculative times, investors tend to favor the riskier small-cap names, while at other times investors are more conservative and will favor larger-cap names that are more established.

History of the NYSE Amex

The NYSE Amex exchange is located in New York City. It was founded in 1908 as the New York Curb Market Agency. It operated outdoors until 1921, when it moved indoors to a new building on Greenwich Street in lower Manhattan. In 1929, it changed its name to the New York Curb Exchange.

It was renamed as the American Stock Exchange (AMEX) in 1953. Since the 1920s, it has been a leading U.S. securities exchange for international listings. The AMEX launched options trading in 1975. In the early 1980s, the trading floor got handheld computers. This was revolutionary at the time.

In 2008, the American Stock Exchange was bought by NYSE Euronext, which itself was acquired by Intercontinental Exchange in 2013. In 2017, the exchange was renamed NYSE American and its designated market makers and floor brokers were replaced with an electronic system.

The exchange is primarily a market exchange for emerging growth companies. It offers a variety of trading advantages including modern execution technology and advanced trading functionality. It also boasts a competitive transaction fee structure, with transaction costs ranging from zero cents to $0.0005.

NYSE Amex Composite Index vs. S&P 500 Index

The chart below shows a comparison of the price performance of the NYSE Amex Composite Index (price bars) and the S&P 500 Index between the 2009 low and June 2019.

Initially, the NYSE Amex Composite Index was stronger rising with greater magnitude than the S&P 500. By 2013 that started to change, showing that investors favored larger-cap stocks and that likely larger-cap stocks were posting stronger numbers than the smaller-cap stocks. This told savvy investors that it was time to focus on large-cap stocks.

Between 2013 and 2019 the NYSE Amex Composite Index moved largely sideways, while the S&P 500 moved higher. Comparing different indexes in this manner can provide insight into which segments of the market are doing better than others.