TSX Composite set for biggest turnover since 2022 as trade tensions reshape index

Investing.com -- Canada’s S&P/TSX Composite Index is on track to see its largest reshuffle in nearly three years, driven by strong price divergence across sectors and geopolitical uncertainty, according to Scotiabank (TSX:BNS) analysts. The surge in expected turnover comes as the measurement period for June’s index rebalance opens, with final changes to be announced on June 6.

The index has outperformed U.S. benchmarks year-to-date, gaining 3.3% compared to a 0.9% decline in the S&P 500 through Monday afternoon. That relative strength has masked underlying turbulence, as Canadian markets react to a shifting trade landscape amid U.S. President Donald Trump’s escalating tariff regime and growing expectations for changes to cross-border investment flows.

According to Scotiabank analyst Jean-Michel Gauthier, three names are likely to be added to the TSX Composite based on current trading: Ritchie Bros. Auctioneers (NYSE:RBA), Dream Select (DSV), and Anglo-Asian Uranium Corp (AAUC). RBA alone is expected to contribute 0.75% of index turnover, a size not seen since Q4 2022, as its addition impacts nearly 8 million shares.

At the same time, five names are positioned for likely removal: Tilray Inc (TSX:TLRY), Algoma Steel Group Inc (TSX:ASTL), Precision Drilling Corporation (TSX:PD), Spin Master Corp (TSX:TOY), and Pason Systems Inc . (TSX:PSI). The full measurement period runs through May 23 and could shift with price changes over the coming days.

Separately, Gauthier estimates index turnover could reach 1.76%, the highest quarterly figure in nearly three years. Scotiabank also flagged PSI’s deletion from both the composite and the TSX High Dividend Index, and added that no changes are expected for the TSX 60, with Algonquin Power (TSX:AQN) now safely above the deletion threshold.

Among the most-watched names is Ritchie Bros (TSX:RBA)., which has been on a "positive path" ahead of its anticipated inclusion. “The addition of RBA fuels the largest turnover trade since Q4 2022,” Gauthier noted.

With the June rebalance set to generate the largest index turnover since 2022, investors will be closely watching final pricing movements and S&P’s official decisions on June 6.