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The NYSE Amex Composite Index (XAX) is a market-cap weighted index which was designed to track the performance of all the stocks listed on the NYSE Amex Market (now known as the NYSE American). Despite sometimes being abbreviated to ‘AMEX,’ the index is not connected to the well-known credit card provider, and given the name change of its base exchange, the XAX index is now more commonly referred to as the NYSE American Composite Index.
This page will take you through a brief history of the XAX index, how the stocks it tracks are selected, and give you all the information you need in order to invest in the index.
The XAX index historically tracked the stocks listed on the NYSE Amex exchange – an exchange with roots that go back to the New York Club Market Agency founded in 1908. In its history, the exchange has gone through a variety of name changes and in 2019 was rebranded as the NYSE American. The two names most commonly given to the XAX index in light of this are the NYSE Amex Composite Index and the NYSE American Composite Index.
The XAX has held up well in recent years, hovering around the 2,500 mark. However, the index was hit hard – as many indices were – but the economic difficulties caused by the COVID-19 pandemic. The XAX fell from 2,626.91 on 16th January 2020 to 1,317.22 on 18th March before starting to mount a recovery.
As the composite index for the NYSE American, the XAX tracks the stock performance of every stock traded on the exchange. The XAX Index is composed largely of small-cap stocks, unlike the NYSE Composite which tracks trading activity on the New York Stock Exchange, including some of the biggest companies in the world.
In order to invest in an index, you need to use a financial instrument designed to track its performance over time. The two most common ways of doing this are ETFs (exchange-traded funds) and mutual funds. With a XAX ETF you’ll have a diversified investment that follows the NYSE American Composite Index, and you can also trade your investment at any time during trading hours on an exchange. A mutual fund gives you a similar form of diversification, but less flexibility as mutual funds can only be bought or sold at the end of the day’s trading.