https://www.marketindex.com.au/methodologyS&P/ASX 200Code
XJO
Constituents
~200
Criterion
Market Cap + Liquidity
Rebalances
Quarterly
Market Cap.
~72% of the ASX
Index GoalTo establish a highly liquid and tradable index with low turnover. This allows the index to be used as a benchmark for investment returns and for additional S&P/ASX indices to be constructed as benchmarks for varying investment classes and objectives.
Measuring PerformanceThe S&P/ASX 200 contains a fixed number of constituents. Its numerical value (or level) represents the total weighted market capitalisation of its 200 constituents, relative to a base period. Therefore, a move in the index from 5,000 to 5,500 would indicate the total weighted market capitalisation of its constituents had risen 10%.
Movements in the value (share price) of large companies will have a greater effect on the index level than movements in a small company as there a calculation (weighting) is applied according to a company’s market capitalisation.
Selection CriteriaA security must be listed on the ASX and be an ordinary or preferred equity stock (e.g. no bonds or warrants etc.). Its average daily market capitalisation for the previous six months must be considered institutionally investable and meet a minimum benchmark size. Liquidity must be adequate and its public float (shares not owned by company founders, directors, government agencies etc.) must also meet a minimum requirement.
Note: The above criteria are for inclusion into the index and not for continued membership. As low index turnover is important, a security in the index may on occasions violate one or more of the selection criteria without being removed.
Index MaintenanceRegular maintenance of the S&P/ASX 200 is required to accurately reflect changes in its constituent’s market capitalisation and liquidity.
Quarterly RebalancingChanges are implemented on the third Friday of March, June, September and December. One week notice is given on impending changes (excluding September where two weeks notice is given).
Intra-Quarterly AdditionsGenerally only occur when there is a vacancy in the index due to a deletion. Two to five business days notice is given.
Intra-Quarterly DeletionsGenerally only occur due to mergers, acquisitions and suspensions. Two to five business days notice is given.
