What Is the ASX 200?

The S&P/ASX 200 Index is a market capitalization weighted, float adjusted stock market index including stocks featured on the ASX or Australian Securities Exchange.

The ASX 200 benchmark index was created in the year 2000 and is made up of 200 of the largest companies listed on the ASX. It is one of many indices created by S&P Dow Jones and is considered Australia’s primary index. The All Ordinaries index was the primary index used in Australia until the ASX 200 was published.

The ASX 200 is re-balanced quarterly, at this time companies are removed and added according to their current market capitalization. Stocks must also meet liquidity requirements before they become part of the index. This means a percentage of the company’s outstanding shares must be traded regularly for them to be eligible for the index.

Index Sectors

The ASX 200 Index uses the Global Industry Classification Standard (GICS) to categorize companies and places them within a sector depending on the nature of their primary business activity.

The ASX 200 is made up of 11 sectors, Financials, Materials, Health Care, Real Estate, Industrials, Consumer Staples, Consumer Discretionary, Energy, Telecommunications, Utilities and Information Technology.

ASX 200 ETF’s

There are three primary ETFs tracking the ASX 200 for those who would prefer a diversified and possibly managed portfolio. Firstly, iShares Core S&P/ASX 200 (IOZ). Also, we have Betashares FTSE RAFI Aust 200 ETF (QOZ). Lastly, we have the longest-running ASX 200 ETF which is SPDR S&P/ASX 200 Fund (STW). STW’s inception was on the 28th of August 2001 and has averaged a 7.34% return p.a. since inception.