sp asx 200

The S&P (Standard and Poor's) ASX 200 is a highly regarded benchmark index that closely monitors the financial performance of the top 200 firms listed on the Australian Securities Exchange.

The index's members are chosen based on each firm's market value, which means that the larger the company, the greater its impact on the index. The S&P ASX 200 is widely used as a benchmark for measuring investment results.

Importance of S&P ASX 200

The objective of employing float-adjusted market capitalization is to produce a tradable benchmark index that can be used by major institutional asset managers. Stocks with low free floats (i.e., sparsely traded) are difficult to trade and are not regarded as suitable for inclusion in benchmark indexes based on their total market capitalization. Only equities that are routinely traded are eligible for inclusion, ensuring that the index is liquid. S&P Dow Jones, the index publisher, defines the S&P/ASX 200 as the leading Australian benchmark because it is representative, liquid, and tradable.

The index was introduced in April 2000 and is rebalanced quarterly to guarantee that the stocks included in it match the eligibility requirements. Despite the presence of 200 stocks, the index is dominated by large firms. As of June 2021, the top ten stocks accounted for more than 46% of the index. Four of these ten equities were banking organisations, and financials represented little more than one-third of the index. Materials (resources) was the second largest sector, accounting for 20.6%. In June 2021, the index's trailing P/E ratio was 65.72, with a dividend yield of 2.8%.

There are several exchange-traded funds (ETFs) and exchange-traded notes (ETNs) based on the S&P/ASX 200, as well as futures, options, and futures options that may be traded. The index provider's monthly fact sheet includes a list of investable products tied to the S&P/ASX 200. The S&P/ASX 200 VIX index, released by S&P Dow Jones, monitors the Australian stock market's 30-day implied volatility.