The ASX 200 is a stock market index comprised of the top 200 Australian equities traded on the Australian Securities Exchange (ASX). The ASX 200 is an excellent place to begin investing in stocks for beginners since it provides exposure to some of Australia’s most successful firms while also providing enough diversification so long-term investors do not feel overly exposed to a single sector or industry.
What exactly is the S&P/ASX 200 index?
The S&P/ASX 200 is Australia’s top stock index and is frequently used as a benchmark against which the performance of individual stocks or funds is evaluated. The index is intended to follow the performance of the 200 biggest eligible equities listed on the Australian stock exchange, as measured by float-adjusted market capitalization.
By size, the index encompasses more than 80% of the Australian stock market. The S&P/ASX 200 debuted in April 2000 and is priced in Australian dollars (Australian Dollars).
How is the ASX 200 compiled, and how are firms chosen?
The ASX 200 is a float-adjusted market cap weighted index, which means that a company’s stake in the index is proportional to its entire market value.
A stock must fulfill various eligibility requirements in order to be considered for inclusion as an index constituent:
The stock must be listed on the Australian Securities Exchange (ASX).
Types of securities: Both common and equity preferred stocks are eligible, however only common stocks are eligible.
Convertible stocks, bonds, and warrants are not examples of hybrid goods.
Market capitalization: To be included in the ASX 200 index, a stock must be institutionally investable, therefore the market capitalisation is an important factor in stock selection.
Liquidity: The stock must be traded regularly, with liquidity assessed in relation to its peers.
The ASX 200 index is rebalanced on a regular basis to guarantee adequate market capitalization and liquidity. Rebalancing occurs on a quarterly basis in March, June, September, and December.
What are the trading hours ?
From 10:00 a.m. to 4:00 p.m. AEST, the cash equities market is open.
During Daylight Saving Time, the SPI 200 Index Futures and Options can be traded from 5:10 PM to 08:00 AM AEST and again from 09:50 AM to 04:30 PM AEST, then from 05:10 PM to 08:00 AM + from 09:50 AM to 04:30 PM AEST when the clocks change again in mid-March.
What industries are represented by the ASX 200?
The ASX 200 is primarily dominated by banks, as seen by the data below. The financial sector accounts for 31% of the total index, followed by Materials, Healthcare, and Consumer Discretionary firms. 186 of the 200 enterprises are based in Australia, with the remaining eight in New Zealand, four in the United States, and one in each of the United Kingdom and France.
What are the top ten ASX 200 companies?
Banks account for five of the top ten largest firms in the ASX 200 share market index. As we can see from the sector split above, the financial sector dominates the index, accounting for over a third of the total.
While the ASX 200 is a decent approach to diversify as compared to buying a few individual shares, investors should be aware of the restrictions and that further diversification (such as investing in other stock markets and/or fixed-income instruments) may be required.
Share price
Since its inception, the ASX 200 index has had various downturns, the most prominent of which were the 2007-2009 slump (during the Great Financial Crisis) and the more recent March 2020 dip triggered by the coronavirus epidemic. The index immediately rebounded from the COVID setback and followed its American/European rivals to new highs.
What is the best way to trade the ASX 200?
Contracts for Difference (CFDs) are one way to trade the ASX 200 in a cost-effective and efficient manner. Brokers often provide a CFD based on the Cash Index (AUS200) as well as a CFD based on the underlying Futures contract (SPI200).
When you trade the index using CFDs, you may speculate on the underlying instrument’s (the ASX 200) direction without owning it or any of its members. You will be able to travel both long and short with the use of leverage.
This is especially important during a recession. Most investors want to avoid portfolio reshuffling since the fees may quickly build up and it is extremely difficult to predict the market accurately. As a result, instead of selling a substantial portion of your portfolio when a downturn is expected, you might utilize CFDs to bet on declining prices.
The Cash CFD (AUS200) or Futures CFD (SPI200) will be better suited for you depending on your trading style. If you just hold positions for a short amount of time, the AUS200 may be preferable due to its modest spreads. However, if you are a long-term trader, you may choose the SPI200 because there are no swap costs.
What is the best way to invest in the ASX 200?
ETFs (Exchange Traded Funds) are the most convenient way to invest in the ASX 200 index. It is less expensive than purchasing individual shares, and it is rebalanced quarterly.
While ETFs can also be leveraged, they often provide less flexibility than trading CFDs. However, if you are a long-term investor who does not want to actively trade the product, the ETF may be an economical alternative.
There are several ETFs available from various suppliers. When selecting an ETF, you should read the factsheet given by your broker and become acquainted with the product’s features as well as the fees associated.
What causes the ASX 200 to move?
As investors trade the component shares, the index will rise and fall. Large price swings in shares with a higher weighting in the index will result in bigger variations in the index’s value.
Companies with a lesser market cap, on the other hand, will have little effect on the index’s price movement.
The following are the primary drivers of the ASX 200 price movement:
Economic statistics from Australia will have an impact on the domestic stock market. Depending on the nature of the data, some firms will be impacted more than others, while others would be impacted less or not at all. Rising interest rates, for example, would almost certainly have an impact on bank stock prices.
Earnings – Quarterly and yearly results, predictions, and corporate news may all have an impact on a business’s share price, and hence the value of the ASX 200. Because the index is dominated by a limited set of firms and two industries in particular (Finance and Materials), it is important to pay close attention to their outcomes.
Currency fluctuations – Significant changes in the value of the Australian dollar can have an impact on the price of the ASX 200. A strong AUD may make things more difficult for exporters, pushing down their share price.
Commodity pricing – Australia is a major commodities exporter, and the fluctuations in the global commodities market will have a significant impact on those enterprises. A rise in commodity prices boosts the share price of mining businesses, whereas a fall in commodity prices depresses the share price of such companies.
What is the average return ?
Over a 10-year period, the S&P/ASX 200 had an average total return of 9.3 percent each year, according to S&P Dow Jones Indices.
What does the performance tell us?
The ASX 200 experienced its ups and downs, but the average return makes the index considerably more appealing than bonds or bank cash. It all boils down to your risk tolerance.
For example, risk-averse investors may feel uneasy with stock market volatility. However, dollar-cost averaging is a strategy that can assist (DCA). This is an investing strategy in which investors split the entire amount to be invested over a set length of time. For example, instead of investing $100,000 in the stock market today, you may spread it out over 12 months (spending A$8333 every month). While DCA may result in reduced long-term profits, some investors who are hesitant to deposit a huge lump sum prefer it.
Regardless, the ASX 200 is a good instrument for measuring the overall performance of the Australian stock market because it accounts for more than 80% of Australia’s stock market capitalization and is routinely rebalanced.
List of ASX 200 companies
| Ticker | Company Name |
| AGL | AGL Energy Ltd |
| AMP | AMP Ltd |
| ANZ | Australia and New Zealand Banking Group Ltd |
| APA | APA Group |
| ARB | ARB Corporation Ltd |
| ASX | ASX Ltd |
| ABP | Abacus Property Group |
| ABC | Adbri Ltd |
| APT | Afterpay Ltd |
| ALQ | Als Ltd |
| ALU | Altium Ltd |
| AWC | Alumina Ltd |
| AMC | Amcor Plc |
| ALD | Ampol Ltd |
| ANN | Ansell Ltd |
| ARG | Argo Investments Ltd |
| ALL | Aristocrat Leisure Ltd |
| ALX | Atlas Arteria |
| AIA | Auckland International Airport Ltd |
| AZJ | Aurizon Holdings Ltd |
| AST | Ausnet Services Ltd |
| AFI | Australian Foundation Investment Company Ltd |
| BHP | BHP Group Ltd |
| BFL | BSP Financial Group Ltd |
| BWP | BWP Trust |
| BOQ | Bank of Queensland Ltd |
| BAP | Bapcor Ltd |
| BPT | Beach Energy Ltd |
| BEN | Bendigo and Adelaide Bank Ltd |
| AAA | Betashares Australian High Interest Cash ETF |
| NDQ | Betashares Nasdaq 100 ETF |
| BSL | Bluescope Steel Ltd |
| BLD | Boral Ltd |
| BXB | Brambles Ltd |
| BRG | Breville Group Ltd |
| BKW | Brickworks Ltd |
| CLW | Charter Hall Long Wale REIT |
| CSL | CSL Ltd |
| CSR | CSR Ltd |
| CAR | Carsales.com Ltd |
| CNI | Centuria Capital Group |
| CIP | Centuria Industrial REIT |
| CHN | Chalice Mining Ltd |
| CGF | Challenger Ltd |
| CIA | Champion Iron Ltd |
| CHC | Charter Hall Group |
| CQR | Charter Hall Retail REIT |
| CNU | Chorus Ltd |
| CIM | Cimic Group Ltd |
| CWY | Cleanaway Waste Management Ltd |
| CUV | Clinuvel Pharmaceuticals Ltd |
| COH | Cochlear Ltd |
| CDA | Codan Ltd |
| COL | Coles Group Ltd |
| CBA | Commonwealth Bank of Australia |
| CPU | Computershare Ltd |
| CRN | Coronado Global Resources Inc |
| CTD | Corporate Travel Management Ltd |
| CMW | Cromwell Property Group |
| CWN | Crown Resorts Ltd |
| DXS | Dexus |
| DDR | Dicker Data Ltd |
| DHG | Domain Holdings Australia Ltd |
| DMP | Domino’s PIZZA Enterprises Ltd |
| DOW | Downer Edi Ltd |
| APE | Eagers Automotive Ltd |
| EBO | Ebos Group Ltd |
| EDV | Endeavour Group Ltd |
| EVT | Event Hospitality and Entertainment Ltd |
| EVN | Evolution Mining Ltd |
| FPH | Fisher & Paykel Healthcare Corporation Ltd |
| FBU | Fletcher Building Ltd |
| FLT | Flight Centre Travel Group Ltd |
| FMG | Fortescue Metals Group Ltd |
| GPT | GPT Group |
| GNE | Genesis Energy Ltd |
| GMG | Goodman Group |
| GOZ | Growthpoint Properties Australia |
| HVN | Harvey Norman Holdings Ltd |
| HLS | Healius Ltd |
| HMC | Home Consortium |
| IGO | IGO Ltd |
| IFL | IOOF Holdings Ltd |
| IEL | Idp Education Ltd |
| ILU | Iluka Resources Ltd |
| IMU | Imugene Ltd |
| IPL | Incitec Pivot Ltd |
| IFT | Infratil Ltd |
| INA | Ingenia Communities Group |
| IAG | Insurance Australia Group Ltd |
| IRE | Iress Ltd |
| IOZ | Ishares Core S&P/ASX 200 ETF |
| IOO | Ishares Global 100 ETF |
| IVV | Ishares S&P 500 ETF |
| JBH | JB Hi-Fi Ltd |
| JHX | James Hardie Industries Plc |
| LFS | Latitude Group Holdings Ltd |
| LLC | Lendlease Group |
| LFG | Liberty Financial Group |
| LIC | Lifestyle Communities Ltd |
| LNK | Link Administration Holdings Ltd |
| LTR | Liontown Resources Ltd |
| LYC | Lynas Rare EARTHS Ltd |
| MQG | Macquarie Group Ltd |
| MFG | Magellan Financial Group Ltd |
| MGOC | Magellan Global Fund (Open Class) (Managed Fund) |
| MGF | Magellan Global Fund |
| MPL | Medibank Private Ltd |
| MP1 | Megaport Ltd |
| MCY | Mercury NZ Ltd |
| MEZ | Meridian Energy Ltd |
| MTS | Metcash Ltd |
| MLT | Milton Corporation Ltd |
| MIN | Mineral Resources Ltd |
| MGR | Mirvac Group |
| NXT | NEXTDC Ltd |
| NAB | National Australia Bank Ltd |
| NSR | National Storage REIT |
| NWL | Netwealth Group Ltd |
| NHC | New Hope Corporation Ltd |
| NCM | Newcrest Mining Ltd |
| NHF | Nib Holdings Ltd |
| NIC | Nickel Mines Ltd |
| NEC | Nine Entertainment Co. Holdings Ltd |
| NST | Northern Star Resources Ltd |
| NVX | Novonix Ltd |
| OZL | OZ Minerals Ltd |
| OSH | Oil Search Ltd |
| ORI | Orica Ltd |
| ORG | Origin Energy Ltd |
| ORE | Orocobre Ltd |
| ORA | Orora Ltd |
| PDL | Pendal Group Ltd |
| PMGOLD | Gold |
| PXA | Pexa Group Ltd |
| PLS | Pilbara Minerals Ltd |
| PNI | Pinnacle Investment Management Group Ltd |
| PBH | Pointsbet Holdings Ltd |
| PMV | Premier Investments Ltd |
| PME | Pro Medicus Ltd |
| QBE | QBE Insurance Group Ltd |
| QUB | QUBE Holdings Ltd |
| QAN | Qantas Airways Ltd |
| REA | REA Group Ltd |
| RIO | RIO Tinto Ltd |
| RHC | Ramsay Health Care Ltd |
| REH | Reece Ltd |
| RWC | Reliance Worldwide Corporation Ltd |
| RMD | Resmed Inc |
| S32 | SOUTH32 Ltd |
| STW | SPDR S&P/ASX 200 Fund |
| SYD | Sydney Airport |
| STO | Santos Ltd |
| SCP | Shopping Centres Australasia Property Group |
| SCG | Scentre Group |
| SEK | Seek Ltd |
| SVW | Seven Group Holdings Ltd |
| SGM | Sims Ltd |
| SKC | Skycity Entertainment Group Ltd |
| SHL | Sonic Healthcare Ltd |
| SOL | Washington H Soul Pattinson & Company Ltd |
| SKI | Spark Infrastructure Group |
| SPK | Spark New Zealand Ltd |
| SDF | Steadfast Group Ltd |
| SGP | Stockland |
| SNZ | Summerset Group Holdings Ltd |
| SUN | Suncorp Group Ltd |
| SUL | Super Retail Group Ltd |
| TPG | TPG Telecom Ltd |
| TAH | Tabcorp Holdings Ltd |
| TNE | Technology One Ltd |
| TLS | Telstra Corporation Ltd |
| SGR | The Star Entertainment Group Ltd |
| A2M | The a2 Milk Company Ltd |
| TCL | Transurban Group |
| TWE | Treasury Wine Estates Ltd |
| UWL | Uniti Group Ltd |
| QUAL | Vaneck MSCI International Quality ETF |
| VEU | Vanguard All-World Ex-US Shares INDEX ETF |
| VAP | Vanguard Australian Property Securities INDEX ETF |
| VAS | Vanguard Australian Shares INDEX ETF |
| VGS | Vanguard MSCI INDEX International Shares ETF |
| VTS | Vanguard US Total Market Shares INDEX ETF |
| VCX | Vicinity Centres |
| VUK | Virgin Money Uk Plc |
| VEA | Viva Energy Group Ltd |
| WAM | WAM Capital Ltd |
| WPR | Waypoint REIT |
| WEB | Webjet Ltd |
| WES | Wesfarmers Ltd |
| WBC | Westpac Banking Corporation |
| WHC | Whitehaven Coal Ltd |
| WTC | Wisetech Global Ltd |
| WPL | Woodside Petroleum Ltd |
| WOW | Woolworths Group Ltd |
| WOR | Worley Ltd |
| XRO | Xero Ltd |
| YAL | Yancoal Australia Ltd |
| Z1P | ZIP Co Ltd |
| ZIM | Zimplats Holdings Ltd |
If you have any question please don’t hesitate to
CONTACT MARMARA FX
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.58% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.