Interesting facts about the ASX200 (Australia 200 Index)
The ASX 200 index was started in 2000 with a value of 3133.3 points. It was equal to the All Ordinaries, which includes the 500 largest companies listed on the ASX.
The point of using float-adjusted market capitalization is to have a tradable reference index that large institutional asset managers can use. It is difficult to trade stocks with a low level of free float (i.e., weakly traded). They are not considered eligible for inclusion in benchmark indices based on their total market capitalization. To ensure the liquidity of the index, only regularly traded shares are included in it. The S&P/ASX 200 is considered the main Australian benchmark as it is representative, liquid and tradable.
The index is rebalanced quarterly. It is dominated by huge corporations. As of January 2022, S&P/ASX 200 accounts for 78% of the Australian stock market.
The 30-day implied volatility of the Australian stock market is measured by the S&P/ASX 200 VIX published by the S&P Dow Jones. The value of the index depends on the price dynamics of the shares included in it. Thus, before investing in the S&P/ASX 200, check which companies have the highest weight in the index. Their price direction will determine where the index moves.
Also, keep track of which of the 11 sectors included in the ASX 200 are leading. The leaders’ list includes energy, information technology, utilities, healthcare, consumer services, and telecommunications services.
It is always important to follow the economic and political events in the world. However, since Australia is an isolated country, economic and political events do not affect the direction of the ASX 200 price so much.
