ASX Limited are currently operating the Australian Securities Exchange, which is the primary securities exchange in Australia. It was formed in July 2006 after the Sydney Futures Exchange and the Australian Stock Exchange were merged. When people talk about “ASX Shares” they normally mean shares listed on the ASX, if you are looking for shares of the company ASX Limited, click here.
Over 2,000 issuers and companies are listed on the ASX. These span from small start up companies to well established and large businesses. At this point in time, ASX are the second biggest shareholder in the Asia-Pacific region and the 8th biggest shareholder on the planet (this ranking is based on free-float market capitalisation).
The Australian Securities Exchange maintain stock indexes regarding stocks being traded via the exchange in conjunction with Standard & Poor’s. They feature groups in a hierarchy called the S&P/ ASX 300, S&P/ ASX 200, S&P/ ASX 100, S&P/ ASX 50, S&P/ ASX 20, notionally including the 300, 200, 100, 50 and 20 biggest companies currently on the exchange listings, subject to a few different qualifications.
ASX 200 Share Price (ASX:TLS)
The S&P/ ASX 200 is probably the most famous index used for Australian shares, it includes approximately 200 of the biggest companies which are listed on the ASX. Standard & Poor’s rebalances the ASX 200 every quarter, and the amount of companies which are included in the index is dynamic, so it does not always add up to be exactly 200.
The most narrow index within the S&P/ASX group of indices is the S&P/ASX 20. The ASX 20 includes only the 20 biggest companies listed on the Australian chip market. The companies in the AXS 20 are mainly well know blue chip companies. Those companies are actively traded and highly liquid, and the majority of companies pay over average dividends.
Just like the ASX 200, the ASX 20 is quarterly rebalanced by Standard & Poor’s, but because only the biggest Australian companies are in the ASX 20, it does not happen often that shares are added or removed from the ASX 20. In April 2015, the ASX 20 accounted for 45% of the total Australian equity market.
If you’re interested in following the S&P/ASX 20 you have the option of buying an EFT that follows the ASX 20, or buying all 20 of the shares in the index. You can indirectly invest in the index through the Australian Security Exchange’s iShares S&P/ASX 20 ETF. Performance returns follow the ASX 20 benchmark very closely and every company within the index is given exposure.
Investing in the ASX’s listed shares means that you’re buying part ownership of one of their listed companies. If good company performance follows, you will benefit from income paid as dividends and/or from share price growth. If poor performance follows, the company might not pay dividends and/or your shares could fall in value. The listed companies are the issuers of trades and these are traded by the investors using the ASX sharemarket. Use a licensed broker to sell or buy shares on behalf of yourself.