Despite a dip in the index experienced in May last year, investors have welcomed the 15% ascent of the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) over the past 12 months – a rise of 687.4 points, which has been predominantly influenced by just 10 stocks.
Whilst smaller companies down the lower end of the broader market have barely moved during this period, investors seeking a safety zone have flocked towards higher yielding stocks.
The big four banks were all amongst the top 5 index performers for the year, with the Commonwealth Bank (ASX: CBA) leading the charge. A chart, provided by the Brisbane Times, shows that its shares gained $17.23 for the year to 10 April, adding over 114 index points. Meanwhile, Westpac (ASX: WBC) added 112 points with its gain of $8.84.
For some, it may come as no surprise that mining heavyweights BHP Billiton (ASX: BHP) and Rio Tinto (ASX: RIO) did not make the top 10 list for the year. Whilst these companies have lead numerous market rallies in the past, investors have largely turned their backs to the mining industry in recent times. In fact, Commonwealth Bank recently overtook BHP as Australia’s largest company by market capitalisation.
Rounding out the top 10 companies were CSL Limited (ASX: CSL), Insurance Australia Group (ASX: IAG), and supermarket rivals Wesfarmers Limited (ASX: WES) and Woolworths Limited (ASX: WOW). Despite falls in the brick-and-mortar retailing industry, Westfield Group (ASX: WDC) also made the elite group.
Local and foreign investors alike have sought Australia’s high yielding companies, despite many of them offering low levels of growth yet high multiples of earnings. Whilst the share activity of our mining heavyweights have done little to impress investors this year, analysts are expecting a strong rebound in the sector that will ensure shareholders a great reward.
The top 10 may not be your best bets for new investments. Savvy investors are now seeking growth in smaller companies. Discover two stellar small-cap opportunities now, in our brand-new research report, “2 Small Cap Superstars” — simply click here to download your FREE copy.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
- Coronavirus (COVID-19): 6 charts every Australian needs to see – April 6, 2020 1:46pm
- Innovation through crisis – April 2, 2020 11:48am
- Coronavirus (Covid-19): Why Is Italy’s Fatality Rate So Bad? – March 26, 2020 3:39pm