This morning S&P Dow Jones Indices announced the June 2020 quarterly rebalance of the S&P/ASX Indices.
This is when a number of shares are added or removed from particular indices. Which can be a bigger deal than you might think, as billions of dollars are invested into funds which track indices like the S&P/ASX 200 Index (ASX: XJO).
In addition to this, fund managers often have mandates that allow them to only buy shares on a certain index. This can lead to them dumping shares which are removed from indices and buying shares which are added.
What changes have been made?
Given that S&P Dow Jones Indices skipped the March quarterly rebalance because of the market volatility, there have been a larger than normal amount of changes today.
Here's a summary of some key changes that will be effective at the open on 22 June 2020.
S&P/ASX 20 Index
Gaming technology company Aristocrat Leisure Limited (ASX: ALL) has been added to the ASX 20 index at the expense of packaging company Amcor PLC (ASX: AMC).
S&P/ASX 50 Index
Infant formula and fresh milk company A2 Milk Company Ltd (ASX: A2M) will join the ASX 50 index later this month. It will take the place of embattled financial services company AMP Limited (ASX: AMP). Payments company Afterpay Ltd (ASX: APT) had been tipped for inclusion in the index but appears to have fallen just short.
S&P/ASX 100 Index
The shares of data centre operator NEXTDC Ltd (ASX: NXT) and gold miner Saracen Mineral Holdings Limited (ASX: SAR) have been strong performers in 2020. This has led to them being included in the ASX 100 index at the expense of shopping centre operator Unibail-Rodamco-Westfield (ASX: URW) and coal miner Whitehaven Coal Ltd (ASX: WHC).
S&P/ASX 200 Index
The benchmark index will welcome five new shares later this month. Centuria Industrial REIT (ASX: CIP), Megaport Ltd (ASX: MP1), Mesoblast limited (ASX: MSB), Omni Bridgeway Ltd (ASX: OBL), and Perseus Mining Limited (ASX: PRU) will join the illustrious index.
Making way for them will be Estia Health Ltd (ASX: EHE), Hub24 Ltd (ASX: HUB), Jumbo Interactive Ltd (ASX: JIN), Mayne Pharma Group Ltd (ASX: MYX), Pilbara Minerals Ltd (ASX: PLS), and Pinnacle Investment Management Group Ltd (ASX: PNI).
You might have noticed that there are five in and six out. This is because there has actually been 201 shares on the ASX 200 over the last few months. This was the result of Graincorp Ltd (ASX: GNC) spinning off its United Malt Group Ltd (ASX: UMG) business earlier this year.
Two surprising omissions from the new additions were Kogan.com Ltd (ASX: KGN) and Zip Co Ltd (ASX: Z1P). Both looked like strong candidates for inclusion after their remarkable share price gains this year. It looks like they will have to wait until September now.
