ASX quarterly rebalance: HUB24 joins ASX 200, Brainchip into ASX 300

A number of shares could be on the move today after the S&P Dow Jones Indices announced its quarterly rebalance of the ASX/S&P Indices.

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ASX quarterly rebalance represented by elephant walking a tightrope

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After Friday’s market close, the S&P Dow Jones Indices announced some changes in its quarterly rebalance of the S&P/ASX Indices.

The updated list could potentially move the prices of some shares as fund managers seek to readjust their portfolios. In addition, exchange-traded funds (EFT’s) will also see changes across the broader indices.

Here is a brief summary of the most well-known shares on the ASX that were added or removed on the S&P/ASX Indices.

Australia’s top 100 companies remained stable with no changes to their retrospective benchmark this quarter. However, it was a different story for the remaining indices.

S&P/ASX 200 Index changes

The S&P/ASX 200 Index (ASX: XJO) added a few new companies, mostly within the mining sector, as a result of growing consumer confidence. This saw iron ore developer Champion Iron Ltd (ASX: CIA), along with nickel producer Nickel Mines Ltd (ASX: NIC) and lithium miner Pilbara Minerals Ltd (ASX: PLS) added into the benchmark.

In addition, electronic products company Codan Limited (ASX: CDA) and investment platform provider HUB24 Ltd (ASX: HUB) were also included.

They replaced Bravura Solutions Ltd (ASX: BVS), Smartgroup Corporation Ltd (ASX: SIQ), Service Stream Limited (ASX: SSM) and Tassal Group Limited (ASX: TGR).

S&P/ASX 300 Index changes

There was a number of swaps within the S&P/ASX 300 Index (ASX: XKO), particularly relating to some companies that have taken centre stage recently. The most notable businesses that joined the list were furniture retailer Adairs Ltd (ASX: ADH), artificial intelligence company Brainchip Holdings Ltd (ASX: BRN), and subscription-based meal kit provider Marley Spoon AG (ASX: MMM).

Leaving the ASX 300 index are ELMO Software Ltd (ASX: ELO), Freedom Foods Group Ltd (ASX: FNP), Kathmandu Holdings Ltd (ASX: KMD), Macmahon Holdings Limited (ASX: MAH), and Superloop Ltd (ASX: SLC) among others.

What does this mean?

While the changeover will take place on 22 March 2021, the news could boost or put pressure on the affected shares. Most fund managers are required to adhere to their strict guidelines, which allow them to buy shares only within a certain index. On the other hand, EFTs usually pick up and/or dump the appropriate shares to keep in line with the benchmark.

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Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Elmo Software. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Bravura Solutions Ltd, Hub24 Ltd, and SUPERLOOP FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia has recommended ADAIRS FPO, Bravura Solutions Ltd, Elmo Software, Freedom Foods Group Limited, Hub24 Ltd, Service Stream Limited, and SMARTGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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