The S&P/ASX 200 Index (INDEXASX: XJO) is Australia's benchmark share market index. Launched in April 2000, it comprises the largest 200 companies on the Australian Securities Exchange by float-adjusted market capitalisation, and is one of a number of indices published by S&P Dow Jones on Australian markets. Since inception, the index has returned 4.17% per annum excluding dividends and 8.53% including dividends, making it a reliable long-term benchmark for Australian equity performance.
As with all indices, the ASX 200 is measured in points and tracks the combined movements of all 200 shares within the index. Quarterly rebalances ensure the shares included meet the index's eligibility criteria, taking place in March, June, September, and December.
The index is largely dominated by the Financials and Materials sectors. Financials is the largest, making up around 28% of the index, and includes the big four banks such as Commonwealth Bank of Australia (ASX: CBA). Materials is the second largest sector and includes companies such as BHP Group Ltd (ASX: BHP) and Fortescue Ltd (ASX: FMG).
Investing in the index is simple: investors can buy shares in any ASX 200-listed company through a broker, or buy into an exchange-traded fund (ETF), which tracks the index as a whole and is traded like a common share.
