Since its debut in April 2000, the S&P/ASX Index Series has helped to define the Australian equity market. As Australia’s most widely followed market indicator, the S&P/ASX 200 serves as the de facto measure of the value and performance of the nation’s stock market. Market peaks and valleys are defined by the level of the S&P/ASX 200.
Beyond the headlines, however, the index series serves an integral role in Australia’s investment infrastructure. For example, the fund management industry utilizes the S&P/ASX 200 and other S&P/ASX Indices to serve as the investable universe for active investment strategies and to benchmark fund performance. Likewise, asset owners, such as superannuation funds, use S&P/ASX Indices to benchmark their domestic portfolios. With an estimated AUD 309 billion1 of Australian equity funds benchmarked to S&P/ASX Indices, the series represents by far the most widely used benchmarks for Australian investment funds.
Perhaps most importantly, the S&P/ASX Index Series served as the foundation for the growth of index-based investing in Australia. The deep ecosystem of liquid financial products tracking key S&P/ASX Indices allows active and passive investors to express investment views in an efficient manner. S&P DJI’s SPIVA® research has also shined a light on the inability of most Australian fund managers to beat their benchmarks, further highlighting the benefits of passive investing. As has occurred in other parts of the world, the growth of index investing has democratized investment solutions that were previously only available to large institutions and lowered the cost of investing for millions of Australians.