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. In a literal sense, market peaks and valleys are reflected by the level of the S&P/ASX 200.
The S&P/ASX Shariah Indices aim to track the performance of Shariah-compliant stocks in the S&P/ASX 200 and the S&P/ASX 300. This launch comes in the context of increased interest in the Muslim community for Shariah investing in Australia.
The indices can be used as performance benchmarks for Shariah-compliant investment strategies, the selection universe for actively managed funds and the basis for index-linked products. Customisation is also available to accommodate various preferences or requirements.
What’s Driving the Continued Growth of Index Investing in Australia
The shift to passive investing has been driven in part by the frequent inability of active managers to outperform their benchmark over the past two decades.
The S&P Indices Versus Active (SPIVA®) Scorecard measures the performance of actively managed funds against their relevant benchmark in equities, A-REITs, and bonds.
Our annual Persistence Scorecard provides additional evidence that it’s hard for top-performing active funds to stay at the top.
With trillions of dollars in reported annual volumes, the S&P/ASX index series is linked to a deep ecosystem of liquid, tradable products available to support investors as they enter, and exit, the markets. An investor looking for access to an S&P/ASX index can get it through a range of instruments, including ETFs, options, and futures.
Although the S&P/ASX 200 stands out in particular for its associated liquidity, other S&P/ASX indices have benefited from their connections to this ecosystem. For example, products linked to sectors of the S&P/ASX 200 had a cumulative traded value of approximately AUD 5 billion in 2019.
A Pillar of Australia’s Investment Infrastructure
Beyond the headline S&P/ASX 200, the S&P/ASX index series plays an integral role in Australia’s investment infrastructure. In fact, in the fund management industry, the S&P/ASX 200 and other S&P/ASX indices serve as the investable universe for actively managed strategies and as ways to benchmark active fund performance. Asset owners, such as superannuation funds, use the S&P/ASX indices to benchmark their domestic portfolios.
Going Green in Australia
Market participants are recognizing the importance of sustainable investing and the need to realign their portfolios to meet global ESG targets. Starting with the launch of the Dow Jones Sustainability Australia Index in 2006, S&P Dow Jones Indices has been at the forefront of Australia’s sustainable movement to identify local leaders in ESG based on long-term economic, environmental, and social criteria. As the importance of ESG investing has grown, our range of ESG indices has expanded to include the premier S&P/ASX 200 ESG in 2019 and the newly launched S&P/ASX 300 Net Zero 2050 Paris-Aligned ESG Index and S&P/ASX 300 Net Zero 2050 Climate Transition Index in November 2022.
About the Exchange Partnership
S&P DJI and the Australian Securities Exchange (ASX) together provide a complete range of Australian market benchmarks.
Operating at the heart of the deep and liquid Australian financial markets, ASX has a proud history as an early and successful adopter of new technology. The exchange continues to focus on embracing innovative solutions for ease of the customer, helping companies grow, creating value for shareholders, and supporting the Australian economy. ASX is an integrated exchange offering listings, trading, clearing, settlement, technical and information services, and other post-trade services.
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