asx 300
ASX 300 is a market capitalization index of the 300 largest Australian companies listed on the Australia Stock Exchange.
There are several overlaps between the large-cap indices as the bigger market indexes in terms of companies include overlaps with the large-capitalization companies included in the index’s smaller iterations. For example, the ASX 20 represents the 20 largest companies all form part of the ASX 300. In the same instance, the list of 200 companies from the ASX 200 shares the first 200 companies in the ASX 300.
The ASX 300 index is most commonly compared to the ASX 200, but from looking at the indices underlying composition, it is more like the All Ordinary index in terms of quantity which leans towards mid-size and small-cap stocks.
Does Small Caps Help Returns?
The cut-off for inclusion in the ASX 200 is less than a billion dollars market cap. The list of companies in the ASX 300 between 200 to 300 segment makes up from 0.01% to 0.05% of the total index value.
- This means the smallest 100 stocks in the index only make up 3 – 5% of the index’s aggregate value, which means the overlap is more than you would’ve thought, given there are 100 more stocks in the ASX 300.
- The sum of the 100 to 300 ranked companies in the index only make up just slightly more than 10% of the total value, which implies the diversification benefit from increasing from ASX 100 or 200 to ASX 300 contributes only to 10% difference in the portfolio composition.
The minimum size of a company to be included in the index starts at $100mil. The key indication is that although the quantity of companies is larger than the other large-cap indexes, the last 100 or 200 companies’ overall contribution compared to ASX 100 is much smaller. In most instances, it is doubtful it will make a meaningful impact on the overall returns.
The cost-benefit analysis of managing 100 to 300 companies won’t make sense. In most instances, the easiest way of tracking the index at minimum cost is using market index funds.
ASX 300 List
Here is a list of companies in the ASX 300.
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ASX 300 Sector Weights
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The table shows the index sector weight compared to the rest of the market. The ASX 300 is the least reliant on mining and financial shares than the other major market indexes and is the most diversified major market index.
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Investing in ASX 300
Vanguard Australian Shares ETF (ASX VAS) tracks the ASX 300 index returns, and investors can use the ETF to track the index’s performance.
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Australian Market vs International Market
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