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The S&P/ASX Australian Indices are real-time, market capitalization-weighted indices that include the largest and most liquid stocks in the Australian equity market listed on the Australian Stock Exchange (ASX). These indices are closely aligned with Standard & Poor’s global suite of indices, and are recognized internationally as Australia’s principal investable equity indices.
Standard & Poor’s global indices are constructed with a fixed number of constituents. The aim is not to replicate a fixed percentage of the market capitalization, but to design a highly liquid and
tradable index whose total market capitalization is large enough to approximate the market segment it is capturing while keeping the number of stocks at a minimum. This
creates a highly cost-effective, easily replicable trading instrument that provides an
appropriate barometer of the market’s performance. The fixed number of stocks also
ensures minimum turnover as changes are made due to corporate activity or a reduction
in a stock’s size or liquidity that makes it ineligible for inclusion.
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