measuring changes in the weighted price of 500 of the largest companies listed on the Australian Stock Exchange
). Companies are weighted according to their market capitalisation
, while liquidity
factors are not a consideration in this index (with the exception of foreign domiciled companies). It comprises 99% of the Australian market.
Affectionately known as the “All Ords”, it is the basic index for measuring the overall performance of the Australian sharemarket.
The All Ordinaries was first introduced in 1979 where it was intended to cover at least 80% of the market capitalisation of each market sector, however it had generally accounted for more than 90% of total market capitalisation. The number of stocks in this index was not fixed, and was anywhere from 299 to 330 companies. The All Ords could be divided into an All Industrials index and All Resources index, and from the latter is was derived an All Mining index.
In 1998, the ASX modified the All Ords to reduce the number of companies that formed the index. However, this was not entirely satisfactory, and in April 2000, the ASX revamped it to include 500 companies, which comprises 99% of the total market value.
In addition to the new All Ords, six other benchmark indices were created. They are the ASX 20, the ASX 50, the ASX 100, the ASX 200, and the ASX 300 and the Small Ordinaries. These indices are complied by Standard and Poor,
an international financial data research company and a leading provider of equity indices around the world.