The Australian Securities Exchange (ASX) is among the leading ten stock exchanges, in
terms of market capitalisation, across the world.
The stock exchange was established in 2006 by the merger of the Australian Stock Exchange
and the Sydney Futures Exchange.
The ASX 200 constitutes 200 largest companies listed on the ASX.
The index, which is considered the benchmark for the Australian equity performance, is
composed of 200 large ASX stocks.
The ASX 200 is maintained by Standard & Poor’s and is rejigged quarterly.
The companies listed on ASX 200 represent sectors such as materials, resources, financials,
real estate, banking, etc.
These companies together add up to over 80% of the Australian share market’s m-cap.
Over the years, ASX 200 has given healthy overall returns, while a few years were a
little disappointing for the shareholders.
Still, investors have relief of getting steady income via dividends during the years with
muted returns.
ASX 200’s historical returns (2010 to 2020)
Between 2010 and 2020, the benchmark index delivered five negative returns: 2010 (-2.57%),
2011 (-14.51%), 2015 (-2.13%), 2018 (-6.90%) and 2020 (-1.45%).
In three out of 10 years, the annual return was more than 10%: 2012 (14.60%), 2013 (15.13%)
and 2019 (18.38%).
In two out of 10 years, the returns were over 5%: 2016 (6.98%) and 2017 (7.05%).
Returns were just over 1% in 2014 (1.10%).
The above-calculated returns do not include any dividend payment or any stock spinoffs
from the original stock.
The calculations also do not consider taxes and commissions.
Meanwhile, based on S&P Global data, which assumes reinvestment of all dividends (excluding
the value of franking credits), ASX 200 has mostly given healthy returns since 2010.
ASX 200 gave negative returns of 10.84% and 3.13% in 2011 and 2018, respectively.
The year 2019 gave a return of 23.02%.
The years 2016 and 2017 gave returns of 11.45% and 11.46%, respectively.
The year 2012 and 2013 gave returns of 19.88% each.
The benchmark ended the financial year 2020-21 with a positive rise in 11 out of 12 months.
The performance of the index beat that of the mining boom in the financial year 2006-07.
In FY21, the benchmark index surged 24%.
The same financial year was also the best since 1987 for the broader All Ordinaries
index.
The rally was boosted by a rebound in the domestic share market following the sustained
weakness due to challenges posed by the coronavirus pandemic.
Meanwhile, Commonwealth Bank of Australia Ltd (ASX:CBA), BHP Group Ltd (ASX:BHP), National
Australia Bank Ltd (ASX:NAB), CSL Ltd (ASX:CSL), Westpac Banking Corporation Ltd (ASX:WBC),
Fortescue Metals Group Ltd (ASX:FMG), Rio Tinto (ASX:RIO), Afterpay Ltd (ASX:APT), IDP
Education Ltd (ASX:IEL), and Australia & New Zealand Banking Group Ltd (ASX:ANZ) are the
top ten biggest companies (by m-cap) listed on ASX 200.