What are the All Ordinaries?

Submitted by Share Trading on 9 March, 2010 - 18:35

The S&P/ASX All Ordinaries Index (XAO)

The S&P/ASX All Ordinaries Index represents the 500 largest companies (by market capitalisation) in the Australian equities market. The index has a stock code of XAO, which is its exchange ticker code. Index constituents are drawn from eligible companies listed on the Australian Stock Exchange. Liquidity is not considered as criteria for inclusion, except for foreign domiciled companies. The index is a component of the Australian indices that could be used as building blocks for portfolio construction.

The All Ordinaries or known colloquially as the All Ords, but also known as the All Ordinaries Index was established in January 1980 and is the oldest index of shares in Australia. The market capitalisation of all the companies listed in the All Ordinaries account for 95% of the value of all shares listed on the ASX.

The All Ordinaries had a base index of 500 when it was established. Therefore, if the index is at 5000 points, the value of the stocks within the All Ords have increased tenfold since inception in 1980. This increase in value does not factor inflation. As of 1 November 2007, the All Ords index was at a record 6873.20. As of 22 January 2008, due to turmoil related to the US 2007 subprime mortgage financial crisis, the index had fallen 24 percent to 5,222.0 points. On 6 March 2009, in the wake of a worldwide drop in stock values, the index reached a low of 3,111.7 points, a drop of over 54% from the 1 November 2007 high. As of 14 September 2009, the index has rebounded to 4,568.5 points, representing a 46.8 percent increase from the 6 March 2009 low.

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