The Australian Standard & Poor’s Index 200, also known as the ASX 200 Index, has the English name “S&P/ASX 200 index”, or ASX 200 for short. The index was founded by Standard & Poor’s in 2000 and covers the 200 largest companies listed on the Australian Securities Exchange (ASX or ASX) by market capitalization. The index covers more than 80% of the ASX’s total market value and covers large companies in multiple industries in Australia, so it is often used as a weather vane for the Australian stock market and the economy.

Like the US S&P 500, which is also an S& P company, the Australian S&P 200 also belongs to the market capitalization-weighted Index, therefore, the greater the market value of the company to which the constituent stocks belong, the greater the impact of stock price fluctuations on stock indexes. As the management agency of ASX 200, S&P considers the following three factors when determining its constituent stocks: company market value, liquidity, and listed exchanges. The market value of the company to which the constituent stocks belong must be large enough (the top 200), the liquidity must be high enough (more than 0.025% of the total ASX trading), and it must be listed on the ASX.

S&P will approve the ASX 200 four times a year, at which time substandard constituent stocks will be removed, and non-constituent stocks that meet the criteria will be included. It is worth noting that although there are 200 in the name of the index, in order to ensure that the index can fully represent the Australian economy, the number of companies in the index is dynamic and may exceed or be less than 200. As of April 2020, a total of 201 companies have been selected for ASX 200, with a total of 201 constituent stocks.

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