The S&P/ASX 50 index represents the 50 largest companies listed on the Australian Stock Exchange. Like the ASX20 and ASX200 shares the index is a market capitalization index in which the companies size determines its contribution to the index. Naturally, market capitalization indexes have a large cap bias.
We have listed out the 50 companies by their total market capitalization value and sector, with the market capitalization rounded to the nearest hundred million.
Average Size of ASX Companies
Market capitalization is defined as the total shares outstanding times the share price. The values of the companies change on a day to day basis as the share price changes. The indexes’ makeup only makes a minor adjustment to reflect the portion of the free float shares (that is not locked up) as a proxy for liquidity.
The minimum size for companies to be included in the ASX 50 is estimated to be $5.0 billion in market capitalization and the average value of all of the companies is $23 billion.
Long Term Index Investing
Index funds allow long term passive investors a cost effective way to track the market index. The return of the ASX 200 is very similar to the ASX 50 because the ASX includes an additional 150 companies but the first 50 companies are the same companies included in the ASX 50.
Periodically, the index is rebalanced as companies’ value changes overtime. Standard and Poors’ set a quarterly rebalancing frequency when companies in the index are replaced either when the value of one of the index member drops or another company rises that it is now one of the 50 largest listed companies on the ASX.
ASX 50 Index Components
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ASX 50 Sectors
The list shows the companies in the top 50 ASX index is dominated by resources, financials and real estate shares.
Similar to the sector breakdown of the broader ASX 200 index, the financials and resources still make up around 40% of the total value in the index. This can be considered highly concentrated on an individual stock basis as the financials are mostly made up of the big 4 domestic banks and their bank share prices are highly correlated.
Real estate used to be one of the largest sub sectors within the financial component of the index. For historical comparisons, one should note that REITs were broken out from the financial segment in 2016.
The Australia Stock Exchange is known to be the preferred listing option for the mining sector. Even with hundreds of mining companies, the values of BHP and RIO still dominates the resources sector.
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The index sector weightings split across the major ASX indices highlight the heavy reliance on the financials and miners gradually decline as the total number of companies increases. Still, the rate of diminishment is not as much as you would’ve thought. For example the difference between ASX 50 and ASX 100 is an additional 50 companies but the sectors’ total weight is similar in both indexes.
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ASX 50 Index Fund (ASX SFY)
Let’s face it, it is hard for individual investors even to keep track of a top 10 shares list let alone an index of 50 companies. Index funds have the advantage of providing a low cost option to track the index.
S&P ASX 50 ETF (ASX SFY) is an ASX listed fund that tracks the ASX 50 index. The goal of the fund is to replicate the performance of the index. The fund invests proportionally in each of the companies included in the index. There are several advantages of using ETF including a powerful way of achieving market returns if the investor does not have the skill set or time to manage capital themselves.
It is extremely cost effective where the annual cost of SYF ETF is only 0.286% per year and bypasses the need for an additional layer of financial adviser fees. Savings from fees are an important factor in increasing returns as academic research shows that more than half of fund managers underperform their benchmark after taking into account fees charged.
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ASX 50 Dividend Yield
LTM = Last Twelve Months
LTM Yield = Last 4 quarters of dividend payments
ASX SFY Dividend History
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Quarterly SFY Dividend Payments
Q1 : November
Q2 : February
Q3: May
Q4: August