S&P/ASX Emerging Companies Index: What It Measures and How It Is Built

Direct Answer

The S&P/ASX Emerging Companies Index is a rule-based measurement of smaller emerging companies listed on the Australian Securities Exchange, maintained by S&P Dow Jones Indices/ASX. Like every index it owns nothing: it is a number produced by applying a published weighting formula to a selected list of companies, revised on a schedule the provider sets.

What this index covers

The S&P/ASX Emerging Companies Index covers smaller emerging companies listed on the Australian Securities Exchange, within the Australia market. S&P Dow Jones Indices/ASX defines which securities are eligible, how they are selected from that pool, and how much each one contributes to the published number.

The index name does not state a fixed company count, so the number of constituents follows the eligibility rules rather than a target.

How constituents are weighted

Constituents are weighted by float-adjusted market capitalization using the divisor method, with each stock assigned an Investable Weight Factor between 0 and 1 reflecting its publicly available shares.

The weighting method is the single biggest driver of how an index behaves. Two indexes covering the same market can diverge for years purely because they weight differently, which is why comparing index levels without knowing the method tells you very little.

What qualifies for inclusion

Up to 200 emerging ASX-listed companies, chosen by rank of six-month average total market capitalization within a band (the document example: 450th qualifies, 280th and 700th do not). A stock also needs a six-month daily trading average of at least A$200,000, and members are excluded below A$75,000.

Eligibility rules are the part of an index most readers never look at and the part that decides what it can possibly measure. A screen that excludes a whole sector, or admits only one listing venue, shapes the result far more than any day of trading does.

When the membership is revised

Rebalanced semi-annually, effective on the third Friday of March and September, with a reference date of the second to last Friday of February and August. Additions are made only at those rebalances, except spin-offs, which are added at a zero price and kept until the next rebalancing.

Reconstitution is the one date an index changes shape by design rather than by price. Funds tracking it have to trade toward the new membership, which is why the schedule matters to anyone holding the tracker rather than only to the provider.

The rule that surprises people

The index is maintained independently of the traditional S&P/ASX hierarchy, so it overlaps the smaller end of other S&P/ASX indices. Selection uses total market capitalization ranks, and a buffer keeps existing members until they drift outside a wider band than the entry band.

References

• S&P Dow Jones Indices/ASX: S&P Dow Jones Indices, S&P/ASX Emerging Companies Index Methodology, as published 2021. Every rule described on this page is taken from this document.

Current S&P/ASX Emerging Companies Index constituents

S&P Dow Jones Indices/ASX publishes and licenses the S&P/ASX Emerging Companies Index constituent list. Swoopr does not republish it here. The provider's own page is the authoritative source for current membership and weights.

S&P Dow Jones Indices/ASX: official S&P/ASX Emerging Companies Index page

Related reading

• All stock market indexes: how indexes are built, weighted and revised.
• Asia-Pacific indexes: others covering the same region.
• Index concentration: measuring how much of an index sits in its largest holdings.
• Index rebalancing and inclusion effects: what happens to a stock when index membership changes.

Frequently Asked Questions