What Is The All Ordinaries Index (XAO)

When discussing the Australian stock market, there are a couple of well-known market indices to consider. One is, of course, the ASX 200, which tracks the top 200 companies by float-adjusted market capitalisation listed on the Australian Stock Exchange.  

However, those seeking a broader view of the Australian economy can turn to the All Ordinaries Index. With the ticker XAO, this index tracks 500 of the top-performing listed companies in Australia, with companies selected based on market capitalisation.  

XAO was established in January 1980 with a base value of 500 points and represents close to 90% of the Australian stock market ^[1]. It is also known colloquially as “Kangaroos”, or the “All Ords”.  

Key Points 

• The All Ordinaries Index is a key market benchmark of the Australian stock market, tracking the performance of the top 500 companies listed on the Australian exchange.  

• It is composed of the most actively traded stocks in Australia, representing around 90% of the entire market. As such, the All Ords is also widely referenced as a wide indicator of the Australian economy. 

• The All Ordinaries Index is operated by the Australian Stock Exchange in partnership with the S&P Dow Jones Indices. It carries the ticker symbol XAO, and is also known as “Kangaroos” or “the All Ords”. 

Understanding the All Ordinaries Index 

Like many of its peers, the All Ordinaries Index is weighted by market capitalisation. This means that the 500 companies tracked by the index are ranked according to their market capitalisation, which is derived by multiplying the share price by the number of company stocks. 

As share prices can go up and down in response to events such as earnings, policy changes, or geopolitical risks, so too will the market capitalisation of the underlying companies. To maintain accuracy, the All Ordinaries Index undergoes periodic balancing.  

As stated earlier, the XAO tracks the top 500 listed companies in Australia, which together represent around 91% of the entire Australian stock market as of July 2024 ^[2].  

The All Ordinaries Index does not include company dividends in its calculations. Hence, investors focused on total market returns over time might be better served with a variation that accounts for dividends – the All Ordinaries Total Return Index (XAOA). The latter includes dividends reinvested on the ex-dividend date for the 250 companies that make up the index. 

History of the All Ordinaries ^[3,4] 

The All Ordinaries Index was first introduced on 1 Jan 1980 with a baseline value of 500. Back then, it was created as a simple way to track market movements.  

In 2000, in recognition of the evolved needs of investors to measure portfolio or individual stock performances, the All Ordinaries was restructured to its current format, covering the 500 largest Australian listed companies. The previous liquidity requirements were also removed as part of the revamp. 

As a significant benchmark in the market, the XAO also suffered during major economic events. For instance, after the Black Monday stock market crash, the XAO experienced a 50% decline from the beginning of October 1987 to 13 November 1987. 

A more prolonged downturn would afflict the All Ordinaries Index during the Global Financial Crisis, triggered by the subprime mortgage crisis in the US. During the period, All Ords fell by 55% over 14 months, from its peak in November 2007 to its market bottom in early March 2009. 

Following this trend, during the COVID-19 pandemic between February and March 2020, the XAO dropped 37% within a month but quickly rebounded thereafter. 

Since then, the XAO has gone to mount recoveries and reached new highs, charting the same bull trend as its worldwide peers. In Jan 2020, the index closed over the 7,000-point mark for the first time. Four years later, in March 2024 the XAO broke through 8,000 points for the first time ever. In July 2024, the All Ordinaries Index charted a new record high of 8,320.40 points. 

What Companies are in the All Ordinaries? 

Here are the top 10 companies that are in the All Ordinaries Index: 

Company	Index weight (%)
Commonwealth Bank of Australia	8.24
BHP Group Ltd	7.85
CSL Ltd	5.48
National Australia Bank Ltd	4.38
Westpac Banking Corp	3.79
ANZ Group Holdings Ltd	3.20
Wesfarmers Ltd	3.06
Macquarie Group Ltd	2.94
Goodman Group	2.44
Fortescue Ltd	2.13

The table above shows the top 10 constituents of the All Ordinaries Index as of 31 July 2024, ranked according to how much of the index they take up by percentage. Together, the top 10 stocks make up 43.51% of the XAO. 

Five of the top 10 stocks (in 1st, 3rd, 4th, 5th and 7th place) belong to the banking sector, making the XAO quite heavily balanced towards the financial services sector.  

Of the remainder, two companies are in the mining sector (BHP Group, Fortesque); one in biotechnology (CSL); one in real estate (Goodman) and one conglomerate company (Wesfarmers). 

While the top 10 constituent stocks can give us a quick description of the character of the All Ordinaries Index, taking the entire sector mix into account would provide a more accurate view.  

Here’s how XAO breaks down according to sector: 

Sector	Index weight (%)
Financial services	30.1
Basic materials	20.0
Healthcare	9.8
Consumer cyclical	7.7
Industrials	7.7
Real estate	6.9
Energy	4.7
Communication services	4.4
Consumer Defensive	3.9
Information technology	3.6
Utilities	1.3

From the table above, we can see that financial services take up around one-third of the index’s composition by weight. This underscores Australia’s status as a major financial hub on the global stage.  

Inclusion Criteria ^[7] 

The All Ordinaries Index tracks the 500 largest companies listed on the Australian Stock Exchange (ASX), according to market capitalisation. But that’s not the only criteria to satisfy for inclusion in the index.  

Companies are required to have a market value of no less than 0.2% of all domestic equities quoted on the ASX. They must also maintain an average turnover of at least 0.5% of quoted shares on a monthly basis. 

To ensure adherence to these criteria, the All Ords index is reviewed at least once every month. It is also updated on a constant basis whenever relevant events take place, such as delistings, additions and other corporate actions.  

All Ordinaries Index vs ASX 200 

All Ordinaries Index	ASX 200
Tracks the top 500 companies listed on the ASX	Tracks the top 200 companies listed in the ASX
Weighted by market capitalisation	Weighted by market capitalisation
Top 3 sectors: – Financial services (30.58%) – Basic materials (19.56%) – Healthcare (9.79%)	Top 3 sectors: – Financial services (32.3%) – Basic materials (19.9%) – Healthcare (10.1%)
9 of the top 10 constituents are the same as ASX 200	9 of the top 10 constituents are the same as All Ordinaries Index
No ETFs available	ETFs available

The fundamental difference between the All Ords and ASX 200 lies in the number of socks tracked – 500 for the former, vs 200 for the latter. It would be logical to assume that the All Ords offer a broader view of the Australian market, while the ASX 200 is more focused on the top performers.  

However, when compared, we see that both indices are very similar to each other. This is not surprising, given that the ASX 200 is simply a shorter version of the All Ordinaries Index.  

Furthermore, because both indices are weighted according to market capitalisation, the largest companies (which are almost equally represented in both indices) have the most influence on index readings. This translates to largely similar price trends in both the All Ordinaries Index and the ASX 200. 

Given the close similarities, most traders and investors tend to reference the ASX 200 when dealing in the Australian stock market. This is further enforced by the fact that there are no ETFs available that track the All Ords, whereas the ASX 200 can be indirectly invested in via ETFs such as the iShares Core S&P/ASX 200. 

Conclusion 

Vantage currently does not offer XAO for trading, but as explained, traders can access the price action of the Australian stock market by trading the ASX 200.  

Our Contracts-for-Differences (CFDs) allow you to speculate on the price movements of the top-performing Australian stocks without direct ownership of underlying shares.  

With the ability to take short or long positions, you can trade CFDs in all market conditions, amplifying your outcomes with leverage while benefiting from low commissions and a transparent fee structure. Sign up for an account and start trading today!  

FAQs 

1. What is the All Ordinaries Accumulation Index? 

The All Ordinaries Accumulation Index is the former name for the All Ordinaries Total Return Index, which is a version of the All Ordinaries Index that accounts for the impact of company dividends.  

In the All Ordinaries Total Return Index, readings are inclusive of company dividends immediately re-invested upon disbursement, making it a more accurate gauge for benchmarking the total returns of the Australian stock market. 

2. How does the All Ordinaries Index show market performance? 

The All Ordinaries Index tracks the 500 largest companies listed on the Australian Stock Exchange, and to date, represents over 90% of the entire Australian stock market. As such, it is a reliable barometer of the overall market performance of the Australian market and economic health.  

3. How many companies are in the All Ordinaries Index? 

The All Ordinaries Index tracks around 500 publicly listed companies in Australia. At the time of writing, the index benchmarks a total of 485 companies, across 11 sectors.  

4. What is the difference between ASX 200 and All Ordinaries? 

The ASX 200 tracks the top 200 companies on the Australian Stock Exchange, while the All Ordinaries benchmarks the top 500 companies in the same market.  

Despite the difference in constituent stocks, both indices have high overlap in their top constituents; they are also both weighted according to market capitalisation. These factors lead to both indices being functionally similar.  

However, the AXS 200 is accessible to investors via the iShares Core S&P/ASX 200 ETF; meanwhile, no such instrument exists for the All Ordinaries Index. 

5. How do you calculate the All Ordinaries Index? 

The All Ordinaries Index is calculated using a market capitalisation weighting, applied to the top 500 publicly listed companies in Australia. Market capitalisation is derived by multiplying share price by the number of company stocks, and companies with larger market cap are accorded a higher weight on the index.  

This means that the top constituents in the All Ordinaries Index have significantly more influence, and changes in their share prices impact the index’s readings more significantly, compared to price changes in the stocks of smaller companies.  

References