ASX All Technology Index finishes its first day down 4%

The new S&P/ASX All Technology Index (XTX) closed its first day of operation today down 3.80%, echoing the broader market.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The new S&P/ASX All Technology Index (XTX) closed its first day of operation today down 4%, echoing the broader market. The Index, envisioned as a 'mini NASDAQ' gives investors a chance to invest in one of the fastest-growing sectors on the ASX in a single trade. 

What you need to know about the All Tech Index

The launch of the Index gives unprecedented recognition to ASX technology shares, which now number more than 200, up from around 100 just 5 years ago.

Recognising the critical mass of technology companies listed on the ASX, the Index provides an opportunity for investors to see how the sector is tracking. It will also provide a benchmark against which performance can be measured. 

The new Index is designed to be a broader, more inclusive index than the existing S&P/ASX 200 Information Technology Index, reflecting the broad range of ASX-listed companies in the technology sector. The current Information Technology Index only covers ASX technology companies in the S&P/ASX 200 Index (INDEXASX: XJO).

The new Index is expected to be highly investable, with returns from investing in technology exceeding returns on the benchmark S&P/ASX 200 Index in recent years. Over the last 3 years, annualised returns from the ASX 200 have been around 10% – over the same period, returns from technology companies in the new index have been over 20%.

Which shares are included in the index?

This new S&P/ASX All Technology Index does not have a set number of stocks and will be rebalanced quarterly. To qualify for inclusion in the Index, ASX technology shares must have a market capitalisation of at least $120 million and have a minimum of $120,000 of shares traded each day. 

The S&P/ASX All Technology Index will initially track 46 tech companies with a combined market capitalisation of some $100 billion. New Zealand-based Xero Limited (ASX: XRO) heads up the index, with the top five also including Computershare Limited (ASX: CPU), Afterpay Ltd (ASX: APT), REA Group Limited (ASX: REA) and Altium Limited (ASX: ALU). The remaining WAAAX shares WiseTech Global Ltd (ASX: WTC) and Appen Ltd (ASX: APX) are also represented. 

The Index is expected to boost the number of tech initial public offerings (IPOs) this year, with tech shares representing the highest number of new listings on the ASX in 2019, according to the Australian Financial Review.

ASX General Manager of listing services Matt Cunningham told The Australian that the ASX is expecting at least six new sizable technology company listings before the end of June, including companies from the US, Singapore, New Zealand, and Israel. 

Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO, Altium, Appen Ltd, WiseTech Global, and Xero. The Motley Fool Australia has recommended REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Unsure man analysing data on laptop.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors endured a rough day of trading this Tuesday.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Share Market News

ASX 200 takes the latest RBA interest rate verdict in stride

The ASX 200 looks to have shaken off today’s RBA interest rate call.

Read more »

A mature-aged couple high-five each other as they celebrate a financial win and early retirement
Share Gainers

Why this ASX 300 stock is soaring 12% after a disastrous year

This company has had a dramatic reversal of fortunes this Tuesday...

Read more »

A young woman wearing overalls and a yellow t-shirt kicks one leg in the air showing excitement over the latest ASX 200 shares to hit 52-week highs
Share Gainers

Why Core Lithium, Imugene, Lifestyle Communities, and Mineral Resources shares are charging higher

These shares are having a good session. What's going on?

Read more »

A miner stands in front oh an excavator at a mine site
Broker Notes

Broker says buy the dip on ASX 200 uranium share with 69% upside

Shaw and Partners says this ASX uranium stock is trading at an attractive price point right now.

Read more »

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

Why Domino's, Lynas, Paladin Energy, and St Barbara shares are sinking today

These shares are having a tough session. What's going on?

Read more »

A young woman smiles as she rides a zip line high above the trees.
Share Gainers

4 ASX All Ords shares up 315% to 682% in a year!

Investors have sent these ASX All Ords shares flying higher. But why?

Read more »

Woman on a swing at a beach, symbolising passive income.
Dividend Investing

Overinvested in Fortescue shares? Here are two alternative ASX dividend stocks

Let’s unearth some other passive income opportunities.

Read more »