The ASX 200 is getting a shakeup today. Here's the tea

The ASX 200 is changing today. Here's what you need to know.

Woman looking at a phone with stock market bars in the background.

Image source: Getty Images

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

Key points

  • The ASX 200 is getting a shakeup today 
  • Every three months, the index is rebalanced 
  • So here's what is changing on the ASX 200... 

It's a big day for the S&P/ASX 200 Index (ASX: XJO) today, its biggest day in months. Not because anything too remarkable is happening with the index's movements themselves this Monday. At the time of writing, the ASX 200 is essentially flat, having gained an unremarkable 0.04% so far this session to just over 6,740 points.

No, it's a big day for the ASX 200 today because the latest quarterly rebalancing has just taken effect. The ASX 200 has just had a shakeup.

Why do indexes need rebalancing?

Like most indexes, the ASX 200 is constructed through weighting by market capitalisation. This means the largest companies by size enjoy the largest weighting in the index.

So even though there are 200 or so ASX shares in the ASX 200, the largest ones have more influence than the smallest ones. So Commonwealth Bank of Australia (ASX: CBA), for example, has a far more influential presence on the ASX 200 than, say, Bank of Queensland Limited (ASX: BOQ).  

But market capitalisations are determined by a company's sales price. And, as we know, this changes every trading day. As such, the largest ASX 200 shares by market capitalisation are always in flux.

To make up for this, the ASX 200 is rebalanced every three months to ensure the index is accurately representing the Australian share market. What might have been the ASX 200's 195th largest share by market cap in one quarter might become the 205th, for example, by the time the next quarter rolls around.

As such, there are normally new companies that leave the index when this rebalancing takes place. These will be replaced by others that have seen their market capitalisation rise over the quarter in question.

So these changes to the ASX 200 Index are normally announced with a few weeks to spare. This gives index funds and other concerned parties the time to adjust and hopefully prevents no unnecessarily wild price swings on the rebalance day.

We found out what the latest rebalancing would involve a few weeks ago on 2 September. But today is the day these changes take effect. So let's go over some of the biggest changes to the ASX 200 Index that are in place from today.

A new look ASX 200

So, to get the bad news out of the way first, here is a list of the ASX 200 shares that are, well, no longer ASX 200 shares.:

In their place, here are the new faces that have just gained an ASX 200 membership card:

So some interesting names here, which perhaps some readers might be familiar with.     

ASX 200 membership can be a big deal for a company's shares. For example, as of today, any ASX 200 index fund or exchange-traded fund (ETF) that tracks the ASX 200 will have now sold any of the companies in our first list. They also would have just welcomed all of the companies in our second list in their funds.

There's also the prestige that comes along with being in the flagship index of ASX 200 shares.

So today might be a bitter day for some ASX shares that didn't make the cut this time. But it will also be a happy day for the new companies being welcomed onto the ASX 200 as of this Monday.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended EML Payments, Johns Lyng Group Limited, Pointsbet Holdings Ltd, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended EML Payments and SMARTGROUP DEF SET. The Motley Fool Australia has recommended Johns Lyng Group Limited, Lovisa Holdings Ltd, and Pointsbet Holdings Ltd. 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

A piggy bank on the cloud in the blue sky symbolising a record high share price.
52-Week Highs

12 ASX 200 shares that smashed historical peak prices today

Twelve ASX 200 shares rose to new multi-year peaks in an otherwise quiet day of trading.

Read more »

A woman's hand draws a stylised 'Top Ten' on a projected surface.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors saw another day of mild gains for the stock market this Thursday.

Read more »

Two boats on the water with crates with the words trade war in the middle.
Share Market News

Trump's tariffs blocked by trade court: Which ASX 200 stocks could benefit the most?

These 3 ASX 200 stocks have heavy tariffs exposure.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Broker Notes

How this undervalued ASX All Ords share could rocket 80% in a year

A leading fund manager expects a big turnaround for this beaten-down ASX All Ords stock.

Read more »

Man looking happy and excited as he looks at his mobile phone.
Share Gainers

Why Champion Iron, Clarity Pharmaceuticals, St Barbara, and Woodside shares are charging higher today

These shares are having a good session today. But why are investors buying them?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why ALS, Black Cat, Boss Energy, and Soul Patts shares are falling today

These shares are falling on Thursday. Let's find out why.

Read more »

A car dealer stands amid a selection of cars parked in a showroom.
Broker Notes

Up 77% in a year, guess how much more upside Macquarie tips for Eagers Automotive shares

Macquarie released its latest analysis on Eagers Automotive fast rising shares this morning.

Read more »

Boy looks quizzical standing in front of a graph.
Share Market News

Big ASX 200 news! Stock market whipsaws as Trump's tariffs struck down

Markets initially surged on news that Trump's tariffs are out.

Read more »