Quarterly rebalance: These shares are joining the ASX 200 index. What's being kicked out?

These are the changes to the ASX 200 index later this month.

Contented looking man leans back in his chair at his desk and smiles.

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

sdf

After the market close on Friday, S&P Dow Jones Indices announced its quarterly rebalance of the S&P/ASX Indices.

This latest update reveals that there will be three ASX shares kicked out of the benchmark ASX 200 index later this month.

Let's now take a look at which shares are being removed and then what will be replacing them.

Which ASX 200 shares are leaving the ASX 200?

The ASX 200 shares that have been kicked out are property companies Cromwell Property Group (ASX: CMW) Growthpoint Properties Australia Ltd (ASX: GOZ), and administration services company Link Administration Holdings Ltd (ASX: LNK).

Over the last 12 months, their shares have fallen 40%, 28%, and 61%, respectively. This has dragged their market capitalisations to a level that means there are now more suitable options for ASX 200 index inclusion.

The bad news for the evicted ASX 200 shares is that selling pressure could now increase. That's because index funds that track the ASX 200 will be forced to sell their shares. In addition, fund managers that have strict investment mandates may have to sell if they aren't permitted to invest outside the benchmark index.

What are the new additions?

Joining the ASX 200 index on 18 December will be uranium developer Boss Energy Ltd (ASX: BOE), mortgage insurer Helia Group Ltd (ASX: HLI), formerly known as Genworth Mortgage Insurance Australia, and fleet management and salary packaging company Smartgroup Corporation Ltd (ASX: SIQ).

Their shares are up 78%, 51%, and 70%, respectively, over the last 12 months.

And, in contrast to the three companies that have been kicked out, they could experience an increase in demand for their shares as index funds buy shares and they become available to fund managers with the aforementioned investment mandates.

Motley Fool contributor James Mickleboro 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 Link Administration. The Motley Fool Australia has positions in and has recommended Smartgroup. 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

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

Guess which ASX 300 stock was downgraded to sell today

Bell Potter has become bearish on this stock. But why?

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX gave up an afternoon lead to close lower today.

Read more »

a gas worker with hard hat and high visibility vest stands cross armed and smiling in front of an elaborate steel structured gas plant.
Share Market News

Morgans names 2 ASX energy shares to buy now

These shares could be top picks for investors with a high tolerance for risk.

Read more »

Young businesswoman sitting in kitchen and working on laptop.
Broker Notes

Is the ResMed share price still cheap? What the numbers say

Let's see what analysts are saying about this blue chip as it nears a 52-week high.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Broker Notes

What does Macquarie think REA shares are worth?

Top broker Macquarie has reviewed its rating and price target on REA shares.

Read more »

Three guys in shirts and ties give the thumbs down.
Share Fallers

Why Aurelia Metals, Centuria Office, Meeka Metals, and Resolute shares are tumbling today

These shares are having a tough time on Thursday. Let's find out why.

Read more »

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why Clarity Pharmaceuticals, Kelsian, Life360, and Syrah shares are rising today

These shares are pushing higher on Thursday. But why?

Read more »

Woman checking out new TVs.
Broker Notes

Does JP Morgan think JB Hi-Fi shares can keep rising?

The retailer is up 16% for the year to date.

Read more »