# What defines Small and Medium cap stocks (ASX)?



## jbocker (9 April 2013)

Hi What defines the small cap stocks?
 Is it those stocks that are under $X when price x number of shares are calculated, and does it exclude the 'penny dreadfuls'. Do they have to be dividend payers?
Is there an accepted range that defines medium caps. Is it related to the ASX 500, ASX 300. or whatever.

I assume large cap stocks are known as the Blue Chip Stocks.

If there is a reference for these answers just post that.

Thanks and Cheers


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## Whiskers (9 April 2013)

Full explanation here: http://www.asx.com.au/products/capitalisation-indices.htm


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## jbocker (9 April 2013)

Perfect! Thanks Whiskers.


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## So_Cynical (9 April 2013)

http://www.asx.com.au/products/capit...on-indices.htm said:
			
		

> The S&P/ASX Small Ordinaries Index (XSO) is comprised of companies included in the S&P/ASX 300 index, but not in the S&P/ASX 100 index. This index provides a benchmark for small-cap investments.




So only the bottom 200 stocks in the ASX 300 are considered small caps.  ok that's a little surprising, i always considered those stocks as mid caps.


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## DJG (4 June 2013)

Is there a list anywhere on the ASX website and/or internet that has every company that falls into the mid-cap sector?
And/or narrow a search field down to the mid-cap and then further narrow to a certain industry sector.


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## pavilion103 (4 June 2013)

So_Cynical said:


> So only the bottom 200 stocks in the ASX 300 are considered small caps.  ok that's a little surprising, i always considered those stocks as mid caps.




Me too


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## sinner (4 June 2013)

pavilion103 said:


> Me too




The important thing to note that this is S&P definition of ASX small cap *investable* benchmark index. They don't use the same rules and formula to calculate factors (size, value, yield, etc) in all countries/universes and there are multiple companies (S&P, MSCI, Russell, etc) as well as the exchanges with their own benchmark index (All Ordinaries, etc) for each factor with slightly different rules. 

To meet academic consensus (Fama & French) and make sure the benchmarks are realistically investable universes for large institutions like mutual or super funds, a large majority of the total market (~1500 of ~1800 on the ASX) will be discarded as uninvestable.

In this case I assume the principle is supposed to be analoguous to the popular US Russell indices, where you've got the large cap Russell 1000 (less well known/accepted than the S&P 500) and the small cap Russell 2000, combining together to form the Russell "US Total Market" index.

If I remember correctly, the benchmark midcap index is the bottom half of the S&P ASX 100.

EDIT: Yep
http://www.asx.com.au/products/capitalisation-indices.htm#sp_asx_small_ordinaries_index


> S&P/ASX MidCap 50 Index
> 
> The S&P/ASX MidCap 50 Index (XMD) is comprised of companies within the S&P/ASX 100, but not those included in the S&P/ASX 50. The index provides a benchmark for large active managers where the emphasis is on having a portfolio with sufficient liquidity.


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