All Ordinaries and ASX

[The Owls]

I have often looked at the % rise and fall of the ALL ORDINARIES & ASX index and most offen the % is not consistent with % rise or fall of the shares I hold. Would someone please explain how the indexes are calculated in relation to the market.

 

[Mr J]

Someone correct me if I'm wrong, but I think they're based on market cap of the companies within that index. So when the market goes up 3%, that is the index cap going up 3%, and companies on average going up 3%.

The % between the index and your own portfolio will only match if you have a portforlio that perfectly represents the market, i.e. the correct amount of shares in all companies.

 

[The Owls]

Thank you for your reply