What defines Small and Medium cap stocks (ASX)?

[jbocker]

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

 

[Whiskers]

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

 

[jbocker]

Perfect! Thanks Whiskers.

 

[So_Cynical]

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.

 

[DJG]

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.

 

[pavilion103]

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

 

[sinner]

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.

 

[Dona Ferentes]

Hard to find the right thread to drop stuff into. This looks the most relevant / staying on topic.

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

Too true, the perception can get blurred. Keeping the theme alive...
.
Last year, small-cap industrial stocks had their worst year in more than 20 years relative to big-cap industrial stocks as concerns about the impact of rising interest rates and energy costs led to lower profit expectations.

 

[divs4ever]

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.

yes equally surprised , here

the lower 200 of the XAO ( the all ords or ASX to 500 ) yes , i could believe that

although that leaves a LOT of microcaps ( more than 1000 )

 

[divs4ever]

Hard to find the right thread to drop stuff into. This looks the most relevant / staying on topic.

Too true, the perception can get blurred. Keeping the theme alive...
.
Last year, small-cap industrial stocks had their worst year in more than 20 years relative to big-cap industrial stocks as concerns about the impact of rising interest rates and energy costs led to lower profit expectations.

View attachment 153788

yes many small ( industrials ) caps seem to have got it in the neck

higher staff costs , rising prices and costs , and more pressure from take-over opportunists

but there have been some nice buying prices for those bold enough to go 'cherry-picking'

 

[So_Cynical]

In most market downturns the small caps get hit hard, always been that way, genuine downturn like now for sure.

 

[Dona Ferentes]

In most market downturns the small caps get hit hard, always been that way, genuine downturn like now for sure.

and this manager of three listed funds with barely $100M between them must be feeling the pain. Is it sentiment or something else?




Index and ETFs that cover the space don't seem to be traveling that badly

The S&P/ASX Small Ordinaries (XSO) represents the small-cap component of the Australian stock market. It includes all companies in the S&P/ASX 300, excluding those in the S&P/ASX 100. It accounts for 12% (November 2020) of Australia's equity market.

Related ETFs
• iShares Small Ordinaries ETF (ISO)
• SPDR Small Ordinaries Fund (SSO)

Performance​

1 Day	+0.16%
1 Week	+0.92%
1 Month	-2.28%
YTD 2024	+1.51%
1 Year	+4.43%

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(DNH any of them )