S&P/ASX 300

2000–2010

On 31 March 2000, the ASX300 closed its first day of trading at 3133.26 points.

Mining Boom

From 2003 to 2008, the index achieved a gross return of 186%. This period in Australia was characterised by the mining boom that occurred when bulk commodity prices rose in response to the industrialisation and urbanisation of the Chinese economy. During the period from 2000 to 2010, 30% of the total market capitalisation of the ASX300 was concentrated within the materials sector, doubling within a period of five years. This was largely driven by increased company earnings. Revenue from the mining industry increased by $60 bil during this period, likewise, earnings increased by $37 bil, leading to higher resource company valuations relative to other sectors.

2008 financial crisis

The index ended 2007 at 6356.72 points, after previously reaching its all-time high of 6845.38 on 1 November 2007. Throughout 2008, the ASX300 experienced extensive losses as a consequence of the 2008 financial crisis, particularly with the folding credit markets and the collapse of Lehman Brothers in mid-September, 2008. Despite the relatively subdued impact upon the Australian economy compared to other markets such as the US, Europe and Asia, the ASX300 fell by 41.94% during 2008 and exceeded the S&P500's loss which stood at – 35.61%3. Major losses were incurred by retirees and retail investors.

From its inception to 4 January 2010, the ASX 300 gained 1,741.03 points, closing at 4874.29 points. This represented a gross return of 55.56%.

2010–2020

On 4 January 2010, the ASX300 closed at 4874.29, 55% above its lowest point following the GFC.

On 10 January 2020, the ASX 300 broke its previous record high of 6845.38 points set on 10 November 2007.

From 2010 to January 2020, the ASX 300 increased by 1828.9 points to post a 10-year gain of 37.6%.

Coronavirus Pandemic

The coronavirus pandemic first emerged in December 2019. Despite this time, the ASX300 maintained its bull run from the previous decade into 2020. The index reached its all-time high of 7115.69 on 20 January. The index began to slowly retreat as COVID-19 extended its spread beyond China. By the end of February, the index fell by 720.1 points (10.1%) and on 8 March, losses were extended with the onset of the 2020 Russia-Saudi Arabia oil price war. The index closed at 4500 on 24 March, marking a 34.12% drop since February's high. This put the index well into bear territory which is typically defined by a 20% fall within a 52-weeks of a high. On 18 March, the Reserve Bank of Australia (RBA) agreed to engage in a variety of measures designed to support the economy. The ASX300 gained 1250 points (27%) during the months of April–May 2020, aided by the RBA's loose monetary policy, including quantitative easing and a Term Funding Facility for the banking system.

Market capitalisation

Market capitalisation is the product of price per share multiplied by the total number of shares outstanding. Stocks must meet the minimum threshold of AUD 100 million and is based on the average daily market capitalization of the security over the last 6 months.

Issues with market representation

Mathematically, weighing securities by their market value causes overpriced stocks to be over-weighted, and under-priced stocks to be under-weighted. This creates deviation in true company value relative to its present value of future cash flows, thereby hindering accurate price discovery. The ASX 300 is heavily skewed towards large-cap stocks, making up 40-50% of the index. As of 30 April 2020, the financial sector constituted for 26% of index value and materials accounted for 19.2%.