ASX100 vs ASX300: Key Differences And What Investors Should Know

This story features COMMONWEALTH BANK OF AUSTRALIA, and other companies. For more info SHARE ANALYSIS: CBA

The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

Discover the key differences between the ASX100 and ASX300 indices. Learn how each index works, what companies they include, and which suits your investment goals.

The Australian Securities Exchange (ASX) offers various indices to help investors track market trends.

Two of the most followed are the ASX100 and ASX300. Both indices serve different purposes and represent different segments of the market.

Understanding their differences can help you make better investment choices.

What Is the ASX100?

The ASX100 Index tracks the performance of the top 100 companies listed on the Australian Securities Exchange by market capitalisation. These companies are generally the largest and most established in Australia. They include household names from sectors like banking, mining, retail, and telecommunications.

Because of their size and market stability, companies in the ASX100 are often seen as lower-risk investments. Investors who want exposure to blue-chip stocks usually look at this index. The ASX100 provides a snapshot of the broader Australian economy through its most influential players.

What Is the ASX300?

The ASX300 Index includes all the companies in the ASX100, plus 200 smaller firms. These additional firms are often referred to as mid-cap and small-cap companies.

The ASX300 index gives a broader view of the market. It includes growing businesses that may not yet have reached the size or maturity of ASX100 companies but still offer potential for future growth.

Smaller, less mature businesses also come with higher risks.

Key Differences Between ASX100 and ASX300

While both indices are market-cap weighted and part of the ASX index family, they differ in important ways.

1. Size and Scope

-ASX100: Covers (roughly) the largest 100 companies. These firms are typically more stable and have large market caps.

-ASX300: Covers (roughly) the largest 300 companies. This includes the ASX100 and a wider range of smaller-cap companies.

2. Risk and Return

-ASX100: Generally less volatile. It focuses on well-established businesses (in particular at the top end, i.e. Top20 and Top50)

-ASX300: Offers more variety. It includes companies with growth potential but also higher risk.

3. Investment Strategy

-ASX100: Good for conservative investors looking for stability and dividends.

-ASX300: Suitable for investors wanting a more diversified portfolio, including emerging companies.

4. Market Representation

-ASX100 Index: Represents around 70% of the total market capitalisation of the ASX.

-ASX300 Index: Represents over 80% of the total market capitalisation. Note how 200 additional companies only add 10% on top of the ASX100.

Why These Differences Matter

Choosing between the ASX100 and ASX300 depends on your personal risk appetite and goals.

If you prefer lower-risk exposure to larger, more reliable companies, the ASX100 may be better.

If you’re looking to diversify more and take on more risk for possible higher returns, the ASX300 offers that option.

Examples of Companies in Each Index

ASX 100

-Commonwealth Bank of Australia ((CBA))
-BHP Group ((BHP))
-CSL Limited ((CSL))
-Goodman Group ((GMG))
-Telstra Corporation ((TLS))
-Macquarie Group ((MQG))
-Pro Medicus ((PME))
-WiseTech Global ((WTC))
-Woolworths Group ((WOW))
-Xero ((XRO))

ASX 300

Includes all the ASX100 companies and adds:

-Aussie Broadband ((ABB))
-Audinate Group ((AD8))
-Boss Energy ((BOE))
-Cettire ((CTT))
-Gentrack Group ((GTK))
-Integral Diagnostics ((IDX))
-Kogan.com ((KGN))
-Mac Copper ((MAC))
-nib Holdings ((NHF))
-Redox ((RDX))

Some of these companies are in high-growth sectors like technology and healthcare, which adds diversity to your investment strategy.

How Often Are the Indices Updated?

Standard & Poor’s updates both indices quarterly. This review process ensures only companies that continue to meet the criteria stay in the index.

Companies can move in or out depending on market performance, available shares, mergers, acquisitions, and other factors.

This regular update helps keep the ASX100 and ASX300 current and relevant for investors.

Index Performance Over Time

Historically, the ASX100 has shown a more consistent performance with lower volatility. It’s often used as a benchmark for more conservative portfolios.

In contrast, the ASX300 may show more ups and downs but offers the possibility of higher returns over time due to the presence of smaller, fast-growing firms.

Investors often compare both indices to gauge the overall health and momentum of the Australian stock market.

Which One Should You Track?

It depends on what you want from your investments.

-Track the ASX100 if you want to monitor how the largest and most stable companies are performing.

-Track the ASX300 if you’re interested in broader trends, including up-and-coming businesses.

Some financial advisers suggest using both indices together to balance risk and reward.

Using the Indices in Your Portfolio

There are many exchange-traded funds (ETFs) that track these indices. For example:

-iShares S&P/ASX 100 ETF ((IOZ))

-Vanguard Australian Shares Index ETF ((VAS)) tracks the ASX300

These listed investment options make it easier to invest in a wide range of companies without buying individual shares. They can also reduce your risk through diversification.

Final Thoughts

Both the ASX100 and ASX300 serve important roles in the Australian investment landscape.

The ASX100 provides exposure to the most stable and influential companies. The ASX300 offers a broader mix, including high-growth firms that may become tomorrow’s market leaders.

Understanding how these indices differ helps you make better choices with your money.

Whether you prefer lower-risk options or want to explore new growth opportunities, knowing the role of each index can support a smarter investment strategy.

Follow FNArena for daily financial news and analysis to stay up to date with ASX indices.

The composition of indices can be checked via our website: https://fnarena.com/index/ASX300/

Find out why FNArena subscribers like the service so much: “Your Feedback (Thank You)” – Warning this story contains unashamedly positive feedback on the service provided.

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms