The evolving ASX

The chart below splits the market capitalisation of the ASX100 Index into GICS sectors, and shows the index as it was ten years ago (on the left) and the index as it is today (on the right). A couple of things stand out in this chart. The main one is the declining significance of materials, which made up 33 per cent of the Index by capitalisation in 2006, compared with approximately 17 per cent today. This perhaps doesn’t come as a big surprise; we all know that the resources boom has ended and resource company share prices have fallen sharply. What is a little more interesting is which sectors have been the largest beneficiaries of the declining share of materials. All else being equal, we might expect financials – by far the largest component of the index – might stand to pick up the most percentage points. In fact, financials have barely moved. A large part of this is probably due to some recent bank share price weakness. (VIEW LINK)