This morning S&P Dow Jones Indices announced the June 2020 quarterly rebalance of the S&P/ASX Indices.

This is when a number of shares are added or removed from particular indices. Which can be a bigger deal than you might think, as billions of dollars are invested into funds which track indices like the S&P/ASX 200 Index (ASX: XJO).

In addition to this, fund managers often have mandates that allow them to only buy shares on a certain index. This can lead to them dumping shares which are removed from indices and buying shares which are added.

What changes have been made?

Given that S&P Dow Jones Indices skipped the March quarterly rebalance because of the market volatility, there have been a larger than normal amount of changes today.

Here’s a summary of some key changes that will be effective at the open on 22 June 2020.

S&P/ASX 20 Index

Gaming technology company Aristocrat Leisure Limited (ASX: ALL) has been added to the ASX 20 index at the expense of packaging company Amcor PLC (ASX: AMC).

S&P/ASX 50 Index

Infant formula and fresh milk company A2 Milk Company Ltd (ASX: A2M) will join the ASX 50 index later this month. It will take the place of embattled financial services company AMP Limited (ASX: AMP). Payments company Afterpay Ltd (ASX: APT) had been tipped for inclusion in the index but appears to have fallen just short.

S&P/ASX 100 Index

The shares of data centre operator NEXTDC Ltd (ASX: NXT) and gold miner Saracen Mineral Holdings Limited (ASX: SAR) have been strong performers in 2020. This has led to them being included in the ASX 100 index at the expense of shopping centre operator Unibail-Rodamco-Westfield (ASX: URW) and coal miner Whitehaven Coal Ltd (ASX: WHC).

S&P/ASX 200 Index

The benchmark index will welcome five new shares later this month. Centuria Industrial REIT (ASX: CIP), Megaport Ltd (ASX: MP1), Mesoblast limited (ASX: MSB), Omni Bridgeway Ltd (ASX: OBL), and Perseus Mining Limited (ASX: PRU) will join the illustrious index.

Making way for them will be Estia Health Ltd (ASX: EHE), Hub24 Ltd (ASX: HUB), Jumbo Interactive Ltd (ASX: JIN), Mayne Pharma Group Ltd (ASX: MYX), Pilbara Minerals Ltd (ASX: PLS), and Pinnacle Investment Management Group Ltd (ASX: PNI).

You might have noticed that there are five in and six out. This is because there has actually been 201 shares on the ASX 200 over the last few months. This was the result of Graincorp Ltd (ASX: GNC) spinning off its United Malt Group Ltd (ASX: UMG) business earlier this year.

Two surprising omissions from the new additions were Kogan.com Ltd (ASX: KGN) and Zip Co Ltd (ASX: Z1P). Both looked like strong candidates for inclusion after their remarkable share price gains this year. It looks like they will have to wait until September now.

More reading

• 3 gold mining shares that may be a buy today
• 5 things to watch on the ASX 200 on Friday
• Why is the A2 Milk share price underperforming?
• All Technology Index sees stunning comeback
• Why Afterpay, Amcor, Computershare, & Westpac shares are dropping lower

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, Hub24 Ltd, MEGAPORT FPO, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Hub24 Ltd, Jumbo Interactive Limited, and MEGAPORT FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post S&P quarterly rebalance: A2 Milk added to ASX 50 & NEXTDC in the ASX 100 appeared first on Motley Fool Australia.

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Could this be the start of the second COVID-19 share market crash?

The S&P/ASX 200 Index (ASX: XJO) fell 3% yesterday and it’s expected to fall another 3% at the open. Who knows where it will finish by the end of today?

A second wave of COVID-19 was always a risk to the share market recovery. Countries like Australia, New Zealand, Taiwan and Vietnam have done a good job at controlling the spread of the virus. The north east of the US took the brunt of the initial wave. Now a lot of other US states are seeing rising numbers.

We’ve already seen that many places in the US can’t uniformly follow restriction rules, so this second wave could be harder to control. Although, the first wave didn’t really end.

Is this the second COVID-19 share market crash?

It certainly could be. A second wave was one of the key reasons that could start another share market fall. I don’t think the market was pricing in the high chance of a second wave. So if you’ve been saving your cash for another COVID-19 share market crash, this period is probably your chance.

But there’s a fair chance that this fall won’t be as bad as the first for a few reasons.

First, all of the central bank support is still there. Interest rates are still incredibly low in Australia, the US and Europe. It was seemingly the central banks stepping in that halted the crash in March.

Second, the US may be bad at controlling COVID-19 but many other places have gotten on top of it. Europe was in bad shape, but now daily case numbers are a lot lower. Several important countries in Asia are in control. We’re not looking at every developed country being in trouble. 

Third, people will expect a recovery. The first COVID-19 share market crash was only three months ago. There’s a good chance that once the market stops falling it will recover nicely again as people see value in lower prices.

Foolish takeaway

I’m going to be scanning the market today and next week to see if I can find any great opportunities. Be greedy when others are fearful. A 6% fall over 24 hours would certainly suggest that a COVID-19 share market crash may be starting. But it may be quicker and not as bad as the first. 

More reading

• Woolworths facing fresh threat from Amazon.com
• Is this why the NAB share price could be cheap today?
• ASX 200 to sink lower after Wall Street crashes on second wave concerns
• 5 things to watch on the ASX 200 on Friday
• ASX 200 drops 3%, Webjet share price sinks

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Is this the start of a second COVID-19 share market crash? appeared first on Motley Fool Australia.

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