So the ASX is mostly those big companies, but what about the other index funds, such as the small caps?
That and I speculate that investing in Australian index funds would be similar to investing in China more directly, given how tightly coupled the economies seem to be getting.
> So the ASX is mostly those big companies, but what about the other index funds, such as the small caps?
If you're prepared for the low liquidity and high risk, be my guest.
> That and I speculate that investing in Australian index funds would be similar to investing in China more directly, given how tightly coupled the economies seem to be getting.
It is if you invest in Rio Tinto and BHP. The main tradeoff is that the Australian market is regulated by officials are probably less likely to be corrupt. Plus, if you're not Australian, a different currency risk profile.
Just 10 companies (the 4 big banks, the 3 biggest miners, Wesfarmers, Woolworths, Telstra) form the majority of the capitalisation of ASX indices.