What is the All Ordinaries Index?

The All Ordinaries Index (AOI) is a stock index in Australia used as a major indicator of Australian economic health. Together, the stocks listed on this index make up around 95% of the value of shares traded on the Australian Securities Exchange (ASX). Investors use the AOI as an indicator of the market direction, along with other stock indexes, and it can also be used when building portfolios and developing a strong base of core stocks to fill a portfolio. The latest information on the performance of this index can be found on financial sites and through the ASX itself.

The Australian Securities Exchange developed the All Ordinaries Index in 1980, making it the oldest stock index used in Australian markets. It includes 500 companies and is adjusted every month to remove companies no longer meeting the requirements for inclusion, and to add new companies to the listing. The stocks listed on this index must have a monthly turnover of at least 0.5% of the shares outstanding, and their market value must exceed 0.2% of the equities traded on the ASX.

Sometimes referred to as the “All Ords,” the All Ordinaries Index is a reflection of the largest companies operating in Australia. Fortunes of individual companies listed on this broad index wax and wane at different rates, but the index provides a good general snapshot for traders and economists about how well these companies are performing as a whole. Another index used to gauge performance on the Australian Securities Exchange is the S&P/ASX 200, a listing generated by Standard & Poor's to compile information about high-performing stocks in Australia.

People can use stock indexes like the All Ordinaries Index in a number of different ways. People sometimes use them to reference overall market activity. Upticks on stock indexes suggest a general upward trend on the market, while downward movements suggest faltering investor confidence and a decline in overall stock values. Individual investors track the movements of stock indexes to make decisions about when and where to invest.

The Australian Securities Exchange lists up-to-date information on the All Ordinaries Index and other indexes on its website, as well as providing it by ticker on the trading floor. In addition, finance sites around the world list this index. Subscription services allow people to follow trading activity by phone, email, and other venues, and people can set up specific alerts for sudden movements in order to respond quickly to changes in the market.