Time’s up for All Ords

THE All Ordinaries is no longer a meaningful benchmark for the Australian share market and should be consigned to history, according to fund manager State Street Global Advisers (SSGA), Australia’s largest index manager.

Most institutional investors use either the S&P/ASX200 Index or the S&P/ASX300 Index, which track the value of Australia’s largest and most highly traded stocks, when selecting a bench-mark.

In contrast, the All Ords has 500 stocks and they are not screened for liquidity.

Susan Darroch, head of structured products at SSGA Australia, said the All Ords lost its status as an institutional benchmark when it was revamped in April 2000.

The futures contract is no longer over the All Ords; it is over the S&P/ASX 200.

The All Ords will become even less useful after July 5, when sector indices will only be over the S&P/ASX 200 and S&P/ASX300 indices.