The S&P/ASX All Technology Index (XTX) measures the performance of the technology sector on the Australian Securities Exchange (ASX), providing investors with exposure to companies involved in technology-driven industries such as software development, cloud computing, e-commerce, and fintech, reflecting the growth and innovation of the Australian technology landscape.
S&P/ASX All Technology Index Price & Chart
As a relatively new addition to the ASX, having launched in 2020, the index highlights the increasing importance of technology companies within Australia’s economy. It currently holds 42 constituents, with the top 10 constituents making up 80.9% of the total weighting of the index. Information technology names make up 50.7% of the index, with communication services in second at 23.5%.
S&P/ASX All Technology Index Performance
Like US tech stocks, the XTX has experienced substantial growth over the last couple of years, making new all-time highs. Despite a pullback between December 2024 and January this year, the index looks to be climbing once again and charts a similar path to the XIJ.
| Period | Total Return |
|---|---|
| 1-Year Return | +42.45% |
| 3-Year Return | +13.96% |
| 5-Year Return | +12.53% |
| 10-Year Return | (Launch Date Feb 2020) |
S&P/ASX All Technology Index Top 10 Companies
The index is rebalanced quarterly in March, June, September and December.
| Company | Market Cap (USD) (As of January 2024) |
|---|---|
| Computershare Ltd | $12.71 Billion |
| Xero Limited Npv | $16.54 Billion |
| Wisetech Global Limited | $25.64 Billion |
| Car Group Ltd | $9.31 Billion |
| Pro Medicus Limited | $17.75 Billion |
| REA Group Ltd | $20.02 Billion |
| NEXTDC Ltd | $6.47 Billion |
| Technology One Ltd | $6.10 Billion |
| Seek Ltd | $4.88 Billion |
| Block Inc. CDI | $53.89 Billion |
Australian Tech Stocks Forecast
The Bull Argument: Many analysts believe the Australian tech sector continues to benefit from strong demand given the emergence of technological advances such as artificial intelligence. The Tech Council of Australia said recently that its research shows artificial intelligence is the most influential technological trend for 2025, with one-third of industry leaders in the country seeing a significant opportunity to harness the technology to improve efficiency. Meanwhile, other aspects, such as lower interest rates and a healthy global economy, are also expected to boost technology stocks in Australia.
The Bear Argument: On the downside, there are also potential risks that the sector may have to face. For example, inflation could continue to remain stubborn, meaning the risk remains that rates could be raised.
This may pressure valuations of high-growth technology stocks in Australia (the same can also be said in other countries if they face similar headwinds). Additionally, global competition, regulatory challenges, and potential economic slowdown could weigh on performance. Currency fluctuations and dependence on international markets may also pose risks for some constituents.
Our View: Tech stocks attract significant attention given their substantial growth potential. The S&P/ASX All Technology Index represents a dynamic and innovative segment of the Australian stock market, offering investors an opportunity to gain exposure to the country’s leading technology companies.
While the sector offers significant growth potential, it also comes with higher volatility compared to more traditional sectors. However, those looking for strong growth may want to take a closer look at funds tracking the index.
Who Should Invest in the S&P/ASX All Technology Index?
Of course, you should first assess whether the fund tracking the index matches your goals and characteristics. For example, a dividend-focused investor won't want to buy a growth-focused technology fund and vice versa.
Those looking to invest in Australian technology stocks will generally be:
- Growth-focused investors: For many of the reasons explained above, investors looking for exposure to high-growth sectors and innovative industries will find this index appealing.
- Looking for exposure to Australia Stocks: It goes without saying, but those interested in Australian tech stocks, specifically, will favour a fund tracking the index.
- Tech enthusiasts: Investors with a keen interest in technology and its impact on industries may prefer the index for its concentrated focus.
- Risk-tolerant investors: Given its volatility, the index and stocks in the sector are generally better suited to those comfortable with potential short-term fluctuations in pursuit of long-term capital gains.
- Long-term investors: The sector's long-term growth potential makes it a suitable choice for those with a longer investment horizon.
