This time last year, some of the country’s most prominent fund managers were counting the cost of sitting out of the dazzling rally in Commonwealth Bank as the lender’s ballooning weight on the S&P/ASX 200 Index punished those who avoided the stock because it had become too expensive.
Now, investors are facing a similar predicament after soaring copper prices rocketed BHP’s shares to yet another record above $68 on Tuesday that has cemented its title as the ASX’s most valuable company with a market capitalisation of $343 billion.
The 12 per cent rally in BHP’s shares this month has coincided with a 12 per cent sell-off in CBA as concerns about slowing credit demand, falling property prices, increased competition and rising bad debts dragged the lender’s market cap to $266 billion.
BHP now makes up nearly 12 per cent of the widely tracked ASX 200 while CBA’s weighting has fallen to about 10.5 per cent. That shift is starting to cause a serious headache for Australian equity fund managers who don’t own the mining giant but are benchmarked against the index.
Atlas Funds Management, which oversees $300 million, was among the few to benefit from CBA’s rally last year and still holds the stock in its Atlas Core Australian Equity Portfolio. That helped the fund to outperform the ASX 200 by 3 per cent over the 12 months to July 30, but the portfolio has taken a hit this month because it doesn’t hold BHP.
Source: https://www.afr.com/markets/equity-markets/bhp-leaves-cba-in-the-dust-as-big-australian-s-share-price-soars-20260825-p60r8x