The composition of the ASX 200 is likely to be fundamentally reshaped in the next five years, according to Tribeca’s Jun Bei Liu, as more “vibrant” companies come to market.
The ASX 200 was currently composed of 30% in financials, 20.6% in materials, 10% in healthcare and 8% in consumer discretionary as the largest sectors.
Speaking to Money Management, Liu said it was a positive move that the index was no longer dominated entirely by resources and the big four banks.
“There are now more vibrant sectors in the ASX, it is no longer just about banks and resources,” she said.
“In the next five years, mining and banks will become a smaller component of the ASX and it will have a far larger core of fintech businesses. The index is going through a transition.”
While 90% of the Tribeca Alpha Plus fund was invested in ASX 200 companies, she said the firm had the ability to invest in IPOs and had utilised this ability in the past.
“We don’t have enough technology [in the index] but now there are new contenders coming in. There are some baby fintechs coming through, they have excellent business models and it is good to know them early.”
Information technology currently represented just 4% of the ASX 200 but the Australian Securities Exchange launched an All Technology index in February 2020 which included consumer electronics, internet and direct marketing retail, interactive media and healthcare technology.
Since launch, the number of constituents in the index had risen from 46 to 69 while the market cap had increased from $80 billion to $182 billion, a rise of 78%.
The Tribeca Alpha Plus fund returned 45% over one year to 31 March, 2021, according to FE Analytics, versus returns of 15% by the alternatives sector within the Australian Core Strategies universe.
