Global X announces Australian equity ETF
Global X has launched the Australia ex Financial & Resources exchange-traded fund (ETF), offering investors wide exposure to the nation’s largest companies.
To provide effective portfolio diversification, Global X’s new ETF (OZXX) would invest in Australia’s top 100 companies whilst specifically excluding the bank, mining and energy sectors, which tend to dominate the share market.
The firm’s 32nd Australian-listed ETF would additionally track the Solactive Australia Ex Financials Materials and Energy Capped Index. Moreover, it offered a management fee of 0.25 per cent per annum.
Blair Hannon, head of investment strategy at Global X, explained: “OZXX will offer investors exposure to mid-cap and smaller capitalisation companies, and this potentially offers greater growth opportunities than those offered by the big banks, which operate in more mature markets”.
Sectors relating to healthcare, telecommunications, infrastructure and consumer staples companies like Wesfarmers and Woolworths would be a key focus.
Hannon recommended that the ETF could be used as a core Australian equities holding or as a sector diversification tool to complement existing blue-chip portfolio holdings within the big four banks, key mining and energy companies.
Thus, investors could avoid concentration in those industries, which would occur if a broad-based Australian equities fund was chosen.
“This fund offers an effective solution, particularly for Australian retirees and pre-retirees who generally hold a higher concentration of direct shares, as it allows them to either complete or diversify their portfolio in one simple trade,” he continued.
Global X identified that the product would meet the needs of investors looking to avoid concentration in Australian banks and mining shares in their investment portfolios.
“We surveyed the market and believe that OZXX will deliver value to our clients and fill a gap in many Australian investors’ portfolios for greater exposure to relatively higher growth shares.”
AUTHOR
Jasmine Siljic
Recommended for you
BlackRock, in collaboration with iCapital and GeoWealth, has unveiled a model portfolio that delivers access to both private and public market assets in a single account, following adviser demand.
Magellan has confirmed the new leadership of its active infrastructure ETF once head of investment, Gerald Stack, exits in July.
Vanguard has indicated it is actively trying to meet the demand for international ETFs with its next ETF launches sitting in this space.
Dubious marketing strategies involving financial advisers are among reasons that research house SQM Research has put the private credit space on alert.
