Global X ETFs launches Australia’s first index-based ‘Growth at a Reasonable Price’ ETF
Global X ETFs have brought to market the Global X S&P World Ex-Australia GARP ETF (ASX: GARP), the first index-based exchange traded fund (ETF) in Australia to offer a ‘Growth at a Reasonable Price’ (GARP) strategy for broad global shares.
GARP has a competitive management fee of 0.30% per annum and tracks the S&P World ex Australia GARP Index which holds 250 global companies. It is the only broad global share index ETF on the Australian market to combine growth, value and quality metrics into one solution.
Product and Investment Strategist, Marc Jocum said GARP is an innovative ETF strategy which empowers investors to incorporate companies with competitive growth profiles at reasonable valuations into their portfolios.
“Our GARP ETF strikes a balance between growth and value, providing international exposure to market-leading companies without sacrificing quality,” Jocum said.
“Some global share markets are currently trading above their historical long-term average valuation, potentially prompting investors to seek out companies with robust earnings growth and solid financial strength that are more reasonably priced.”
There are around 65 factor-based ETFs with $28 billion in assets under management listed locally, comprising 13% of the total market, with majority of the assets invested in quality and yield factors.
“Growth ETFs have primarily been actively managed, and the evidence shows that the majority of actively managed funds underperform a low-cost index over the long term,” Jocum said.
“Our GARP strategy is particularly timely as it aligns with the growing trend of investors seeking diversified global portfolios amidst local market volatility. By integrating growth and value metrics, with a quality overlay, GARP addresses the need for a core portfolio holding to handle various market cycles and has the potential to outperform the broader market.
“As ETFs are increasingly used to gain exposure to global companies with strong growth traits, we expect global equity ETFs to attract more investment flows given the concentrated and value-orientated nature of the Australian market.”
Jason Ye, S&P Dow Jones Indices’ Director of Factors and Thematics Indices, said, “In recent years, an index-based growth-at-a-reasonable-price (GARP) approach has been gaining traction among investors seeking strategies that effectively balance growth opportunities with valuation and quality considerations. The S&P World Ex-Australia GARP Index serves as an innovative benchmark, providing market participants with a unique opportunity to assess the performance of growth companies with high-quality and value composite scores beyond the Australian market. S&P Dow Jones Indices is delighted to license the S&P World Ex-Australia GARP Index to Global X ETFs Australia for its new fund launch.”
Global X is dedicated to launching innovative ETFs to better serve investors, exemplified by the introduction of Australia’s first “three-in-one” Australian Bank Credit ETF (ASX: BANK) in July.
GARP adds to the company’s 40-strong ETF lineup across core, thematics, commodities, income and cryptocurrency. Global X now has more than $7.7 billion in assets under management.
