Global X launches Australian Equity ETF to complete and diversify portfolios

Global X launches Australian Equity ETF to complete and diversify portfolios

Global X ETFs (Global X) has launched the Australia ex Financial & Resources ETF (ASX: OZXX) on the Australian Securities Exchange, enabling investors to gain greater exposure to Australia’s largest companies while avoiding doubling up on bank, mining and energy shares.

The newly launched exchange traded fund (ETF) offers investors more effective portfolio diversification by investing in Australia’s top 100 companies, but specifically excluding those in the financial (including REITs), energy and mining sectors which dominate the Australian share market. OZXX will track the Solactive Australia Ex Financials Materials and Energy Capped Index. The management fee is just 0.25% per annum.

“OZXX will offer investors exposure to midcap and smaller capitalisation companies, and this potentially offers greater growth opportunities than those offered by the big banks, which operate in more mature markets,” said Blair Hannon, Global X Head of Investment Strategy.

“The ETF can be used as a core Australian equites holding or as a sector diversification tool which allows investors to compliment existing blue-chip portfolio holdings in the big four banks, major mining and energy companies, avoiding a concentration in these sectors which would occur if investors instead opted for a broad-based Australian equites fund,” Hannon said.

“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.”

OZXX offers exposure to a broad range of companies and sectors, including healthcare, with CSL a top holding, the telecommunications sector through Telstra, consumer staples companies Wesfarmers and Woolworths and infrastructure such as toll road company Transurban.

“It is yet another innovation from Global X, which is quickly expanding its ETF offerings to Australian investors, with 31 ETFs now listed on the ASX, up from 20 a year ago. We are listening to investors to understand their needs and this launch further shows our commitment to Australian ETF market,” Hannon said.

Incidentally OZXX has been launched in direct response to client demand. Global X was approached by a leading asset consultant, managing up to two billion dollars on behalf of financial advisers, to develop the ETF. Upon developing the product, Global X identified that OZXX would also meet the need of many Australian investors keen to avoid concentration in big banks and mining shares in their investment portfolios.

“Although OZXX was initiated by a client request, 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. The management fee of just 0.25% per annum will add to the appeal of this ETF, which will mark Global X’s 32nd ETF listed in Australia,” Hannon said.