Back in June, InvestorDaily uncovered ASIC records showing that Global X had registered the Global X Australia GARP ETF – a core-oriented strategy that complements its existing S&P World ex Australia GARP ETF.
At the time, this was seen as a signal of the firm’s shift towards core portfolio solutions with a growth at a reasonable price (GARP) focus.
Global X has now officially confirmed that the Australian GARP ETF, GRPA, will launch in October.
“GRPA will capture high-growth, quality Australian companies at a price worth paying; this will help protect investors in a drawdown and to build wealth over time,” Global X Australia CEO Alex Zaika said on Wednesday.
“Both GRPA and GARP are different to your typical market index or vanilla ETF; this style of investing combines growth, value and quality for potential outperformance. Global X is the leader in GARP ETF investing in Australia.”
Global X’s S&P World ex Australia GARP ETF has outperformed the broader global equities index in its first year, returning 29.0 per cent, compared to the MSCI World Index’s 20.7 per cent.
The ETF gives Australian investors access to companies with strong earnings growth, solid financial strength and reasonable valuations, qualities Zaika said are particularly important in today’s market environment.
“GARP is performing better than the traditional global equities index, a feat most managers can’t achieve over the short or long term. Celebrating its anniversary, GARP has achieved its objective of delivering robust returns to investors for a reasonable price,” the CEO said.
“Over the longer term, GARP investing has historically outperformed a broad sharemarket index and delivered higher risk-adjusted returns to investors.
“This is important; with developed global equity markets trading above historical long-term valuations, investors are seeking out fairly priced, higher quality growth companies for their portfolios.”
Building on the success of the global fund, Zaika said Global X’s new ETF, GRPA, will invest in 50 leading Australian companies with strong growth characteristics at fair valuations.
Back in June, Marc Jocum, investment strategy and research manager at Global X, said the firm is looking to expand its remit, moving beyond using its ETFs primarily for “small satellite positions” to capitalise on the growing ETF industry and rising demand for low-cost core portfolio solutions.
“We lead in innovative solutions such as thematic and smart solutions that are best in class when it comes to research capabilities,” Jocum said.
“We do want to expand into lower cost, core exposures, that serve a broader set of Australian investors. I think the whole idea behind that is we just want to be more relevant in portfolios.”
At the time, Jocum added: “We want to become a leading ETF issuer and a premier ETF issuer.
“So, whilst I can’t confirm exactly what we’re launching, there will be a bit more of a shift in terms of looking more at the low cost, core space whilst also being true to label and what we’re known for.”
