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Global X launches Australian equity ETF

By Jessica Penny
3 minute read

Investors will be able to gain greater exposure to Australia’s largest companies while avoiding concentration in bank, mining, and energy shares. 

Global X ETFs (Global X) has announced the launch of the Australia ex Financial & Resources ETF (ASX: OZXX) on the Australian Securities Exchange (ASX).

Specifically, OZXX invests in Australia’s top 100 companies, but excludes those in the financial sector — including REITs — energy, and mining. With a management fee of 0.25 per cent per annum, the fund tracks the Solactive Australia Ex Financials Materials and Energy Capped Index. 

Expounding on the fund’s ability to provide investors more effective portfolio diversification, Global X head of investment strategy, Blair Hannon, said OZXX will offer investors exposure to midcap and smaller capitalisation companies, with potentially greater growth opportunities than those operating in more mature markets, such as the big banks.

“The ETF can be used as a core Australian equities 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 equities fund,” Mr Hannon explained.

Moreover, Mr Hannon said that OZXX is an effective solution 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.

Among the fund’s offerings, investors will be exposed to a range of 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.

“We are listening to investors to understand their needs and this launch further shows our commitment to Australian ETF market,” Mr Hannon said.

He added that this is best seen through Global X’s quickly expanding ETF suite to Australian investors, with 31 ETFs now listed on the ASX. 

According to Global X, the fund’s launch was in response to client demand, with the fund manager being approached by an asset consultant on behalf of financial advisers, to develop the ETF. 

While initiated by client request, Mr Hannon said that market research revealed that OZXX can fill a gap in many Australian investors’ portfolios for greater exposure to relatively higher growth rates and meet the needs of investors wanting to avoid concentration in big banks and mining shares.

“The management fee of just 0.25 per cent per annum will add to the appeal of this ETF, which will mark Global X’s 32nd ETF listed in Australia,” he concluded.