New Global X ETF to diversify portfolios

Yasmine Raso

Senior Journalist, Financial Newswire

14 April 2023

Global X ETFs has announced the launch of its latest product to join its exchange traded fund (ETF) suite available on the Australian Securities Exchange (ASX), the Australia ex Financial & Resources ETF (OZXX).

OZXX provides investors with access to Australia’s top 100 companies but excludes those in the financial, energy and mining sectors to prevent over-exposure and facilitate greater portfolio diversification.

The ETF offers exposure to sectors including healthcare with CSL, telecommunications with Telstra, consumer staples with Wesfarmers and Woolworths and infrastructure through toll road company Transurban.

“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,” Blair Hannon, Global X Head of Investment Strategy, said.

“The ETF can be used as a core Australian equites holding or as a sector diversification tool which allows investors to complement 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.

“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.”

Tracking the Solactive Australia Ex Financials Materials and Energy Capped Index, the ETF also has a management fee of 0.25 per cent per annum. Global X also said OZXX was first developed from a client’s request after which it was then opened up to Australian investors via the ASX.

“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.

“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 on the ASX.”