Index provider Solactive has launched the Solactive Australia 200 Index, tracking the performance of the 200 largest companies by market capitalisation listed on the Australian Securities Exchange.
Timo Pfeiffer, head of research at Solactive
Timo Pfeiffer, head of research at Solactive, commented, “With the Solactive Australia 200 Index, we are targeting investors interested in gaining access to the largest corporations driving the Australian economy. The launch of the index is also another stepping stone into our long-term strategy of providing global coverage of cost-efficient benchmark solutions.”
The index is a free-float market cap-weighted index covering approximately 90% of the Australian equity market. The three most highly represented sectors are finance, basic materials, and industrials, which have a combined weight of 70% of the total index.[pullquote]“With the Solactive Australia 200 Index, we are targeting investors interested in gaining access to the largest corporations driving the Australian economy.”
– Timo Pfeiffer, head of research at Solactive[/pullquote]
The index has some idiosyncratic (stock-specific) risk with the top ten constituents accounting for roughly 45% of the total index weight. The largest constituent, Commonwealth Bank of Australia, has a 7.5% weight.
The index can be used as a performance indicator of the Australian equity market and as the underlying index for investment products, such as ETFs.
The index is denominated in AUD and is available in three different versions: gross total return (GTR), price return (PR) and net total return (NTR). The composition is re-adjusted quarterly.
The index methodology is similar to that of an existing index: the S&P/ASX 200 Index. This index is up 1.2% year to date (as at 4 May 2018).
There are two funds in Europe which track this S&P index: the Lyxor Australia (S&P/ASX 200) UCITS ETF (LAUS LN) and the Xtrackers S&P/ASX 200 UCITS ETF (DR) (XAUS_LN). LAUS has AUM of £54.7m, a total expense ratio (TER) of 40bps, and was launched in 2010. XAUS has £87m AUM, a TER of 50bps, and was launched in 2008.
However, the largest ETF in Europe with pure Australian equities exposure is the iShares MSCI Australia UCITS ETF (SAUS LN). This fund was launched in 2010 and has AUM of £311m. SAUS has a TER of 50bps.