Global X Australia ex Financials & Resources ETF

Global X Australia ex Financials & Resources ETF (ASX:OZXX) invests in Australia’s top 100 companies, excluding those in the financial (including REITs), basic material and energy sectors.

OZXX aims to deliver portfolio diversification by investing in Australia’s top 100 companies, excluding those in the financial (including REITs), basic material and energy sectors. OZXX seeks to provide investment results that correspond generally to the price and yield, before fees and expenses, of the Solactive Australia Ex Financials Materials and Energy Capped Index.

• According to Morgan Stanley, Australian retail investors own roughly 48% of the big four’s float (Commonwealth Bank, NAB, Westpac and ANZ) as of late-2022.¹
  
• Almost half of the market capitalisation of the S&P/ASX 200 is from the financials and materials sectors.

¹ https://www.marketindex.com.au/news/what-percentage-of-retail-investors-hold-australias-big-4-banks

Many Australians already hold banks, miners and energy companies in their portfolio – with trading data suggesting they are some of the most popular stocks with direct investors. For these Australians, buying ETFs that track broad share market indexes like the S&P/ASX 200 or 300 means that they are over-allocated to the same stocks or sectors. OZXX was designed to give Australians that already own banking, mining and energy shares an easy way to “buy the rest” of the Australian share market, without the overlap. The aim is to provide investors with a portfolio completion tool that can complement investors’ existing holdings.

Additionally, OZXX can also be used as an alternative way to play the Australian share market. Due to their size, the financials and materials sectors together take up more than 50% of the weight of the S&P/ASX 200. Yet these sectors are mostly composed of big banks and miners, which are mature businesses. A portfolio that removes these companies can be expected to tilt instead towards less mature and potentially higher growth stocks in other sectors.   

After removing financials (including REITs), materials and energy sectors, OZXX creates a concentrated focus on other parts of the market which include:

• Healthcare
• Utilities
• Consumer Staples
• Consumer Discretionary
• Information Technology
• Communication Services

• As a strategic diversification tool to help avoid over-allocation with existing individual stocks with blue-chip holdings including the big four banks, major miners and energy companies.
• To access a broader range of companies and sectors such as consumer staples, consumer discretionary, healthcare and information technology in an accessible and cost-effective vehicle. 

• The value of your investment may go down as well as up. Past performance does not predict future returns. Investor capital may be at risk up to a total loss.
• OZXX is exposed to market movements in a single country (Australia) which may be affected by political or economic developments, government action or natural events that do not affect a fund investing in broader markets.

The Solactive Australia ex Financials Materials and Energy Capped Index aims to track securities from the all-cap segment of the Australian stock market excluding financial, basic materials and energy sectors. The index is rebalanced quarterly according to the following rules:

• Only securities listed on the ASX are eligible for inclusion.
• Based on the Factset RBICS classification system finance (incl. REITS), energy and basic materials are removed.
• Weightings are assigned according to market capitalisation, with the maximum weight of an individual stock capped at 10%.
• The total number of holdings is capped at 100.

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This document is issued by Global X Management (AUS) Limited (“Global X”) (Australian Financial Services Licence Number 466778, ACN 150 433 828) and Global X is solely responsible for its issue. This document may not be reproduced, distributed or published by any recipient for any purpose. Under no circumstances is this document to be used or considered as an offer to sell, or a solicitation of an offer to buy, any securities, investments or other financial instruments. Offers of interests in any retail product will only be made in, or accompanied by, a Product Disclosure Statement (PDS) which is available at www.globalxetfs.com.au. In respect of each retail product, Global X has prepared a target market determination (TMD) which describes the type of customers who the relevant retail product is likely to be appropriate for. The TMD also specifies distribution conditions and restrictions that will help ensure the relevant product is likely to reach customers in the target market. Each TMD is available at www.globalxetfs.com.au.The information provided in this document is general in nature only and does not take into account your personal objectives, financial situations or needs. Before acting on any information in this document, you should consider the appropriateness of the information having regard to your objectives, financial situation or needs and consider seeking independent financial, legal, tax and other relevant advice having regard to your particular circumstances. Any investment decision should only be made after obtaining and considering the relevant PDS and TMD. This document has been prepared by Global X from sources which Global X believes to be correct. However, none of Global X, the group of companies which Mirae Asset Global Investments Co., Ltd is the parent or their related entities, nor any of their respective directors, employees or agents make any representation or warranty as to, or assume any responsibility for the accuracy or completeness of, or any errors or omissions in, any information or statement of opinion contained in this document or in any accompanying previous or subsequent material or presentation. To the maximum extent permitted by law, Global X and each of those persons disclaim all any responsibility or liability for any loss or damage which may be suffered by any person relying upon any information contained in, or any omissions from, this document. Investments in any product issued by Global X are subject to investment risk, including possible delays in repayment and loss of income and principal invested. None of Global X, the group of companies of which Mirae Asset Global Investments Co., Ltd is the parent, or their related entities, nor any respective directors, employees or agents guarantees the performance of any products issued by Global X or the repayment of capital or any particular rate of return therefrom. The value or return of an investment will fluctuate and an investor may lose some or all of their investment. All fees and costs are inclusive of GST and net of any applicable input tax credits and reduced input tax credits, and are shown without any other adjustment in relation to any tax deduction available to Global X. Past performance is not a reliable indicator of future performance.