Thursday, last week, we saw a new ETF inclusion onto the ASX. This was the 141st ETF listed on the exchange and the first this new financial year. Though you might think that it is not that exciting, it comes as an important inclusion for Australian investors. This ETF gives access to an index and a market that has been previously difficult to tap into: The Eurozone.
Kris Walesby, head of ANZ ETFS, commented recently “Europe as a region is 20% of the world market by market capitalisation, and 22% by global output.”
ANZ ETFS’EURO STOXX 50® ETF (ASX code: ESTX) tracks the performance of the EURO STOXX 50® Index. This index covers 50 stocks from 12 Eurozone countries (e.g. countries with the Euro as their common currency); this means that there is no UK exposure.
“EURO STOXX 50 is the leading European benchmark. For investors used to investing globally, it is uttered in the same breath as the S&P 500, the Dow Jones Industrial Average and the Nikkei 225.” says Walesby.
“By focusing on the top fifty Eurozone companies by size it becomes the proxy for European sentiment where all the trading (liquidity) for Europe gravitates towards. Putting this in perspective, the EURO STOXX 50 trades $9.2 billion per day versus the Nikkei 225 $12.2 billion.”
Walesby added, “ESTX will provide greater depth of access to sectors that the ASX lacks in, such as consumer goods – with a 20% allocation versus the ASX 200’s one per cent. We also see higher allocations to Tech and Oil and Gas sectors.”
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(Source: Bloomberg, June 2016)
When asked, why the Australian market hasn’t been able to access the EURO STOXX 50 previously, Walesby responded, “Other fund managers have issued funds that are either actively managed or, for ETFs, covering all of Europe i.e. the Eurozone and the UK, Switzerland, Sweden and Norway. The EURO STOXX 50 just focuses on the Eurozone’s top fifty companies.”
“The index is made up of household names that we all know, including brand names like Budweiser, L’Oreal, BMW, Allianz and Louis Vuitton.”
“Brands like Mercedes (through Daimler) and BMW – continue to enhance car brand prestige throughout the world and are likely to maintain/grow market share especially in developing economies.”
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(Source: Bloomberg, June 2016)
The EURO STOXX 50® ETF (ESTX) will give Australian investors, “Simple, efficient, low cost access to one of the most important, and potentially undervalued economic zones in the world,” says Walesby.
If you would like to know more about the ANZ ETFS EURO STOXX 50® ETF, click here.
