In this week’s ANZ ETFS Trade Idea we look back at companies that reported full-year earnings in February and examine how they were received by the market and what impact they had on ANZ ETFS’ two domestic equity focused ETFs; ZYAU and ZOZI.
To analyse the impact of earnings announcements we rank the companies in each fund that release their results in February by their contribution to the overall fund return in the month. We additionally report on:
- Surprise %; the difference between actual and expected earnings measured as a percentage of expected EPS, where analyst expectations are as reported by Bloomberg (where available).
- Market Reaction %; the price impact that earnings announcements have on a stock relative to the market, as measured by the one day return immediately following the company’s earnings announcement less the return of the S&P/ASX 200 on the same day.
Earnings season was overall positive for the market, with the benchmark S&P/ASX 200 returning 2.25% for the month of February, which compares favourably in an international context with the MSCI World Index, for example, returning 1.38% from the month in Australian dollar terms.
- ANZ ETFS S&P/ASX 300 HIGH YIELD PLUS ETF (ZYAU)
Of the 40 companies held in ZYAU’s portfolio at the end of February, 33 companies representing 67% of the fund’s assets reported earnings during February. The table below highlights the five biggest contributors to and detractors from the fund’s performance in the month from amongst the reporting companies.
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2. ANZ ETFS S&P/ASX 100 ETF (ZOZI)
Of the 100 companies held in ZOZI’s portfolio at the end of February, 81 companies representing 71.5% of the fund’s assets reported earnings during February. The table below highlights the five biggest contributors to and detractors from the fund’s performance in the month from amongst the reporting companies.
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3. FUND PERFORMANCES
The table below details the returns of ZYAU and ZOZI over a range of periods relative to the S&P/ASX 200. ZYAU, which is the top performing Australian equity yield ETF over the past 12 months (as at 28 February 2017), has outperformed the benchmark by over 5.5% p.a., despite lagging so far in 2017. ZOZI, which holds the top 100 Australian companies by market capitalisation and covers 93% of the S&P/ASX 200 has outperformed the benchmark over 1, 3, and 6 months to the end of February net of fees.
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PRODUCT SPOTLIGHT
Fund: ANZ ETFS S&P/ASX 300 High Yield Plus ETF (ZYAU)
MER: 0.35%
Annual performance: 27.78% total return (to February 2017)
Investment rationale:
ZYAU can be a foundation of a high yield portfolio designed to benefit from a low interest rate environment.
Fund: ANZ ETFS S&P/ASX 100 ETF (ZOZI)
MER: 0.24%
Annual performance: 22.12% total return (to February 2017)
Investment rationale:
Top 100 Australian companies in one trade. Ideal for core positions or low balance clients.
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