Solactive releases new equity benchmark covering Australia
The latest index from German index provider Solactive is the Solactive Australia 200 Index, tracking the performance of the 200 largest companies by market capitalisation listed on the Australian Securities Exchange.
The company comments that with this launch it offers, for the first time, a broad-market index providing targeted exposure to the largest economy in the Oceanian region.
Specifically, the Solactive Australia 200 Index is a free-float market capitalisation weighted index covering approximately 90 per cent of the Australian equity market. The index is constructed in a way to reduce turnover and increase liquidity. The three most represented sectors are Finance, Basic Materials, and Industrials, with a composite weight of 70 per cent of the total index. The five largest stocks by market-value weight are Commonwealth Bank of Australia, Westpac Banking Corporation, BHP Billiton Limited, Australia and New Zealand Banking Group Limited, and National Australia Bank Limited.
Timo Pfeiffer (pictured), Head of Research at Solactive, says: “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 Solactive Australia 200 Index can serve multiple purposes, the firm says. Firstly, it can be used as a performance indicator of the Australian equity market. Second, investors can employ it as a yardstick against which to compare the performance of their strategies. Alternatively, it can constitute the starting universe from which to build smart beta or niche indices. In addition, it can be used as the underlying index for investment products, such as ETFs.
The Solactive Australia 200 Index is denominated in AUD and is available in three different versions: gross total return (GTR), price return (PR) and net total return (NTR). Shares must be listed on the Australian Securities Exchange. The index composition is readjusted quarterly.