Sydney-based ETF issuer BetaShares has launched a new equity ETF in Australia providing exposure to locally listed technology and technology-related stocks.
The fund is the first ETF in Australia to target the country’s technology sector.
The BetaShares S&P/ASX Australian Technology ETF (ATEC AU) has listed on the Australian Securities Exchange (ASX) and comes with an expense ratio of 0.48%.
Income is distributed to investors on an annual basis.
The fund is linked to the S&P/ASX All Technology Index which consists of ASX-listed stocks of companies operating within the information technology sector as defined by the Global Industry Classification Standard (GICS).
Outside of the information technology sector, firms classified within the consumer electronics, internet & direct marketing retail, health care technology, and interactive media & services sub-sectors will also be eligible for inclusion.
Companies with market capitalizations below AUD 120 million as well as those ranked in the bottom 30% by liquidity relative to the entire ASX market will be removed from the selection.
Constituents are weighted by float-adjusted market capitalization, and the index is rebalanced on a quarterly basis.
There are currently 46 stocks in the index – the largest being Xero (13.7%), Computershare (11.5%), Afterpay (9.8%), REA Group (7.9%), and Carsales.com (6.5%). Over three-quarters (79.4%) of the index is allocated to stocks from the information technology sector, followed by communication services at 15.5%.
The ETF aims to provide investors with a low-cost and efficient means of accessing Australia’s dynamic tech sector which has outperformed the broader Australian stock market in recent years.
Between April 2014 and February 2020, the S&P/ASX All Technology Index produced an annualized return of 13.42%, compared with a return of 7.57% for the S&P/ASX 200 Index. Investors should note, however, that tech stocks have historically displayed greater volatility than the market and may be susceptible to larger losses during corrections or bear markets.
Source: BetaShares.
According to BetaShares, the fund may also offer a valuable diversification tool for Australian investors who tend to hold portfolios that are heavily weighted towards large-cap financials and resource stocks.
It is the first ETF listed in Australia to specifically target the country’s domestic technology sector.
A statement from BetaShares said, “We’re excited to announce BetaShares’ S&P/ASX Australian Technology ETF is now available. ATEC is the first ETF focused on providing access to Australia’s fast-growing technology sector and offers exposure to a diversified portfolio of dynamic ASX-listed tech players such as REA Group, Xero, Afterpay, WiseTech Global and carsales.com.”