UBS has launched the UBS MSCI Australia UCITS ETF (AUSAUY) on SIX Swiss Exchange, providing exposure to the large- and mid-cap segments of the Australian equity universe.

The MSCI Australia Index covers approximately 85% of the free float-adjusted market capitalization in Australia.

The ETF tracks the MSCI Australia Index which consists of 70 constituents and covers approximately 85% of the free float-adjusted market capitalization in Australia.

The index is dominated primarily by exposure to the financials sector, comprising 42.0%. Australia’s mining companies also have a notable impact on the index’s performance, making up the second largest exposure at 17.3%. The real estate (8.4%), consumer staples (7.7%) and health care (7.1%) sectors also play a significant role.

The Commonwealth Bank of Australia accounts for just over 10% of the index while Westpac Banking (8.3%), BHP Billiton (7.0%), ANZ Banking Group (6.9%) and National Australia Bank (6.4%) are the next largest exposures (data as of 31 August 2017).

While the index has outperformed the MSCI ACWI IMI since its inception on 31 May 1994, returning 8.9% per annum compared to 7.5% per annum, it has done so with considerably higher volatility. Most notably, the index appears susceptible to larger drawdowns compared to its global benchmark during periods of stress in equity markets, such as during the 2007/2008 financial crisis and, more recently, in the second half of 2015.

Source: MSCI.

The fund trades in Australian dollars and has a total expense ratio (TER) of 0.40%.