Aussie Index and Industry ETFs

[matty2.0]

Hi guys,
I'm not new to investing but new to the Aussie market.
I've come from an international investing background (mainly US and FTSE) ... and my international brokers have an extensive range of products to trade, industry etfs (e.g. financials etf, oil etfs, treasury etfs ... etc etc), options, warrants, CBOE futures etc ...etc

Now ... I've just opened a commsec account.

I've found that the product range is less extensive here in Australia.
i was looking for an S&P200/ASX or All Ord Index ETF style product ... and an Australian financials ETF ... but have not had much luck.

Anyone have any direction they could show me to find the right product if at all??

Thanks.

 

[awg]

STW is the only pure ASX200 ETF I know of.

http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=stw

They (Barclays Ishares) have many other ETFs listed on the ASX exchange

http://au.ishares.com/index.do?2473PSEM

 

[matty2.0]

ah thanks ... I'll have a look into STW.

seems the usual suspects are here in aust. ... barclays, proshares, rydex, state street ... maybe I'll explore their websites and see if they have any listed on the asx.

international markets are way more developed in this regard as compared to asx ... which is mainly why i've gone overseas ... however i don't want to convert AUD to any currency as i think the AUD might appreciate and hence, FX risk ATM ... when AUD/usd was at 85-90 ... man was i furiously buying USD ... situation reversed now.

 

[alphaman]

Australia is quite primitive when it comes to ETFs. As far as I know the only sector ETF available is SLF which is meant to track the REITs industry.

If you just want exposure to the whole financials sector, you could buy 6 stocks (the big 4 banks + QBE + WDC), which give you ~75% of XXJ. And add SLF to get XFJ.

And CMC has sector CFDs. But I've never used them.

 

[Gordon Gekko]

Vanguard is soon to introduce a new range of ETF's to the Australia market.

It should provide more choice but they have vague up to this point.

Best

G

http://www.vanguard.com.au/personal...ases/media-releases_home.cfm?item=vanguard-to

 

[So_Cynical]

State streets other ETF's are

• SFY - tracks the ASX50
• SLF - tracks the property components of the ASX200 (approx 50% Westfield)

 

[alphaman]

SLF - tracks the property components of the ASX200 (approx 50% Westfield)

Oh yeah that brings back an an old puzzle that I forgot about.

For some reason S&P's more recent factsheets (ASX50 and ASX200) have been labelling WDC as "Financials x Property". That's pretty odd isn't it? Because that implies WDC is a component of XXJ, not XPJ. Doesn't make sense to me.

 

[BillyIdol]

Cheers Gordon, was not aware of that, even though I am an existing Vanguard investor.

REALLY nice of them to tell me, huh ?! (especially seeing as how I just received my 'The Helm' magazine today in the mail).....'thanks' Vanguard... So, how will this affect my Vanguard managed fund holding...will I need to go and buy the ETF instead or are they going to introduce something different to iShares ? iShares don't replicate the SPDRs or vice versa, so will be interesting to see what Vanguard release.

Anyway, I've just been watching IEM (iShares) today, and after close (right now), there is the following depth in the market in the first three rows :-

BUY

1 x 350 @ 38.580
1 x 100 @ 38.480
1 x 200 @ 38.180

SELL

1 x 350 @ 39.170
1 x 100 @ 39.270
1 x 200 @ 39.570

This just all seems a bit 'too perfectly ordered' for me and I assume that there is a bot involved in there somewhere in the buying / selling process as some kind of 'market maker' somehow. Any thoughts ?

By the way, if these things really DO keep the market price in line with the NAV, as Barclays claim at :-

http://au.ishares.com/publish/content/documents/pdfs/liquidity.pdf

then why is the NAV only released once a week (when theoretically, it could actually be calculated every day), and between NAV valuations being released, these things trade pretty wildly up and down....even the developed index ETFs. STW / SLF etc.

StreetTracks can publish a daily NAV, why not Barclays ?

 

[BillyIdol]

Oh yeah that brings back an an old puzzle that I forgot about.

For some reason S&P's more recent factsheets (ASX50 and ASX200) have been labelling WDC as "Financials x Property". That's pretty odd isn't it? Because that implies WDC is a component of XXJ, not XPJ. Doesn't make sense to me.

Yeah, and the rest of the Real Estate index....so when I log into my online broker, thanks to the GICS classifications, it makes me look REALLY overweight in financials, when the reality is (thanks to my excel spreadsheet), I am not (in my own terms).

I hate it. I cannot see easily just how much exposure I have to listed property and types of in my portfolio through my broker, but I can with my spreadsheet, and thus can keep it within my 'happy window' of risk tolerance (sleep factor). Yes, I am that obsessive !

I asked the broker what they were going to do about it, "not much actually" was the general response because of the GICS classification.

I find it pretty daft when Real Estate is classed as a "financial", yet, the same index without REITs is considered "Financials ex-REITs" when looking at it from 'the other side'. So, why can we not have an index that is just "Real Estate (ex-financials)" (or ex-everything else for that matter) ?

To me, an office building trust, industrial trust etc. is not a financial, it is a piece of property and deserves to have its own GICS classification, in the same way a petrol or oil producer (energy) is not the same as a chemical producer (materials), although parts of their industry may be very, very similar, they are in different GICS classes completely.

I personally don't like the way that they are organised, and with our REIT market being so big, would like to see some form of change.

 

[mlennox]

Hi guys,
I'm not new to investing but new to the Aussie market.
I've come from an international investing background (mainly US and FTSE) ... and my international brokers have an extensive range of products to trade, industry etfs (e.g. financials etf, oil etfs, treasury etfs ... etc etc), options, warrants, CBOE futures etc ...etc

Now ... I've just opened a commsec account.

I've found that the product range is less extensive here in Australia.
i was looking for an S&P200/ASX or All Ord Index ETF style product ... and an Australian financials ETF ... but have not had much luck.

Anyone have any direction they could show me to find the right product if at all??

Thanks.

Hey Matt,

ETFs have only really hit our shores recently, with the ASX launching multiple seminars across the country in early March w/ the likes of iShares, Vanguard and Barclays attending.

There is no ASX Financials ETF at the moment, but there is an ASX200 ETF listed in the US under ETW (or something similar), i noticed you didn't want to hold USD but there are ways around this and i'd be happy to discuss further over PM if your interested.

Cheers
Mark

 

[matty2.0]

Hey Matt,

ETFs have only really hit our shores recently, with the ASX launching multiple seminars across the country in early March w/ the likes of iShares, Vanguard and Barclays attending.

There is no ASX Financials ETF at the moment, but there is an ASX200 ETF listed in the US under ETW (or something similar), i noticed you didn't want to hold USD but there are ways around this and i'd be happy to discuss further over PM if your interested.

Cheers
Mark

I already hold USD ... I'm fully invested in my US brokerage accounts. But I don't want to sell my positions and I'm leveraged as well, and I believe my existing positions have further upside ... and I don't want to buy any more USD right now.

"There is no ASX Financials ETF at the moment, but there is an ASX200 ETF listed in the US under ETW"

... yeah there are heaps of global ETF's overseas that I have access too ... but they're all in my USD-based accounts.
I have cash lying around in my comssec acct right now ...

Despite the stone-aged nature of the Aussie markets, and the small size of the ASX ... I figure the best way to get around it is just buy up shares in the major banks to develop your own financials ETF ... however I don't like the commission costs of this approach.

 

[Richard Dale]

I find it pretty daft when Real Estate is classed as a "financial", yet, the same index without REITs is considered "Financials ex-REITs" when looking at it from 'the other side'. So, why can we not have an index that is just "Real Estate (ex-financials)" (or ex-everything else for that matter) ?

There is such an index - it's called XPJ and it's basically all stocks in the level 3 industry classification of Real Estate Investment Trusts.

To clarify the other index constituents further:
XFJ is all stocks in the level 1 sector called Financials.
XXJ is all stocks in the level 1 sector Financials less all stocks in the level 3 Real Estate Investment Trusts Industry.

 

[emilov]

But Richard,
You can't really trade those, can you? If yes, how?

I trade options exclusively and the only index I get is the XJO (the ASX S&P 200).

Cheers, Emil

 

[alphaman]

XFJ is all stocks in the level 1 sector called Financials.
XXJ is all stocks in the level 1 sector Financials less all stocks in the level 3 Real Estate Investment Trusts Industry.

Richard, do you know why S&P labels WDC as a a "Financials X Property"? (http://www2.standardandpoors.com/spf/pdf/index/SP_ASX_50_Factsheet_A4.pdf)

Did they make a mistake?

 

[Richard Dale]

Emil: You're correct - there are no ASX exchange-traded products or derivatives to be able to just trade the Real Estate Investment Trusts level 3 GICS Industry.

Alphaman: According to my information WDC has GICS code 40402060 which means Retail REITs (Sub Industry Group). 404020 is the Level 3 code for Real Estate Investment Trusts, so yes there is an error in S&P's document you've quoted.