Solactive launches equity benchmark covering Australia

Ridhima Sharma
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Solactive has launched Solactive Australia 200 Index, a new benchmark tracking the performance of the 200 largest companies by market capitalization listed on the Australian Securities Exchange.

With this release, Solactive expands its range of competitively-priced benchmarks and offers for the first time a broad-market index providing targeted exposure to the largest economy in the Oceanian region.

Solactive Australia 200 Index is a free-float market capitalisation weighted index covering approximately 90% of the Australian equity market. It 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% 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.

The index can serve multiple purposes. First, 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.

It 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.