BetaShares has been awarded a Recommended (Index) rating from Lonsec for its Australian Ex-20 Portfolio Diversifier ETF (EX20).
Launched in October, EX20 provides exposure to approximately 180 stocks listed on the Australian Securities Exchange, ranked from number 21 to number 200, based on their market capitalisation.
By excluding the top 20 largest stocks listed on the ASX, EX20 gives investors broad market exposure beyond the stocks which a significant proportion of Australian investors already hold in their portfolios.
In its report, Lonsec noted the strengths of EX20 included its diversification benefits to investors already exposed to the large-cap segment of the Australian market, as well its transparent portfolio construction.
Lonsec looks at a fund manager’s investment process, people and resources, liquidity, fees, performance and the risk associated with the fund as part of its review process. The Recommended (Index) rating is the second highest investment rating awarded by Lonsec.
BetaShares managing director, Alex Vynokur, says the rating highlights the benefits EX20 provides to Australian investors as a diversification tool.
“Australian investors are biased to large-caps, in particular the big four banks,” he says. “This bias can expose portfolios to excessive stock and sector specific risk, and means investors miss out on the potential available in mid to smaller-cap Australian equities.
“EX20 allows advisers to construct portfolios for their investors which overcome this bias in a single trade, via a simple, low-cost investment vehicle.”