Give your portfolio the “EX” factor | BetaShares

Give your portfolio the “EX” factor

BY BetaShares ETFs | 4 April 2017

When it comes to the Australian sharemarket, there are a couple of mantles Australians can claim over our international counterparts. Firstly, Australians have some of the highest levels of share ownership in the world, with 33% of us owning shares directly*.  Secondly, by global standards,  the concentration of this ownership in large-cap shares is relatively high. The top 20 shares in the S&P/ASX 200 Index account for 60.5% of the Index’s market capitalisation (as at 30 September 2016), and have a heavy concentration in the banks and materials sectors.

Why do I point this out? Because according to ‘The Australian Share Ownership Study’ conducted by the ASX, the median number of shares held in Australian share portfolios is 7, mainly in large-cap shares. It’s easy to understand the attraction of these shares – they are mature businesses that are generally household names, many offer attractive yields and they have served many investors well over the long term.  But, on the flipside, investors whose holdings are largely limited to these stocks may be susceptible to some concentrated sector-specific risk, and may potentially be missing out on opportunities in other sectors, including information technology, infrastructure, healthcare and retailers to name a few.

With this much sector concentration, the question is – how can you acquire an exposure to those companies outside the top 20 in a cost-effective manner? In other words, how can you give your portfolio a bit of the “EX” 20 factor?

BetaShares has recently launched the BetaShares Australian Ex-20 Portfolio Diversifier ETF (ASX Code: EX20) to provide simple, transparent and cost-effective access to Australian mid to smaller-cap companies listed on the Australian Securities Exchange.

The inclusion of EX20 in a portfolio potentially offers greater diversification than a typical direct share portfolio via one simple transaction on the ASX, reducing individual security and sector specific risk and introducing exposure to opportunities in a wider variety of sectors.

The graph below shows the performance of the index that EX20 aims to track, relative to our benchmark S&P/ASX 200 Index:

Performance shown here is the Index which EX20 aims to track (Nasdaq Australia Completion Cap Index). You cannot invest directly in an index. Performance excludes the impact of ETF fees and expenses. Past performance is not an indication of future performance of the Index or the ETF. Index inception was March 2001.

Investors seeking to add a bit of the EX factor to their portfolios, that is, diversified exposure to Australian shares outside of the top 20, can do so easily on the ASX through BetaShares Australian Ex-20 Portfolio Diversifier ETF (ASX Code EX20).   For those interested in learning more, we have a variety of resources available on website, including ‘The Investment Case for EX20’, portfolio holdings, and other important information to review before considering an investment in EX20.


  1. Geoffrey Spence  |  April 5, 2017

    Could you re-do the chart net of fees and expenses? Has re-investment been included?

    1. Ilan Israelstam  |  April 5, 2017

      Hi Geoffrey,
      As our fund has only recently been launched, we are not able to accurately chart this. However, suffice to say that if this chart was done apples-for-apples and the broad market exposure also removed fees the shape would be very similar. Dividend reinvestment has indeed been included in both lines

  2. David Amstell  |  April 5, 2017

    An excellent question. We look forward to the modified chart.

  3. Manf  |  April 5, 2017

    Indeed an excellent question. We all are aware of the graph trend but it disguises the actual numbers net of the various fees and expenses.

    1. Alistair Mills  |  May 28, 2018

      Hi Manny,

      You are correct in stating that this chart is of historical index performance and therefore does not take into account fees, however this is true for both EX20’s index and the S&P/ASX 200 index shown.

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