| S&P
Launches Global Sector Indexes in Australia
By IndexFunds.com Staff
June 13, 2001 |
|
Standard & Poor's (S&P) will begin live dissemination
of real-time global sector indexes in Australia on June 25. S&P
will launch 12 sector indexes from the broad Australia S&P/ASX
200 index, which covers approximately 89% of the total market
capitalization of the Australian market.
| Sector index |
Percentage of S&P/ASX 200 |
| Energy |
2.60% |
| Materials |
15.07% |
| Industrials |
6.74 % |
| Consumer Discretionary |
16.52% |
| Consumer Staples |
7.11% |
| Health Care |
3.03% |
| Financials |
36.87% |
| Information Technology |
0.89% |
| Telecommunication Services |
9.88% |
| Utilities |
1.29% |
| Financials-ex Property Trusts |
31.34% |
| Property Trust |
5.53% |
Source: Standard & Poor's
The new Australia sector indexes are designed around the Global
Industry Classification Standard (GICS), which organizes over
15,000 global companies into 10 economic sectors. S&P and
MSCI collaborated on GICS with the goal of reducing investor confusion
"by classifying companies around the world with a consistent
standard according to its line of business," said Jason Feldmayer
of S&P.
The launch underscores the continuing trend towards global sector-based
investing and analysis, and the demand for liquid and transparent
global sector indexes. Some of the factors that are driving global
sector investing include global deregulation, the increased cross-listing
of stocks across countries, and more homogenization in the Eurozone.
"S&P's GICS indexes are modular tools that fill up the
complete opportunity set for global sectors," said Binu George,
international equity investment strategist at Barclays Global
Investors (BGI). "The transparency of the indexes also prevents
overlap and allows investors to avoid unnecessary risk."
George also noted that BGI will launch iShares exchange-traded
funds based on S&P global sector indexes in the coming year.
S&P launched 12 sector indexes in Australia because a separate
property trust sector index needs to be maintained for the Australian
home market. For the purposes of GICS, Financials-ex Property
Trusts and Property Trusts are combined to make up the GICS Financials
sector.
Odds and ends
- To learn more about the methodology for GICS, click here.
- To read an interview with MSCI about the development of GICS,
click here.
- To check out a summary of an important Barclays Global Investors
report on international equity benchmark selection, click here.
