Marc Jocum

The timing of the February reporting season may prove an unexpected silver lining for Australian equities, as strong corporate earnings provide investors with a fundamental anchor at a time when geopolitical headlines risk dominating sentiment.

The Australian share market climbed 4% over February, its best reporting season since 2017, with companies overwhelmingly outperforming expectations.

Marc Jocum, Senior Product and Investment Strategist at Global X ETFs, said the February reporting season delivered a decisive turning point for local investors.

“While the ASX won’t be fully insulated from global risk-off sentiment, Australia’s commodity-heavy index is acting as a natural geopolitical hedge. Energy producers benefit from oil spikes, gold miners from safe‑haven flows, and critical minerals are supported by both geopolitical risk premiums and long-term AI infrastructure demand,” Mr Jocum said.

“This was a genuine blockbuster reporting season for Australian companies and a potential catalyst to lure investors back to the domestic market after years of underperformance versus global peers,” he said.

“Geopolitics may dominate headlines in the short term, but over the long run, it is earnings growth that ultimately drives equity markets. Reporting season served as a reminder that beneath the noise of global conflicts, corporate fundamentals remain the primary engine of long-term returns.”

Mr Jocum said earnings revision momentum is now the strongest in more than three years, and the market is pricing mid double‑digit EPS growth for FY26.

Resources and banks headlined the winners’ circle. Superloop (+28.3%), Lynas Rare Earths (+27.4%) and Iluka Resources (+25.9%) led the market, reflecting renewed demand for critical minerals and rising commodity prices. Financials also surprised to the upside, with Commonwealth Bank delivering its strongest single‑day gain in six years post-results.

Conversely, healthcare, technology and discretionary sectors lagged. Temple & Webster (-31.6%), Webjet parent WEB Travel Group (-30.1%) and Pro Medicus (-29.4%) were among the sharpest decliners as elevated expectations collided with softer guidance and margin pressure. Meanwhile, Australian consumers are showing a more cautious hand when it comes to discretionary spending, with a clear tilt toward essentials. The nation’s household savings ratio has climbed to its highest level since September 2022, suggesting households are choosing to rebuild buffers as they navigate the possibility of further tightening from the RBA.

Despite individual stock swings, broad‑based exposure proved a powerful advantage. The Global X Australia 300 ETF (A300) returned +4% in February, outperforming 72% of ASX 300 companies.[1]

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Billy Leung

The US technology giants represent some of the strongest growth and quality exposures in global equity markets, with their huge price gains underpinned by strong earnings growth and profitability, according to Global X senior investment strategist, Billy Leung, who says the artificial intelligence (AI) boom is just getting started.

“The US technology giants are exceptionally profitable, with robust margins, scalable business models and strong balance sheets, which could keep getting stronger. On 2026 estimates, Apple and Nvidia are forecast to deliver returns on equity (ROE) of around 175% and 90% in financial year 2025-26, respectively, while Meta, Alphabet, Microsoft and ServiceNow also sit comfortably above the S&P 500 average of roughly 20%,” Leung said, as the chart below highlights.

“Growth expectations tell a similar story. Over the next three years, earnings per share (EPS) for the broader FANG universe is projected to rise faster than the overall market, with chipmakers Nvidia and Broadcom expected to compound at around 35% to 40% a year, while EPS of Netflix, ServiceNow, Microsoft and Amazon forecast to grow in the high teens to low twenties. The group combine structural growth with consistent profitability, which remains rare in global equities,” Leung said.

“Smart Australian investors are buying into this boom, with assets under management (AUM) for Global X’s FANG+ ETF attracting near record inflows of $315 million this year and that is set to surpass total inflows of $349 million in 2024. With total AUM of $1.69 billion as at October 31, including the currency hedged ETF, FANG+ could soon surpass $2 billion in AUM as smart investors buy into the profitability of the US tech giants.

“By maintaining diversified exposure to the most profitable and strategically positioned names in technology, the FANG basket still offers an efficient way for Australian investors to stay invested in the next phase of digital transformation and the AI boom, which has propelled the growth of these US technology giants as they reap revenues unmatched in history,” Leung said.

“Nvidia is the first company ever to surpass US$5 trillion in market capitalisation and recently announced over US$500 billion in revenue from sales of its graphics processing units, which are essential to the processing of AI. Nvidia’s shares have rallied 77% for the six months to October 31^[1], unpinned by its huge profitability and earnings growth.  

“Also last week, Apple’s market capitalisation rose above $4 trillion for the first time, and it overtook Microsoft, after announcing record revenue in the first quarter of FY 2025-26 of just over $1 billion, pushing it shares to a record high of US$277. Alphabet too announced AI-driven cloud boom pushed its quarterly revenue past US$100 billion for the first time. Its shares reached a fresh record high at US$291.59 and have rallied around 70% in six months.

“Global X believes that the AI boom still has more room to run. Hyperscalers’ capital investment has already risen more than 50% this year and is projected to rise again in 2026. That spending is still translating into stronger earnings for these technology giants and could do so for some time yet, so Australian investors could still have time to ride the boom,” said Leung.

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Notes:
[1] https://finance.yahoo.com/news/why-nvidia-nvda-stock-today-192046409.html

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Billy Leung

Global X has launched the Global X Defence Tech ETF (ASX: DTEC), providing Australian investors with access to global companies at the forefront of defence innovation. As global security concerns shift focus onto technology-driven solutions, DTEC offers targeted exposure to key sectors driving the future of defence, including artificial intelligence (AI), drones and cybersecurity.

DTEC aims to track the performance of defence technology sectors by focusing on innovations in security, defence systems and hardware that enhance national safety. The fund maintains a competitive management fee of 0.50% per annum.

The fund has been available in the US under the ticker code SHLD and has gathered more than US$500 million in net assets since listing less than one year ago.^[1]

Investment Strategist, Billy Leung said DTEC’s launch comes at a critical juncture, as geopolitical uncertainty has heightened national security concerns and sparked global defence spending.

“As the global landscape evolves, modern defence planning has shifted towards safeguarding nations through a combination of technology-driven innovations and essential defence infrastructure to enhance protection, intelligence and security. DTEC offers investors access to the sectors leading this transformation, with global defence spending rising at an annualised rate of 4.3%^[2] over the past 40 years.

“We expect this trend to continue amid further geopolitical uncertainty, which is a testament to the sector’s resilience even during economic downturns.

“DTEC offers growth due to its differentiated exposure across various sectors, including industrials, cybersecurity, AI and augmented reality. What is key here is that unlike many civilian markets defence revenues are closely tied to military needs. This gives the defence sector a level of resilience and less correlation with general economic cycles, positioning DTEC as an attractive option for investors seeking capital growth,” Billy said.

DTEC expands Global X’s ETF lineup in Australia to 41 across core, thematics, commodities, income and cryptocurrency. Global X now holds more than $8 billion in assets under management in Australia and over US$85 billion globally.^[3]

———–

Notes:
[1] As of 30 September 2024.
[2] Stockholm International Peace Research Institute, US Department of State.
[3] As of September 2024.
[4] As of May 2024.
[5] As of March 2024.

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Marc Jocum

Global X ETFs (Global X) has brought to market the Global X S&P World Ex-Australia GARP ETF (ASX: GARP), the first index-based exchange traded fund (ETF) in Australia to offer a ‘Growth at a Reasonable Price’ (GARP) strategy for broad global shares.

GARP has a competitive management fee of 0.30% per annum and tracks the S&P World ex Australia GARP Index which holds 250 global companies. It is the only broad global share index ETF on the Australian market to combine growth, value and quality metrics into one solution.

Product and Investment Strategist, Marc Jocum said GARP is an innovative ETF strategy which empowers investors to incorporate companies with competitive growth profiles at reasonable valuations into their portfolios.

“Our GARP ETF strikes a balance between growth and value, providing international exposure to market-leading companies without sacrificing quality,” Jocum said.

“Some global share markets are currently trading above their historical long-term average valuation, potentially prompting investors to seek out companies with robust earnings growth and solid financial strength that are more reasonably priced.”

There are around 65 factor-based ETFs with $28 billion in assets under management listed locally, comprising 13% of the total market, with majority of the assets invested in quality and yield factors.^[1]

“Growth ETFs have primarily been actively managed, and the evidence shows that the majority of actively managed funds underperform a low-cost index over the long term,” Jocum said.

“Our GARP strategy is particularly timely as it aligns with the growing trend of investors seeking diversified global portfolios amidst local market volatility. By integrating growth and value metrics, with a quality overlay, GARP addresses the need for a core portfolio holding to handle various market cycles and has the potential to outperform the broader market.

“As ETFs are increasingly used to gain exposure to global companies with strong growth traits, we expect global equity ETFs to attract more investment flows given the concentrated and value-orientated nature of the Australian market.”

Jason Ye, S&P Dow Jones Indices’ Director of Factors and Thematics Indices, said, “In recent years, an index-based growth-at-a-reasonable-price (GARP) approach has been gaining traction among investors seeking strategies that effectively balance growth opportunities with valuation and quality considerations. The S&P World Ex-Australia GARP Index serves as an innovative benchmark, providing market participants with a unique opportunity to assess the performance of growth companies with high-quality and value composite scores beyond the Australian market.  S&P Dow Jones Indices is delighted to license the S&P World Ex-Australia GARP Index to Global X ETFs Australia for its new fund launch.”

Global X is dedicated to launching innovative ETFs to better serve investors, exemplified by the introduction of Australia’s first “three-in-one” Australian Bank Credit ETF (ASX: BANK) in July.

GARP adds to the company’s 40-strong ETF lineup across core, thematics, commodities, income and cryptocurrency. Global X now has more than $7.7 billion in assets under management.^[2]
———-

Notes:
[1] Global X using Bloomberg data as of 31 July 2024.
[2] As of September 2024.

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Alex Zaika

Global X ETFs Australia (Global X), a leading global provider of exchange-traded funds (ETFs), is pleased to announce the appointment of Alex Zaika as its new Chief Executive Officer (CEO), effective 4 November 2024.

Zaika, a proven leader with over two decades of experience in the ETFs and funds management industry, most recently served as Managing Director at GAM Investments. During his tenure, he played a pivotal role in driving the firm’s growth across Australia and New Zealand. His extensive career also includes senior positions at BlackRock, Barclays Capital, and Macquarie Bank, where he established his strong expertise in distribution, product development, and client engagement across institutional and retail segments.

As CEO, Zaika will lead Global X’s strategic initiatives aimed at broadening its suite of investment solutions and solidifying its position as a comprehensive and dynamic ETF provider in the Australian market. As Global X continues to establish itself as an industry innovator and thought leader, Zaika is committed to further strengthening Global X’s role as a partner for investors, delivering solutions that anticipate and address the evolving market landscape. His appointment marks a new chapter for the firm and comes following the accomplishment of key milestones and a period of significant growth for Global X.

Since its acquisition by Mirae Asset and subsequent rebranding from ETF Securities in 2022, Global X has expanded its suite of investment solutions to include 39 ETFs, including Australia’s first dedicated artificial intelligence ETF (ASX: GXAI) and Australia’s only copper miners ETF (ASX: WIRE). Under Zaika’s leadership, Global X aims to continue this momentum, focusing on ingenuity and growth in line with the evolving needs of investors.

Zaika commented, “I am excited to lead Global X at a time of significant growth and advancement in the ETF space. With over US$86 billion in assets under management globally and a strong track record of designing client-centric solutions, Global X is uniquely positioned to forge its leadership in Australia. I look forward to working with the talented team at Global X to expand our offering and enhance our value proposition for Australian investors.” [1]

Hyeon-Joo Park, Founder and Global Strategy Officer of Mirae Asset Financial Group, added, “We are committed to revolutionising the Australian ETF landscape by providing our clients with high quality investment solutions and are delighted to welcome Alex to our global leadership team. His extensive experience and strategic vision position him as an ideal leader to drive Global X’s next phase of growth. We are confident that under his leadership, Global X will continue to deliver innovative and tailored investment solutions that meet the diverse needs of Australian investors.”

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Notes:
[1] As at July 2024

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Marc Jocum

The Australian Exchange-Traded Fund (ETF) market grew 37.3% over the past year to $206.2 billion across 380 products, according to the Global X ETFs (Global X) Australia ETF Landscape report.

Growth was driven by more than $21.4 billion in net inflows, positive market movements, and the conversion of numerous unlisted active funds into active ETFs.

Product and Investment Strategist, Marc Jocum said, “It’s the strongest start ever for the Australian ETF market. In fact, we could surpass the calendar year record of $23.6 billion set in 2021, and potentially reach an industry valuation of $1 trillion by 2030[1] if this momentum continues.”

“It took nearly 20 years to reach $100 billion, but the next $100 billion was achieved in just over three years. Today, the Australian ETF market is growing at a faster rate than the US and has quadrupled its share in the Australian funds market over the past six years.”

Global shares ETFs were the year’s most popular asset class as Australian investors shifted to a ‘risk on’ position. Approximately $6 billion has been allocated to this category in 2024, representing 55% of the total market net flows. In 2023, bond ETFs were one of the most popular asset classes, capturing 37% of annual net flows.

“Artificial intelligence, regional pockets of investor interest, and fixed income are the three main trends which we expect will accelerate into the second half of 2024,” Jocum said.

Global X expects investment vehicles which are generally lower cost, like ETFs, will continue to steal market share over the next decade at the expense of traditional managed funds. Still, the market is in its infancy, with ETFs accounting for just under 5% of the total Australian funds market.

Head of Sales, Manny Damianakis said the Global X Australian ETF Landscape report has been a cornerstone for clients for more than eight years, aiming to empower investors to make informed decisions. Global X is committed to providing clients with intelligent solutions supported by industry-leading research.

“Our unique combination of international resources paired with local expertise allows us to explore innovative opportunities across thematic, income, commodity, digital assets and core solutions. Our expanding range of innovation-led ETFs reflects our investor-first philosophy of delivering the highest quality products to Australian investors,” Damianakis said.

​———

Notes:
[1] Global X, ASX and Cboe
[2] Assets under management as at May 2024, Global X
[3] Assets under management as at March 2024, Mirae Asset Global Investments
[4] Assets under management as at June 2024, Mirae Asset Global Investments

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As Head of Portfolio Management, Wolak will lead a team of investment professionals, overseeing the management of all Global X ETFs, trading infrastructure, and fostering service provider relationships, all while driving product development with key market insights.

Wolak brings more than 18 years of extensive portfolio management experience. He joins Global X from UBS Global Asset Management, where he led the index portfolio management team in Australia for over 12 years, driving strategic growth and product development. During his tenure, Wolak spearheaded the establishment of the firm’s APAC regional indexing capability, including building a portfolio management team, which resulted in over AU$28 billion of client portfolio growth.

Wolak’s incumbent Cliff Man, will depart the business after more than a decade with Global X and its predecessor business ETF Securities.

Mr Young Kim, Chief Global Officer, Mirae Asset Global Investments welcomed Chris Wolak to the firm during an exciting growth phase for the business.

“Chris’ deep understanding of funds management and exceptional track record reflects Global X Australia’s commitment to our team, clients, and partners. We are excited to welcome him to our team and confident his ability will help drive forward our mission to provide better investment solutions for Australians,” Mr Kim said.

Commenting on his appointment, Wolak said, “I’m thrilled to be joining the team during a pivotal moment of innovation in the Australian ETF market. Global X has seen tremendous success over the past few years, and I look forward to leveraging my experience to help lead the next phase of the firm’s product suite and evolution.”

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Notes:
[1] As at 13 August 2024.

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The ‘Recommended’ rating reflects strong conviction in BANK’s structure and returns, making it an apt choice for investors seeking diversified exposure to Australian bank credit, high yields, and steady income amid rising interest rates. According to Lonsec’s report, the firm expressed confidence in the fund’s ability to generate risk-adjusted returns and deemed it an appropriate entry point to this asset class.

BANK provides investors with an efficient means to access a blend of Australian Bank Senior, Hybrid, and Subordinated investment-grade bonds. Tracking the performance of the Solactive Australian Bank Credit Index, it is currently the only passively managed ETF listed in Australia that offers this strategy. The fund invests in assets offering a higher yield relative to cash, term deposits, and traditional bonds for an elevated degree of risk, and aims to provide monthly distributions to deliver regular income to investors.

Manny Damianakis, Head of Sales at Global X, said the ‘Recommended’ rating supports the firm’s conviction in the strategy and anticipates it will attract new investors seeking to generate attractive yields from Australian banks.

“Recently, fixed income ETFs have captured significant net flows in the Australian market, with a majority portion of that directed towards Australian fixed income ETFs. This trend underscores how rising interest rates have influenced local investor sentiment, prompting an investor shift towards reducing portfolio duration while seeking attractive yields,” Damianakis said.

“BANK offers exposure to the broader capital stack of Australia’s banks in one diversified solution, providing investors with a well-managed, high-performing fund that stands out in the market.

“We are pleased to receive Lonsec’s recommended rating for this product, which reflects our commitment to delivering high-quality and relevant investment solutions that meet investors’ needs amid evolving market conditions.”

BANK is the latest addition to the Global X’s suite of 40 listed ETFs across thematics, commodities, income, digital assets, and more. The company now manages more than $7.5 billion in assets under management in Australia.[1]

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Oliver Reynolds, Chief Operating Officer, and Manny Damianakis, Head of Sales, will oversee day-to-day operations while Metcalf will support the handover of his responsibilities and continue to work on some ongoing projects.

Metcalf joined Global X (formerly ETF Securities) in 2014 and has held several roles during this time including Head of Operations, Co-Head of Portfolio Management, and Head of Product before being appointed as CEO in 2022 following the acquisition of ETF Securities by Mirae Asset. Under his leadership, Global X has launched 19 new funds and increased assets under management by AUD$3 billion.

Commenting on the news, Metcalf said, “We have reached many significant milestones during my time at Global X and I’m incredibly proud of everything we’ve accomplished. I have the utmost confidence in the future of the firm, and I want to thank our team for their hard work and commitment to delivering innovative and client-led solutions for investors.”

Mr Young Kim, Head of the Global Business Unit at Mirae Asset, thanked Evan for his contribution to Global X.

“Evan performed a pivotal leadership function during his tenure as CEO, establishing a strong foundation for Global X Australia and reinforcing the firm’s position as a leading provider of innovative and disruptive investment solutions. On behalf of Global X and Mirae Asset, I want to thank Evan for his leadership and dedication to the firm. We are grateful for Evan’s contribution to Global X and wish him all the best in his future endeavours,” Kim said.

Global X have commenced steps to appoint Metcalf’s replacement and are looking forward to welcoming a new leader to the business. Global X remains committed to delivering the same level of excellence and innovation that our team, customers and partners expect.

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Evan Metcalf

Global X ETFs (Global X) has announced the launch of its Global X FANG+ (Currency Hedged) ETF (ASX: FHNG), offering Australian investors exposure to companies at the leading edge of next-generation technology with minimised exchange rate risk.

FHNG is the currency hedged version of the company’s most popular growth orientated fund, the Global X FANG+ ETF (ASX: FANG), which was launched in 2020 and holds more than $645 million in net assets.^[1]

The new hedged strategy provides exposure to ten companies driving technology innovation across multiple segments, including both household names and newcomers, currency hedged to the AUD. The fund aims to provide investors with a return that (before fees and expenses) tracks the performance of the NYSE® FANG+ Index (AUD Hedged), with a competitive management fee of 0.38% p.a. It includes the ‘Magnificent 7’ stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla – which have outperformed the broader S&P 500 over the last three years.^[2]

Chief Executive Officer, Evan Metcalf said FHNG is an attractive option as a core building block for growth-oriented portfolios, offering an unconstrained approach that incorporates the most innovating next-generation technology companies across a variety of segments and sectors.

“The Australian dollar has softened considerably over the past two years, and given this fluctuation, our clients are seeking to include AUD-hedged products in their portfolios. Given FANG is entirely exposed to the USD, FHNG presents a strategic way to achieve this minimised currency risk, while still offering a high growth opportunity,” Metcalf said.

“Global X remains at the forefront of capitalising on the significant potential of emerging macrotrends driven by technological advancements. With innovations such as cloud computing and artificial intelligence having only just scratched the surface, we are committed to offering investors solutions that engage with these transformative and long-term structural trends.”

Global X also plans to launch a currency hedged physical gold ETF later this quarter. Global X is the industry leader in gold ETFs, having launched GOLD in 2003 as the world’s first physically backed gold exchange traded product, and it remains the largest and most liquid of its kind in Australia. Earlier this year the company launched its Global X Gold Bullion ETF (ASX: GXLD), offering investors a lower-cost alternative to GOLD, designed for longer-term investments.

FHNG is the 39th product to be added to Global X’s suite of ETFs in Australia.

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