‘Incredible milestone’ reached for tech investors

By Cameron Micallef

February 25 2020
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Australian investors are able to track and back ASX’s booming tech stocks with greater clarity with the launch of a smaller Australian version of the US Nasdaq composite index.

The S&P/ASX All Technology Index (All Tech Index), in partnership with S&P Dow Jones Indices, started trading on Monday under the code XTX.

The new index reaches across the economy from logistics and finance to artificial intelligence holding ASX-listed companies in the technology sector, starting with 46 members holding a combined market cap of around $104 billion.

Minister for Industry, Science and Technology Karen Andrews rang the ASX bell at the launch of the index, describing it as an incredible milestone for Australia’s technology sector.

In a little over five years, there have been more than 100 ASX Tech initial public offerings, and in 2019, seven of the 10 highest-performing stocks were technology companies.

Tech contributes $122 billion to our economy and has the potential to generate an additional $50 billion per year. It is Australia’s sixth largest sector and employs over 720,000 Australians.

“It represents seven years of hard work, and I congratulate the ASX and the companies involved on their efforts. Australia’s tech sector is booming, and it is a real privilege as Minister to be part of it,” Ms Andrews said.

ASX chief executive and managing director Dominic Stevens said the index will enhance the profile and understanding of listed technology companies in Australia and increase opportunities for investors.

“We’ve seen tremendous growth in the number of technology companies listing on the ASX and the quality of their performance recently,” Mr Stevens said.

“Over the last three years, the annualised total return from the S&P/ASX 200 has been around 10 per cent, while the return from the new All Tech Index over the same period – it had existed – would have been over 20 per cent.

“The All Tech Index recognises the critical mass of technology companies listed on the ASX. It provides investors with an opportunity to see how the sector is tracking and gives them a benchmark to measure its performance.”

Max Cunningham, ASX executive general manager, listings and issuer services, commented that he expects more foreign listings to come, adding one of the most important factors attracting overseas firms to the ASX is the local superannuation system.

“Given recent listings that we had in December and a very healthy pipeline for 2020, that part of the cohort is likely to rise,” Mr Cunningham said.

BetaShares is the first provider set to roll out an ETF tracking the index, with its launch to come in the next week and a half.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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