Smartshares to launch 2 new ETFs, appoints ETF market maker
8:30am, 9 Dec 2014 | GENERAL
Smartshares, NZX’s funds management business, is pleased to announce that it has registered a prospectus for the launch of two new Smartshares Exchange Traded Funds (ETFs).

The new Smartshares ETFs will be the Australian Property Index Trust (ASP) that invests in 16 listed Australian property companies; and the Australian Dividend Index Trust (ASD), the investment focus being the top 50 high dividend paying Australian listed companies.

Smartshares ETFs are listed funds that aim to provide a return to unitholders that closely matches the return on a specific equity market index. The Aus Property Fund will track the S&P/ASX 200 A-REIT Equal Weight Index and the Aus Dividend Fund will track the S&P/ASX Dividend Opportunities Index.

The new funds complement Smartshares’ existing suite of ETFs, which comprises:

- New Zealand Top 50 (FNZ) - The objective of smartFONZ is to provide a return that closely matches the return on the NZX 50 Portfolio Index. The NZX 50 Portfolio Index comprises 50 of the largest entities listed on the NZX Main Board
- New Zealand Top 10 (TNZ) - The objective of smartTENZ is to provide a return that closely matches the return on the NZX 10 Index. The NZX 10 Index comprises 10 of the largest entities listed on the NZX Main Board
- Australian Top 20 (OZY) - The objective of smartOZZY is to provide a return that closely
matches the return on the S&P/ASX 20 Index. The S&P/ASX 20 Index comprises 20 of the largest entities listed on the ASX
- Australian Mid Cap (MZY) - The objective of smartMOZY is to provide a return that closely matches the return on the S&P/ASX MidCap 50 Index. The S&P/ASX MidCap 50
Index comprises 50 entities ranked from 51 to 100 by market capitalisation and liquidity on the ASX
- New Zealand Mid Cap (MDZ) - The objective of smartMIDZ is to provide a return that closely matches the return on the NZX MidCap Index. The NZX MidCap Index comprises a broad range of medium sized New Zealand entities listed on the NZX Main Board

The announcement today follows NZX’s announcement yesterday that it is acquiring leading New Zealand superannuation and passive funds manager SuperLife, providing the catalyst for Smartshares to further develop the ETF market in New Zealand. By combining SuperLife and Smartshares, NZX’s funds management business will become the country’s leading passive funds manager and provider of Exchange Traded Funds building on both businesses’ passive investment approaches and proven track records.

Smartshares intends to launch a broad range of domestic and international debt and equity ETFs in the next year to provide investors with greater choice and cost effective opportunities for further diversification.

Smartshares is a wholly owned subsidiary of NZX and is the pioneer of ETFs in New Zealand having launched the first New Zealand ETF in 1996.

No applications for the two new ETFs will be accepted unless the subscriber has received an investment statement (available at www.smartshares.co.nz following quotation, which is expected to commence on 16 December 2014).

Smartshares has applied to Special Division (that regulates Smartshares in place of NZX) for permission to quote the units in the new funds on the NZX Main Board, and all the requirements of the Special Division relating to the application that can be complied with on or before the date of this announcement have been duly complied with. However, the Special Division accepts no responsibility for any statement in this announcement or in respect of the offer. The NZX Main Board is a licensed market operated by NZX Limited, a licensed market operator regulated under the Financial Markets Conduct Act 2013.

Craigs Investment Partners appointed ETF market maker
NZX is also pleased to announce that Smartshares has launched a market making initiative in association with Craigs Investment Partners (CIP), which is now underway.

Under the agreement with CIP, during normal market conditions, CIP will offer two-way quotes of agreed minimum volume and maximum spread for an agreed minimum period of the full trading day. This will cover all current Smartshares ETFs, plus future ETFs launched by Smartshares.

Market making will enhance the liquidity of NZX’s Smartshares’ ETFs. Improved liquidity will allow investors to trade at prices closer to the funds NTA that will allow investors to achieve returns that more closely follow the indices that the Smartshares ETFs track.