BetaShares launches geared equity fund on ASX

BetaShares, a leading provider of Australian exchange traded products, today announced the launch of a new investment fund on the Australian Securities Exchange (ASX).

The BetaShares Geared Australian Equity Fund (hedge fund) trades under the ASX Code “GEAR” and provides investors with a simple way to obtain a cost-effective geared exposure to the returns of the Australian share market. The assets of the Geared Fund will generally comprise the 200 largest equity securities listed on the ASX weighted by market capitalisation, which are expected to earn dividends and franking credits for the fund. The gearing ratio [see note 1] within the fund will be managed between 50 and 65 per cent.

BetaShares Managing Director Alex Vynokur said that GEAR may be a cost-effective alternative for investors considering or already invested in geared exposures such as margin loans or geared managed funds. Importantly, all gearing obligations are met by the Fund, which means that investors in GEAR are not exposed to the possibility of margin calls.

“As a leading provider of exchange traded products in Australia, BetaShares’ aim is to offer a range of exposures for different market conditions. Investment products such as geared funds, margin loans and warrants are well established in Australia but can sometimes be expensive. While any use of gearing must be approached by investors with caution – as it magnifies both gains and losses – we believe that GEAR provides a cost-effective solution compared with many other geared options available, whilst avoiding the possibility of margin calls for investors,” Mr Vynokur said.

Recent research conducted by Investment Trends indicated that 9 out of 10 financial planners expressed interest in a no-margin-call investment loan on behalf of their clients [see note 2].

Further information can be found at www.betashares.com.au and www.asx.com.au

[1] Gearing ratio = total amount borrowed expressed as a percentage of the total assets of the Fund

[2] Investment Trends December 2013 Margin Lending Planner Report, based on a survey of 616 financial planners