BetaShares, a leading Australian manager of exchange traded products, today announced the launch of two new investment funds on the Australian Securities Exchange (ASX). The newly launched Funds allow Australian investors to back their view on the outlook for US equities – whether bullish or bearish, as easily as trading any share on the ASX.
The BetaShares Geared US Equity Fund – Currency Hedged (hedge fund) (ASX Code: GGUS) provides investors and investment advisors with a simple way to obtain a cost-effective geared exposure to the returns of the US share market, hedged to Australian dollars.
GGUS will generally maintain exposure to the 500 largest securities listed in the US, weighted by market capitalisation. The gearing ratio[1] of the fund will generally vary between 50 – 65%, and will be actively monitored and adjusted to stay within this range. All borrowing obligations are met internally by the fund itself, meaning investors are not exposed to the risk of margin calls.
The BetaShares US Equities Strong Bear Hedge Fund – Currency Hedged (ASX Code: BBUS) aims to help investors and investment advisors profit from, or protect against, declines in the US share market. Similar to its Australian counterpart launched earlier this year (ASX code: BBOZ), BBUS seeks to generate magnified returns that are negatively correlated to the returns of the US share market.
BBUS will invest its assets into cash and sell S&P 500 equity index futures contracts, which can be expected to generate a positive return when the US S&P 500 index declines and vice versa. The Fund’s short exposure to the S&P 500 index will generally vary between 200% and 275% of the Fund’s net asset value, and will be actively monitored and adjusted to stay within this range.
Both GGUS and BBUS are currency hedged, aiming to substantially reduce the currency risk for Australian investors.
BetaShares Managing Director Alex Vynokur said the launch of these two funds was driven by investor demand and would broaden the options available for investors to profit from and protect against movements in the US share market, which was particularly important given growing local interest in international equities investments via exchange traded products (ETPs).
“International equities were the most popular ETP product category in the first half of 2015, with around $1.2 billion of net inflows in the six months to June,” said Mr Vynokur. “As investor interest in the US equity market in particular continues to grow, and with increased US share market volatility, we believe it’s important that investors have access to a range of tools to help position portfolios for different market conditions.
While any form of portfolio gearing, or the use of shorting, must be approached by investors with caution and as a component of an investor’s overall portfolio, we believe that BBUS and GGUS will represent useful investment tools, allowing informed investors to tactically manage their US market exposure, without the complexity of instruments like CFDs, or the risk of margin calls.”
Source: BetaShares
