Available on the ASX from today, the Betashares Wealth Builder Global Shares Geared (30–40 per cent LVR) Complex ETF (ASX: GGBL) provides moderately geared exposure to an index of about 1,300 developed markets companies across more than 20 countries, excluding Australia.
Its addition takes the number of funds in the company’s “wealth builder” range to four, joining other options covering Australian companies (G200), Australian and global equities (GHHF) and the Nasdaq 100 (GNDQ).
GGBL provides geared access to Betashares’ Global Shares ETF (ASX: BGBL), which is currently nearing AU$3 billion in assets under management. Under professional management, the fund will combine investor capital with borrowed funds to be invested in BGBL at a moderate gearing range of 30 to 40 per cent.
First launched early last year, Betashares’ “wealth builder” series introduced Australia’s first moderately geared ETFs to the ASX.
While a number of geared equity funds exist in the Australian market from players such as VanEck, Perpetual and Ausbil, Betashares reported that it is still Australia’s only provider of this ETF style, with the current suite now managing nearly AU$200 million.
Commenting on the launch, Betashares CEO Alex Vynokur said he was excited about the expansion of the range, adding that significant investor uptake has already been observed.
“GGBL provides convenient, moderately geared exposure to a portfolio of global shares, designed for investors seeking to accelerate their long-term wealth creation as part of a well-diversified portfolio,” Vynokur said.
According to Betashares, the fund borrows at institutional rates which are considerably lower than those typically available to individual investors, providing investors with access to low-cost funding without the need for loan applications, credit checks or portfolio rebalancing due to the effects of gearing.
Additionally, the new fund has a management fee structure of 0.35 per cent per annum of the fund’s gross asset value and is internally geared, meaning investors’ risk is limited to their capital invested, with no margin calls for investors, according to Betashares.
However, Vynokur noted that the fund is not suitable for all investors, as gearing tends to be more volatile than traditional investment methods.
“Our Wealth Builder range is particularly well suited to accumulators with a long investment horizon and who are comfortable with the higher levels of volatility associated with gearing,” he added.
