BetaShares has launched a new ETF that will give investors a leveraged short exposure to the Australian stock market.
The fund has a short exposure to the S&P/ASX200 index and will vary between 200 per cent and 275 per cent of the fund’s total assets.
The Strong Bear Fund (ASX Code: BBOZ) aims to help investors profit from, or protect against, a declining Australian share market.
The ETF will invest assets into cash and sell equity index futures contracts, which can be expected to generate a positive return when the index declines, a statement issued by BetaShares said.
BetaShares managing director Alex Vynokur said that the fund is a “useful tool” for investors looking to protect their portfolios from a downturn in the market.
Mr Vynokur added that BetaShares was in the process of launching a new fund that would provide a similar exposure to the US equities market in the coming weeks.
“While Australian and global equities markets have recently enjoyed a period of strong investment performance, investors are expressing interest in exposures which help manage investment risk in the event of a downturn.
“While any use of shorting must be approached by investors with caution as a component of an investor’s overall portfolio, we believe that BBOZ will represent a useful investment tool, allowing informed investors to actually manage their Australian market exposure, without the complexity of instruments like CFDs, or the risk of margin calls,” Mr Vynokur said.
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