BetaShares has launched a new exchange-traded product which offers investors access to a range of Australian shares using a 'managed risk' strategy.
According to BetaShares, the Managed Risk Australian Share Fund has been “specifically designed” to meet the needs of SMSFs, pre-retirees and retiree investors who are seeking equity exposure but may also be concerned about uncertain financial markets.
BetaShares explained that the fund’s investment strategy is to invest in a passively managed group of Australian shares which consists of approximately 200 of the largest shares on the ASX by market capitalisation.
The fund also employs an active risk management strategy which seeks to reduce volatility and defend against losses in declining markets, BetaShares said.
“Investors and their advisers are increasingly being made aware of a major investment challenge – invest too cautiously and risk insufficient investment performance required to fund lifestyle purposes; invest too aggressively and risk exposure to significant losses in a market decline,” BetaShares managing director Alex Vynokur said.
“Particularly in a low interest rate environment, the potential performance and income benefits of investing in shares are attractive to investors.
“However, investors may be concerned about the effects of volatility and potential losses when markets fall, particularly in the current environment, where the volatility of the S&P/ASX 200 has risen to its highest level since 2011.
“To address this, the fund’s risk management strategy actively monitors sharemarket volatility and, when volatility rises, applies a handbrake to reduce the impact of major market declines. It does this by reducing investors’ exposure to equities in falling markets, while still allowing participation in rising markets," he said.