Betashares has launched its latest Australian equity ETF and reduced the management fee on its existing global dividend ETF.
The S&P Australian Shares High Yield ETF (HYLD) aims to provide higher income than the broad Australian share market, while avoiding the shortcomings of traditional high-dividend strategies by seeking to screen out potential dividend traps.
Designed for income-oriented investors, HYLD offers monthly distributions and could be used as a core Australian equity allocation with the potential to outperform the ASX 200.
Betashares chief executive Alex Vynokur said: “Australian investors are well-known for their affinity for dividends. Both HYLD and INCM can be used as core equity allocations that can boost income, while also implementing dividend sustainability related screens.
“Right now, the ASX dividend yield and RBA cash rate are both below 4 per cent. Outside of the COVID dip, these are market conditions we have not seen at any other time in the last 50 years. This has serious implications for investors, particularly retirees, who rely on cash and shares for income. As a result, we’re expanding our range of intelligent investment exposures to help Australian investors generate more income.”
In addition to this, the firm has revised its investment strategy and decreased the management fee for its $48.9 million Betashares Global Income Leaders ETF, which has been renamed as the Betashares S&P Global High Dividend Aristocrats ETF (INCM).
The reasoning behind this change is because the benchmark index has changed from the Nasdaq Global Income Leaders Index to the S&P World Ex-Australia High Dividend Aristocrats Select Index. This offers exposure to 100–200 companies that have increased or maintained their dividends every year for at least the past decade, compared to 100 companies in the former index.
“Relative to the current index, the new index’s construction methodology, in particular its regional and sector weightings, is designed to provide an exposure that is more aligned with the broader global market composition and to include companies with long-term track records of generating dividends. As a result, the strategy can be expected to have lower volatility and lower portfolio turnover relative to the current approach.”
The management fee will decrease from 0.45 per annum to 0.39 per cent of the fund’s net asset value.
HYLD is now trading on the ASX, and INCM’s strategy change has been implemented as of close of trading 5 August.
This comes just a week after Betashares’ launch of its Global Aggregate Bond Currency Hedged ETF (ASX: WBND) earlier this week, which offers global exposure to investment grade bonds.
WBND provides investors with exposure to a global bond index comprising over 30,000 Treasury, government-related, corporate and securitised bonds, originating from 3,100 issuers across more than 70 countries, all of which is hedged into Australian dollars.
