North and Betashares have joined forces to create a targeted geared retirement series utilising internally geared exchange-traded funds (ETFs).
The investment platform announced it has extended its partnership with Betashares to create an ‘Australian-first’ geared retirement series.
This will be seen through the addition of Betashares’ dynamic managed accounts range to North, alongside jointly launching a series of federated managed accounts to clients later in August.
The geared managed portfolio series on North is constructed to raise exposure to defensive assets and income, offering a cost-effective way to leverage exposure to the sharemarket.
Namely, the Betashares Moderately Geared Managed Account Portfolios access leverage through internally geared ETFs, which borrow at institutional interest rates that are considerably lower than those typically available to individual investors, according to North.
“We’re thrilled to be expanding our partnership with Betashares to launch a unique geared retirement series on North, the first of its kind in the Australian market,” said David Hutchison, AMP’s general manager of managed portfolios and investments.
“It’s another example of how North continues to innovate in retirement solutions, ensuring we are the platform of choice for more advisers across Australia.”
Last year, Betashares announced the launch of two ETFs that were described as Australia’s first “moderately geared” ETFs available on the ASX. The “wealth builder” range offers a gearing ratio approximately between 30 and 40 per cent on a given day.
The Betashares Wealth Builder Australia 200 Geared (30–40% LVR) Complex ETF provides moderately geared exposure to the returns of the broad Australian sharemarket.
Meanwhile, the Betashares Wealth Builder Diversified All Growth Geared (30–40% LVR) Complex ETF offers moderately geared exposure to the returns of an “all-cap, all-world” share portfolio.
Money Management previously explored how geared funds were proving to be a popular strategy for wealth accumulation – an investment strategy that combines investors’ capital with borrowed funds, allowing for larger amounts to be invested and potentially delivering magnified returns.
A number of such offerings from fund managers exist in the Australian market, such as geared equity funds from VanEck, Perpetual, and Ausbil.
