BetaShares offers income option with bank hybrid ETF
BetaShares has announced an Australian Major Bank Hybrids Index exchange traded fund (ETF), aimed at those investors struggling for income in a low-rate environment.
The BHYB ETF would offer a cost-effective way to get exposure to a portfolio of listed hybrid securities offered by the big four banks.
BetaShares said hybrid securities offered attractive franked income returns with moderate volatility and relatively low correlation to equities. They also produced risk and return characteristics above those of bonds but below equities.
The firm already ran an ETF focusing on active Australian hybrids which was over $1 billion in assets under management.
To be included in the new ETF, the security must be a listed preference share, have a market cap of at least $100 million and be rated at least investment grade. The ETF’s management cost was 0.35% per annum.
BetaShares chief executive, Alex Vynokur, said: “Record low interest rates present a significant challenge for investors seeking income. Our new ETF offers attractive income, but only holds hybrids backed by our big four banks, which are among the most profitable and prudentially sound banks in the world. BHYB offers investors who understand the features and risks of hybrids a convenient, cost-effective way to access this unique asset class.
“The growth of our Active Australian Hybrids Fund has demonstrated that there is strong demand for exchange traded funds which provide access to the hybrids market. We have additionally heard from our investors that there is demand for a passive exposure to the hybrids market, which we are now proud to deliver with BHYB.”
AUTHOR
Laura Dew
Recommended for you
There is one specific risk that is a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the AICD.
Global fund managers are shunning bonds, with the asset class seeing the largest drop in allocations in more than 20 years.
Australian Ethical has seen its funds under management reach $10 billion, driven by organic customer growth and superannuation contributions.
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
