BetaShares to launch latest yield maximiser ETF

BetaShares expects to launch a NASDAQ 100 Yield Maximiser exchange traded fund (ETF) later this month which will offer investors an attractive income.

The ETF, known as QMAX, would aim to provide investors with exposure to companies in the NASDAQ 100 and attractive income that was expected to exceed the dividend yield associated with holding the portfolio of underlying shares alone, with lower volatility than the underlying index.

The fund’s approach would be to provide exposure to the index and to sell some of the upside share price potential of the portfolio in return for additional upfront income via a ‘covered call’ or ‘buy-write’ strategy.

This was the third yield maximiser fund to be offered by BetaShares following the launch of the Australian Top 20 Yield Maximiser in 2012 and S&P 500 Yield Maximiser in 2014.

Alex Vynokur, BetaShares chief executive, said many Australian investors were seeking out equity strategies that deliver attractive, regular income distributions combined with less volatility than traditional equity portfolios.

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“QMAX’s strategy aims to outperform a strategy of holding the share portfolio alone (i.e. without writing call options) in falling, flat and gradually rising markets. However, in a strongly rising market, covered call strategies such as QMAX should be expected to produce lower total returns compared to owning the share portfolio alone.”

The fund expected to begin trading later in September, subject to regulatory approval.