CFS launches two geared index options
Colonial First State (CFS) has launched two geared index options designed to complement its existing suite of seven actively managed geared funds and add to its range of index options on its $109 billion FirstChoice platform.
The superannuation and investments group said its Geared Index Australian Share option and Wholesale Geared Index Global Share option would offer investors a low-cost way to boost their exposure to Australian or global share markets using borrowing within the investment products.
CFS chief distribution officer, Bryce Quirk, said the options were in response to a growing appetite from investors and advisers for passive investments.
“These funds will allow investors to use leverage to increase their exposure to global or Australian share markets via passively managed investment strategies,” he said.
“Using low-cost index funds as a base, offers the benefits of broad market exposure, low management fees and transaction costs, and systematic processes.
“Our new offerings have also come about as a result of adviser demand for greater access to lower cost strategies, which provide the potential for significant growth in portfolios with longer investment horizons.”
The CFS Geared Index Australian Share option would borrow to invest in a diversified basket of Australian listed companies. It would aim to outperform the S&P/ASX 100 Accumulation Index over rolling seven-year periods before fees and taxes.
The CFS Wholesale Geared Index Global Share option aimed to magnify long-term investment returns by borrowing to invest in a diversified portfolio of global shares. This option aimed to outperform the MSCI All Country World Index in Australian dollar terms over rolling seven-year periods before fees and taxes.
The geared index options could borrow at institutional interest rates, which were typically lower than the rates charged on margin loans to individual investors.
“The geared index options manage debt internally, so investors don’t need to worry about margin lending applications or margin calls. There is no debt recourse at the investor level, so the maximum loss is restricted to the value of the original investment,” Quirk said.
AUTHOR
Liam Cormican
Recommended for you
Lonsec Research and Ratings has appointed a head of sales, completing the leadership team to boost its reach with financial advisers.
Allianz Retire+ has announced major leadership changes with the appointment of a new CEO and distribution heads to help expand its presence across the wealth channel.
The RBA assistant governor (business services) is set to speak at the Women in Finance Summit 2025, taking place this November.
Momentum Media’s wealth publishing network is pleased to announce the launch of the annual Australian Wealth Management Summit 2025.
