Fund manager Betashares has launched four funds offering geared long and geared short exposure to 10-year U.S. Treasuries and Australian Government Bonds on the Australian Securities Exchange (ASX).
The four new funds are:
- Betashares Geared Long Australian Government Bond Fund (hedge fund) (ASX: GGAB) which seeks to generate magnified gains when the prices of 10-year Australian Government Bonds rise on a given day (and conversely magnified losses when the bond prices fall on a given day).
- Betashares Geared Short Australian Government Bond Fund (hedge fund) (ASX: BBAB) which seeks to generate magnified gains when the prices of 10-year Australian Government Bonds fall on a given day (and conversely magnified losses when the bond prices rise on a given day).
Also read: Shorter versus Longer-dated Bonds: Is There a Role For Both?
- Betashares Geared Long U.S. Treasury Bond Fund – Currency Hedged (hedge fund) (ASX: GGFD) which seeks to generate magnified gains when the prices of 10-year US Treasury Bonds rise on a given day (and conversely magnified losses when the bond prices fall on a given day).
- Betashares Geared Short U.S. Treasury Bond Fund – Currency Hedged Fund (hedge fund) (ASX: BBFD) which seeks to generate magnified gains when the prices of 10-year US Treasury Bonds fall on a given day (and conversely magnified losses when the bond prices rise on a given day).
The funds are expected to appeal to experienced investors and asset allocators seeking to manage fixed income exposure in their portfolio, and who are comfortable with the higher risk associated with geared investments.
Cash and fixed income investing has been particularly relevant for Australian ETF investors so far this year, with the asset class receiving $5.6 billion in net inflows over the calendar year to 31 October 2023, making it the most popular asset class so far this year.
Betashares CEO, Mr Alex Vynokur, said the new funds provide experienced investors with a way to adjust interest rate risk in their portfolios by either increasing or decreasing the duration of their existing bond portfolio.
“Our new range of geared fixed income exposures can play a helpful role in allowing investors and asset allocators navigate different market conditions in a more convenient investment vehicle,” Mr Vynokur said.
