First Sentier Investors is making waves in the Australian ETF market with its latest move to list its First Sentier Geared Australian Share Fund on the Australian Securities Exchange (ASX). This new ETF, with the ticker code LEVR, is designed to provide investors with a different avenue to tap into the fund’s growth opportunities by focusing on specific ASX100 stocks known for their strong balance sheets, cash flow potential, and liquidity.
The Head of Australian Equities Growth at First Sentier Investors, Dushko Bajic, expressed enthusiasm for the launch of LEVR, highlighting the flexibility it offers investors to leverage the active investment approach of the firm through the ASX platform. The fund, initially launched in 2023 and managed actively since then, has seen its funds under management grow to AU$155 million, setting the stage for the ETF transition.
With an experienced investment team steering the ship, the First Sentier Geared Australian Share Fund Complex ETF is expected to leverage over 25 years of combined market experience. According to David Wilson, Deputy Head of Australian Equities Growth and Portfolio Manager, the ASX 100 presents a fertile ground for an actively managed, geared strategy, even in volatile market conditions.
By borrowing at favorable institutional interest rates for investment, LEVR aims to capitalize on rising market trends to deliver amplified returns and franking credits over the long term. However, the fund’s gearing levels also expose it to high-risk scenarios, potentially resulting in amplified losses during market downturns, albeit without the burden of managing margin calls.
Looking ahead, the fund is poised to commence trading on the ASX in mid-May pending final regulatory approvals. Harry Moore, Chief Commercial Officer at First Sentier Investors, underscored the significance of listing LEVR, emphasizing the opportunity for clients to access the expertise of the firm’s Australian Equities Growth Investment Team through this new channel.
As the demand for ETFs continues to rise, the move to offer LEVR reflects a strategic response to evolving client needs and preferences. By expanding the suite of investment strategies available through the ETF structure, First Sentier Investors aims to reach new clients who may not have traditionally considered investing through managed funds.
In the broader context of the financial market landscape, the introduction of LEVR adds a new dimension to the Australian ETF market, providing investors with a fresh option to engage with actively managed, geared portfolios focused on Australian shares. With the fund’s emphasis on quality, liquid companies with conservative gearing, it seeks to strike a balance between growth potential and risk management in a dynamic market environment.
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