Betashares has added four new “industry-first” long and short bond funds to its product range which will allow investors to adjust interest rate risk in their portfolios.
The four funds, which recently commenced trading on the ASX, offer geared long and geared short exposure to 10-year US Treasuries and Australian government bonds.
The new funds include the Betashares Geared Long Australian Government Bond Fund (hedge fund) (ASX: GGAB), which seeks to generate magnified gains when the prices of 10-year Australian bonds rise, while delivering magnified losses when these prices fall.
Meanwhile, the Betashares Geared Short Australian Government Bond Fund (hedge fund) (ASX: BBAB) aims to generate magnified gains when the prices of 10-year Australian bonds fall, and conversely magnified losses when the bond prices rise.
Also among the new line-up is the 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 but magnified losses when prices fall.
Finally, the Betashares Geared Short U.S. Treasury Bond Fund – Currency Hedged Fund (hedge fund) (ASX: BBFD) aims to generate magnified gains when the prices of 10-year US Treasury Bonds fall, and conversely magnified losses when the prices rise.
Betashares CEO Alex Vynokur explained that the 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,” he said.
According to Betashares, the four funds are expected to appeal to experienced investors and asset allocators who are seeking to manage fixed income exposure in their portfolio and are comfortable with the higher risk associated with geared investments.
The firm now offers 18 funds in the category of cash, hybrids and fixed income with a total of more than $10 billion in funds under management, which Betashares said make it the largest provider of cash, hybrids and fixed income ETF solutions in Australia.
Cash and fixed income have remained in strong demand among Australian ETF investors so far this year. Betashares reported that the asset class received $5.6 billion in net inflows in the year to 31 October 2023.
Along with Betashares, a number of other firms have also expanded their line-up of cash and fixed income ETFs in recent months, including JP Morgan Asset Management, Macquarie Asset Management, VanEck and BlackRock.
