Wed, 28/11/2012 - 06:00
Australian exchange-traded fund provider BetaShares has launched a listed managed fund on the Australian Stock Exchange, designed to provide investors with exposure to a portfolio of 20 blue-chip Australian shares while providing an attractive income yield, paid quarterly, which exceeds the dividend yield of the portfolio of underlying shares alone.
BetaShares Australian Top 20 Equity Yield Maximiser Fund (managed fund) will trade under the ASX code YMAX and aims to provide lower overall volatility than the underlying share portfolio alone.
The fund’s approach is to hold a basket of the 20 largest ASX-listed securities (as represented in the S&P/ASX 20 Index) and, at the same time, to sell some of the upside share price potential of the portfolio in return for additional ongoing income.
According to research recently published by ASX in conjunction with the University of Sydney, strategies of the type used by the actively managed YMAX Fund have demonstrated an ability to add meaningful performance to equity investment returns over time, in most market conditions, with lower volatility, relative to a traditional portfolio of shares alone. YMAX offers investors a simple, low-cost way to access this strategy as simply as buying a share on the ASX.
Drew Corbett, head of investment strategy at BetaShares says the launch of YMAX provides investors with the potential to substantially enhance the yield on a portfolio of blue-chip Australian equities.
“The feedback we are hearing from investors and advisers suggests there is strong demand for equity strategies that deliver attractive, regular income distributions combined with less volatility than traditional equity portfolios. The YMAX Fund now offers a simple way for investors to access an income strategy that can deliver enhanced yield but also has the opportunity for some capital appreciation,” he says.
In falling, flat and gradually rising markets, the strategy employed by the fund would be expected to outperform a strategy of holding the underlying share portfolio alone, but it would be expected to underperform in a strongly rising market.
“We believe YMAX fills a gap for investors looking for core Australian equities exposures with greater income. YMAX also has the added advantage, especially for SMSFs and those nearing retirement, of helping to manage the potential downside risk from shares, yet still providing some exposure to any equities rally,” says Corbett.
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