Exchange-traded product provider BetaShares has launched a new ETF designed to provide leveraged short exposure to the Australian stock market.
In a statement issued by BetaShares, the ETP provider said The Strong Bear Fund has a short exposure to the S&P/ASX200 index and will vary between 200 per cent and 275 per cent of the fund’s total assets.
The ETF will invest assets into cash and sell equity index futures contracts, which can be expected to generate a positive return when the index declines, a statement issued by BetaShares said.
BetaShares managing director Alex Vynokur said the fund is a “useful tool” for investors looking to protect their portfolios from a downturn in the market.
Mr Vynokur added that BetaShares was in the process of launching a new fund that would provide a similar exposure to the US equities market in coming weeks.
“While Australian and global equities markets have recently enjoyed a period of strong investment performance, investors are expressing interest in exposures which help manage investment risk in the event of a downturn," he said.
“While any use of shorting must be approached by investors with caution as a component of an investor’s overall portfolio, we believe that [the fund] will represent a useful investment tool, allowing informed investors to actually manage their Australian market exposure, without the complexity of instruments like CFDs, or the risk of margin calls."
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