BetaShares has launched a new product which it claims will allow investors to hedge against a decline in the value of the Australian equities market.
The company announced this week it had broadened the scope of exposures available to Australian investors by launching the first managed fund which allows investors to profit from, or hedge against, a decline in the value of the Australian equities market.
It said the product – the BetaShares Australian Equities Bear Hedge Fund – will trade under the Australian Securities Exchange (ASX) code "BEAR" and is designed to generate returns that are negatively correlated to the S&P/ASX 200, the main benchmark for Australian equities.
The company explained that the fund employs a simple structure, investing all of its assets in cash and cash equivalents and obtaining short exposure via futures contracts (ASX SPI 200 futures).
It said that, in addition, the fund will be quoted on the ASX, providing investors with the ability to buy and sell units during the course of the trading day, just like any share.
BetaShares head of investment strategy Drew Corbett said the launch of the BEAR fund was a significant step for investors seeking to profit from declines in the equities market – something which represented a relevant strategy considering the current volatility observed in the equity markets.
"We have seen the Australian equities market swing markedly and stay range bound in the last 18 months," Corbett said.
"With the BEAR fund, investors now have a tool that provides the potential to profit from, or hedge against, market downturns."
