First Sentier Investors joins Aussie ETF market
First Sentier Investors is the latest investment manager to enter the ETF space, enabling financial advisers and investors to access an existing geared fund via an ETF structure.
The global investment manager confirmed it will apply to list its first ETF product, the First Sentier Geared Australian Share Fund Complex ETF (LEVR), on the ASX.
It expects the investment vehicle to begin trading in mid-May 2025, First Sentier Investors stated.
The incoming ETF will give Australian advisers and investors an additional way to access the existing First Sentier Geared Australian Share Fund. The fund seeks to deliver long-term growth by actively gearing a range of ASX 100 companies defined by strong balance sheets, ability to grow cash flows, and liquidity.
Dushko Bajic, First Sentier Investors’ head of Australian equities growth, said LEVR will offer investors with greater flexibility to access the firm’s active investment approach through the ASX.
“Our experienced investment team has been actively managing the First Sentier Geared Australian Share Fund since its launch in 2023, growing funds under management to $155 million,” Bajic said.
“LEVR will offer additional access to the fund through an ASX quoted structure, for investors seeking to invest in an actively managed, geared portfolio of Australian shares.”
David Wilson, deputy head of Australian equities growth and portfolio manager at First Sentier Investors, noted the team’s experience of gearing for over 25 years through rapidly rising and falling markets.
He explained: “We believe the ASX 100 is the perfect hunting ground for an actively managed, geared strategy – even when markets are volatile – with a number of high-quality growing companies capable of compounding earnings growth and providing opportunities.”
By borrowing at a low institutional interest rate to invest, the LEVR product aims to compound the long-term growth of rising markets, Wilson added, providing the potential for amplified returns and franking credits.
“Given LEVR’s gearing levels, it’s a high to very high-risk fund with the potential for amplified losses in falling markets, but without the hassle of servicing margin calls. That’s why we’re focused on high-quality, liquid companies with conservatively geared balance sheets to help manage this risk.”
Amid the rising demand for ETFs throughout Australia, the firm’s chief commercial officer, Harry Moore, said the product may attract new clients who may not have traditionally considered investing via managed funds.
“Given the increasing demand for ETFs, we’re excited to provide our clients with an additional way to access our active investment approach via this structure and expand our offering to new clients who may not have traditionally considered investing via managed funds.
“We will continue to assess opportunities to meet evolving client needs and broaden access to our suite of investment strategies.”
The announcement represents the broader trend of investment managers converting an existing managed fund into an ETF to realise attractive growth opportunities in the market. Firms that have recently done so include Coolabah Capital Investments, Resolution Capital, and Lakehouse Capital.
AUTHOR
Jasmine Siljic
Recommended for you
GSFM and its fund manager partner, Munro Partners, have launched an investment fund for New Zealand wholesale investors, marking a “natural extension” of its capabilities.
In its latest quarterly update, alternative asset manager MA Financial said it saw a 22 per cent increase in net inflows (ex institutional) to $444 million and is holding onto cash at historically high levels.
One of Australia’s largest ETF products lost over $300 million in outflows during March as international equity ETFs suffered steep declines in flows.
Australian Ethical Investment has welcomed an independent non-executive director to its board, who previously spent a decade as Colonial First State’s CEO.
