Monash sees success in ETF move


Monash Investors has said the structural change of its listed investment company into an actively-managed exchange traded fund (ETF) has been “much better” for investors.
In the first update since the strategy changed structure, manager Simon Shields said the Monash Absolute Active Trust was now “very appealing” in this new format.
Reasons for the improvement included it was a better structure for investors, had better transparency, better dividend experience and was one of only a few Australian equity long/short managed ETFs.
“The big issue we had was trading at a discount and now it trades at NAV [net asset value], and with liquidity – now the market makers provide liquidity,” Shields said.
“Another issue that people miss a lot is we are now regulated as an investment product rather than a company so we don’t have the issue of conflicting shareholdings and all the regulatory issues that brings.
“Because we aren’t making tax payments to the ATO [Australian Taxation Office], that means we can also hold onto our cash for longer until we have to distribute it which means more reliable and regular distributions.
“It is very appealing for investors, much better than when it was an LIC.”
Since inception as an active ETF on 28 May, 2021, it had returned 10.3% and had an average cash weighting of 21.3%.
The original Monash Absolute Investment Company LIC was launched in 2016 but was transitioned earlier this year after encountering a persistent discount.
Recommended for you
Australia’s “sophisticated” financial services industry is a magnet for offshore fund managers, according to a global firm.
The latest Morningstar asset manager survey believes ETF providers are likely to retain the market share they have gained from active managers.
Negative market movements, coupled with net outflows, have prompted a near $6 billion decline in Challenger’s funds under management for FY25’s third quarter.
The real estate investment manager has positioned the APAC region for future growth with an internal promotion to the newly created role of deputy head of Asia Pacific.