Key Highlights

  • Betashares Geared Australian Equities Complex ETF (ASX:GEAR) has a management fee of 2.23%, the highest of the three, and a listed Yield of 1.73%.
  • Betashares Geared Long Australian Government Bond Complex ETF (ASX:GGAB) is about $6.27 million in size and holds a 10-year Treasury bond futures position.
  • Betashares Strong Australian Dollar Complex ETF (ASX:AUDS) aims for magnified exposure to the Australian dollar against the US dollar, with a fee of 1.38%.
  • All three use gearing or derivatives, which magnify both gains and losses.

Three Betashares products use gearing or Derivatives to magnify exposure: Betashares Geared Australian Equities Complex ETF (ASX:GEAR), Betashares Geared Long Australian Government Bond Complex ETF (ASX:GGAB) and Betashares Australian Dollar Complex ETF (ASX:AUDS). They serve different markets, but each can move by more than its underlying asset in either direction. This article compares their structure, cost and risk.

Measure

ASX:GEAR

ASX:GGAB

ASX:AUDS

Listed price

$38.57

$19.40

$6.30

Fund size

$587.20 million

$6.27 million

$20.76 million

Management fee

2.23%

0.98%

1.38%

Listed annual yield

1.73%

Not shown

Not shown

Underlying exposure

About 200 Australian shares, geared

10-year Treasury bond futures

AUD versus USD, magnified

Listed holdings

201

1 futures position

1 holding plus cash

How the gearing is built

ASX:GEAR borrows to hold shares worth more than its own capital, and its listing shows shares at 213.67% of assets. ASX:GGAB uses a 10-year Treasury bond futures position to deliver a geared return on that bond. ASX:AUDS uses currency derivatives to provide magnified exposure to the Australian dollar against the US dollar, and its listing shows cash at 100% of assets.

Each structure is different. ASX:GEAR is an Equity product with borrowing, ASX:GGAB is a bond product built on futures, and ASX:AUDS is a currency product with an unexplained holding on its listing.

Costs

The fees are high across the group. ASX:GEAR charges 2.23%, ASX:AUDS 1.38% and ASX:GGAB 0.98%. Because gearing charges are built into the structure, investors should expect the fee to be a meaningful drag on returns over time.

ASX:GEAR shows a listed yield of 1.73%, while neither ASX:GGAB nor ASX:AUDS shows an annual yield, since their returns come mainly from price movements.

Risks to weigh

Gearing magnifies losses as well as gains. A fall in the Australian share market, a move against 10-year Treasury bonds or a fall in the Australian dollar can each cause larger losses than an unleveraged holding. The products also require ongoing management of derivatives or borrowing, which can create Margin or Rebalancing demands during volatile markets.

ASX:GGAB and ASX:AUDS are small funds, and the listings show wide bid and offer ranges in places, which can add to the cost of trading. These products are designed for investors who understand leveraged exposure.

Final Word

The three geared products serve different markets but share one central feature: they magnify both gains and losses. Their high fees, small size in two cases and specialist structures mean they suit only investors who fully understand the risks.