New active ETF to launch on ASX
InvestSMART will launch ASX:INIF to deliver both income and capital gain.
Listed financial services company InvestSMART will launch a new Active exchange traded fund (ETF) on the Australian Securities Exchange (ASX) that will deliver investors both capital gain, and income in the form of dividends. The new ETF, which will trade under the code INIF, is set to be listed on the ASX later this month.
The ETF is unique for a few reasons: it's actively managed, it's very underweight in the Australian banks and it aims to deliver both income and capital growth. It will mirror InvestSMART's existing Australian Equity Income Portfolio, which has returned 11.05% p.a. after fees since it was launched in July 2015.
“While the priority of the fund is delivering income, the portfolio is constructed in such a way as to allow an investor to also benefit from capital gains. We believe everyone should have the confidence to control their future and it shouldn’t be hard or expensive to do so,” said InvestSMART head of funds management Alastair Davidson.
"The launch of the Active ETF will allow investors to access the strongly performing portfolio in a simple and cost-effective way. ETFs historically have been indexed-based. We decided we'd have an actively managed ETF. They're very similar to what a managed fund is."
Australian investors are typically over-reliant on the bank and financial services sector. However, InvestSMART's new ETF currently has less than 9% exposure to bank stocks. Instead, INIF will invest predominately in strongly performing, under-valued companies listed on the ASX that are generating cash.
InvestSMART believes the majority of Australian banks are over-valued and could be risky in the current environment. "I think there will be implications from the royal commission, but I don't think we'll see them for a while," said Davidson.
In terms of fees, the new ETF will charge 0.97% p.a. for the active management of the fund, with no performance-based fees.
Frequently Asked Questions about this Article…
InvestSMART is launching a new Active ETF on the Australian Securities Exchange (ASX) under the code INIF. This ETF aims to deliver both income through dividends and capital gains to investors.
Unlike traditional index-based ETFs, the INIF ETF is actively managed. It focuses on delivering both income and capital growth, and it has a unique investment strategy that is underweight in Australian banks.
The INIF ETF mirrors InvestSMART's Australian Equity Income Portfolio, which has historically returned 11.05% p.a. after fees. It invests in under-valued, cash-generating companies listed on the ASX, with less than 9% exposure to bank stocks.
InvestSMART believes that most Australian banks are over-valued and could pose risks in the current market environment. Therefore, the INIF ETF maintains less than 9% exposure to bank stocks.
The INIF ETF charges an annual management fee of 0.97% for its active management. There are no performance-based fees associated with this ETF.
Everyday investors looking for a simple and cost-effective way to access a strongly performing portfolio that offers both income and capital growth can benefit from investing in the INIF ETF.
The INIF ETF is expected to be listed on the Australian Securities Exchange (ASX) later this month.
The INIF ETF is constructed to prioritize income through dividends while also allowing investors to benefit from capital gains by investing in under-valued, cash-generating companies.
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