InvestSMART International Equities Portfolio

We've increased our exposure to US markets by introducing BetaShares S&P 500 Yield Maximiser Fund.

By ·
6 Sep 2017 · 1 min read

Our passively managed Portfolios are designed to provide returns in line with the market after fees, but at a lower cost than our Peers.

For our International Equities Portfolio, we regularly monitor the Geographic Exposure of our Peers to ensure we are aligned.

We’ve increased our exposure to US markets by introducing the BetaShares S&P 500 Yield Maximiser Fund (UMAX).

 

Why UMAX?

UMAX provides exposure to the S&P 500 Index while also providing regular income that exceeds the dividend yield of the underlying stocks alone.

The portfolio generates additional income by writing out of the money call options. Premiums are earned by selling the right to purchase securities in the portfolio at a specified price (strike) in the future. It is expected that at the options expiry date the market price will be below the strike, making the option worthless to the buyer. The portfolio retains the premium without having to sell the stock.

UMAX should outperform the index in sideways and falling markets, but may underperform during strong bull markets.

The investment in UMAX enables us to achieve three objectives,

  1. Increased exposure to the US to align with our Peers
  2. Maintain underlying diversification across sectors
  3. Improve the income profile of our Portfolio

 


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