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Highlights
First Sentier enters the ETF market with a geared Australian share fund
New ETF offers ASX-listed access to the First Sentier Geared Australian Share Fund
Focus remains on high-quality, liquid companies within the ASX 100
First Sentier Investors has formally announced its entry into the Australian ETF sector, expanding its product range within the funds management space. The firm plans to launch its first exchange-traded fund on the ASX, with the new listing designed to reflect an existing geared fund.
This strategic move aligns with a broader trend among asset managers converting established managed funds into ETFs. The ETF structure is expected to provide greater accessibility for those engaging with the Australian share market through listed investment vehicles.
Product Overview: First Sentier Geared Australian Share Fund ETF
The newly planned product, First Sentier Geared Australian Share Fund Complex ETF (LEVR), will mirror the structure and strategy of the existing geared Australian share fund managed by the firm. It is expected to begin trading on the Australian Securities Exchange in mid-May.
The fund focuses on a portfolio made up of companies within the ASX 100 index. Selection is based on criteria such as strong balance sheets, consistent cash flow generation, and overall market liquidity.
Experienced Management Team and Active Strategy
According to company leadership, the team behind the ETF has been managing the underlying fund since its inception. With a history of applying gearing strategies through various market conditions, the portfolio team brings significant experience to this product.
The investment approach actively gears exposure to selected Australian companies, aiming to magnify returns when market conditions are favorable. The fund employs institutional borrowing rates to increase exposure to equities.
Key Features and Structure of LEVR
The ETF aims to offer the same actively managed and geared strategy already in use within the firm's existing managed fund. Through this structure, users can access the strategy directly through the ASX without engaging in traditional margin loan arrangements.
The focus remains on companies with resilient fundamentals, prioritizing those with stable earnings, strong liquidity, and prudent financial structures. This methodology helps to reduce vulnerability during market downturns, while allowing leveraged exposure during upward trends.
Broader Market Context and Strategic Expansion
First Sentier’s move comes as other fund managers transition similar offerings into the ETF space, further broadening market participation. The launch reflects a growing trend in Australia’s financial services sector to meet demand for diversified, exchange-traded strategies.
The firm's commercial leadership highlighted an increasing interest in ETFs from those who previously engaged through other fund structures. This product aims to broaden access to the firm's investment strategies while maintaining alignment with regulatory and market expectations.
Focus on Market Trends and Accessibility
As part of its expansion, First Sentier plans to monitor market developments closely and explore additional ways to deliver its investment capabilities. The new ETF listing represents a step towards improving the accessibility of geared equity exposure through a listed structure, enabling more streamlined portfolio allocation within the ASX ecosystem.
The approach continues to be shaped by disciplined security selection within the ASX 100 and a focus on corporate fundamentals. This ETF will serve as a new path to gain exposure to the firm’s geared strategy through a format designed for exchange-based transactions.
