Finance & Fury Podcast

Welcome to Finance and Fury, the Say What Wednesday Edition. This weeks question comes from Gab. “I had a question regarding a leveraged ETF from Betashares called GEAR. It is designed to offer around 2:1 exposure to the ASX 200, with 0.8% management cost. Looking at the long term growth and dividends, it seems like an excellent way to get exposure to the market and bank in around 20% franked divided (at 107% ??). Also no margin calls .... Am I missing something? It seems too good!” Not personal advice – Just general information GEAR The Fund is ‘internally geared’, meaning all gearing obligations are met internally by the Fund. How this works - combines funds received from investors with borrowed funds and invests the proceeds The Fund’s gearing ratio (being the total amount borrowed expressed as a percentage of the total assets of the Fund) is managed between 50-65% This is the LVR - rebalance the LVR to the middle of the range (i.e. 57.5%) whenever it reaches either the minimum 50% or maximum 65% thresho