The two ‘MINIs’ have been launched over BetaShares Resources and Financial Sector ETFs – the CitiFirst MINI, Resources (ASX Code: QREKOA) and the CitiFirst MINI, Financials (ASX Code: QFNKOA).
Citigroup’s MINIs are leveraged trading tools classified as warrants with the new products offering investors access to the two largest sectors of the Australian economy, without the risk of margin calls. For a fraction of the outlay of buying the ETFs outright, investors are now able to access the same exposures leveraged at between 65-70%.
Drew Corbett, Head of Investment Strategy and Distribution said that, particularly in a sideways moving market, some investors look to actively trade all or part of their portfolio to generate or boost returns. This strategy has proven successful for savvy traders with volatility providing opportunities where markets have been range bound.
“Through the new listed MINIs, investors can now take short term views and target small positive or negative sector moves. As these products employ limited recourse lending, the amount of capital at risk is reduced while still taking advantage of smaller market movements through leverage,” he said.
With analysis showing approximately 90 per cent of returns are driven by market and sector performance instead of choosing the right share, ETFs have the ability to capture these returns.
“Most times major stocks like BHP, Rio Tinto and the four banks track the movement of their respective sector indices very closely. This means that often, trading a single stock potentially adds risk without necessarily boosting returns,” says Corbett.
For active traders and savvy investors looking to take short term views, liquidity and tight bid/ ask spreads play a crucial role in a products uptake.
“The liquidity of BetaShares ETFs underlying the MINIs has been widely recognised by market participants as trading tightly with sufficient liquidity and depth. The demonstrated spreads since our sector ETFs listed late last year have been at or very close to those available in blue-chip shares,” Mr Corbett said.
BetaShares’ resources (QRE) and financials (QFN) broad based sector ETFs are approaching $80m in combined FUM.
Further information can be found at www.betashares.com.au and www.asx.com.au.
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BetaShares is a specialist provider of ETFs designed for Australian investors. BetaShares objective is to expand the universe of investment possibilities open to investors by providing ETFs that empower investors to implement their investment strategies with ease.
About BetaShares ETFs
BetaShares ETFs are Australian domiciled ETFs which trade on the Australian Securities Exchange, and are bought and sold by investors like shares. BetaShares will deliver ETF products that allow investors to track the performance of a range of market indices and asset classes.
Australian-owned and managed, BetaShares is affiliated with BetaPro Management, one of the largest ETF issuers in North America.
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BetaShares is a specialist provider of ETFs dedicated to delivering products that meet specific investor needs.