Zenith has issued ratings on three BetaShare ETFs – the US Dollar ETF (Recommended), BetaShares Australian High Interest Cash ETF (Recommended) and BetaShares Gold Bullion ETF – Currency Hedged (Recommended).
BetaShares US Dollar ETF
The BetaShares US Dollar ETF (ASX: USD) provides investors with a pure, true to label exposure to the relative change in Australian and U.S. dollars. USD provides a flexible way for retail investors to change the currency exposure of their portfolio either through hedging exposure or using the ETF to actively speculate on currency movements. USD will be most suited to those seeking exposure to U.S. dollars with the higher level of control and transparency imbued by the ETF structure without the related issues and risks associated with trying to gain currency exposure through Forex trading, CFDs or derivatives.
BetaShares Gold Bullion ETF – Currency Hedged
The BetaShares Gold Bullion ETF (ASX: QAU) provides investors with pure, true to label exposure to the movement in gold prices with a currency overlay (to the AU$) to hedge out the effect of FX movements which tends to dilute exposure. One of only two gold Exchange Traded Products in Australia (at the date this rating was issued) which are physically backed by gold bullion, it is also the only gold ETF to use currency hedging.
BetaShares Australian High Interest Cash ETF
The BetaShares Australian High Interest Cash ETF (ASX: AAA) aims to provide an attractive alternative to traditional cash funds via a listed vehicle. AAA will invest solely in bank deposits from major Australian banks, providing a regular monthly income distribution with capital stability. The investment objective is to exceed the 30 Day Bank Bill Swap Rate before fees and expenses. Cost of the fund in terms of the management fee is cheap even by ETF standards and significantly more competitive to fees charged by those managed funds focusing on cash like returns as an asset class. The appeal of the ETF is that it provides investors with access to liquidity without an interest rate penalty while providing a competitive rate of return.
Zenith’s View
Zenith has a positive view that each of these ETFs can provide cost effective, efficient and true to label exposure to each of the relevant assets. While each ETF has its own idiosyncrasies and uses in a portfolio, Zenith sees them as a potential useful way to gain easy exposure to each asset class in a listed environment.
