First Sentier shakes up ETF market with new ASX launch

The Australian exchange traded fund (ETF) market is set to welcome a new entrant, after First Sentier Investors announced it has applied to the Australian Securities Exchange (ASX) to list its first ETF.

The global investment manager said its First Sentier Geared Australian Share Fund would be repackaged into the ETF format with ASX ticker code, LEVR, providing investors with an alternative path to access the fund’s long-term growth opportunities with its selection of specific ASX100 stocks that offer a strong balance sheet, the ability to grow their cash flows and liquidity.

“We are pleased to bring LEVR to market next month to provide investors with flexibility to access our team’s active investment approach via the ASX,” Head of Australian Equities Growth at First Sentier Investors, Dushko Bajic, said.

“Our experienced investment team has been actively managing the First Sentier Geared Australian Share Fund since its launch in 2023, growing funds under management to AU$155 million. LEVR will offer additional access to the Fund through an ASX quoted structure, for investors seeking to invest in an actively managed, geared portfolio of Australian shares.”

Similarly to its sister fund, the First Sentier Geared Australian Share Fund Complex ETF will leverage more than 25 years of combined experience from the investment management team having navigated a variety of market conditions.

“Our team has more than 25 years’ experience of gearing through both rapidly rising and falling markets,” David Wilson, Deputy Head of Australian Equities Growth and Portfolio Manager at First Sentier Investors, said.

“We believe the ASX 100 is the perfect hunting ground for an actively managed, geared strategy – even when markets are volatile – with a number of high-quality growing companies capable of compounding earnings growth and providing opportunities.”

“By borrowing at a low institutional interest rate to invest, LEVR aims to compound the long-term growth of rising markets, offering the potential for amplified returns and franking credits.

“Given LEVR’s gearing levels, it’s a high to very high-risk fund with the potential for amplified losses in falling markets, but without the hassle of servicing margin calls. That’s why we’re focused on high quality, liquid companies with conservatively geared balance sheets to help manage this risk.”

The fund is expected to commence trading on the ASX from mid-May, once all required approvals are in place.

“We’re looking forward to listing LEVR, which provides clients the opportunity to access the expertise of our long-standing Australian Equities Growth Investment Team and one of Australia’s largest and longest-running geared share managers,” Harry Moore, Chief Commercial Officer at First Sentier Investors, said.

“Given the increasing demand for ETFs, we’re excited to provide our clients with an additional way to access our active investment approach via this structure and expand our offering to new clients who may not have traditionally considered investing via managed funds. We will continue to assess opportunities to meet evolving client needs and broaden access to our suite of investment strategies.”