Betashares has launched a high yield exchange traded fund (ETF), the Betashares S&P Australian Shares High Yield ETF trading under the Australian Securities Exchange (ASX) ticker HYLD, and has also reduced the fee on its global equity income offering.
The global equity income ETF investment strategy has also been revised, and it will now track the S&P Global High Dividend Aristocrats Index, instead of the Nasdaq Global Income Leaders Index.
“Australian investors are well known for their affinity for dividends. Both Betashares S&P Australian Shares High Yield ETF and the Betashares S&P Global High Dividend Aristocrats ETF can be used as core equity allocations that can boost income, while also implementing dividend sustainability related screens,” Betashares chief executive officer Alex Vynokur said.
The Betashares S&P Australian Shares High Yield ETF aims to provide investors exposure to a portfolio of 50 Australian companies that generate higher income than the rest of the market. It also seeks to avoid the shortcomings of traditional high-dividend strategies by screening out potential dividend traps, citing Star Entertainment Group and LendLease as examples of how such pitfalls can be detrimental to performance.
Noting that many self-funded retirees rely heavily on dividends and term deposit income to fund their retirement, Betashares hopes these new high yielding ETFs will fill a hole in their SMSF portfolios as other traditional sources of income dry up.
“Right now, the ASX dividend yield and RBA cash rate are both below 4 per cent. Outside of the COVID dip, these are market conditions we have not seen at any other time in the last 50 years. This has serious implications for investors, particularly retirees, who rely on cash and shares for income. As a result, we’re expanding our range of intelligent investment exposures to help Australian investors generate more income,” Vynokur said.
The Betashares S&P Australian Shares High Yield ETF has a management fee of 0.25 per cent. The management fee of the Betashares S&P Global High Dividend Aristocrats ETF was cut to 0.39 per cent from 0.45 per cent following the change in its tracking index from the Nasdaq Global Income Leaders Index to the S&P World Ex-Australia High Dividend Aristocrats Select Index.
