GEAR - BetaShares Geared Australian Equity Fund (hedge fund)

[qldfrog]

If you have the time, better to use call/ put option on indexes but, you can pay a fortune for options brokerage fees, may not have access to these and it is more comfortable to deal with stocks like gear/BBOZ..options are a world and language of their own

 

[divs4ever]

GEAR is my pick for the competition in October

i do not hold GEAR yet, but expect it to hit some 'headwinds' in the rest of September , potentially giving me a chance to dip my toe in the water , however in October i am thinking the US will throw a massive stimulus plan ( or market bailout ) to rescue the mid-term elections in early November ( and am thinking our ASX will get a boost from that action )

PS if i can get an entry-point i plan to CAREFULLY accumulate GEAR into the longer term ( as i expect an L-shaped recovery going into 2023 )

Top 10 Holdings .. Portfolio Turnover 6.57%​

BHP	BHP Group Ltd	9.97%
CBA	Commonwealth Bank of Australia	8.06%
CSL	CSL Ltd	6.86%
NAB	National Australia Bank Ltd	4.77%
WBC	Westpac Banking Corp	3.67%

Top 10 Holdings

CODE	COMPANY	ASSET
ANZ	Australia and New Zealand Banking Group Ltd	3.30%
WDS	Woodside Energy Group Ltd	3.13%
MQG	Macquarie Group Ltd	3.10%
WES	Wesfarmers Ltd	2.58%
TLS	Telstra Corp Ltd	2.23%

unlike many portfolios

of the top ten in this fund , i hold BHP , ( a trivial amount of ) WBC , WDS , MQG ( 'free-carried ' ) and WES so my concentration risk is lower than many investors

 

[qldfrog]

One of my winners of the year choice: a broad geared asx index, up after following recession and pivot/mad run up of markets

 

[peter2]

The ASX remains stuck in its range. It's Sept and the seasonal weakness has started. I've started to accumulate GEAR in a conservative portfolio that I tend to let sit without much activity. I hoping that the weakness continues and I can buy more GEAR near the lows of this range. I'll buy a little at every dollar level. Now at 24, then at 23, 22 etc. If the markets sells off quickly then I'll try to time the bottom.

My underlying reason is that the world still requires our resources. They may not need to buy them now but eventually they must. Plus they're getting great value with the AUD so low.

 

[Sean K]

The ASX remains stuck in its range. It's Sept and the seasonal weakness has started. I've started to accumulate GEAR in a conservative portfolio that I tend to let sit without much activity. I hoping that the weakness continues and I can buy more GEAR near the lows of this range. I'll buy a little at every dollar level. Now at 24, then at 23, 22 etc. If the markets sells off quickly then I'll try to time the bottom.

My underlying reason is that the world still requires our resources. They may not need to buy them now but eventually they must. Plus they're getting great value with the AUD so low.

Is there a comparison to be made between IOZ and GEAR? IOZ is currently my biggest ETF holding and want to keep adding but don't want to put all my Super eggs in one basket. Is this just the same basket?

 

[divs4ever]

Is there a comparison to be made between IOZ and GEAR? IOZ is currently my biggest ETF holding and want to keep adding but don't want to put all my Super eggs in one basket. Is this just the same basket?

well GEAR as the name implies is leveraged

https://digital.feprecisionplus.com/documents/tpp/en-au/KSPJ/FS

https://digital.feprecisionplus.com/documents/tpp/en-au/G1ED/FS

now since i do not hold either GEAR or IOZ i am not sure whether either has a DRP

and a DRP would put an extra tweak into any accumulation plan

but according to the fact sheetsheets GEAR and IOZ are close to identical baskets except one adds a gearing component ( and a hefty fee for doing so )

 

[Sean K]

well GEAR as the name implies is leveraged

https://digital.feprecisionplus.com/documents/tpp/en-au/KSPJ/FS

https://digital.feprecisionplus.com/documents/tpp/en-au/G1ED/FS

now since i do not hold either GEAR or IOZ i am not sure whether either has a DRP

and a DRP would put an extra tweak into any accumulation plan

but according to the fact sheetsheets GEAR and IOZ are close to identical baskets except one adds a gearing component ( and a hefty fee for doing so )

I DRP IOZ. Will check the fees on GEAR. I have a feeling they'd be same same and it just depends on entry points to squeezing out any additional winnings. Or, in the long run, it's time in, not timing.

 

[divs4ever]

well i can only compare with my journey with VAS since 2011 i DRPed them after averaging down during 2011 now DRPing worked nicely ( much better with VHY because of the lower share price but comparable distributions )

DRP on a six-monthly payer isn't so sweet but with GEAR that might be offset by the extra franking credits

so GEAR seems to dip lower than the normal index ETFs so it would depend how tolerant the investor is to capital ( unrealized ) losses

( some close to faint when they are down 20% , i consider if i should add some more @ -20% )

but could be an investing strategy ( dual investing ) as GEAR and IOZ should move independently in turbulent times

 

[qldfrog]

I DRP IOZ. Will check the fees on GEAR. I have a feeling they'd be same same and it just depends on entry points to squeezing out any additional winnings. Or, in the long run, it's time in, not timing.

Beware beware do not even think about staying long term in either gear or bboz. They are both short term plays, I use (d) but there is a slow grinding effect eating at the value on a medium long term play..so gearat least is not time in but timing.
Not sure about ioz as I never used it

 

[qldfrog]

Beware beware do not even think about staying long term in either gear or bboz. AllThey are both short term plays, I use (d) but there is a slow grinding effect eating at the value on a medium long term play..so gearat least is not time in but timing.
Not sure about ioz as I never used it

To add to the above, has been discussed before, but it is structural so yes, play with these but not as long term investment ...

 

[Sean K]

To add to the above, has been discussed before, but it is structural so yes, play with these but not as long term investment ...

Well, I'm looking to park my super in some super, so this might not be for me. More research needed. Thanks.

 

[divs4ever]

Beware beware do not even think about staying long term in either gear or bboz. They are both short term plays, I use (d) but there is a slow grinding effect eating at the value on a medium long term play..so gearat least is not time in but timing.
Not sure about ioz as I never used it

BBOZ absolutely as a short-term play ( i used these successfully between September 2019 and March 2020 ) but have resisted since
GEAR i have not bought into , but am still looking , waiting and thinking ( so have no hands on experience )

but to me the leverage factor vs the extra fees is something to consider but at least you don't have to worry about currency hedging ( into the bargain )

a straight index fund on ASX listed funds i find useful as insurance ( against me selecting too many dud/unlucky stocks ) i selected VAS only because the XKO ( top 300 ) had a marginally better growth potential over the XJO mandate

 

[qldfrog]

Well, I'm looking to park my super in some super, so this might not be for me. More research needed. Thanks.

Yes a VAS or similar for long term.
If you have time, chart Gear vs ASX on a couple of years window and I expect you to see what I mean even on a flat market.

 

[divs4ever]

Yes a VAS or similar for long term.
If you have time, chart Gear vs ASX on a couple of years window and I expect you to see what I mean even on a flat market.

for GEAR i was hoping to buy/add in a reasonable downtrend and let the DRP work it's magic , but the six-monthly divs ( compared to 3 monthly by some ungeared rivals ) might remove the shine off that theory

 

[peter2]

Betashares estimated distributions have been released today. XD date is Jan 2, 2024. Paid 17th Jan, 2024

GEAR ~ 0.555 $/unit - paid semi-annual
URNM ~0.01

 

[rolly1]

Hi can someone explain why GEAR has a franking rate of 789% for the div just gone?

 

[divs4ever]

Hi can someone explain why GEAR has a franking rate of 789% for the div just gone?

NO !

i strongly suspect an error in calculation ( surely they don't leverage 5X )

especially when i noticed the low franking on A200 in the same announcement

over 100% when you leverage sure , but over 700% that will scare ATO

 

[rolly1]

NO !

i strongly suspect an error in calculation ( surely they don't leverage 5X )

especially when i noticed the low franking on A200 in the same announcement

over 100% when you leverage sure , but over 700% that will scare ATO

The two before that were 195% and 284% so don't think there is an error there.

 

[divs4ever]

The two before that were 195% and 284% so don't think there is an error there.

well when you are leveraging the holding say at 3 times you would receive three times the usual franking credits

Betashares describes GEAR as

The fund will seek to achieve this objective by combining application money from investors with borrowed funds, and investing the proceeds in a broadly diversified share portfolio generally consisting of approximately 200 of the largest equity security on the ASX, weighted by their market capitalisation.

or in layman's term a top 200 index fund that is then leveraged

the top 10 holdings

CODE	COMPANY	ASSET
BHP	BHP Group Ltd	9.71%
CBA	Commonwealth Bank of Australia	8.50%
CSL	CSL Ltd	6.03%
NAB	National Australia Bank Ltd	4.62%
WBC	Westpac Banking Corp	4.03%

Top 10 Holdings

CODE	COMPANY	ASSET
ANZ	ANZ Group Holdings Ltd	3.73%
WES	Wesfarmers Ltd	3.29%
MQG	Macquarie Group Ltd	3.05%
WDS	Woodside Energy Group Ltd	2.51%
GMG	Goodman Group	2.25%

not astoundingy different to A200

top ten holdings

4.71%
Top 10 Holdings

CODE	COMPANY	ASSET
BHP	BHP Group Ltd	9.76%
CBA	Commonwealth Bank of Australia	8.57%
CSL	CSL Ltd	5.98%
NAB	National Australia Bank Ltd	4.68%
WBC	Westpac Banking Corp	4.04%

Top 10 Holdings

CODE	COMPANY	ASSET
ANZ	ANZ Group Holdings Ltd	3.79%
WES	Wesfarmers Ltd	3.38%
MQG	Macquarie Group Ltd	3.19%
GMG	Goodman Group	2.57%
WDS	Woodside Energy Group Ltd	2.34%

the major difference is GEAR is leveraged

A200 seems to be paying 31.8% franking while GEAR seems to be paying 789.09% in franking credits

GEAR pays distributions 6 monthly , A200 pays 3 monthly and we are talking the same ETF issuer so we are talking stable-mates

the discrepancy seems rather wide ( even if you halved GEAR to measure in 3 monthly time spans )

 

[rolly1]

well when you are leveraging the holding say at 3 times you would receive three times the usual franking credits

Betashares describes GEAR as

The fund will seek to achieve this objective by combining application money from investors with borrowed funds, and investing the proceeds in a broadly diversified share portfolio generally consisting of approximately 200 of the largest equity security on the ASX, weighted by their market capitalisation.

or in layman's term a top 200 index fund that is then leveraged

the top 10 holdings

CODE	COMPANY	ASSET
BHP	BHP Group Ltd	9.71%
CBA	Commonwealth Bank of Australia	8.50%
CSL	CSL Ltd	6.03%
NAB	National Australia Bank Ltd	4.62%
WBC	Westpac Banking Corp	4.03%

Top 10 Holdings

CODE	COMPANY	ASSET
ANZ	ANZ Group Holdings Ltd	3.73%
WES	Wesfarmers Ltd	3.29%
MQG	Macquarie Group Ltd	3.05%
WDS	Woodside Energy Group Ltd	2.51%
GMG	Goodman Group	2.25%

not astoundingy different to A200

top ten holdings

4.71%
Top 10 Holdings

CODE	COMPANY	ASSET
BHP	BHP Group Ltd	9.76%
CBA	Commonwealth Bank of Australia	8.57%
CSL	CSL Ltd	5.98%
NAB	National Australia Bank Ltd	4.68%
WBC	Westpac Banking Corp	4.04%

Top 10 Holdings

CODE	COMPANY	ASSET
ANZ	ANZ Group Holdings Ltd	3.79%
WES	Wesfarmers Ltd	3.38%
MQG	Macquarie Group Ltd	3.19%
GMG	Goodman Group	2.57%
WDS	Woodside Energy Group Ltd	2.34%

the major difference is GEAR is leveraged

A200 seems to be paying 31.8% franking while GEAR seems to be paying 789.09% in franking credits

GEAR pays distributions 6 monthly , A200 pays 3 monthly and we are talking the same ETF issuer so we are talking stable-mates

the discrepancy seems rather wide ( even if you halved GEAR to measure in 3 monthly time spans )

Maybe, but before these last three divs they were all below 100%