Betashares gearing up to expand Wealth Builder product suite

Betashares has registered a new managed investment scheme, which possibly signals the expansion of its Wealth Builder geared ETF product suite, launched in April last year.

The Betashares Wealth Builder Global Shares Geared (30-40% LVR) Complex ETF has been registered with ASIC and, if launched, would be the fourth fund in the Wealth Builder range, which the firm said comprised "Australia's first 'moderately geared' ETFs on the ASX."

The inaugural funds, the Betashares Wealth Builder Australia 200 Geared (30-40% LVR) Complex ETF (ASX: G200) and Betashares Wealth Builder Diversified All Growth Geared (30-40% LVR) Complex ETF (ASX: GHHF) provide exposure to the Australian share market and to an all-cap, all-world equity portfolio, respectively.

The G200, although it doesn't aim to track an index, has delivered an annualised return of 18.45% since inception, compared to the S&P/ASX 200's 14.14% over the same period.

The GHHF, which also doesn't track an index, has achieved a return of 21.96% per annum since its launch. Together, G200 and GHHF have amassed $87.8 million in net assets.

A third fund, the Betashares Wealth Builder Nasdaq 100 Geared (30-40% LVR) Complex ETF (ASX: GNDQ) was launched in October last year.

GNDQ has returned 13.49% since inception versus the Nasdaq 100 (AUD)'s 10.71% and reeled in $36.2 million in net assets.

A Betashares spokesperson said the Wealth Builder ETFs have received "strong interest," and that the firm is planning to expand the range over the second half of 2025.

"We've had significant adviser and investor demand for a Wealth Builder ETF that provides broad exposure to global share markets outside of Australia," the spokesperson said.

Geared ETFs like those in the Wealth Builder range offer a compelling proposition, particularly for self-managed super funds (SMSFs), which can't legally borrow to invest in shares as they can with property. However, SMSFs are permitted to invest in geared ETFs.

For other investors, they simplify and de-risk the gearing process. When investing in a geared ETF, the maximum potential loss is limited to the capital invested.

"Compared to a margin loan, where individuals have to manage a loan application process, take whatever interest rate the margin lender offers, and manage things like margin calls - there's a lot of admin and cost involved there - Betashares manages all of that process," Betashares senior investment strategist Cameron Gleeson told Financial Standard.

Betashares, as an institutional borrower, can also secure "incredibly low" interest rates, which it passes on to investors in its Wealth Builder ETFs.

As for concerns that the superior economics Betashares achieves on its interest rate may be largely offset by the management fee it charges, Gleeson said that, even after accounting for fees, investors still access a lower cost of leverage than what's available through margin loans or home equity loans.

Separately, Betashares has recently registered the Betashares Global Shares Ex US ETF.

Gleeson declined to comment on that ETF.