Betashares launches ETF amid smart beta surge

Betashares has expanded its smart beta product suite, as the ETF issuer believes the domestic market, covering equities and fixed income, will pass $50 billion by the end of the year.

The Betashares Global Fundamental Value ETF (ASX: GVAL) tracks the FTSE Developed Markets Select ex Australia Fundamental Value Index, comprising up to 750 companies, and implements a "full replication" strategy, investing in securities that comprise the index.

As far as practicable, the timing and nature of any changes to the composition of the fund's investments will generally correspond with the timing and nature of changes to the index, Betashares said.

Specifically, GVAL analyses business fundamentals, including sales, cash flow, book value and dividends, to determine a company's value. At each rebalance, the approach trims companies whose share prices have moved ahead of their fundamentals and adds those whose fundamentals are stronger relative to their share prices, Betashares explained.

GVAL has a recommended investment horizon of five or more years.

Commenting, Betashares chief executive Alex Vynokur said the business continues to deliver robust factor-based investment strategies through a convenient, cost-effective ETF vehicle.

"We're proud to expand the choice for investors and financial advisers who want the potential to outperform market-capitalisation weighted indices while keeping costs down," Vynokur said.

"That demand has helped smart beta ETFs grow to nearly $50 billion in assets in Australia, as many investors have sought to replace higher-cost active investments with targeted index-based solutions to suit their risk, return and fee budgets."

Betashares currently manages over $7 billion across its factor-based equity ETFs. Others include the Betashares Australia 200 Fundamental Value ETF (ASX: QOZ), which has $1.4 billion in funds under management.

Meanwhile, Financial Standard understands the business is also preparing to launch a new artificial intelligence (AI) ETF, dubbed the Betashares Artificial Intelligence ETF, according to ASIC's register.

The ETF was registered in May.

Currently, Global X offers a similar product with its Global X Artificial Intelligence ETF (GXAI) - investing in companies benefitting from the growth of AI technology, as well as those providing hardware facilitating the use of AI for the analysis of big data. However, it is unsure if the strategy will be mirrored for the upcoming ETF from Betashares.