First Sentier to enter Australian ETF market

First Sentier Investors is expecting to list its first exchange-traded fund (ETF) on the ASX in mid-May.

The listing of the First Sentier Geared Australian Share Fund Complex ETF (ASX: LEVR) will provide advisers and investors with listed access to an existing unlisted strategy that aims to deliver long-term growth by actively gearing selected ASX 100 companies that have strong balance sheets, growing cash flows, and liquidity.

First Sentier Investors head of Australian equities growth Dushko Bajic said the firm is pleased to bring LEVR to market, adding it would provide investors with flexibility to access the team's active investment strategy via the ASX.

"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," Bajic said.

First Sentier Investors deputy head of Australian equities growth David Wilson, meanwhile, said that the team has over 25 years' experience of gearing through both rapidly rising and falling markets.

"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," he said.

"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."

First Sentier Investors chief commercial officer Harry Moore concluded that given the increasing demand for ETFs, this additional way to access its active investment approach will expand the firm's offering to new clients who mightn't have traditionally considered investing via managed funds.