Global Sectors

Question 1

What is the name for BNKS?

Answer 1

BetaShares Global Banks ETF (ex-aus, currency hedged)

Question 2

What is the name for FOOD?

Answer 2

BetaShares Global Agriculture ETF (ex-aus, currency hedged)

Question 3

What is the name for FUEL?

Answer 3

BetaShares Global Energy ETF (ex-aus, currency hedged)

Question 4

What is the name for DRUG?

Answer 4

BetaShares Global Healthcare ETF (ex-aus, currency hedged)

Question 5

What is the name for MNRS?

Answer 5

BetaShares Global Gold Miners ETF (ex-aus, currency hedged)

Question 6

MNRS: Cost, Index, Weighting, Rebalancing, Distribution, Number of companies

Answer 6

57 bps. Nasdaq Global ex-Australia Gold Miners Hedged AUD Index. 60 companies by MC. Max 5 companies @ 8% weight. 4% cap for ex-5. Qtrly rebalancing. Annual eligibility check. Modified Market Cap Weighting

Question 7

BNKS: Cost, Index, Weighting, Rebalancing, Distribution, Number of companies

Answer 7

57 bps. Nasdaq Global ex-Australia Bank Hedged AUD Index. Modified Market Cap Weighting - Top 60 by MC. Max 5 companies @ 8% weight. 4% cap for ex-5. Qtrly rebalancing. Semi-ann Reconstitution and distribution.

Question 8

FOOD: Cost, Index, Weighting, Rebalancing, Distribution, Number of companies

Answer 8

57 bps. Nasdaq Global ex-Australia Bank Hedged AUD Index. Modified Market Cap Weighting. Max 5 companies @ 8% weight. 4% cap for ex-5. Qtrly rebalancing. Semi-annual distribution. Annual eligibility check. ICB Classification of Agriculture & Farming.

Question 9

DRUG: Cost, Index, Weighting, Rebalancing, Distribution, Number of companies

Answer 9

57 bps. Nasdaq Global ex-Australia Healthcare Hedged AUD Index. Modified Market Cap Weighting [MORE TO COME]

Question 10

FUEL: Cost, Index, Weighting, Rebalancing, Distribution, Number of companies

Answer 10

57 bps. Nasdaq Global ex-Australia Energy Hedged AUD Index. Modified Market Cap Weighting [MORE TO COME]

Question 11

FOOD: Cost, Index, Weighting, Rebalancing, Distribution, Number of companies

Answer 11

57 bps. Nasdaq Global ex-Australia Agriculture Hedged AUD Index. Modified Market Cap Weighting [MORE TO COME]

Question 12

DRUG: Cost, Index, Weighting, Rebalancing, Distribution, Number of companies

Answer 12

57 bps. Nasdaq Global ex-Australia Healthcare Hedged AUD Index. Modified Market Cap Weighting [MORE TO COME]

Question 13

FUEL: Cost, Index, Weighting, Rebalancing, Distribution, Number of companies

Answer 13

57 bps. Nasdaq Global ex-Australia Energy Hedged AUD Index. Modified Market Cap Weighting [MORE TO COME]

Question 14

MNRS: Why would I invest?

Answer 14

• Diversified Exposure to a diversified portfolio of the world’s leading mining companies. Tactical tilt.
• Tends to be leveraged play on gold price (Short term) – gold miners have operating leverage to gold price movements BUT although this is mostly true, the macro environment, capital structure and technicals make a big difference to the degree of leverage and the asymmetry of the leverage. Ultimately, gold miners tend to be poor long-run investments vs gold for a range of structural (and governance) reasons, but they can enjoy significant outperformance in a particular environment: one where gold has truly establish bullish momentum and inflation pressures are accelerating
• As gold (both what’s stuck in the mine and what’s being extracted) is the primary asset of miners, equity positions in miners should benefit when gold increases. However, we need to think of it in option terms rather than a fixed leverage ratio – the cost of extraction works a little like the strike price and significant leverage on the upside can be obtained once that ‘call’ becomes moves from ‘out of the money’ to ‘in the money’ However, because mining is a fairly capital intensive business, both the extraction and going operation costs requires continuous capital raisings, meaning that if the gold price falls or remains flat, there can be significant drag due relatively high interest expenses from debt issuance (as most miners are very low credit quality) and equity dilution from frequent secondary offerings
• Because miners can carry a decent amount of financial leverage, inflation has a positive effect on their equity position through the erosion of the real value of debt vs gains in the real value of assets (both capital equipment and gold itself)
[ADD MORE/CONCISE]

Question 15

BNKS: Why would I invest?

Answer 15

• Diversified Exposure to a diversified portfolio of the world’s leading banks (different to Aust Fn)
• Tactical play on global banking sector. Currency hedged providing a more ‘pure play’
• Cyclical that benefits from yield curve steepening and inflation
• Global banks are one the most sensitive sectors to positive signs of an economic recovery. This is due largely to their sensitivity to bond yields (particularly long-term interest rates relative to short-term interest rates) with any sustained recovery likely to be inconsistent with current ultra-low levels, and any re-emergence of long term inflation expectations likely to put upward pressure on global bond yields and see a steepening of yield curves. To the benefit of bank net interest margins and profitability
[ADD MORE/CONCISE]

Question 16

FUEL: Why would I invest?

Answer 16

• Exposure to a diversified portfolio of the world’s leading energy companies. Energy thematic
• Tactical play on energy – very cyclical industry with potential to outperform in recoveries
• More geographically diversified and vertically integrated than Australian energy companies that focus on exploration and production, and have more gas exposure than oil.
• Proxy for oil w/o derivatives – 0.65% correl with oil price last 3 months.
[ADD MORE/CONCISE]

Question 17

FOOD: Why would I invest?

Answer 17

• Exposure to a diversified portfolio of the world’s leading agriculture companies
• One of the most leveraged sectors to inflationary upswing
• Hold 60 leading/largest global stocks in agriculture sector
[ADD MORE/CONCISE]

Question 18

DRUG: Why would I invest?

Answer 18

• Exposure to a diversified portfolio of the world’s leading healthcare companies
• Tactical play on healthcare
• Ageing populations, rising living standards and ongoing medical advancements are expected to support increasing ongoing demand for healthcare products and services. COVID push
• Trend of healthcare spending increasing as a share of GDP
[ADD MORE/CONCISE]

Question 19

What is Hedging? Why do BetaShares use it?

Answer 19

Hedged: If ETF rises by 10% and the AUD depreciates by 10%, for arguments sake our net AUD gain is 0 (when converting back to AUD we lose the 10% gain from the ETF). By using currency forward contracts we lock in an exchange rate for some point in the future, today, in doing so eliminating the FX risk associated with international exposures. It results in a more ‘pure’ exposure to the underlying ETF in question

Question 20

What is Hedging? Why do BetaShares use it?

Answer 20

Hedged: If ETF rises by 10% and the AUD depreciates by 10%, for arguments sake our net AUD gain is 0 (when converting back to AUD we lose the 10% gain from the ETF). By using currency forward contracts we lock in an exchange rate for some point in the future, today, in doing so eliminating the FX risk associated with international exposures. It results in a more ‘pure’ exposure to the underlying ETF in question