InvestSMART announces ETF launch plans

In a statement, InvestSMART announced plans to list the active ETF on the ASX under the ticker INIF in June, before which it would launch an initial offer of units at $2.50 per unit from 14 May.

The ETF mirrors the firm’s current Australian Equity Income Portfolio, which has demonstrated returns of 11.05 per cent per annum since it was incepted in July 2015.

The active ETF will have a management fee of 0.97 per cent and no performance-based fees.

InvestSMART head of funds management Alastair Davidson indicated in the statement the new ETF would underweight banks (with an exposure of less than 9 per cent, compared to over 22 per cent in the ASX200) and prefer “under-valued, cash-producing companies” instead.

“In InvestSMART’s view, the majority of Australian banks are overvalued, and in the current environment, risks in the sector are also on the increase,” the statement said.

“Holding up to 30 stocks, INIF has a benchmark unaware approach with a bias towards under-valued companies that have a high certainty of generating cash, which can help produce excess returns during difficult or downward trending markets.”

Mr Davidson commented, “While the priority of the fund is delivering income, the portfolio is constructed in such a way as to allow investor to also benefit from capital gains.

“The launch of the active ETF will allow investors to access the strongly performing portfolio in a simple and cost-effective way.”

The active ETF will be managed by InvestSMART head of research James Carlisle, along with deputy head of research Gaurav Sodhi.