Link Group has announced it has re-launched, together with Switzer Asset Management, the Switzer High Yield Fund as a quoted managed active exchange traded fund (ETF).
This will allow investors to buy and sell on the stock exchange as well as directly from the issuer, becoming the first fixed-income quoted managed fund in the Australian market.
The firm said it would allow fund managers to offer a consolidated product with all the benefits of a dual fund but without the complexity or costs associated with running two structures.
To this end, Link Group built a framework for dual-structure exchange traded products (ETPs) so investors would be offered the same transparency and registry capacity on and off market, a move which was largely facilitated by a close collaboration with the Australian Securities and Investments Commission (ASIC) and Chi-X Australia.
Following the regulatory approvals, Link Group and Switzer ensured that its existing off market fund satisfied all requirements needed by Chi-X and then united the two registry platforms intone structure, it said.
The Switzer Higher Yield Fund is a floating-rate bond fund that seeks to provide investors with cash yield with low capital volatility by investing in a portfolio of high-quality and liquid fixed income securities. The fund aims to achieve total returns which are 1.5% to 3.0% greater than the RBA Cash Rate after fees and expenses on a rolling 12-month basis.
“We’re proud to have played our role in developing this innovative structure for the Australian market. The quoted managed fund is a product of two years of ideation and the resultant product will be celebrated by funds and investors alike,” Paul Khoury, chief executive officer APAC, Link Fund Solutions, said commenting on the move.
“We have a significant amount of interest from our clients in launching these products, with our next one already underway and due to launch in March. Link Group will continue to enhance the operational efficiency of the product as the market size grows.”
Link Group said it expected quoted managed funds to eventually become the default structure for all retail investor focussed managed funds.