Benefits of investing in the BetaShares Geared Australian Equity Fund

• Simple access to geared exposure - ability to obtain magnified returns to the Australian sharemarket as simply as buying any share

• Convenience - avoid the complexity associated with other alternatives providing gearing - no need for margin loans, loan application forms or credit checks

• Cost effective - management fee lower than most geared fund alternatives

• Lower cost of borrowing - Fund uses its capacity as wholesale investor to borrow at significantly lower interest rates than those available directly to individual investors

• No margin calls for investors - gearing obligations met by the Fund with no further recourse to the investor, meaning investors cannot lose more than their initial investment

• SMSF eligible - a means to access gearing in superannuation as a component of a diversified portfolio

• Diversification - Fund invests in a broadly diversified portfolio of shares representative of the Australian share market, assisting with risk management of a geared investment

• Liquidity - available to trade on ASX like any share

• Transparent - gearing ratio, value of the Fund's assets, net asset value per unit and portfolio holdings available daily on our website

About the Fund

• The Geared Fund provides investors with a simple way to obtain a cost-effective geared exposure to the returns of the Australian sharemarket

• The Fund is internally geared', meaning all gearing obligations are met by the Fund, such that there are no possibilities of margin calls for investors

• The Fund combines funds received from investors with borrowed funds, and invests the proceeds in a broadly diversified share portfolio consisting of the largest 200 securities on the ASX by market capitalisation

• The Fund's gearing ratio (total amount borrowed expressed as a percentage of the total assets of the Fund) will be managed between 50-65%

Gearing magnifies gains and losses and may not be a suitable strategy for all investors. 

Investment objective

The Fund provides investors with a simple way to obtain cost-effective geared exposure to the returns of the Australian sharemarket.

How to use this ETF in your portfolio

The Fund can be used to implement a variety of investment strategies. For example:

1. Increasing market exposure via an efficient use of capital
2. Accessing the potential for enhanced franking credit exposure for tax-effective investing
3. Increasing exposure to the share market for SMSFs that have reached their concessional contribution cap

How we invest your money

As at the date of this PDS, the Responsible Entity intends to implement the investment strategy by combining application money from investors with borrowed funds, and investing the proceeds in a broadly diversified share portfolio, generally consisting of approximately 200 of the largest equity securities listed on the ASX, weighted by their market capitalisation and rebalanced quarterly.

The Fund does not have specific diversification guidelines or limits.

The Responsible Entity will publish information about the composition of the Fund's share portfolio on a daily basis on its website www.betashares.com.au .

Using borrowed funds in order to increase the amount that can be invested is known as "gearing". The aim of this is to contribute more capital and to provide greater exposure to the Australian share market.

For example, if the Fund's gearing ratio is 50%, this means that, for every $1 invested in the Fund, an additional $1 will be borrowed to invest. The gearing ratio is defined as the total amount borrowed expressed as a percentage of the total assets of the Fund.

The Fund is 'internally geared', which means the Fund borrows the money instead of investors. One advantage of internal gearing is that the Fund is able to use its capacity as a wholesale investor to borrow at competitive interest rates. Also, investors do not need to apply for a margin loan to obtain geared exposure or  pay "margin calls" in market downturns, since all gearing obligations are met within the Fund.

Small cash balances may be held in the Fund from time to time.

The target asset allocation ranges for the total assets of the Fund are as follows:

• Australian listed equities: 90-100%

• Cash and cash equivalents: 0-10%

For more information on gearing and how it works within the context of this Fund, please see section 2 of the PDS.