sp betashares seminar - commodities - 0312
TRANSCRIPT
Confidential – may not be distributed without the consent of BetaShares Capital2
Disclaimer
The information contained in this document is general information only and does not constitute financial advice. It does not take into account any person’s financial objectives, situation or needs. It has been prepared with all reasonable care by BetaShares Capital Limited (ABN 78 139 566 868, Australian Financial Services Licence No. 341181) (“BetaShares”). The information is provided for information purposes only and should not be construed as an offer or solicitation. It should not be relied upon by any person. BetaShares assumes no responsibilities for errors, inaccuracies or omissions in this summary. Performance and statistical results noted are unaudited. The information is provided without warranty of any kind. Past performance is not indicative of future performance. Investments in BetaShares ETFs are subject to investment risk and investors may not get back the full amount originally invested. Any person wishing to invest in BetaShares ETFs should obtain a copy of the relevant PDS from www.betashares.com.au and obtain financial advice in light of their individual circumstances.
Confidential – may not be distributed without the consent of BetaShares Capital3
BetaShares is affiliated with Mirae Asset Financial Group
• Mirae Asset Financial Group (“Mirae”) has a controlling interest in Horizons ETFs, BetaShares’ institutional shareholder
• Through Horizons, BetaShares benefits from the global scale and expertise of Mirae• Mirae is one of the largest fund managers in Asia, currently managing >US$50B • Mirae is active in 11 countries worldwide
Confidential – may not be distributed without the consent of BetaShares Capital 4
Mirae Asset/Horizons ETFsStrategic Shareholder
• Horizons ETF is one of North America’s leading ETF issuers
• Majority owned by Mirae Asset, one of Asia’s largest asset managers, managing >$55B
RBC DexiaCustodian & Administrator
• Provides Administration and Custody services for ETFsglobally
Optiver, IMC, SusquehannaMarket Makers
• Global arbitrage groups• BetaShares official market-
makers
BetaShares Partners
Standard & PoorsIndex Provider
• Indices for BetaShares Sector ETFs
Credit SuisseCounterparty
• BetaShares swap counterparty for several BetaShares ETFs
• One of the world’s largest financial institutions with activities across 55 countries
Morgan Stanley, Goldman Sachs, BOA Merrill Lynch, Citi, ABN AmroAuthorised Participants
JP Morgan ChaseDepositary
• Depositary bank services for BetaShares Currency ETFs, gold bullion custodian for BetaSharesGold Bullion ETF
Confidential – may not be distributed without the consent of BetaShares Capital5
COST EFFECTIVE Entry and exit costs limited to cost of brokerageTypically lower management costs than managed fund alternatives and index funds.
HIGH TAX EFFICIENCY Low portfolio turnover within the ETF minimises capital gainsTransactions on the secondary market do not impact the ETF’s tax position
LOW TRACKING ERROR ETFs typically track their benchmark indices very closely.
TRANSPARENCY Disclosure of underlying index constituents published on a daily basisIndicative NAV typically published continuously by exchange/sponsors
LIQUIDITY Investors can buy or sell ETF units on market at or close to NAV any time during the trading day.In primary market, institutions can create or redeem ETF units according to demand.
DIVERSIFICATION Investor can easily gain exposure to entire indices with a single product and asingle trade.ETFs can be shorted or lent just like ordinary shares.
Benefits - Exchange Traded FundsBenefits of ETFs
Confidential – may not be distributed without the consent of BetaShares Capital6
SERIESETF NAME ASX
TICKERINDEX TRACKED MGT FEE
(% p.a.)
SECTOR ETFS
S&P/ASX 200 Financials Sector ETF
QFN S&P/ASX 200 Financial –x-A-REIT 0.39%
S&P/ASX 200 Resources Sector ETF
QRE S&P/ASX 200 Resources 0.39%
CURRENCY ETFS
U.S. Dollar ETF
British Pound ETF
Euro ETF
USD
POU
EEU
U.S. Dollars
British Pounds
Euro
0.45%
COMMODITY ETFS
Gold Bullion ETF - Currency Hedged
QAU Gold Bullion (US$) 0.49%
Crude Oil Index ETF – Currency Hedged
OOO S&P GSCI Crude Oil Index Excess Return 0.69%
Copper Index ETF – Currency Hedged
QCP S&P GSCI North American Copper Index Excess Return
0.69%
Commodities Basket ETF –Currency Hedged
QCB S&P GSCI Light Energy Index Excess Return
0.69%
Agriculture ETF – Currency Hedged QAG S&P Agriculture Enhanced Select Index Excess Return
0.69%
BetaShares Product RangeCurrent BetaShares Product Range
Confidential – may not be distributed without the consent of BetaShares Capital7
S&P GSCI Light Energy Index Excess Return hedged into Australian dollars, plus an interest component- is a broadly inclusive index that contains 24 commodities from all commodity sectors that meet certain eligibility requirements. The broad range of constituents provides a high level of diversification across the commodity sector. The interest component is based on interest earned by the ETF on its cash holdings
Key Information
Index Tracked & Description of Index
Product Name: BetaShares Commodities Basket ETF – Currency Hedged (Synthetic)
ASX Code QCB
Bloomberg code QCB AU
IRESS Code QCB.AXW
Index Name
S&P GSCI Light Energy Excess Return
Index Bloomberg Code
SPGCLEP
# of commodities 24
Management Fee 0.69% p.a.
ETF Inception Date
November 2011
Commodity Index Weight
Crude Oil 15.6%
Brent Oil 8.7%
Gas Oil 3.8%
Heating Oil 2.8%
RBOB Gas 2.6%
Natural Gas 1.4%
Energy 34.8%
Index Components30th September 2011
Commodities Basket ETF
Commodity Index Weight
Corn 9.2%
Wheat 6.1%
Soybeans 5.0%
Sugar 4.7%
Cotton 2.8%
Coffee 2.1%
Kansas Wheat 1.6%
Cocoa 0.6%
Agriculture 32.1%
Commodity Index Weight
Copper 6.4%
Aluminium 4.9%
Nickel 1.2%
Zinc 1.1%
Lead 0.8%
Industrial Metals 14.4%
Gold 7.0%
Silver 1.1%
Precious Metals 8.0%
Live Cattle 6.2%
Lean Hogs 3.4%
Feeder Cattle 1.1%
Livestock 10.6%
Sector Allocation30th September 2011
Energy 34.8%
Agriculture 32.1%
Industrial Metals 14.4%
Livestock 10.6%
Precious Metals 8.0%
Source: Bloomberg
BetaShares Commodity ETFs
Confidential – may not be distributed without the consent of BetaShares Capital8
BetaShares Commodity ETFsSummary
As at 30 September 2011
BetaShares Agriculture ETF - Currency Hedged (Synthetic)
Category: Agriculture
ASX Code QAG
Index TrackedS&P GSCI Agriculture Enhanced Select
Management Fee 0.69% p.a.
Corn 37.8%
Wheat 24.0%
Soybeans 19.6%
Sugar 18.6%
BetaShares Crude Oil Index ETF – Currency
Hedged (Synthetic)
Category: Energy
ASX Code
Index Tracked
Fee
OOO
S&P GSCI Crude Oil Index Excess Return
0.69% p.a.
Crude Oil 100%
BetaShares Gold Bullion ETF – Currency Hedged
Category: Precious Metals
ASX Code
Index Tracked
Fee
QAU
Gold Bullion – US$
0.49% p.a.
Gold Bullion 100%
BetaShares Copper Index ETF – Currency Hedged
Category: Metals
ASX Code
Index Tracked
Fee
QCP
S&P GSCI North American Copper Index
0.69% p.a.
Copper 100%
Confidential – may not be distributed without the consent of BetaShares Capital9
���������� �� �����
������� ������� �������� ������ �������������� ������������� �� �����
����������������� � ������� ������ ������ ������� ������� ������ ������ ������
���� � ����!����� ����"�������� ���#�� ����� �$��$� ����$�� ���##�
��� ���� ����%�"��������� ������� ���#�� $���� ������ ������ ����� #���� ������
&����� � ������� ����#� ���$�� �����#� ����#�� ������ ����� ������
�����"�����' ("��%���(� ������ ����� ������ ���#�� #�$�� ����#� �$��#�
�����)�'����*�+ �� �(�����
Commodity Funds – Performance Table
Confidential – may not be distributed without the consent of BetaShares Capital10
Portfolio Allocations – AgricultureFrom International Equities
Confidential – may not be distributed without the consent of BetaShares Capital11
Portfolio Allocations – AgricultureFrom Australian Equities
Confidential – may not be distributed without the consent of BetaShares Capital12
Portfolio Allocations – Commodities From International Equities
Confidential – may not be distributed without the consent of BetaShares Capital13
Summary
• BetaShares • Strong corporate structure • Global strategic shareholder
• Commodity Basket ETF • Broader diversification • Sub-allocations have strong fundamentals• Superior risk - return payoff
• Cost Effective, Transparent and Liquid
• Client Service & Reporting