The objective of the BBOZ ETF is to allow investors to profit from a declining ASX200 with 2 -2.75x leverage. Again, like most bearish ETFs, it’s relatively expensive, costing 1.38% pa. It’s also important to be quick to exit if it goes against us, due to the structure of the product. They short SPI Futures using leverage and are forced to maintain exposure within 2-2.45x the market parameter, which means they are forced to reduce exposure if the market rallies.
During the panic selloff, primarily in April, the ASX200 fell 16.9% while the BBOZ ETF surged +35%, which again is a good correlation in a panic market, especially for those with excellent timing. This would have likely been the vehicle Shawn used to try and profit from a pullback over the coming weeks, but 3% in the ASX200 only translates to 6% in the BBOZ, if we time it perfectly (unlikely). In other words, we don’t feel this is the right time to play the market from the short side as we remain net bullish into Christmas, i.e. “3-steps forward and 2-back”.
- We can see the ASX200 retreating ~3% but such a move is hardly going to register on the BBOZ ETF.
MM is neutral towards the BBOZ ETF in the short term
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ASX200 v BetaShares Australian Equities Strong Bear ETF (BBOZ)
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ASX200 v BetaShares Australian Equities Strong Bear ETF (BBOZ)
