Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
In the weekend MM report you discuss hybrids and mention HBRD, the hybrid ETF. There is another hybrid ETF listed on CX-I under the code EHF-1 and managed by Elstree as part of their unlisted Australian Enhanced Income Fund. From my cursory look it seems to do better than HBRD. Do you have a view on this ETF? Thanks you, Bob
Hi Bob,
Good job for flagging this. We have looked at Elstree before given they have superior returns to the HBRD. They are smaller manager out of Melbourne, and the team has had a long history in the space, although the Exchange Traded Product or ETP that you mentioned (listed under code EHF1) came to fruition in early 2021. That said, it does apply the same strategy as a wholesale fund they run which has been around a lot longer.
From afar, they look better managers than marketers which is not necessarily a bad thing. They delivered an 8.5% return in FY23 and are 4.8% per annum since inception. They charge 0.60% + GST and they can change expenses of a further 0.2% + GST, so it’s not cheap for a fund like this and that may be a reason why their FUM is low. We have not traded this before and liquidity could be an issue, however we will actively review this over the coming weeks. Their June 23 update is available here
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