HVST ETF report

Betashares HVST ETF (ASX:HVST)

With the goal of providing a franked income stream of at least 1.5x the yield of the broad Australian sharemarket on an annual basis, BetaShares HVST ETF aims to pay income to investors monthly. Please note that HVST does not aim to track an index.


HVST ETF Fast Facts

Australian shares sector

Yield/income strategy

Issuer: Betashares

Tired of the same ol' dividend stocks?

Betashares HVST ETF (ASX:HVST) key information

Ticker code: HVST Exchange: ASX Yearly fee: See ETF list
Geography: Australia Sector: Australian shares Distribution frequency: Monthly
DRP: Full or partial Domicile: Australia Issuer: Betashares
Registry: Link Market Services ISIN code: AU00000HVST1 IRESS code: HVST

HVST: Performance Warning

We assign a 'performance' warning label to ETFs and managed funds which we believe will likely produce a return and risk profile that is different to a traditional ETF or fund operating in this sector. This will include most ETFs which uses an active or rules-based approach to investing, such as:

  • Yield, value, quality, momentum and growth "factor ETFs"
  • Equal weight strategies
  • Hedge fund style ETFs
  • Multi-asset funds, and
  • Ethical ETFs

For example, let's say you're comparing two ETFs that you found here on the Best ETFs Australia website. Both of the ETFs operate in the Australian shares sector. So, regardless of which ETF you invest in, you get exposure to the local share market.

However, let's say ETF #1 uses a rules-based "yield strategy" and only ever buys shares in companies which have high dividend yields. ETF #2 uses a traditional "market capitalisation" or vanilla indexing strategy -- that is, for example, it only buys shares in the largest 200 or 300 companies on the market. Broadly, here's what our team at Best ETFs Australia expect you will get from your investment:

  • Yield strategy (ETF #1) -- with this ETF you'll get exposure to a portfolio of dividend-paying Australian stocks/shares. The dividend or 'historical yield' on this ETF will look higher than ETF #2 and it'll probably have fewer stocks inside the portfolio because not every share pays a dividend. The companies inside the ETF are giving up some of their profits that could be reinvested in the business.
  • Traditional market cap strategy (ETF #2) -- with this ETF you will get all of the largest shares in the, for example, top 200. Some will pay dividends back to shareholders and some won't pay dividends. In our opinion, the most likely reason a large company will not pay a dividend is because they want to keep that cash inside the company for growth and new projects. Typically, this leads to more profit and the companies can grow faster.
  • The difference. Ultimately, the difference between the two ETFs is how you get your returns and impact that has on your wealth in the long run. You might like an ETF to pay a regular dividend. But if you're a long-term investor (5-10+ years or more) you might find that the ETF which pays higher dividends (ETF #1) is sacrificing growth and might actually be going backward! Please take another look at the image above. It shows a simplified example of the potential trade-off. Of course, some ETFs can pay dividends and grow over time. We're taking a generalised approach.

Our take: don't be fooled by every ETF and fund that claims to provide a 'differentiated' approach to investing. There's no secret formula. Every investment has risks.

Tired of the same ol' dividend stocks?

Australian shares sector

The Best ETFs Australian shares sector includes ETFs, managed funds and index funds which cover the ASX and national stock exchange (NSX). It also includes other sharemarket-focused ETFs and funds which may hold investments overseas (e.g. via the New Zealand or US exchanges).

Performance Characteristics

Over the ultra-long-term, the Australian share market has proven to be among the best-performing in the world. We truly are 'the lucky country'.

One of the unique features of the Australian sharemarket is a willingness by companies to pay substantial dividends back to shareholders. We believe this may be a result of Franking Credits.

What exactly does Australian shares invest in?

The BetaShares HVST ETF invests in large dividend-paying Australian companies on the Australian share market (e.g. “blue chips”). You could buy all of these companies yourself using a share brokerage account, but that would be a very expensive and time-consuming process. ETFs are an effective way to invest in a specific investment strategy through a single trade.

Sector risks

The Australian sharemarket is heavily skewed towards financials (i.e. banks and insurers), resources and property. These companies tend to be 'cyclical', meaning they move in-line with the direction of the broader economy and financial markets.

Some risks to investing in this sector include:

  • Market risk: This is the risk that the performance of the ETF/fund rises or falls unexpectedly day-to-day, month-to-month or even year-to-year. We believe these price movements are unpredictable. Therefore, we believe investing for multiple years is the most prudent way to invest.
  • Home country bias: That happens when you invest a larger amount of your money in local/Australian investments and exclude overseas markets. This may be because it is 'too difficult' or 'too complex' to invest in overseas markets.
  • Concentration: The Australian share market is made up of many companies. However, traditional market indices have a very high proportion of their performance tied to just a few investments, such as blue-chip shares in the financial and resources sectors.
  • Regulatory risk: Australia is a market with a robust financial system. Changes to the rules or laws regarding public investments could alter the performance of ETFs and funds in the sector.

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What you need to know about Betashares

BetaShares is one of Australia's largest ETF issuers, by number of ETFs issued on the ASX. At the end of 2018, Betashares had $6.1 billion of money invested in its ETFs.

BetaShares was founded in Sydney by a group of finance professionals who have a venture capital (VC) business called Apex Capital Partners. BetaShares was an 'in house' investment for Apex but grew quickly as ETFs took off.

Betashares is part-owned by Mirae Asset Global Investment Group, a specialist ETF business which manages nearly $130 billion.

$6b+ invested in BetaShares ETFs

BetaShares launched its first ETF in 2010 but has grown its ETF count rapidly to have around 50 ETFs in the market today.

BetaShares has issued index fund ETFsrules-based ETFs and actively managed funds in an ETF wrapper. To launch its active funds, BetaShares teamed up with Legg Mason and AMP.

Potential allocation for HVST


What is The Core-Satellite Approach?


Bucket 1: Core Investments



Core ETFs might include:

  • Australian shares (index strategies)
  • Australian bonds and global bonds
  • Cash

Bucket 2: Satellite/Tactical Investments



Tactical ETFs might include:

  • Australian shares (rules-based strategies)
  • Global shares (rules-based strategies)
  • Commodity ETFs
  • Currency ETFs
  • Cash ETFs
  • Hedge funds

Typically, what is HVST used for?

HVST was designed with SMSF and retiree investors in mind, and focuses on providing a tax-effective monthly income stream. HVST also implements a risk management strategy that defends against losses during sustained market declines and reduces portfolio volatility.

How do I invest in the Australian Dividend Harvester Fund (Managed Fund) ETF ETF?



Australian Investing 101

Don't have a brokerage account for ETFs?

Read our tutorial on understanding how share brokerage accounts work.

Is HVST a good ETF?


Where you can go to find more research on this ETF:





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