Is GEAR a good ETF?
GEAR is the BetaShares Geared Australian Equity Fund from BetaShares. We classify it under AU, Large-Cap, and Geared. With about $636 million in assets it is a solidly established fund. Listed on the ASX since 2014-04-30 (over 12 years ago).
On a total-return basis, GEAR has delivered 12.49% a year over 10 years (ranked 24th of 108 ETFs we track), 11.26% a year over 5 years (ranked 39th of 188 ETFs we track), 14.9% a year over 3 years (ranked 61st of 226 ETFs we track), and 5.69% a year over 1 year (ranked 176th of 308 ETFs we track). Its strongest showing is over 5 years, where it sits in the top 21% of all ETFs we track.
The management fee of 2.23% is high, which is common for active, geared or thematic strategies and only worth paying if the approach justifies it. For comparison, similar ETFs average around 0.31%. If cost is your priority, A200 (0.04%), GHHF (0.35%), and GMVW (0.35%) cover similar ground for less. It pays a moderate 1.79% yield.
Over the past 10 years its volatility has been high (annualised standard deviation around 30.5%), meaning a bumpy ride with deep drawdowns. Its 10-year Sharpe ratio of 0.48 is weak — that's the return it has earned per unit of risk taken (higher is better).
Portfolio turnover is somewhat elevated at about 45% a year — close to half the holdings turn over annually, which starts to realise capital gains more often and chips away at after-tax returns.
Strengths
- Top-21% returns over 5 years (39th of 188 ETFs we track).
Things to watch
- A 2.23% management fee is high and compounds against you over time.
- Pricier than similar ETFs, which average around 0.31%.
- Cheaper alternatives exist: A200, GHHF, and GMVW.
- Weak risk-adjusted returns (10-year Sharpe ratio 0.48).
- High volatility (30.5% over 10 years) — expect deep drawdowns.
Good to know
- Distributions are 72% franked, a tax bonus for Australian residents.
- Built on borrowed money (geared), which magnifies both gains and losses — a tactical tool, not a buy-and-hold core.
- Australian focus means franked dividends and no currency risk, but heavy concentration in banks and miners.
What GEAR's categories mean for you
How each category this ETF belongs to tends to behave across market cycles.
Australian shares. Home-market familiarity, fully franked dividends and no currency risk for local investors — but very concentrated in banks and miners, which dominate the index.
- Market regime
- Sensitive to commodity prices, Chinese demand and domestic interest rates. Generous income, but narrow sector diversification.
- In a portfolio
- A natural core for Australian investors thanks to franking, but should be paired with global exposure so you aren't over-reliant on a handful of banks and resource giants.
The biggest, most established companies. More stable earnings, lower volatility and often steadier dividends than the broad market.
- Market regime
- Holds up comparatively well in downturns and uncertain markets; tends to lag small-caps and growth during the most aggressive bull runs.
- In a portfolio
- A dependable core building block suited to long-term holding.
Uses borrowing (leverage) to amplify the return of the underlying assets — magnifying both gains and losses. Internally geared funds remove the margin-call risk but not the volatility.
- Market regime
- Amplifies whatever the market does. In choppy, sideways markets 'volatility decay' steadily erodes returns even if the index ends up flat.
- In a portfolio
- A tactical, short-to-medium-term tool for experienced investors — explicitly not a buy-and-forget holding. Fees are high and the ride is extreme.
General information only, generated from the fund's published data — not personal financial advice. Past performance is not a reliable indicator of future returns. Consider your own circumstances or seek licensed advice before investing.