Relative Value Play
Buy GEAR (leveraged long ASX200)
Buy BBUS (leveraged short S&P500)
*** GENERAL AVICE ONLY***
Date: 28/12/2023
Recommendation
BUY GEAR 27.44 (buying ASX200 at 7590 equivalent)
BUY BBUS 6.58 (Selling S&P500 at 4780 equivalent)
Target: 10%-15% profit
Rationale:
The S&P500 has outperformed the ASX200 by 13% over the last half of the year, the largest outperformance for 2 years.
With the ASX200 near record highs, we expect some catch up to be play, or conversely the S&P500 to return back to the norm.
An added bonus is that GEAR, the ASX200 leveraged 2.5x long will pay out 6 months of dividends on the first trading day of 2024, with 140% franking credits.
We expect the 2 indexes to normalise, while also picking up a solid distribution from GEAR
Brokerage on this trade will be discounted due to there being 2x legs of the trade
Disclaimer: The recommendation given is general advice only. It does not take into account your personal objectives, financial situation, or specific needs. This information should not be your sole resource when making such decisions. We strongly recommend you to seek the advice of financial, taxation, and legal professionals before finalising any investment decisions.