Geared ETFs Australia: All the Leverage. None of the Tenants.

For three decades, property investors had something share investors didn't: leverage without drama. Borrow 80%, keep all the gains, no margin calls, no forced selling, no credit stress. The bank lent the money, the asset grew, the equity compounded.

Geared ETFs are the first product in Australian financial history that replicates that experience for shares — without the loan application, without the margin calls, and without the maintenance calls at 2am.

The title of this article is not a throwaway line. It is the precise value proposition: all the leverage that made property effective, none of the operational overhead that came with it.

Here is exactly how they work.

What a geared ETF actually is

A geared ETF is an exchange-traded fund that borrows money internally — at institutional wholesale rates — and invests the combined capital in a diversified index. The borrowing happens inside the fund. You are not taking on personal debt. There is no loan in your name. There is no lender who can call you.

When you buy one unit of G200 (BetaShares Wealth Builder Australia 200 Geared ETF), you are buying exposure to approximately $143–$167 worth of ASX 200 companies for every $100 you pay. The fund holds the extra $43–$67 worth of shares using borrowed money. You own the fund unit. The fund owns the shares.

This structure is the critical difference from a margin loan. A margin loan puts the debt in your name and gives the lender the ability to demand repayment if your portfolio falls below a threshold — the margin call. A geared ETF puts the debt in the fund's name. The lender has a relationship with the fund, not with you. You cannot be called.

How the internal LVR management works

The BetaShares Wealth Builder range targets a gearing ratio of 30–40% — meaning borrowed funds represent 30–40% of the total assets held by the fund.

At 40% gearing: the fund holds $100 of your capital plus $67 in borrowed funds = $167 total exposure. If the market rises 1%, the fund rises $1.67 on your $100 = 1.67% return. If the market falls 1%, the fund falls 1.67%.

This gearing ratio is not static. Markets move. When markets fall, the gearing ratio rises (the borrowed amount is now a larger percentage of a smaller asset base). If it rises above 40%, the fund automatically sells a small amount of holdings to bring the ratio back within target. This deleveraging is gradual — not a forced immediate sale at a single moment of maximum fear.

When markets rise, the gearing ratio falls. If it drops below 30%, the fund borrows slightly more to bring the ratio back up — maintaining the consistent leverage boost.

This automatic rebalancing is what prevents catastrophic outcomes. The fund cannot go to zero through leverage alone. As markets fall, it de-gears. As markets rise, it re-levers. The result is a consistent, managed leverage exposure throughout the market cycle.

The four BetaShares Wealth Builder funds

The BetaShares Wealth Builder suite launched in April 2024 and updated its product disclosure statements on 1 July 2026. All four funds use physical gearing — actual borrowing and share ownership — not synthetic derivatives.

Fund	ASX code	Underlying exposure	Leverage multiple	Annual management fee
Wealth Builder Australia 200	G200	ASX top 200 companies (via A200)	~1.43–1.67×	0.35%
Wealth Builder Diversified All Growth	GHHF	Global + Australian diversified equities (via DHHF)	~1.43–1.67×	~0.39%
Wealth Builder Global Shares	GGBL	Global shares ex-Australia (via BGBL)	~1.43–1.67×	TBC
Wealth Builder Nasdaq 100	GNDQ	Nasdaq 100 (via NDQ)	~1.43–1.67×	TBC

G200 is the Australian-focused option. It tracks the ASX 200 — 200 of Australia's largest listed companies including BHP, CBA, CSL, Westpac, ANZ, and Wesfarmers. For investors who want leveraged exposure to the Australian economy they already know.

GHHF is the globally diversified option. It tracks DHHF (BetaShares Diversified All Growth ETF) which holds approximately 8,000 companies across Australia, the US, Europe, Japan, and emerging markets. For investors who want one fund, globally spread, with moderate leverage. This is the most commonly recommended starting point for investors new to geared ETFs.

GGBL targets global shares excluding Australia — for investors who want leverage on international markets separately from their Australian holdings.

GNDQ targets the Nasdaq 100 — for investors who want leveraged technology exposure. Higher volatility profile than G200 or GHHF.

Physical vs synthetic: why it matters for long-term investors

Not all leveraged products are the same. This distinction is essential for investors planning to hold for 10+ years.

Physical geared ETFs (the BetaShares Wealth Builder range): The fund actually borrows money from a bank and uses it to buy real shares. The shares are held directly. There are no daily resets. The leverage effect compounds cleanly over time.

Synthetic leveraged ETFs: These use financial derivatives — futures contracts, options, swaps — to achieve leverage. Many are designed to deliver a daily multiple of the underlying index (e.g. "2× daily return"). Because they reset daily, they suffer from volatility decay: in volatile sideways markets, a 2× daily ETF can lose value even when the underlying index is flat. Over a year of volatile trading, a synthetic 2× ETF tracking a flat index can lose 10–20% of its value through decay alone.

For buy-and-hold investors with a 10+ year horizon, synthetic leveraged products are unsuitable. Physical geared ETFs like G200 and GHHF do not have this problem — their leverage is structural, not daily-reset-based.

Rule: If you are investing for the long term, use physical only. The BetaShares Wealth Builder range is physical.

The real cost of gearing

The borrowing inside a geared ETF is not free — the fund pays interest to its lender. But unlike a margin loan where you pay that interest directly (and it shows on your tax return), the gearing cost is embedded in the fund's net asset value. It reduces the fund's return slightly rather than appearing as an explicit charge.

The management fee (0.35% for G200) covers both the management of the fund and the cost of administering the gearing. The institutional borrowing rate the fund accesses is substantially lower than the retail rate an individual investor would pay on a margin loan (which runs to 9–10% p.a.). The embedded gearing cost in a BetaShares Wealth Builder fund is typically in the range of 5–7% per annum on the borrowed portion — but remember, this applies only to the 30–40% of total assets that are borrowed, not to your entire investment.

Because the borrowing cost is not an explicit interest charge, it is not tax-deductible in the same way as margin loan interest. This is an important distinction for investors who are comparing options.

Use our Capital Gains Tax Calculator to understand the CGT implications when you eventually sell geared ETF units held for more than 12 months.

The risks — stated plainly

Leverage amplifies both gains and losses. A geared ETF is not a low-risk investment. These are the specific risks in plain language:

Market risk: A 30% fall in the underlying market produces approximately a 43–50% fall in a 1.5× geared fund before the de-gearing mechanism activates. This is a real and significant loss. Investors must be able to hold through severe drawdowns without selling.

Compounding of losses: Leverage compounds in both directions. A 50% fall requires a 100% gain to recover. A geared fund falling 50% needs the underlying market to rise approximately 65–70% before the fund returns to its starting value. Recovery takes time — often years.

Lender risk: The fund borrows from a counterparty bank. If that lender withdraws credit facilities, the fund may be forced to de-gear rapidly. This is a low-probability risk but it exists.

Time horizon requirement: Geared ETFs are not suitable for money you might need within 5 years. They are designed for 10+ year investment horizons where market volatility averages out and the leverage benefit has time to compound.

Who should not invest: Anyone who cannot commit to a 10+ year horizon, anyone investing with money they cannot afford to lose, anyone who would sell in a 30–50% drawdown.

Who geared ETFs suit — and who they don't

Suited to:

• Investors with a 10–20+ year horizon (superannuation accumulation phase, wealth building for retirement)
• Investors who want the compounding benefit of leverage without the operational complexity of property
• Property investors who want to deploy new capital in a vehicle requiring zero management time
• Investors who understand and can emotionally tolerate significant short-term volatility in exchange for superior long-term outcomes

Not suited to:

• Investors within 5–7 years of needing the capital
• Investors who check their portfolio daily and react emotionally to market movements
• Investors seeking income (geared ETFs reinvest rather than distribute income in the conventional sense)
• First-time investors with no experience of sharemarket volatility

See: How to get leverage on shares in Australia without a mortgage for the full comparison of geared ETFs, NAB Equity Builder, and margin loans.

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Frequently asked questions

What is the difference between G200 and GHHF?

G200 tracks the ASX 200 — Australia's top 200 listed companies. GHHF tracks DHHF, which holds approximately 8,000 companies globally (Australia, US, Europe, Asia, and emerging markets). Both use 30–40% gearing and have similar leverage multiples. GHHF provides broader global diversification; G200 provides concentrated Australian exposure. For most investors starting out, GHHF's global diversification reduces concentration risk.

Are geared ETFs better than property for building wealth?

Under post-2026-budget assumptions, a geared ETF starting from the same capital as a property deposit produces comparable or slightly better long-term outcomes, with no stamp duty, no holding costs, no management requirement, and full liquidity. Property retains advantages in leverage (80% LVR vs 40%), forced savings discipline, and tangibility. Whether one is "better" depends on your capital, risk tolerance, time horizon, and how much management complexity you are willing to accept.

Do geared ETFs pay dividends?

Geared ETFs do pass through distributions from the underlying holdings, but these are typically reinvested or paid at lower levels than the underlying ETF because the fund uses a portion of income to service its borrowing costs. Investors seeking reliable income should consider unleveraged dividend-focused ETFs rather than geared ETFs, which are primarily growth vehicles.

What happens to a geared ETF in a market crash?

The fund automatically de-gears as markets fall — it sells a small amount of holdings to bring its gearing ratio back within the 30–40% target range. This means the leverage effect reduces as markets fall, which limits the speed and depth of loss relative to a fixed-leverage instrument. Investors cannot be margin-called. The fund cannot go to zero from leverage alone. However, significant losses are still possible in a severe bear market, and full recovery requires holding through the cycle.

How do I buy a geared ETF in Australia?

Geared ETFs trade on the ASX like any ordinary ETF. You need a brokerage account (Pearler, CommSec, Selfwealth, or any ASX broker). Search for the ASX code (G200, GHHF, GGBL, GNDQ), check the current price, and place a buy order. The minimum purchase is one unit — currently in the range of $50–$150 depending on the fund's current price. See our ETF investing guide for how to open a brokerage account.

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This article is for general information only and does not constitute financial, tax or legal advice. Individual circumstances vary. Consult a registered tax agent or licensed financial adviser before making decisions based on this information.