Unit consolidation - BetaShares U.S. Equities Strong Bear Hedge Fund - Currency Hedged (ASX Code: BBUS)

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    Unit consolidation - BetaShares U.S. Equities Strong Bear Hedge Fund - Currency Hedged
    (ASX Code: BBUS)
    BetaShares Capital Limited (BetaShares), the responsible entity of BetaShares U.S. Equities Strong
    Bear Hedge Fund - Currency Hedged (BBUS), today announces the upcoming consolidation of the
    units on issue in the Fund.
    The consolidation will take effect from 12 August 2021. Once completed it is expected to result in a
    more favourable bid-offer spread for investors in percentage terms.
    This announcement contains details of the consolidation, its impact on units, tax considerations and
    timeline. Please do not hesitate to contact Link Market Services or BetaShares if you have any
    questions.
    BBUS Unit Consolidation Summary
    Overview:
    • BBUS units will be consolidated on a 1 for 10 basis.
    • the final day for trading BBUS units before the consolidation is 11 August 2021.
    • the consolidation will take effect from 12 August 2021.
    Impact on units:
    • the consolidation will have no direct impact on the net asset value of BBUS.
    • If the consolidation would otherwise result in an investor holding a fraction of a unit, BetaShares
    will, at its expense, round up the unit to the nearest whole number.
    • apart from rounding up of fractional units, the consolidation will not affect an investor’s
    percentage holdings in BBUS or the aggregate value of their holdings.
    During the consolidation period:
    • during the period 12 August to 18 August 2021 (inclusive), the units in BBUS will trade on a
    deferred settlement basis under ASX Code: BBUDA (not BBUS).
    • any trading of units during the deferred settlement period will settle on 23 August 2021, rather
    than on a normal T+2 settlement basis.
    • importantly, the deferred settlement period will result in a delay in receiving the proceeds if an
    investor sells units during this period.
    o for example, if an investor sells their units on 12 August, they will receive the sale proceeds
    on 23 August, rather than on 16 August (T+2 excluding weekends).
    o as such, any investor that is considering selling their units during the deferred settlement
    period, and who may be concerned about the deferred settlement, is encouraged to factor
    this into their decision making.
    2
    Impact of consolidation on unitholding
    BBUS units on issue will be consolidated on a 1 for 10 basis. This means if an investor held 100
    units prior to the consolidation, they will hold 10 units post consolidation.
    Reason for the Consolidation
    The consolidation of units on a 1 for 10 basis will cause an increase in BBUS’ unit price to reflect the
    reduced number of units on issue, which is expected to result in a more favourable bid-offer spread
    for investors in percentage terms.
    To exemplify the impact of the unit consolidation on the bid-offer spread, we provide the following
    example: At a unit price of ~$1.08, and assuming a 0.5 cent bid-offer spread, the percentage spread
    is ~0.46%. At a post-consolidation unit price of ~$10.80 and assuming a bid-offer spread of 2 cents,
    the percentage spread would be ~0.18%1
    .
    Rounding of fractional units & other considerations
    In any instances where an investor’s consolidated unit holding would otherwise result in an
    entitlement to a fraction of a unit, BetaShares will, at its expense, round up the unit to the nearest
    whole number. For example, if an investor held 109 units prior to the consolidation, they would hold
    11 units post consolidation (i.e. rounded up from 10.9).
    Apart from adjustments due to rounding up of fractional units:
    • the consolidation will not affect an investor’s percentage holding in BBUS.
    • the aggregate net asset value of each investor’s holding in BBUS will not change.
    • the current rights attaching to units (as set out in the BBUS constitution) will not be affected by
    the consolidation.
    The consolidation will have no direct impact on BBUS’ net asset value.
    In the absence of other factors, the ASX quoted price per unit can be expected to increase to reflect
    the reduced number of units on issue.
    Tax implications
    Set out below is a summary of the general Australian tax implications of the consolidation for
    investors that hold their units on capital account. The summary in this section is general in nature
    only. It does not constitute tax advice and should not be relied upon as such.
    The consolidation of units should not give rise to a capital gains tax event based on rulings,
    pronouncements and other materials issued or made public by the Australian Tax Office (ATO)
    regarding similar arrangements. Further, there should be no effect on an investor’s total cost base
    in their units. However, the consolidation will affect the cost base of each of an investor’s units. The
    cost base of each consolidated unit should be equal to the aggregate of the cost bases of the units
    that were consolidated into that new unit.

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