Betashares ETHI ETF Reveals 314% Estimated Distribution Breakdown for FY25
Betashares Capital Ltd has released the estimated annual distribution components for its Global Sustainability Leaders ETF (ETHI) for the 2024-25 financial year, highlighting a complex mix of foreign income and capital gains.
- Estimated total attributed distribution exceeds 314% of cash paid
- Foreign sourced income constitutes over 40% of distribution
- Significant capital gains component classified as non-taxable Australian property
- Estimated cash distribution remains at 100%
- Fund operates under the Attribution Managed Investment Trust (AMIT) regime
Overview of ETHI’s Distribution Components
Betashares Capital Ltd has announced the estimated annual distribution breakdown for its Betashares Global Sustainability Leaders ETF (ASX – ETHI) for the financial year ending 30 June 2025. This detailed disclosure provides investors with a granular view of the income and capital gains components that underpin the fund’s distributions, essential for tax planning and understanding the fund’s income profile.
Foreign Income and Capital Gains Dominate
The breakdown reveals a substantial foreign income component, accounting for approximately 40.35% of the total distribution. This reflects the fund’s global exposure to sustainability-focused companies outside Australia. Additionally, a striking 131.61% of the distribution is attributed to capital gains classified as non-taxable Australian property, indicating significant realised gains that are not subject to Australian capital gains tax.
Tax Offsets and AMIT Adjustments
Tax offsets include a foreign income tax offset of around 10.67%, which may help mitigate double taxation for investors. The fund operates as an Attribution Managed Investment Trust (AMIT), a structure that allows for more precise tax attribution to unitholders. Notably, there is a negative AMIT cost base adjustment of approximately -203.7%, reflecting the difference between cash distributions and taxable income attributed to investors, a feature that investors should carefully consider for their tax reporting.
Cash Distribution and Investor Implications
Despite the complex composition of the distribution, the estimated cash distribution remains at 100% of the amount paid to investors. This means investors will receive the full cash amount declared, while the tax components will influence their individual tax obligations. The fund’s disclosure emphasizes the importance of consulting professional tax advice, especially given the interplay of foreign income, capital gains, and AMIT rules.
Context in Sustainable Investing
ETHI’s distribution profile underscores the growing trend of sustainability-focused ETFs delivering diversified income streams from global markets. The significant foreign income and capital gains components reflect the fund’s strategy of investing in leading global companies with strong sustainability credentials, which may appeal to investors seeking both growth and income with an ESG focus.
Bottom Line?
Investors should watch for the final AMMA statement to fully understand the tax impact of ETHI’s outsized distribution components.
Questions in the middle?
- How will the large non-taxable capital gains component affect investors’ tax positions?
- What drives the substantial negative AMIT cost base adjustment and its implications?
- Will future distributions maintain a similar foreign income weighting amid global market shifts?
