Betashares FAIR ETF Projects 100% Cash Distribution for FY25

Overview of Distribution Components

Betashares Capital Ltd has disclosed the estimated annual distribution components for its Betashares Australian Sustainability Leaders ETF (ASX, FAIR) for the financial year ending 30 June 2025. The announcement provides investors with a granular breakdown of income types, capital gains, tax offsets, and non-cash components that will underpin distributions throughout the year.

The fund projects a 100% cash distribution, a key figure that reassures investors of liquidity and income flow. This payout is supported by a diverse mix of income streams, including franked dividends, unfranked dividends, and foreign sourced income, reflecting the fund’s exposure to both domestic and international sustainability-focused companies.

Tax and Capital Gains Insights

One of the standout features of the distribution breakdown is the substantial franking credits, which account for nearly 20% of the distribution. This is a significant benefit for Australian investors, as franking credits can reduce the overall tax payable on dividends. Additionally, capital gains from discounted Australian property assets form a notable portion of the distribution, highlighting the fund’s active management and realisation of gains within its portfolio.

The fund operates under the Attribution Managed Investment Trust (AMIT) regime, which allows for more precise tax attribution to unitholders. This means that while the cash distribution is set at 100%, the taxable income attributed to investors may differ, necessitating careful tax planning. The final tax component details will be provided in the AMMA statement, expected later in the year.

Implications for Investors

For investors, the detailed breakdown offers clarity on the nature of income they can expect and the associated tax implications. The presence of both Australian and foreign income components, alongside various tax offsets, suggests a well-diversified income stream that could appeal to those seeking sustainable investment exposure with tax efficiency.

However, the complexity of the distribution components underscores the importance of consulting with financial or tax advisors to fully understand individual tax outcomes. The fund’s transparency in providing this estimated breakdown ahead of the financial year is a positive step in investor communication.

Looking Ahead

As the financial year progresses, investors will be keenly awaiting the final AMMA statement to reconcile these estimates with actual distributions and tax components. This will provide a clearer picture of the fund’s performance and tax efficiency, informing future investment decisions within the sustainability ETF space.