Target Market
Determination

Betashares Australian Equities Strong
Bear Hedge Fund
ASX: BBOZ
Legal disclaimer

This Target Market Determination (TMD) is required under section 994B of the Corporations Act 2001 (Cth) (the Act). It sets out the class of consumers for whom theproduct, including its key attributes, would likely be consistent with their likely objectives, financial situation and needs. In addition, the TMD outlines the triggers toreview the target market and certain other information. It forms part of Betashares Capital Limited’s design and distribution arrangements for the product.
This document is not a product disclosure statement and is not a summary of the product features or terms of the product. This document does not take into accountany person’s individual objectives, financial situation or needs. Persons interested in acquiring this product should carefully read the Product Disclosure Statement(PDS) for Betashares Australian Equities Strong Bear Hedge Fund before making a decision whether to buy this product.
Important terms used in this TMD are defined in the TMD Definitions which supplement this document. Capitalised terms have the meaning given to them in the
product’s PDS, unless otherwise defined. The PDS can be obtained at www.betashares.com.au or by calling 1300 487 577.

Target market summary
The Fund is likely to be appropriate for a consumer seeking capital preservation or capital growth (depending on the consumer’s purpose) by providing geared short
exposure to the total return performance of the Australian sharemarket, to be used as a small allocation to partially hedge Australian sharemarket risk or for tacticalshort exposure to the Australian sharemarket, within a portfolio where the consumer has a short investment timeframe, very high risk/return profile and needs daily
access to capital.
The Fund is an exchange-traded product and is generally only available to consumers through the ASX.

1TARGET MARKET DETERMINATION | Betashares Australian Equities Strong Bear Hedge Fund ASX: BBOZ

Fund and issuer identifiers

Description of target market

Betashares Capital Limited

This part is required under section 994B(5)(b) of the Act.

Issuer ABN

78 139 566 868

TMD indicator key

Issuer AFSL

341181The Consumer Attributes for which the product is likely to be appropriate havebeen assessed using a red/amber/green rating methodology with appropriate
colour coding:IssuerFund

Betashares Australian Equities Strong Bear
Hedge Fund

ARSN

602 666 839

ISIN Code

AU00000BBOZ2Market Identifier Code

XASX

Product Exchange code

ASX: BBOZ

Date TMD approved

30 November 2022

TMD Version

2

TMD Status

Available

In Target Market

Potentially inTarget Market

Not consideredin Target Market

Instructions
In the tables below, Column 1, Consumer Attributes, indicates a description of
the likely objectives, financial situation and needs of the class of consumers
that are considering this product. Column 2, TMD indicator, indicates whether
a consumer meeting the attribute in column 1 is likely to be in the target market
for this product.
Generally, a consumer is unlikely to be in the target market for the product if:
 one or more of their Consumer Attributes correspond to a red rating, or three or more of their Consumer Attributes correspond to an amber rating.

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TARGET MARKET DETERMINATION | Betashares Australian Equities Strong Bear Hedge Fund ASX: BBOZ

Investment products and diversification
A consumer (or class of consumer) may intend to hold a product as part of a diversified portfolio (typically with an intended product use of satellite/small allocationor core component). In such circumstances, the product should be assessed against the consumer’s attributes for the relevant portion of the portfolio, rather than the
consumer’s portfolio as a whole. For example, a consumer may seek to construct a conservative portfolio with a satellite/small allocation to growth assets. In this case,it may be likely that a product with a High or Very High risk/return profile is consistent with the consumer’s objectives for that allocation notwithstanding that the risk/
return profile of the consumer as a whole is Low or Medium. In making this assessment, distributors should consider all features of a product (including its key attributes).

Consumer attributes

TMD indicator

Product description including key attributes

Capital Growth

In target market

The Fund seeks to generate magnified returns that are negatively correlated to the total return performance of theAustralian sharemarket (as measured by the S&P/ASX 200 Accumulation Index).

Capital Preservation

In target market

Capital Guaranteed

Not considered in target
market

A 1% fall in the Australian sharemarket on a given day can generally be expected to deliver a 2% to 2.75% increase in the value of the Fund (and a corresponding decrease in the value of the Fund if the Australian sharemarket rises).

Consumer’s investment objective

Depending on the purpose for which the Fund is used, the Fund’s leveraged short exposure to the Australiansharemarket means it will likely be suitable for investors who are either (i) seeking capital growth (eg potential for
magnified gains if the Australian sharemarket falls) or (ii) seeking capital preservation (eg potential to protect orhedge an investor’s portfolio against market declines on a short term basis).

Income Distribution

Not considered in target
marketThe Fund’s portfolio exposure is actively monitored and adjusted to stay within a -2x to -2.75x range on any givenday. The Fund’s returns will not necessarily be in the range -2x to -2.75x over periods longer than a day, due to theeffects of rebalancing and compounding of investment returns over time.
Gearing magnifies gains and losses and may not be a suitable strategy for all investors.
Note: the Fund uses ASX SPI 200 futures to obtain its investment exposure (rather than underlying shares). As the
futures market closes at a later time to the share market, at times the Fund’s performance for a given day may
differ from that indicated by the share market.

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TARGET MARKET DETERMINATION | Betashares Australian Equities Strong Bear Hedge Fund ASX: BBOZ

Investment products and diversification
Consumer attributes

TMD indicator

Product description including key attributes

Consumer’s intended product use (% of Investable Assets)
Solution/Standalone (75-100%)

Not considered in target
marketThe Fund provides leveraged short exposure to the Australian sharemarket.

Core Component (25-75%)

Not considered in target
marketThe Fund can be used on a short term basis as a small allocation within a broader portfolio strategy that aims topartially hedge Australian sharemarket risk (noting the extent of its use should take into account the amount ofleveraged exposure), or as a small allocation for tactical short exposure to the Australian sharemarket.

Satellite/small allocation (<25%)

In target market

The Fund itself has medium portfolio diversification.

Short (≤ 2 years)

In target market

Medium (> 2 years)

Not considered in target
marketLong (> 8 years)

Not considered in target
marketThe Fund targets a leveraged short return for a given day only. Returns over longer periods will not necessarily be equivalent to the expected return on a given day due to the effects of rebalancing and compounding ofinvestment returns over time. The Fund’s returns over periods longer than one day may differ in amount andpossibly direction from the daily target return range. This effect on returns over time can be expected to be more
pronounced the more volatile the Australian share market and the longer an investor’s holding period. Investors
should therefore actively monitor their investment as frequently as daily to ensure it continues to meet their investment objectives.

Consumer’s investment timeframe

4

The Fund’s suggested investment timeframe is short.

TARGET MARKET DETERMINATION | Betashares Australian Equities Strong Bear Hedge Fund ASX: BBOZ

Investment products and diversification
Consumer attributes

TMD indicator

Product description including key attributes

Consumer’s risk (ability to bear loss) and return profileLow

Not considered in target
marketMediumNot considered in target
marketHigh

Not considered in target
marketThe Fund provides leveraged short exposure to the Australian sharemarket.
The Fund should therefore be considered a very high risk investment. The Fund’s strategy of seeking returns thatare negatively correlated to market returns is the opposite of most managed funds. Also, seeking to generatemagnified short returns means both investment gains and losses can be expected to be magnified, andconsequently significant variations in the value of the Fund’s investments can be expected. The Fund therefore
involves risks that are not present in most traditional equity funds, and may not be a suitable strategy for all
investors.
An investment in the Fund is very high risk in nature (SRM 7).

Very HighIn target market

Reminder: This section looks at an investor’s objectives for the relevant portion of their portfolio only, rather than
the investor’s portfolio as a whole. For example, a product with a high or very high risk/return profile may beconsistent with the investor’s objectives for a growth allocation as part of a broader portfolio, notwithstanding thatthe risk/return profile of the investor as a whole may be low or medium.

Consumer’s need to withdraw money
Daily

In target market

WeeklyIn target market

Monthly

In target market

Quarterly

In target market

Annually or longer

In target market

As the Fund is exchange traded, under normal circumstances investors are able to buy and sell units in the Fundduring ASX trading hours according to a T+2 settlement cycle.

AppropriatenessNote: This section is required under RG 274.64–66.
The Issuer has assessed the product and formed the view that the product, including its key attributes, is likely to be consistent with the likely objectives, financial situationand needs of consumers in the target market as described above, as the features of this product in Column 3 of the table above are likely to be suitable for consumers
with the attributes identified with a green TMD Indicator in Column 2.
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TARGET MARKET DETERMINATION | Betashares Australian Equities Strong Bear Hedge Fund ASX: BBOZDistribution conditions/restrictions
This part is required under section 994B(5)(c) of the Act.
Distribution condition
There are no distribution conditions.

Distribution condition rationale

Applicable

Not Applicable

Review triggers
This part is required under section 994B(5)(d) of the Act.
Material change to key attributes, fund investment objective and/or fees.
Material deviation from benchmark / objective over sustained period.
Key attributes have not performed as disclosed by a material degree and for a material period.
Determination by the issuer of an ASIC reportable Significant Dealing.
Material or unexpectedly high number of complaints (as defined in section 994A(1) of the Act) about the product or distribution of the product.
The use of Product Intervention Powers, regulator orders or directions that affects the product.

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TARGET MARKET DETERMINATION | Betashares Australian Equities Strong Bear Hedge Fund ASX: BBOZDistribution conditions/restrictions
Mandatory review periods
This part is required under section 994B(5)(e) and (f) of the Act.
Review period

Maximum period for review

Initial review

1 year and 3 months

Subsequent review

3 years and 3 months

Distributor reporting requirements
This part is required under section 994B(5)(g) and (h) of the Act.
Reporting requirement
Complaints (as defined in section 994A(1) of the Act) relating to the
product design, product availability and distribution. The distributor
should provide all the content of the complaint, having regard to privacy.
Significant dealing outside of target market, under s994F(6) of the Act.
See Definitions for further detail.
To the extent a distributor is aware, dealings outside the target market,
including reason why acquisition is outside of target market, & whether
acquisition occurred under personal advice.

Reporting period

Which distributors this requirement
applies toWithin 10 business days following end of calendar quarter.

All distributors

As soon as practicable but no later than 10 business days after
distributor becomes aware of the significant dealing.

All distributors

Within 10 business days following end of calendar quarter.

All distributors

If practicable, distributors should adopt the FSC data standards for reports to the issuer. Distributors must report to Betashares by sending reports by email to DDO.
Reporting@betashares.com.au or as otherwise agreed.

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TARGET MARKET DETERMINATION | Betashares Australian Equities Strong Bear Hedge Fund ASX: BBOZ

Definitions
Term

Definition

Consumer’s investment objective
Capital Growth

The consumer seeks to invest in a product designed to generate capital return. The consumer prefers exposure to growth assets (such as shares orproperty) or otherwise seeks an investment return above the current inflation rate.

Capital Preservation

The consumer seeks to invest in a product to reduce volatility and minimise loss in a market down-turn. The consumer prefers exposure to defensive assets (such as cash or fixed income securities) that are generally lower in risk and less volatile than growth investments.

Capital Guaranteed

The consumer seeks a guarantee or protection against capital loss whilst still seeking the potential for capital growth (typically gained through aderivative arrangement). The consumer would likely understand the complexities, conditions and risks that are associated with such products.

Income Distribution

The consumer seeks to invest in a product designed to distribute regular and/or tax-effective income. The consumer prefers exposure to income-generating assets (typically, high dividend-yielding equities, fixed income securities and money market instruments).

Consumer’s intended product use (% of Investable Assets)
Solution/Standalone (75-100%)

The consumer intends to hold the investment as either a part or the majority (up to 100%) of their total investable assets (see definition below). The
consumer typically prefers exposure to a product with at least High portfolio diversification (see definitions below).

Core Component (25-75%)

The consumer intends to hold the investment as a major component, up to 75%, of their total investable assets (see definition below). The consumer
typically prefers exposure to a product with at least Medium portfolio diversification (see definitions below).

Satellite (<25%)

The consumer intends to hold the investment as a smaller part of their total portfolio, as an indication it would be suitable for up to 25% of the total
investable assets (see definition below). The consumer is likely to be comfortable with exposure to a product with Low portfolio diversification (seedefinitions below).

Investable Assets

Those assets that the investor has available for investment, excluding the residential home.

Portfolio diversification (for completing the key product attribute section of consumer’s intended product use)

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Low

Single asset class, single country, low or moderate holdings of securities - e.g. high conviction Aussie equities.

Medium

1-2 asset classes, single country, broad exposure within asset class, e.g. Aussie equities “All Ords”.

High

Highly diversified across either asset classes, countries or investment managers, e.g. Australian multi-manager balanced fund or global multi-asset
product (or global equities).

TARGET MARKET DETERMINATION | Betashares Australian Equities Strong Bear Hedge Fund ASX: BBOZ

Definitions
Term

Definition

Consumer’s intended investment timeframe
Short (≤ 2 years)

The consumer has a short investment timeframe and may wish to redeem within two years.

Medium (> 2 years)

The consumer has a medium investment timeframe and is unlikely to redeem within two years.

Long (> 8 years)

The consumer has a long investment timeframe and is unlikely to redeem within eight years.

Consumer’s risk (ability to bear loss) and Return profile
Issuers should undertake a comprehensive risk assessment for each product. The FSC recommends adoption of the Standard Risk Measure (SRM) to calculate the likely number ofnegative annual returns over a 20 year period, using the guidance and methodology outlined in the Standard Risk Measure Guidance Paper For Trustees. SRM is not a complete
assessment of risk and potential loss. For example, it does not detail important issues such as the potential size of a negative return or that a positive return could still be less than aconsumer requires to meet their investment objectives/needs. Issuers may wish to supplement the SRM methodology by also considering other risk factors. For example, some products
may use leverage, derivatives or short selling, may have liquidity or withdrawal limitations, or otherwise may have a complex structure or increased investment risks, which should be
documented together with the SRM to substantiate the product risk rating.
A consumer’s desired product return profile would generally take into account the impact of fees, costs and taxes.
Low

The consumer is conservative or low risk in nature, seeks to minimise potential losses (e.g. has the ability to bear up to 1 negative return over a 20 year period(SRM 1 to 2)) and is comfortable with a low target return profile.
Consumer typically prefers defensive assets such as cash and fixed income.

MediumThe consumer is moderate or medium risk in nature, seeking to minimise potential losses (e.g. has the ability to bear up to 4 negative returns over a 20 year
period (SRM 3 to 5)) and comfortable with a moderate target return profile.
Consumer typically prefers a balance of growth assets such as shares, property and alternative assets and defensive assets such as cash and fixed income.

High

Very high

The consumer is higher risk in nature and can accept higher potential losses (e.g. has the ability to bear up to 6 negative returns over a 20 year period (SRM6)) in order to target a higher target return profile.
Consumer typically prefers predominantly growth assets such as shares, property and alternative assets with only a smaller or moderate holding in defensive
assets such as cash and fixed income.
The consumer has a more aggressive or very high risk appetite, seeks to maximise returns and can accept higher potential losses (e.g. has the ability to bear 6
or more negative returns over a 20 year period (SRM 7) and possibly other risk factors, such as leverage).
Consumer typically prefers growth assets such as shares, property and alternative assets.

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TARGET MARKET DETERMINATION | Betashares Australian Equities Strong Bear Hedge Fund ASX: BBOZ

Definitions
Term

Definition

Consumer’s intended investment timeframe
Issuers should consider in the first instance the redemption request frequency under ordinary circumstances. However, the redemption request frequency is not the only consideration
when determining the ability to meet the investor’s requirement to access capital. To the extent that the liquidity of the underlying investments or possible liquidity constraints (e.g.
ability to stagger or delay redemptions) could impact this, this is to be taken into consideration in completing this section.
Daily / Weekly / Monthly /Quarterly / Annually or longer

The consumer seeks to invest in a product which permits redemption requests at this frequency under ordinary circumstances and the issuer istypically able to meet that request within a reasonable period.

Distributor reporting
Section 994F(6) of the Act requires distributors to notify the issuer if they become aware of a significant dealing in the product that is notconsistent with the TMD. Neither the Act nor ASIC defines when a dealing is ‘significant’ and distributors have discretion to apply its ordinary
meaning.
The issuer will rely on notifications of significant dealings to monitor and review the product, this TMD, and its distribution strategy, and to meet its
own obligation to report significant dealings to ASIC.
Dealings outside this TMD may be significant because: they represent a material proportion of the overall distribution conduct carried out by the distributor in relation to the product, or they constitute an individual transaction which has resulted in, or will or is likely to result in, significant detriment to the consumer (or class of
consumer).
Significant dealings

In each case, the distributor should have regard to: the nature and risk profile of the product (which may be indicated by the product’s risk rating or withdrawal timeframes),
 the actual or potential harm to a consumer (which may be indicated by the value of the consumer’s investment, their intended product use or
their ability to bear loss), and the nature and extent of the inconsistency of distribution with the TMD (which may be indicated by the number of red or amber ratings
attributed to the consumer).
Objectively, a distributor may consider a dealing (or group of dealings) outside the TMD to be significant if:

 it constitutes more than half of the distributor’s total retail product distribution conduct in relation to the product over the reporting period,
 the consumer’s intended product use is Solution / Standalone, or the consumer’s intended product use is Core component and the consumer’s risk (ability to bear loss) and return profile is Low.

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Important notice
The information contained in this document is general information only and does not constitute personal financial advice. It does not take into account any person’s financial objectives, situation or needs.
The information is not a recommendation to make any investment or adopt any investment strategy. Investments in any Betashares Fund are subject to investment risk and investors may not get back the fullamount originally invested. Any person wishing to invest in a Betashares Fund should obtain a copy of the relevant PDS from www.betashares.com.au and obtain financial advice in light of their individual
circumstances. To the extent permitted by law Betashares accepts no liability for any loss from reliance on this information.
Any Betashares Fund that seeks to track the performance of a particular financial index is not sponsored, endorsed, issued, sold or promoted by the provider of the index. No index provider makes any
representation regarding the advisability of buying, selling or holding units in the Betashares Funds.

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TARGET MARKET DETERMINATION | Betashares Australian Equities Strong Bear Hedge Fund ASX: BBOZ