VanEck has listed the VanEck Geared Australian Equal Weight Fund (Hedge Fund) (ASX: GMVW) on the ASX, with the ETF provider coining it the “most cost effective” leveraged equity managed fund solution in Australia.
Namely, GMVW combines investors’ capital and borrowed funds to invest in the VanEck Australian Equal Weight ETF (ASX: MVW), its flagship Australian equity strategy first launched in 2014.
MVW has outperformed the S&P/ASX 200 by 1.21 per cent per annum since its inception 10 years ago, with an equal weight, factor indifferent strategy proving to be a “well suited” allocation for Australian equity advisers and investors, according to VanEck.
“GMVW is in response to significant adviser and investor demand and represents a game-changing opportunity for ASX investors in a ‘higher for longer’ interest rate environment,” commented Arian Neiron, VanEck Asia-Pacific chief executive and managing director.
“Furthermore, with many market participants questioning valuations of some of Australia’s largest companies, an equal weighting approach to Australian equities is a prudent alternative.”
Particularly as the concentration of the S&P 500 and the “Magnificent Seven” has been a subject of debate in the US, VanEck noted that Australia’s significant domestic equity bias should be afforded the same attention.
“Australian equities concentration is far more pronounced than in the US, with little change in the composition of the S&P/ASX 200 top 10 companies over the last two decades,” the ETF provider said.
As such, MVW provides three times more diversification than the S&P/ASX 200, with equal weighting having shown to outperform market cap strategies over the long term.
Last month, VanEck also launched Australia’s first global listed private credit ETF, which will give investors access to the “booming” private credit market that surged to US$1.6 trillion in 2023.
The asset class, the firm noted in January, has historically been the “domain” of institutional and high-net-worth investors who have the capacity to invest with limited liquidity and price discovery.
The VanEck Global Listed Private Credit (AUD Hedged) ETF (ASX: LEND) will track the LPX Listed Private Credit AUD Hedged Index (LEND Index), which includes 25 global listed private credit companies.
