VanEck is set to launch the VanEck Australian Long Short Complex ETF (ASX: ALFA) on the ASX on 23 January, marking a first for the exchange.
The actively managed Australian equity portfolio exchange-traded fund (ETF) aims to outperform the S&P/ASX 200 by using advanced technology and data science to take tactical long and short positions, with a high-conviction, unconstrained strategy designed for medium to long-term gains, VanEck said in a statement on Monday.
The fund manager said this move follows VanEck’s history of pioneering smart beta ETFs in Australia.
“The Australian equity market is littered with inefficiencies to exploit. It is hyper-concentrated, overcrowded and lacks persistent ‘factor’ dominance. With style, sector and size leadership proven to be highly idiosyncratic, this has presented an opportunity to exploit the market’s inefficiencies through a highly active approach in 2025 and beyond,” said Arian Neiron, VanEck CEO and managing director, Asia-Pacific.
According to Neiron, ALFA’s investment strategy combines VanEck’s quantitative expertise with active management.
Led by a team with actuarial and quantitative backgrounds, the fund analyses vast data in real time to identify companies with high potential for outperformance or underperformance. The resulting portfolio consists of long and short Australian equity positions.
“Recent and ongoing advances in technology and programmable learning have enabled us to identify a compelling new opportunity for the investing community. We think investment approaches such as the one ALFA offers are the portfolio construction tools of the future and are positioned to deliver an all-weather solution for Australian equity investors seeking excess returns,” Neiron said.
He explained that ALFA’s launch is perfectly timed to take advantage of market inefficiencies, especially considering current volatility and shifting global dynamics.
“We saw last year that market swings and sector-level dispersion were more pronounced than ever, with shifting global growth expectations, geopolitical tensions and the evolving interest-rate environment impacting performance. This volatility is expected to persist into 2025,” Neiron said.
“Meanwhile, style rotations and valuation gaps are presenting short-term opportunities in the Australian market that require adaptability that are not supported by traditional active funds but will complement core beta and smart beta approaches.”
Earlier this month, the fund manager revealed that the Australian ETF industry’s market capitalisation has reached a new high of $247 billion, following growth of 38 per cent in 2024 and inflows of $35 billion.
Commenting on the data, VanEck said it believes the local market could expand to over $250 billion in the first quarter and top $300 billion by the end of the year.
“Looking ahead, the growth trajectory for ETFs is expected to continue unabated,” the fund manager said.
“A growing preference for ETFs in Australia has seen fund managers bring more new products to market than in previous years,” it added.
Looking at the most superior returns for the 12 months to 31 December, VanEck’s latest data put Global X 21Shares Bitcoin ETF (EBTC) in first place, with growth of 146 per cent over the year.
Global X’s FANG+ ETF (FANG) followed with a return of 67 per cent.
Interestingly, VanEck and Betashares were the only top four ETF issuers to have a fund feature in the top 10.
