VanEck has taken its local exchange-traded fund (ETF) suite to a 46-strong line-up with two new products set to launch on the ASX on 24 April – the VanEck Australian RMBS ETF (ASX: RMBS) and the VanEck India Growth Leaders ETF (ASX: GRIN).
The ETF provider described both products as “pioneering” with GRIN marking VanEck’s first India-only ETF, and RMBS acting as an “Australian first” by offering investors a residential mortgage-backed securities strategy in an ETF wrapper.
Regarding the former, the ETF provider said it considers India a “new growth frontier”, with GRIN aimed to offer investors targeted exposure to a portfolio of high-growth Indian companies.
The ETF, VanEck explained, tracks the MarketGrader India Growth Leaders 50 Index, which utilises a growth at a reasonable price (GARP) analysis to pick the top 50 companies – out of some 3,500 stocks – offering the best growth potential for “reasonable price”.
Commenting on the launch, VanEck’s APAC chief executive and managing director, Arian Neiron, said: “India is carving out a niche in the global investment landscape and becoming a rising investment destination.”
Key drivers for this, Neiron elaborated, include higher gross domestic product growth supported by policy tailwinds, favourable demographics, coupled with a growing middle class and government-led initiatives fostering improved efficiency.
“Further, while many countries scramble to recalibrate in response to Trump’s shifting US trade policies, India’s relative detachment from global trade could help it weather shocks that may harm more trade-dependent economies,” he added.
“India’s tariffs are high, and its share of global exports remains under 2 per cent. India’s vast domestic market has continued to fuel its growth.”
Meanwhile, RMBS will provide exposure to a market segment that has historically only been available to institutional investors and will solely invest in AAA-rated Australian residential mortgage-backed securities.
“Residential mortgage-backed securities are one of the fastest growing fixed income asset classes in Australia, reaching a record $59.2 billion of issuance in 2024,” Neiron said.
“As a securitised debt backed by a pool of home loans, Australian residential mortgage-backed securities benefit from a long track record of stability supported by the price growth in the homes of borrowers and debtor resilience during economic downturns.
“Historically, investors in highly rated Australian residential mortgage-backed securities have never experienced principal losses,” the CEO said.
With current market conditions pointing to further rate cuts from the RBA this year, he said residential mortgage-backed securities will remain compelling given the yield premium over cash products and similarly rated senior debt.
“Residential mortgage-backed securities have traditionally been difficult to incorporate in a portfolio with investors having to rely on asset managers to access. They have been utilised in credit strategies for decades, and for the first time, VanEck’s RMBS democratises the opportunity for all types of investors,” Neiron said.
