Australia’s first global listed private credit ETF launching on ASX
Sydney, 24 January 2024 – Australian investors will soon have access to the booming global private credit market via an ETF, which ballooned to US$1.6 trillion in 2023 and is estimated to become a US$2.5 trillion market by 2027.
VanEck will be launching Australia’s first global listed private credit ETF which will give ASX investors access to an asset class that 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 launch on Friday, 2 February, giving investors access to a transparent, liquid and cost-effective investment solution. LEND will track the LPX Listed Private Credit AUD Hedged Index (LEND Index) which includes 25 global listed private credit companies.
Arian Neiron, VanEck CEO and Managing Director, Asia Pacific said: “Growth in the private credit segment is an unparalleled global phenomenon. We’re seeing private credit increasingly taking over the core business of traditional banks, that is, the provision of debt capital to medium-sized companies and real estate. Australian investors will now be able to access this growing opportunity via an ETF on ASX.”
“We’re seeing immense interest in this investment strategy which outstripped all other major asset classes in 2023 from an income perspective, with the LEND Index yielding over 10%.
Over the past 15 years, the income yield of the LEND Index has averaged around 8.6% p.a.
As always, past performance is not indicative of the future performance of LEND. You cannot invest in an index.
“With LEND, all types of investors get to reap the potential rewards from private credit, while also getting all the benefits that an ETF provides, including ease of access, transparency, liquidity and a diversified exposure,” said Neiron.
“This world of potentially higher rates for longer also bodes well for this asset class. As private credit is typically operating on a floating rate, it can offer interest rate protection should inflation persist or continue to be sticky.
“Importantly, to date, Australian investors have taken manager, borrower and sector concentration bets when investing in private credit. A lot of private credit in Australia is targeted towards real estate, whereas the LEND Index has exposure to over 3,950 loans diversified across 25 private credit managers all around the world.
“Furthermore, with LEND, investors in private credit now have a price discovery mechanism for an asset class that has been accused of ‘volatility laundering’,” said Neiron.
The launch of LEND brings VanEck’s total number of ETFs on ASX to 40 and extends on the business’ commitment to innovation and helping investors access the opportunities.
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