VanEck launches ASX listed geared fund on flagship Australian equity strategy
Sydney, 29 February 2024 – VanEck, Australian pioneer of smart beta ETFs and one of the world’s largest ETF providers, has listed on ASX the VanEck Geared Australian Equal Weight Fund (Hedge Fund) (ASX: GMVW) a first of its kind in Australia and the most cost effective leveraged equity managed fund solution in Australia.
GMVW combines investors' capital and borrowed funds to invest in the VanEck Australian Equal Weight ETF (ASX: MVW), its flagship Australian equity strategy which launched 10 years ago.
MVW has outperformed1 the S&P/ASX 200 by 1.21% p.a. since inception in 2014 (data to 31 January 2024) and VanEck has demonstrated that the equal weight, factor indifferent strategy is well suited as a core allocation for Australian equity advisers and investors.
With much debate as to the concentration of the S&P 500 and the ‘Magnificent Seven’, Australian investors, who have a significant domestic equity bias, are well aware of the risk that concentration can have. 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. MVW provides three times more diversification than the S&P/ASX 2002, which is dominated by the big banks, CSL and BHP and has become one of the most concentrated markets in the world. Equal weighting has shown to outperform market cap strategies over the long term3.
Arian Neiron, CEO and managing director, VanEck Asia Pacific said: “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. 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.”
“GMVW will give investors the opportunity to significantly enhance their returns. The return potential, in both directions, is amplified by gearing with no personal recourse for investors,” said Neiron.
The fund is responsible for the borrowing so investors in GMVW avoid the costs and complications of margin loans and CFDs. GMVW will also give Australians who run their own SMSF the opportunity to enhance their investment exposure to the maximum amount possible.
|
ASX code:
|
GMVW
|
|
Commencement date:
|
29 February 2024
|
|
Management fee /cost:
|
0.35% p.a.*
|
|
Gearing ratio:
|
45-60%
|
|
Stock number:
|
76
|
|
Dividend frequency:
|
Semi-annually
|
*GMVW charges a nil management fee. This is the indirect cost represented as a percentage of the gross asset value. If the average gearing level is 50%, the indirect cost will be 0.70% of the net asset value. Other fees and costs may apply. Please refer to the PDS.
1Past performance is not indicative of future performance.
2Based on the Herfindahl Index
3Why Equal Weighting Outperforms: The Mathematical Explanation, VanEck, June 2018.
Click for more information