VanEck launches two new ETFs
VanEck has announced the launch of its two exchange traded funds (ETFs), which will offer Australian investors both opportunities to invest in “economic wide moat companies trading at attractive prices relative to Morningstar’s estimate of fair value.”
A new international ETF would follow the US version of VanEck Vectors Morningstar Wide Moat ETF (MOAT) and would focus on “high conviction quality and value international companies with sustainable competitive advantages from around the world”, the firm said.
The VanEck Vectors Morningstar World ex Australia Wide Moat ETF (GOAT) would aim to invest in economic wide moat companies trading at attractive prices relative to Morningstar's estimate of fair value while the VanEck Vectors Morningstar Australian Moat Income ETF (DVDY) would list in parallel.
DVDY would give investors a portfolio of quality income producing companies, using Morningstar research’s active stock selection strategies, for passive fees
“We believe an approach focused on quality and financial health can help investors navigate dividend traps and volatility and also minimise losses during market drawdowns. DVDY holds quality household names such as ASX, Wesfarmers and Woolworths, which pay relatively high income and enjoy sustainable competitive advantages and growth,” Arian Neiron, VanEck's managing director and head of Asia Pacific, said.
“The search for income is more pronounced than ever, with interest rates at historic lows. Investors are forced up the risk curve but are perpetually mindful of the preservation of capital and even more so the ability for companies to pay dividends in light of COVID-19. As Australian banks significantly reduce their payouts, investors need to look elsewhere and DVDY provides a solution, with an approach focused on quality and strong financial health.”
Both ETFs were at final stages of approval and would commence trading on the Australian Securities Exchange (ASX) in coming weeks.
AUTHOR
Oksana Patron
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