VanEck launches new Australian equity ETF

VanEck has launched the MSCI Australian Quality Plus ETF (ASX: AQTY), dubbing it the first Australian equity ETF using an "optimised methodology".

VanEck said AQTY was developed to address the structural challenges of the Australian share market. The fund uses a purpose-built index developed in partnership with MSCI to identify 50 Australian companies based on financial strength, pricing discipline and resilience instead of market size, VanEck said.

VanEck said quality investing methodology remains relevant in a highly selective segment that may be influenced by political developments, potential shifts in market leadership and elevated valuations across parts of the markets.

Rebalanced quarterly, AQTY's index uses multiple signals to identify financially sound and consistently profitable companies while limiting exposure to overvalued segments of the market, VanEck said.

The result is a portfolio of 50 domestic companies selected for what they have delivered rather than what they are forecasted to deliver, VanEck added.

The ETF incurs a management fee of 0.35% p.a. and currently has some $30.58 million. It traces the MSCI Australia IMI Quality Plus Index.

Commenting, VanEck Asia Pacific chief executive Arian Neiron said Australia is not a standard market for quality investing just yet.

"It is concentrated, cyclical and dominated by sectors that can distort traditional factor outcomes. Applying a conventional quality screen to Australian equities has historically left investors exposed to the very risks they were seeking to manage," Neiron said.

"AQTY has been engineered specifically for the Australian market. It is designed to capture companies with durable financial strength, while also applying valuation discipline and a defensive portfolio construction process.

"This is the critical distinction. Quality investing should not just be about finding profitable companies. In Australia, it also needs to consider whether those companies are sensibly priced and whether the portfolio is built to withstand market volatility. AQTY is designed to find companies that meet all three criteria."