VanEck switches to AI-powered index

The ETF issuer is making a switch to one of its ETFs, telling Financial Standard the ETF will be Australia's first to use artificial intelligence (AI) to select international stocks, while confirming several new products will be available in the near future.

VanEck confirmed local investors will access a portfolio of generative AI-powered stock selection capabilities for international equity opportunities using computational power by using an Akros Technologies' index.

The change will be applied to the VanEck Dynamic International Equity ETF (GOAT) from July 20, becoming Australia's first ETF that uses AI to select international stocks. On the day, GOAT will change from tracking the existing Morningstar Developed Markets ex-Australia Wide Moat Focus Select Index to the Akros Enhanced World ex Australia Index.

The index was developed by VanEck in partnership with the Seoul-based AI and quantitative index specialist, where its engine currently underpins 75 ETFs globally, including the Mirae Asset TIGER US Space Tech ETF and Mirae Asset TIGER 30Y US Treasury Bond Covered Call Active(H) from Mirae Asset Globel Investments.

In the past 12 months, 43 new ETFs began tracking Akros' indices, increasing the firm's assets under management by close to US$6 billion ($8.7bn).

The index is built using generative reinforcement learning, differing from conventional strategies, with the model starting from a blank slate, discovering, testing and validating investment signals across international markets, VanEck explained.

Following the change, GOAT will be rebalanced monthly, while its management fees will also drop from 0.55% p.a. to 0.49% p.a., VanEck said.

Since inception in September 2020, the ETF returned 8.98% to the end of May, slightly underperformed against the index, which returned 9.37% over the same period.

Meanwhile, VanEck has also confirmed the VanEck Global Semiconductor ETF, VanEck Rare Earth and Strategic Metals ex China ETF, and another ETF will be joining its product suite by the end of the month.