VanEck to intro RMBS, India ETFs

VanEck will soon list two new ETFs, one being an RMBS strategy and the other investing in Indian growth stocks.

The VanEck Australian RMBS ETF (ASX: RMBS) will give investors access to a residential mortgage-backed securities strategy, which VanEck said should prove compelling to investors in the current environment.

Residential mortgage-backed securities are one of the fastest growing fixed income asset classes in Australia, reaching a record $59.2 billion of issuance in 2024, VanEck chief executive and managing director Arian Neiron said.

"As a securitised debt backed by a pool of home loans, Australian residential mortgage-backed securities benefit from a long track record of stability supported by the price growth in the homes of borrowers and debtor resilience during economic downturns. Historically, investors in highly rated Australian residential mortgage-backed securities have never experienced principal losses," he said.

"In the current market environment, with the market anticipating rate cuts by the Reserve Bank, residential mortgage-backed securities will be more compelling because of the yield premium over cash products and similarly rated senior debt."

He added that RMBS has traditionally been difficult to incorporate in a portfolio with investors having to rely on asset managers to access.

"They have been utilised in credit strategies for decades, and for the first time VanEck's RMBS democratises the opportunity for all types of investors. RMBS invests in AAA-rated Australian residential mortgage-backed securities only, ensuring investors benefit from high payment seniority," said Neiron.

Meantime, the VanEck India Growth Leaders ETF (ASX: GRIN) provides exposure to high-growth Indian companies, tracking the MarketGrader India Growth Leaders 50 Index.

"India is carving out a niche in the global investment landscape and becoming a rising investment destination. The key drivers include higher GDP growth supported by policy tailwinds, favourable demographics and a growing middle class and government-led initiatives fostering improved efficiency," Neiron said.

"Further, while many countries scramble to recalibrate in response to Trump's shifting US trade policies, India's relative detachment from global trade could help it weather shocks that may harm more trade-dependent economies. India's tariffs are high, and its share of global exports remains under 2%. India's vast domestic market has continued to fuel its growth."

The two products will both list on Thursday, April 24. It will take VanEck's total ETF lineup to 46.