VanEck set to launch active ETF in Australia next month
VanEck is set to list an active ETF that will invest in emerging markets bonds, with a target of 5% annual yield after fees.
The VanEck Emerging Income Opportunities Active ETF (Managed Fund) (ASX: EBND) is expected to list on the ASX in February.
The ETF will hold a portfolio of EM debt securities, denominated in their local currency as well as US dollars. It is targeting 5% per year in target yield and will make monthly distributions.
VanEck has set the management costs are 0.95% per year.
The portfolio will be managed by VanEck portfolio manager Eric Fine and his team.
"We are thrilled to bring this strategy to Australia. We believe an index-agnostic approach is key because bottom-up, country-specific selections drive risk/return, and passively investing in the biggest index components can mean exposure to excessively levered countries and companies," Fine said.
VanEck had about 20 ETFs listed on the ASX, totaling just under $4 billion at December end. About a quarter of its assets are in the VanEck Vectors Australia Equal Weight ETF (ASX: MVW).
The ETF issuer has focused its recent launches on the fixed income sector, which has been hauling the highest inflows from ETF investors in recent quarters. VanEck last year added an ETF that invests in tier two debt of Australian financials and a fixed income model portfolio earlier this year.
VanEck managing director and head of Asia Pacific Arian Neiron said: "With Australian and global developed markets' bond yields extremely low, the higher yields available on emerging market debt provide investors with the potential for higher income."