Global wealth manager VanEck is set to launch the first Australian equity exchange-traded fund (ETF) this week employing long and short positions to generate returns.
The VanEck Australian Long Short Complex ETF will be open for trading on the Australian Securities Exchange (ASX) under the ALFA ticker from 23 January.
Specifically, the offering will use active management and quantitative analysis to assess over 10,000 data points in real time to identify stocks that have a statistical probability of outperforming the market, as well as those shares with a likelihood of underperforming.
The new ETF is aiming to generate a return for investors that will beat the S&P/ASX 200 over a medium and long-term horizon.
VanEck chief executive Arian Neiron indicated the motivation for the launch of the ETF is the inefficiencies inherent on the ASX that can be exploited.
“It is hyper-concentrated, overcrowded and lacks persistent ‘factor’ dominance. With style, sector and size leadership proven to be highly idiosyncratic, this has presented an opportunity to exploit the market’s inefficiencies through a highly active approach in 2025 and beyond,” Neiron explained.
He noted the ETF was being launched at the right time for investors given the environment in which the ASX is currently operating.
“The launch of ALFA is timely given the complexities of the current investment climate. We saw last year that market swings and sector-level dispersion were more pronounced than ever, with shifting global growth expectations, geopolitical tensions and the evolving interest-rate environment impacting performance. This volatility is expected to persist into 2025,” he said.
“Meanwhile, style rotations and valuation gaps are presenting short-term opportunities in the Australian market that require adaptability that are not supported by traditional active funds, but will complement core beta and smart beta approaches.”
According to Neiron, the manager’s continued use of technology in market analysis and to identify opportunities has enabled it to launch a product such as ALFA.
“Recent and ongoing advances in technology and programmable learning have enabled us to identify a compelling new opportunity for the investing community. We think investment approaches such as the one ALFA offers are the portfolio construction tools of the future and are positioned to deliver an all-weather solution for Australian equity investors seeking excess returns,” he suggested.
The listing of the new ETF follows the release of a Bitcoin offering in mid-2024. The number of ETFs operating under the VanEck banner now totals 44.