VanEck Australia has partnered with financial research house Lonsec Investment Solutions to launch a range of ETF model portfolios. The offering is designed for advisers and brokers to assist in the construction of simple and cost effective diversified portfolios that serve as the foundation to help meet their clients’ investment objectives.
Arian Neiron, managing director, VanEck Australia.
Drawing on Lonsec’s research and portfolio construction expertise, the suite of model portfolios provide recommended strategic asset allocations tailored to three risk/return profiles: balanced, growth and high growth.
Each VanEck ETF model portfolio provides broad market exposure across asset classes including Australian equities, global equities, property, Australian fixed income and international fixed income.
Arian Neiron, managing director, VanEck Australia, commented: “We are delighted to partner with Lonsec Investment Solutions who has over 20 years’ experience in strategic asset allocation. We believe the new VanEck ETF model portfolios will provide financial advisers with a set of tools to build cost effective and diversified investment portfolios to help meet the needs of their clients across a range of risk profiles.”
While the portfolios may utilize ETFs provided by issuers other than VanEck, all ETFs included in the models must have a minimum ‘Recommended’ rating according to Lonsec’s fund evaluation methodology. In addition, Lonsec will provide ongoing independent oversight as well as quarterly performance reporting.
On describing the implication of a ‘Recommended’ rating, Lonsec writes: “The Recommended rating indicates that Lonsec has strong conviction the financial product can generate risk-adjusted returns in line with relevant objectives. The financial product is considered an appropriate entry point to this asset class or strategy.”
The target allocations for each of the three model portfolios are outlined below.
Source: VanEck.
Since the portfolios inception date in November 2014, the balanced fund has returned 8.5% per annum, while the growth and high growth funds have returned 10.2% and 11.8% per annum respectively.
Source: VanEck.
The annual management costs, which excludes the fees of the underlying ETF holdings, for the balanced, growth and high growth model portfolios are 0.29%, 0.32% and 0.35% respectively.
“Over the past decade, the investment industry has experienced a rapidly changing environment, with turbulent markets, changes in regulation and evolving technology,” said Neiron. “As a result, clients are scrutinising their investments more closely in search of performance, value and transparency in an increasingly cost conscious world. Our ETF model portfolios are designed to address these factors and provide a reliable, low cost investment framework for investors.”