VanEck Australia lists AUD-hedged version of global quality ETF

Apr 2nd, 2019 | By | Category: Equities

VanEck Australia has listed a currency-hedged version of the VanEck Vectors MSCI World ex Australia Quality ETF (QUAL AU) on Australian Securities Exchange.

VanEck lists AUD-hedged version of global quality ETF in Australia

The new listing offers investors the means to hedge currency exposure relative to the Australian dollar.

The new listing, which trades under the ticker QHAL AU, offers investors the means to hedge currency exposure relative to the Australian dollar.

The ETF provides exposure to a portfolio of stocks with strong quality characteristics that are listed in developed markets globally (excluding Australia).

It is linked to the MSCI World ex Australia Quality 100% Hedged to AUD Index which covers large and mid-cap exposure across 22 developed market countries.

A quality score for each eligible security is calculated by assessing three metrics: return on equity, debt to equity, and earnings variability. Each metric contributes equally to the security’s final quality score.

The methodology then selects a fixed number of securities (currently 300) with the highest quality scores. Stocks are weighted according to the product of their market cap and quality score, subject to a 5% cap. Index rebalancing occurs semi-annually.

The original unhedged ETF launched in 2014 and has accumulated over $500 million in assets under management. It comes with an expense ratio of 0.40%, while the new currency-hedged listing costs 0.43%.

The fund’s closest competitor is the SPDR MSCI World Quality Mix Fund (QMIX AU) which also costs 0.40%. This fund tracks the MSCI World Factor Mix A-Series Index, providing exposure to developed market stocks globally and representing the performance of quality, value, and low volatility factor strategies.

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