Market Vectors new Australian equal-weight ETF lists on ASX

Market Vectors, the exchange traded fund (ETF) business of US-based investment manager Van Eck Global, has listed its new Australian Equal Weight ETF on the ASX today. Trading under the ASX code MVW, the new ETF is the first of its kind in Australia.

MVW gives investors access to a broadly diversified portfolio of the most liquid large, mid and small cap ASX-securities via a single trade on the ASX. The fund currently holds 77 securities, all of which are equally weighted at approximately 1.30%.

Market Vectors Australian Equal Weight ETF tracks a purpose-built index, the Market Vectors Australia Equal Weight Index, which has been developed specifically with the intention of reducing the concentration risk inherent in market capitalisation weighted indexes in Australia.

Arian Neiron, Managing Director of Market Vectors Australia, said: “Our Australian Equal Weight ETF provides investors with something they haven’t had before – the opportunity to invest equally in some of Australia’s most successful companies, from big to small in one transaction on the ASX.

“Many Australian share investors do not have exposure to mid and small-cap companies in their portfolios because traditional indices and broad based unlisted managed funds invariably focus on a few big companies, resulting in a large-cap bias and increased concentration risk.

“The Market Vectors Australian Equal Weight ETF aims to diversify investment risk more evenly across companies and sectors. The index currently includes 77 securities, including mid cap securities such as Orica, Ramsay Health Care, SEEK as well as the big banks and miners such as Commonwealth Bank, Westpac, BHP Billiton and Rio Tinto. Each security currently has an equal weighting of approximately 1.30%.

“Investors will be attracted by the ease of diversifying their portfolios across many different companies, without having to pick the stocks themselves. We particularly expect strong demand from SMSFs, the fastest growing segment of the superannuation sector which has about A$550 billion in assets, seeking diversified exposure to Australian securities,” Mr Neiron said.

Australia’s ETF market is growing rapidly, hitting an all-time high last month, reaching A$10.562 billion assets under management in February 2014, an increase of 47.2% from 12 months ago, according to the Australian Securities Exchange.

Market Vectors now has five ETFs listed on the ASX, “We are fully committed to growing our presence locally by offering investors high-quality purpose-built ETFs which provide targeted exposure to important investment sectors,” Mr Neiron said.

Market Vectors now offers over 60 exchange traded products (ETP) spanning international markets, commodities, emerging markets, global equities, fixed income and currency sectors. Market Vectors has clients worldwide and has approximately $US22 billion in assets under management, making it the seventh largest ETP family in the US and the tenth largest worldwide as of 31 January, 2014.

Details of the new Market Vectors Australian Equal Weight ETF are available here.