Matthew McKinnon

Market Vectors ETFs, the exchange traded fund business of Van Eck Global, announced that its Market Vectors Australian Property ETF has received a four-star superior rating from SQM Research, an independent property advisory and forecasting research house.

Matthew McKinnon, Director, Intermediary and Institutions, Market Vectors Australia said, “We are thrilled to receive a four-star rating from SQM Research, one of Australia’s leading property advisory and research houses. The rating confirms the robust nature of our Market Vectors Australian Property ETF, which provides investors with easy access to the largest and most liquid Australian listed real estate companies.”

The research house confirmed in its report that a positive feature of the Fund is its diversification across A-REITs, “The Fund offers investors a unique and diversified exposure compared to other A-REIT focused ETFs, with the Fund aiming to replicate the Market Vectors Australia A-REITs Index (the Benchmark).

“The Benchmark is a pure-play Australian sector Index that tracks the performance of the largest and most liquid ASX listed A-REITs. Through a cap-weighted methodology, the Benchmark seeks to achieve diversification through capping individual security holdings at 10%. The Benchmark is also required to hold a minimum of ten stocks at any time,” the report said.

The report confirmed the Fund’s Index has outperformed the S&P/ASX 200 A-REIT Accumulation Index over the long term.

“The Fund’s underlying Index has produced robust returns relative to the S&P/ASX 200 A-REIT Accumulation Index. The Benchmark has been able to steadily build upon its cumulative excess return to the S&P/ASX 200 A-REIT Accumulation index, recorded at 9.6% at 31 March 2014.

“As a result of the Benchmark’s 10% capping, the Benchmark is significantly underweight to Westfield (WDC). At 31 March 2014, WDC accounted for over 24.7% of the S&P/ ASX 200 A-REIT Index (which peaked at over 50% in 2009). The Benchmark’s relative performance to S&P/ASX 200 A-REIT Accumulation Index will be driven by the relative performance of WDC,” the research house confirmed.

Another positive feature of the Fund is its fee structure according to SQM Research, “The Fund’s on-going fee structure is slightly below peers, which has positively affected the Fund’s rating. The annual management fee of the Fund is 0.35% p.a. of the Fund’s net assets,” the report said.

According to the research house, the Fund’s rating has also been positively influenced by the resources and capabilities of the Parent entity – Van Eck Global.

“Van Eck Global displays a solid track record in issuing and managing ETFs, having launched its first Market Vectors ETF in 2006. Moreover, over the years Van Eck Global has been able to successfully expand its ETF business, offering over 60 Market Vectors ETFs and developing into the eighth largest Exchange Traded Product (ETP) provider in the United States.

Mr McKinnon commented, “We have seen strong demand for our purpose-built Market Vectors Australian Property ETF since it listed on the ASX in October last year. Investors are actively seeking a liquid and more diversified exposure to a portfolio of A-REITs at a lower cost. We expect demand will continue for our purpose-built ETFs as investors’ continue to seek out exposure to particular investment opportunities.”

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Matthew McKinnon

Market Vectors ETFs (Market Vectors), the exchange traded fund (ETF) business of US-based investment manager Van Eck Global, today announced it has received an ‘Investment GradeIndex’ rating from research house, Lonsec, for its recently listed Market Vectors Australian Equal Weight ETF (ASX code: MVW).

Market Vectors Australian Equal Weight ETF is designed to track a purpose-built index, the Market Vectors Australia Equal Weight Index, which currently provides investors with equal exposure across 76 of the most liquid large and mid-cap ASX-listed securities.

Matthew McKinnon, Director, Institutions and Intermediaries at Market Vectors Australia, commented, “We are pleased to receive a positive review from Lonsec for Market Vectors Australian Equal Weight ETF – the first equal weight ETF available to Australian investors. Equal weight investing is well established in Europe and the United States, where it is used to build a diversified core portfolio.  The methodology is well suited to the Australian market, which is heavily concentrated with the top 10 stocks making up more than 50% of the top 200 listed companies by market capitalisation. Our research shows that MVW’s underlying equal weight index has outperformed the S&P/ASX 200 Index by 23% over the last 10 years.

“What sets our ETFs apart is the rigorously designed methodology and rules governing the construction of the underlying indices. Each of our ETFs is based on a Market Vectors’ purpose-built index which focuses on liquidity and diversification to design investable indices. Our ETFs therefore comprise portfolios of assets that are liquid and diversified, cost effective and easily accessible to investors via a single trade on the ASX.

“The index methodology for MVW reduces exposure to the large-capitalisation companies that typically dominate Australian benchmark indices and increases exposure to the most liquid Australian mid-caps, providing an alternative to ETFs based purely on market capitalisation indices.

“We are confident that MVW will attract a range of investors from direct and SMSF investors to intermediary and institutions seeking diversified balanced exposure to the Australian equity market,” Mr McKinnon said.

Market Vectors listed its Market Vectors Australian Equal Weight ETF on the ASX this month. The equal weight index has been especially developed by Market Vectors Index Solutions (MVIS), the independent index company of Van Eck Global based in Germany.

Lonsec review – Market Vectors Australian Equal Weight ETF (MVW) 

Lonsec has conviction that Market Vectors Australian Equal Weight ETF can achieve its objective. “The Market Vectors Australian Equal Weight ETF tracks an index that is new to the Australian market and is designed to provide a more diversified exposure than traditional market cap-weighted indices which, given the nature of the Australian economy, have a highly concentrated weighting to banks and miners,” Lonsec said.

“The Fund offers a simple and easy means of gaining a diversified exposure to the Australian share market via a single transaction. The Fund tracks the Market Vectors Australia Equal Weight Index, which provides greater diversification across industries versus traditional market cap-weighted indices,” the ratings report said.

Lonsec favourably noted the transparency of the index. “Lonsec considers the index rules to be very transparent and commends the Van Eck group of companies on making the full index methodology and index constituent selection and review processes readily available to investors.”

“It is Lonsec’s belief that not all index providers are as forthcoming with this information. Furthermore, Lonsec believes that access to transparent, straight forward information on index products, their underlying indices and how they are constructed is crucial to investors’ understanding and ability to gauge suitability,” the report said.

“By equal weighting the index constituents, the underlying index has a significantly higher weighting to mid-cap stocks, and is more diversified by sector and individual security weightings than the S&P/ASX 200 Index,” Lonsec said

Analysis by MVIS reveals that its equal-weight index has outperformed the S&P/ASX 200 in nine out of the last 12 years. Overall, the Market Vectors Australia Equal Weight Index has outperformed the S&P/ASX 200 since 2002 to March 2014 by 23 per cent, according to MVIS

The Market Vectors Australian Equal Weight ETF joins four existing Market Vectors sector-based ETFs which were listed on the ASX in October last year. They are the Market Vectors Australian Banks ETF (MVB), Market Vectors Australian Property ETF (MVA), Market Vectors Australian Resources ETF (MVR) and Market Vectors Australian Emerging Resources ETF (MVE).

Market Vectors Australia is planning to launch more ETFs on the ASX later this year as it continues to gain market share in the Australian ETF market.

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Matthew McKinnon

Market Vectors ETFs (Market Vectors), the exchange traded fund (ETF) business of US-based investment manager Van Eck Global, yesterday announced it has received ‘Investment GradeIndex’ ratings from research house, Lonsec, for all four of its new Australian ETFs.

The rating indicates that Lonsec has conviction that the ETFs can achieve their objectives and the report makes particularly favourable mention of the ETFs’ transparency and targeted exposure to their specific Australian economic sectors.

Market Vectors Australian Banks ETF (ASX code: MVB), Market Vectors Australian Emerging Resources ETF (ASX code: MVE), Market Vectors Australian Property ETF (ASX code: MVA) and Market Vectors Australian Resources ETF (ASX code: MVR) were launched on the Australian Securities Exchange (ASX) last week.

Matthew McKinnon, Director, Institutions and Intermediaries at Market Vectors Australia said he was pleased to receive such positive feedback from Lonsec, one of Australia’s top research houses, which confirms Market Vectors ETFs’ first offerings to the Australian market as quality investments for Australian investors.

“Our ETFs offer something different to other ETFs listed in Australia because they aim to track pure-play investable indices which are purpose-built for ETFs by Market Vectors Index Solutions,” McKinnon said.

“To qualify for inclusion in the underlying index, companies must generate at least 50% of their revenue or assets from a particular sector. This is what is defined as ‘pure-play’. Strict liquidity screens are then applied to determine individual components, then individual weightings are determined subject to caps. The result is targeted exposure with real diversification to all underlying securities.

“Our index methodology reduces exposure to the large cap companies that dominate many Australian indices, and increases exposure to the most liquid Australian mid and small caps,” McKinnon said.

Lonsec confirmed the Van Eck Global investment team, “has a track record in minimising tracking error with sector-focused ETFs and more broad-based ETFs,” and “has proven its ability to manage cash flows from dividends.”

The research house also praises the group’s transparent approach; “Lonsec commends the Van Eck Global group of companies on making the full index methodology and index constituent selection and review processes readily available to investors.”

According to Lonsec, Market Vectors Australian Banks ETF (MVB) offers a “simple and easy means of gaining exposure to the Australian banking and finance sector, via a single transaction.”

Lonsec’s report confirms: “The Fund tracks the Market Vectors Australian Banks Index, which provides a cap-weighted exposure to Australian banks, removing the large capitalisation biases found in traditional market capitalisation weighted indices. The Fund’s MER fees are lower than other financial sector based ETFs assessed by Lonsec.” MVB caps an individual component’s weight at 20%.

The research house believes Market Vectors Australian Property ETF (MVA) offers a simple way of gaining exposure to the Australian Real Estate Investment Trust (A-REIT) sector. Lonsec said: “The Fund tracks the Market Vectors A-REIT Index, which provides cap-weighted exposure to A-REITs, providing greater diversification and reducing large capitalisation biases to Westfield Group and Westfield Retail found in traditional market capitalisation weighted indices”. MVA caps an individual component’s weight at 10%.

Lonsec also found Market Vectors Australian Resources ETF (MVR) provides greater diversification and is priced lower than other Resource sector based ETFs assessed by Lonsec.

The report says: “The Fund tracks the Market Vectors Australia Energy and Mining Index, which provides a cap-weighted exposure to this sector, providing greater diversification and reducing the large capitalisation biases to BHP and Rio Tinto found in traditional market capitalisation weighted indices.” MVR caps an individual component’s weight at 8%.

Market Vectors Australian Emerging Resources ETF (MVE) also received a positive review, “The Fund offers a simple and easy means of gaining exposure to the Australian Junior Energy and Mining sector, via a single transaction,” Lonsec outlines. MVE also caps an individual component’s weight at 8%.

Lonsec noted, “The Market Vectors Australian Sector ETFs provide a more targeted exposure to certain economic sectors, unlike most other market capitalisations weighted indices.”

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Timothy Bethe

Market Vectors ETFs (Market Vectors), the exchange traded fund (ETF) business of Van Eck Global, today announced its senior team in Australia. 

Matthew McKinnon has joined Market Vectors Australia as Director, Intermediary and Institutional, responsible for overseeing and developing client relationships in the intermediary and institutional sectors. Prior to joining Market Vectors, McKinnon worked for Perpetual Limited as General Manager of Distribution for Equities and the Superannuation and Investment Solutions divisions. Before that, he held senior roles at Rothschild and IOOF.

Russel Chesler has joined Market Vectors Australia as Director, Investments and Portfolio Strategy from Sunstone Partners, a boutique consulting firm specialising in advice to the asset and wealth management sectors. He is responsible for investment portfolio management, new product development and capital markets. Chesler is a qualified actuary with over 20 years’ experience in financial services. Prior to joining Market Vectors Australia he held senior positions at Perpetual Limited, Grange Securities and Alexander Forbes in South Africa.

Arian Neiron, Managing Director, Market Vectors Australia, said, “I am delighted to announce the appointment of two highly reputable and skilled professionals to our team in Australia. Both have exceptional experience and a genuine passion for working in the ETF industry.

“Matthew has a wealth of experience in business development and brings strong relationships with financial advisers, private banks, stockbrokers, accountants, family offices and institutions. Russel will be responsible for working closely with our New York investment team on the portfolio management of all locally domiciled ETFs, as well as new product development and capital markets in Australia.”

Market Vectors has been building its Australian team as part of its aim to become one of the largest ETF providers in the Australian market. The firm plans to list new Market Vectors ETFs on the Australian Securities Exchange (ASX), providing investors with targeted exposure to key investment sectors.

McKinnon and Chesler join Timothy Bethe and Michael Brown, who have been in their positions since late 2012 and early 2013 respectively. Timothy Bethe is Senior Director, Product and Governance for Market Vectors Australia, previously working for BlackRock where he was responsible for cross-listing iShares ETFs on the ASX. Timothy was part of the team that launched iShares in Australia and its expansion into domestic ETFs.  Michael Brown is Director, Operations and Finance for Market Vectors Australia bringing over 30 years’ experience in the financial services sector. Previously, Brown was Head of Tax at Perpetual, MLC and BT Funds Management.

“These appointments build on the depth of experience of the Van Eck Global team and demonstrate our commitment to growing our business in Australia. Australia’s ETF market is still in its infancy with many opportunities ahead. We believe our ETFs will have broad appeal to financial advisers, direct investors, self-managed super fund investors (SMSFs) and institutions,” Mr Neiron said.

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