Research house Lonsec has awarded Van Eck Global’s Australian exchange traded fund business – Market Vectors ETFs – an ‘Investment Grade Index’ rating for all of its four ETFs.
In awarding the rating, Lonsec made particular mention of the “transparency” of the ETF product suite and the “targeted exposure to their specific Australian economic sectors”, according to a Market Vectors statement.
“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,” said Market Vectors Australia director, institutions and intermediaries, Matthew McKinnon.
“To qualify for inclusion in the underlying index, companies must generate at least 50 per cent 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.”
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