New Listing

VanEck lists currency hedged world ETF in Australia

George Geddes

a pile of money

VanEck has listed the VanEck Vectors MSCI World ex Australia Hedged Quality ETF (QHAL) on the Australian Securities Exchange (ASX) in Sydney.

It offers exposure to its previously listed VanEck MSCI World ex Australia Quality ETF (QUAL) which launched back in 2014, but is currency hedged with Australian dollars (AUD).

Tracking the MSCI World ex Australia index, QUAL is comprised of nearly 300 constituents from around the world, excluding the region of Australia. MSCI scores and ranks the constituents depending on their quality scores which is determined by three variables: high return on equity, stable year-on-year earnings growth and low financial leverage.

While the value of the AUD has not fluctuated much this year so far, it is not at its strongest in the last 12 months. AU$1 is currently valued at US$0.71, which is down from this time last year of US$0.77.

QHAL has ongoing management fees of 0.43%.


chart, line chart

Source: Bloomberg

As QHAL has only just listed, there is no available data for the ETF until it is 12 months old, however we can look at the unhedged version QUAL which listed at the end of 2014.

Having a significantly positive start to 2019, QUAL (unhedged) has produced returns of 13.5% year-to-date. This performance nullifies the losses faced at the end of 2018 where volatility rocked the equity market.

The USD and GBP have had their ups and downs this last month due to the trade war between the US and China as well as the ongoing Brexit uncertainty. However, the value of the AUD has not seen any significant growth so QHAL seems to only be a logical investment choice if the USD starts to slide against the AUD.

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