Invest in some of the highest quality international small companies
Quality investing has stood the test of time and forms the foundation of investing greats such as Benjamin Graham and Warren Buffett.
MSCI, the world’s largest index provider and creator of the first international index, created a Quality Index which employs three fundamental variables to capture the quality factor:
Return on equity – which shows how effectively a company uses investments to generate earnings growth;
Debt to equity – a measure of company leverage; and
Earnings variability – how smooth earnings growth has been.
This approach has demonstrated robust risk/reward outcomes over multiple economic cycles.
To date investors have only been able to access a portfolio of large and mid-cap companies that exhibit the Quality factor via the VanEck Vectors MSCI World ex Australia Quality ETF (QUAL).
We now offer investors an international small companies quality portfolio via a single trade on ASX. The VanEck Vectors MSCI International Small Companies Quality ETF trades under the ASX ticker ‘QSML’.
Many investors seek capital growth opportunities by investing in small companies such as those found in the S&P/ASX Small Ordinaries. The international opportunity is 20x bigger with approximately 4,000 listed international small companies making up the benchmark, MSCI World ex Australia Small Cap Index. However, not all of these companies are desirable from an investment perspective. QSML is an international equity smart beta strategy of approximately 150 international small companies selected by MSCI based on its quality factor.
The QSML opportunity
150 of the world's highest quality small companies Access a diversified portfolio containing some of the world's highest quality small companies based on key fundamentals including (i) high return on equity, (ii) earnings stability and (iii) low financial leverage.
Outperformance potential in growing companies Investments focusing on quality small companies have delivered outperformance over the long term relative to other global small companies benchmarks and also relative to large- and mid-cap benchmarks.
Diversified across countries, sectors and companies Offering investors a portfolio of approximately 150 companies across a range of geographies, sectors and economies.
VanEck Investments Limited ACN 146 596 116 AFSL 416755 (‘VanEck’) is the responsible entity and issuer of units in QSML. This is general advice only,not personal financial advice. It does not take into account any person’s individual objectives, financial situation or needs. Read the PDS and speak with a financial adviser to determine if the fund is appropriate for your circumstances. The PDS is available here.
QSML is subject to investment risk, including possible loss of capital invested. No member of the VanEck group guarantees the repayment of capital, the payment of income, performance, or any particular rate of return from the fund. QSML will invest in international markets which have specific risks that are in addition to the typical risks associated with investing in the Australian market. These include foreign currency, ASX trading time differences, country or sector concentration, political, regulatory and tax risks. The PDS details the key risks.
QSML is indexed to a MSCI index. QSML is not sponsored, endorsed or promoted by MSCI, and MSCI bears no liability with respect to QSML or the MSCI World ex Australia Small Cap Quality 150 Index. The PDS contains a more detailed description of the limited relationship MSCI has with VanEck and QSML.