Positioning portfolios for conflict

Investment themes

Asset class

ETF(s)

Shorting the market

Australian equities

VanEck Australian Long Short Complex ETF ( ALFA)

Flight to safety/ Monetary debasement hedge  

Gold

VanEck Gold Bullion ETF ( NUGG)

Gold miners

VanEck Gold Miners ETF ( GDX)

Defence repricing

Defence equities

VanEck Global Defence ETF ( DFND)

Demand for critical metals and traditional energy

Commodities

VanEck Australian Resources ETF ( MVR)

Flight to quality

Large cap international equities

VanEck MSCI International Quality ETF ( QUAL)

VanEck MSCI International Quality (AUD Hedged) ETF ( QHAL)

Real Assets

Infrastructure

VanEck FTSE Global Infrastructure (AUD Hedged) ETF ( IFRA)

Real Estate

VanEck FTSE International Property (AUD Hedged) ETF ( REIT)

VanEck Australian Property ETF ( MVA)

Yield curve shifts

Long duration

VanEck 10+ Year Australian Government Bond ETF ( XGOV)

Floating rate

VanEck Australian Floating Rate ETF ( FLOT)

Risk off/rising rates

T-bills

VanEck 1-3 Month US Treasury Bond ETF ( TBIL)

VanEck equity and alternative asset ETFs

Australian equities

VanEck Australian Long Short Complex ETF

ALFA¹

• Long/short portfolios are designed to profit from stocks that are going up as well as those that are going down. These types of strategies have been gaining interest, however, being selective is key.
• ALFA uses a dynamic quantitative stock selection approach utilising sophisticated computations and programmed learning designed to be agnostic of market cycle and style rotations.

Gold and gold miners

VanEck Gold Bullion ETF

VanEck Gold Miners ETF

NUGG

GDX

• Since the crisis broke out, gold has risen back above US$5,200/oz on safe-haven demand, and we think it is expected to push further. The structural drivers for gold, central banks accumulating at the fastest pace since Bretton Woods, US fiscal deterioration and the slow unwinding of dollar hegemony were in place before the Middle East conflict. The Strait of Hormuz threat, if it materialises, introduces the prospect of an inflationary oil shock on top of an already uncertain rate environment. That combination, geopolitical uncertainty plus inflation risk, is an environment in which gold has historically performed best.
• NUGG is Australia’s premium gold bullion ETF, physically-backed by gold sourced only from Australian gold producers whose operations adhere to the LBMA Responsible Gold Guidance. In addition to trading on the ASX, investors can convert their ETF holdings into physical gold bullion.
• GDX gives investors instant access to 92²of the largest and most liquid global gold mining companies.

Global defence

VanEck Global Defence ETF

DFND

• The theme of defence spending was already in the spotlight. It is important to remember that, for long-term investors, this conflict will not be the cause of the defence spending upcycle. It could be a further acceleration of a trend that was already structurally underway. NATO allies had already committed to spending increases. Indo-Pacific nations were already expanding their defence capabilities. What’s changed is the urgency and the political impossibility of reversing course.
• DFND was an Australian first when it listed in 2024 and provides investors with diversified access to at least 25 leading defence technology companies, large-scale cyber security firms and defence-relevant service providers based in NATO countries or NATO-friendly countries.

Australian resources

VanEck Australian Resources ETF

MVR

• Last week, we highlighted commodities and MVR, which have historically outperformed broader equity markets in periods of inflation. We also highlighted the other long-term trend driving prices higher in the sector: demand from AI.
• MVR is different from other resource ETFs, as it caps holdings at a maximum of 8%, which means companies like BHP and Rio Tinto don’t dominate.

International equities

VanEck MSCI International Quality ETF

VanEck MSCI International Quality (AUD Hedged) ETF

QUAL

QHAL

• There is a common observation about investing in volatile periods, as we are experiencing now, and as we have seen this time and time again: It is called the ‘flight to quality’. The Quality Factor exists as a smart beta approach, and savvy investors have employed it over time and varying market cycles, particularly in markets such as the one we are currently experiencing, as investors seek companies with strong balance sheets, stable earnings and high return on equity.
• QUAL is an ASX-traded ETF that, via a single ASX trade, provides investors with an international equity portfolio of the world's highest quality companies based on key fundamentals, including
1. high return on equity,
2. earnings stability and
3. low financial leverage
• QHAL is an Australian dollar-hedged version of QUAL, so you can now also manage your desired currency exposure.

Listed infrastructure and listed property

VanEck FTSE Global Infrastructure (AUD Hedged) ETF

VanEck FTSE International Property (AUD Hedged) ETF

VanEck Australian Property ETF

IFRA

REIT

MVA

• Real assets like infrastructure and property are generating interest because they’re backed by tangible assets, cash flows that can help preserve purchasing power and act as a practical inflation hedge through contracted/inflation-linked revenues, rents, and income streams.
• IFRA gives investors access to a diversified portfolio of listed infrastructure companies from around the world.  
• REIT is a portfolio of approximately 300 international REITs diversified by country and sector, providing exposure to commercial, healthcare, retail, office, industrial and other sectors not available in Australia.
• MVA is a smart beta A-REIT ETF that tracks an index that caps its constituents at 10% so that one single REIT or subsector does not dominate, with the aim of reducing concentration risk that is a feature of many A-REIT indices and funds.

VanEck fixed income ETFs

Long duration

VanEck 10+ Year Australian Government Bond ETF

XGOV

• Earlier last week, 10-year Australian Government bond yields hit 5.00%, before swiftly falling back to 4.80%. These moves are not uncommon in the middle of market uncertainty and heightened geopolitical tensions. In such an environment, increasing portfolio duration can serve as an important tail risk hedge. During the dot-com bubble, global financial crisis, COVID-19 period, and recently the Russian invasion of Ukraine, a ‘bull flattening’ scenario unfolded, where short- and long-term Australian government bond yields declined.
• One way to increase duration is the VanEck 10+ Year Australian Government Bond ETF (XGOV), a portfolio of Australian government bonds with maturity dates between 10 and 20 years. XGOV could be used to express your interest rate view. The longer duration of XGOV means that it is more sensitive to changes in interest rates, and as at 11 March 2026, its modified duration was 8.96 years. This means that for every 1% fall in interest rates, XGOV’s value is expected to increase 8.96% and vice versa.
• XGOV is one of three VanEck Australian Government Bond ETFs, each targeting three distinct maturity buckets within different parts of the yield curve so investors can express their view on the direction of rates and potentially add value to their portfolio. VanEck 1-5 Year Australian Government Bond ETF (1GOV) and VanEck 5-10 Year Australian Government Bond ETF (5GOV) are the other two ETFs in the series.

Floating rate notes

VanEck Australian Floating Rate ETF

FLOT

• Rates are rising across the curve. FLOT is a portfolio of floating rate corporate bonds that pay coupons that vary with short-term interest rates.
• FLOT offers investors an enhanced yield and pays income monthly. Coupons and thus yield are expected to increase with rises in short-term (3-month BBSW) interest rates and vice versa.

T-bills

VanEck 1-3 Month US Treasury Bond ETF

TBIL

• T-Bills can act as a defence against both duration and credit risk in the face of macroeconomic uncertainty. T-Bills have an AAA credit rating which helps to mitigate credit risk, while the short-term nature of the bills helps to mitigate interest rate risks.
• TBIL is not AUD currency hedged. The Australian dollar typically depreciates relative to the US dollar during heightened market volatility.