3 years on: Bulls, bears and everything in between


Since its launch in October 2014 the VanEck Vectors MSCI World ex Australia Quality ETF (ASX: QUAL), the first smart beta international equity ETF on ASX, has outperformed the MSCI World ex Australia Index by 1.63% p.a. returning 15.96% p.a.

QUAL’s Index has demonstrated outperformance over the long term through a variety of bull and bear markets. Whether you are a bull or a bear, with a single trade on ASX you can use QUAL to invest in 300 quality international companies.

The attraction of international equities

Diversifying offshore not only provides geographic diversification, it also gives investors access to sectors that are not well represented in Australia such as IT and Healthcare and to companies not available on ASX, including world leaders such as Google, Apple and Johnson & Johnson.

The problem with active managers and LICs

Prior to QUAL’s launch, most investors gained access to international equities via an actively managed fund or a LIC (listed investment company).  However, compared to QUAL, these investment vehicles:

  • have reduced liquidity

  • have higher turnover

  • lack transparency

  • come with additional hazards such as key manager risk

  • have increasingly lagging performance track records

  • are expensive, and

  • in the case of LICs, trade at a value different to the fair value of the underlying assets.

300 quality international securities with one simple trade

QUAL tracks the MSCI World ex Australia Quality Index (QUAL Index) which includes only the 300 highest quality scoring stocks based on three easily identifiable financial characteristics:

  1. high ROE

  2. stable year-on-year earnings growth, and

  3. low financial leverage

QUAL is a simple and cost effective strategy that has continued to outperform across market cycles.

Since its inception QUAL has outperformed the benchmark index across all trailing time periods

QUAL performance graph October 2017

Performance in bull and bear markets

Over the long term the QUAL Index demonstrates outperformance. Notably, in the past, quality has significantly outperformed in down market environments such as the GFC and periods of heightened volatility such as the post GFC bull market and since the election of President Trump. 

Bull and bears October 2017

Whether you are a bull or a bear, with a single trade on ASX you can use QUAL to invest in 300 quality international companies and acquire a portfolio with:

  • greater diversification via exposure to international equities with reduced volatility through quality screening

  • potential capital growth and income from US, European and Asian developed markets

  • increased exposure to technology and health care sectors

  • no foreign tax paperwork and no exposure to US estate tax

IMPORTANT NOTICE: This information is issued by VanEck Investments Limited ABN 22 146 596 116 AFSL 416755 (‘VanEck’) as responsible entity and issuer of the VanEck Vectors MSCI World ex Australia Quality ETF (‘Fund’). This is general information only and not financial advice. It does not take into account any person’s individual objectives, financial situation or needs. Before making an investment decision in relation to the Fund, you should read the PDS and with the assistance of a financial adviser consider if it is appropriate for your circumstances. The PDS is available at www.vaneck.com.au or by calling 1300 68 38 37. The Fund is subject to investment risk, including possible loss of capital invested. Past performance is not a reliable indicator of future performance. No member of the VanEck group of companies gives any guarantee or assurance as to the repayment of capital, the payment of income, the performance, or any particular rate of return from the Fund.

QUAL invests in international markets. An investment in QUAL has specific and heightened risks that are in addition to the typical risks associated with investing in the Australian market. These include currency risks from foreign exchange fluctuations, ASX trading time differences and changes in foreign laws and regulations including taxation.

QUAL is indexed to a MSCI index. QUAL is not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to QUAL or the MSCI Index. The PDS contains a more detailed description of the limited relationship MSCI has with VanEck and QUAL.

Published: 09 August 2018