This is the first episode in our Meet the Manager series, where I sit down with Australia’s ETF providers to find out how they really work. First up is Julian Moore, Senior Business Development Manager at VanEck, Australia’s fourth-largest ETF provider.
The big lesson from our chat: two ETFs can have almost the same name and very different results. You can pick the right theme and still pick the wrong ETF. Here are the key takeaways. Each button jumps the video to that part of the conversation.
1. Who is VanEck?
VanEck manages around $32 billion in Australia and roughly US$200 billion globally. It started in the US in 1955 as an active manager, with one of the world’s first international share funds and one of the first gold funds. Its first ETF, GDX (gold miners), launched in 2006 and is now the largest gold miners ETF in the world. VanEck has been in Australia since 2012.
2. What is “smart beta”?
A traditional index ETF, like an ASX 200 or S&P 500 fund, weights companies by size: the bigger the company, the more of your money goes into it. Smart beta is any index that isn’t weighted purely by size. For example:
- Equal weighting: every company gets the same share.
- Factor weighting: tilting towards quality, value, growth or momentum.
- Capping: no single stock can go above a set limit.
“We would say we are the leader in smart beta and in terms of index design.”Julian Moore, Senior Business Development Manager, VanEck
3. Same sector, very different ETF: resources
This is a great example. In the standard ASX 200 resources index, BHP is about 40%. So in an ETF like QRE, about $40 of every $100 goes into one company. VanEck’s MVR caps every stock at 8%, which spreads your money across a much wider group of resource companies.
If a company grows above 8%, it's trimmed back at the next rebalance. On screen, MVR had outperformed QRE since inception, though it had lagged more recently while BHP held up better than smaller miners.
4. Emerging markets: why Korea matters
A question from my YouTube live: why do some emerging markets ETFs hold South Korea and others don't? It comes down to the index provider. FTSE treats Korea as a developed market. MSCI treats it as emerging. With Korean chipmakers like Samsung and SK Hynix booming, that one difference has had a big impact on returns.
Market-cap weighted. FTSE classes South Korea as developed, so Korea is left out.
MSCI classes South Korea as emerging, so Korea is included. Top 250 stocks by value, quality, size and momentum, 5% cap.
A factor is a common trait that tends to drive returns: quality (strong balance sheets, stable earnings, low debt), value (cheap compared with fundamentals), size (smaller companies) and momentum (winners keep winning). Emerging markets are less efficient and individual factors go in and out of favour, so EMKT combines four of them.
On screen, EMKT had outperformed over three and five years for only a little more in fees than VGE. Past performance isn't a guide to the future, but it shows how much index design can matter.
5. Not everything is smart beta
VanEck does run some standard benchmark ETFs where it was first to market:
- IFRA: global infrastructure, hedged to AUD. About half utilities, 30% transport, 20% other such as pipelines and towers.
- REIT: global property, for diversification beyond Australian REITs.
- FLOT (floating-rate bonds) and RMBS (residential mortgage-backed securities).
- Gold and Bitcoin: physically backed, with no index rules needed.
6. The new Core Plus diversified ETFs
VanEck's new all-in-one portfolios come in Balanced (60% growth), Growth (80%) and High Growth (100%) versions. Each holds 10–19 VanEck ETFs, mostly smart beta, including asset classes that are often missing from other diversified ETFs, like gold, infrastructure and emerging markets. The all-in fee is 0.39% p.a.
Because the asset mix is set by a team in New York, it can't be properly back-tested. That's why I'm watching how they hold up through tougher markets before forming a view.
Julian says they're the only diversified ETFs in Australia with a separate gold allocation, through NUG, VanEck's physical gold ETF (0.14% p.a.). NUG's gold is Australian-sourced and held at the Perth Mint. If you hold NUG directly, you can even convert your units and take physical delivery of the gold.
7. What advisers are talking about now
It's been a tricky year. Julian pointed to conflict in the Middle East pushing up oil and inflation, and to the AI boom carrying US markets. Australia has looked weaker: budget changes, a softer housing market, and an index dominated by the banks.
One idea advisers are discussing is pairing an equal-weight Australian ETF (MVW), which reduces how much rides on the big banks, with a quality Australian ETF (AQTY) that focuses on strong balance sheets.
Overseas, VanEck has been positive on value (VLUE) in a world of sticky inflation and moderate growth. It pairs that with quality (QUAL), which tends to hold up better if growth turns down.
“ETFs are a great tool to democratise markets and give you access to things that are not otherwise available on the ASX.”Julian Moore, Senior Business Development Manager, VanEck
8. ETFs in five years, and AI
Julian expects ETFs to become the default way to invest rather than a niche product, with more active managers listing ETFs and Australia catching up to the US and Europe. He also explained ALFA, VanEck's AI-driven long/short strategy, which screens around 15,000 signals to pick 50 companies to buy and about 20 to short.
The key takeaway
With more than 500 ETFs now listed in Australia, the name on the label isn't enough. Look at how the ETF is built: the index, the weighting rules and what it actually holds. That can be the difference between a good result and a poor one, even in the same sector.
Watch the full interview on YouTube →
Products mentioned are examples discussed in the interview, not recommendations. Figures, holdings and fees are as discussed at the time of recording and may have changed. Check the PDS and issuer’s website.