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Market Vectors lists Australian Equal Weight ETF on ASX

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Market Vectors, the exchange-traded fund business of US-based investment manager Van Eck Global, has listed its new Australian Equal Weight ETF on the ASX.

Trading under the ASX code MVW, the ETF is the first of its kind in Australia.
 
MVW gives investors access to a broadly diversified portfolio of the most liquid large, mid and small cap ASX- securities via a single trade on the ASX. The fund currently holds 77 securities, all of which are equally weighted at approximately 1.30 per cent.
 
Market Vectors Australian Equal Weight ETF tracks a purpose-built index, the Market Vectors Australia Equal Weight Index, which has been developed specifically with the intention of reducing the concentration risk inherent in market capitalisation weighted indexes in Australia.
 
Arian Neiron, managing director of Market Vectors Australia, says: “Our Australian Equal Weight ETF provides investors with something they haven’t had before – the opportunity to invest equally in some of Australia’s most successful companies, from big to small in one transaction on the ASX.
 
"Many Australian share investors do not have exposure to mid and small-cap companies in their portfolios because traditional indices and broad based unlisted managed funds invariably focus on a few big companies, resulting in a large-cap bias and increased concentration risk.”
 
The Market Vectors Australian Equal Weight ETF aims to diversify investment risk more evenly across companies and sectors. The index currently includes 77 securities, including mid cap securities such as Orica, Ramsay Health Care, SEEK as well as the big banks and miners such as Commonwealth Bank, Westpac, BHP Billiton and Rio Tinto. Each security currently has an equal weighting of approximately 1.30 per cent.
 
“Investors will be attracted by the ease of diversifying their portfolios across many different companies, without having to pick the stocks themselves. We particularly expect strong demand from SMSFs, the fastest growing segment of the superannuation sector which has about AUD550bn in assets, seeking diversified exposure to Australian securities,” Neiron says.
 
Australia’s ETF market is growing rapidly, hitting an all-time high last month, reaching AUD10.562bn assets under management in February 2014, an increase of 47.2 per cent from 12 months ago, according to the Australian Securities Exchange.
 
Market Vectors now has five ETFs listed on the ASX.

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