The VanEck Vectors Australian Equal Weight ETF (ASX: MVW) continued to outperform its peer group during the first month of 2019, returning 5.08% versus the ASX 200’s return of 3.87% according to a monthly note.
As we noted here, VanEck’s MVW strategy differs from a traditional market-capitalisation weighted index in that it adds the largest ASX companies to the portfolio in equal proportions.
According to a VanEck memo to clients in January, the MVW ETF took out Money Magazines ‘Best of the Best’ award in the Australian Share ETF category for a second year running.
“Advisers who have employed MVW for their clients’ portfolios have enjoyed superior risk-adjusted returns,” VanEck Vice President, Business Development, Damon Gosen says.
Like all ETFs, Gosen says the ETF isn’t immune to falls, so there are risks that need to be considered.
“The Australian share market faces a challenging year ahead as quantitative tightening continues around the globe and economic growth rates decline in the US, Europe and China, as well as in Australia, according to IMF forecasts,” Gosen explained.
Gosen pointed to the energy and materials sectors as key growth drivers in 2018 but said 2019 could be a bit different.
Citing Factset data, Gosen added that “in 2019, the strongest earnings are expected from the information technology, energy, health care and industrials sectors, with projected growth rates of 17.37%, 16.53%, 11.05% and 10.37%, respectively.”
So far in 2019, the preeminent Australian sharemarket index in the S&P/ASX 200 has risen despite the release of the final report from the Royal Commission into the banking and superannuation sectors.