VanEck has expanded its ETF range with the launch of two strategies offering exposure to China ESG equities and companies involved in rare earths and strategic metals.
The VanEck Vectors Rare Earths and Strategic Metals UCITS ETF (REGB) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.59% while the VanEck Vectors New China ESG UCITS ETF (CNEW) is listed on the LSE and Deutsche Boerse with a TER of 0.60%.
Physically-replicated, CNEW tracks the MarketGrader New China ESG index which offers exposure to 100 companies from just four sectors; non-consumer staples, consumer staples, healthcare and technology.
Companies in these sectors are subsequently selected based on four factors; growth, valuation, profitability and cash flow.
The ETF also implements an ESG overlay that requires companies to exceed the regional median ESG score as calculated by OWL Analytics.
The firm’s ESG ratings covers 25,000 companies worldwide and quantifies corporate behaviour on 30 ESG metrics.
Martijn Rozemuller (pictured), CEO at VanEck Europe, commented: “It is a new kind of consumer that is behind China's amazing growth. They spend their money on innovative technologies, healthcare services, pharmaceuticals, consumer and luxury goods.
“China's economy continues to develop and companies in the country are adapting to the new consumer realities. Chinese companies that are part of the new economy are likely to outpace the country's overall growth.”
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REGB tracks the MVIS Global Rare Earth/Strategic Metals index which offers exposure to 21 companies that mine and process rare earth and strategic metals including cobalt, manganese, tungsten and titanium.
To be included in the index, companies must derive at least 50% of their revenue from rate earths and strategic metals.
Furthermore, companies must have a market cap of at least $150m and a three-month average-daily-volume of at least $1m. REGB is rebalanced quarterly and each constituent is capped at 8%.
Rozemuller continued: “While rare earths are found all over the world, their “rarity” stems from the fact that they are difficult to mine – they never occur in high concentrations and are usually mixed with other elements.
“That is why this industry is also about companies that are very specialised and might be rather unknown and inaccessible to most investors. With REGB, they can bring these companies into the portfolio in a diversified way and benefit from the continued growing importance of these key commodities.”
Earlier this month, VanEck expanded its crypto range with the launch of solana, TRON and polkadot ETPs.
