VanEck debuts ‘pioneering’ RMBS & India growth ETFs in Australia

VanEck has announced the launch of two new funds for Australian investors that tap traditionally hard-to-reach markets for retail investors.

The new-to-market offerings include the VanEck Australian RMBS ETF (RMBS), a residential mortgage-backed securities strategy, and a new India growth fund (GRIN).

The RMBS fund invests solely in AAA-rated Australian residential mortgage-backed securities. According to Van Eck, as an asset class, RMBS boasts a strong track record of capital stability and higher risk-adjusted yields relative to cash and senior debt.

Commenting on the launch, VanEck Asia Pacific chief executive Arian Neiron notes that RMBS funds have traditionally been the preserve of institutional investors, with access typically sought through asset managers.

“For the first time”, Neiron said, Van Eck’s RMBS “democratises the opportunity for all types of investors”.

“Residential mortgage-backed securities are one of the fastest growing fixed income asset classes in Australia, reaching a record $59.2 billion of issuance in 2024,” Neiron added.

“As a securitised debt backed by a pool of home loans, Australian residential mortgage-backed securities benefit from a long track record of stability supported by the price growth in the homes of borrowers and debtor resilience during economic downturns.

He added that, historically, investors in highly rated Australian residential mortgage-backed securities have never experienced principal losses.

“They have been utilised in credit strategies for decades, and for the first time VanEck’s RMBS democratises the opportunity for all types of investors.”

The RMBS fund complements Van Eck’s current fixed income and credit strategies range, which includes Australian government bonds, subordinated debt, corporate bonds, emerging markets, listed business development companies and US treasuries.

In addition to the RMBS, VanEck has launched its first India specialist fund – the GRIN – which offers investors exposure to high-growth Indian companies “with strong fundamentals and attractive valuations”.

The GRIN tracks the MarketGrader India Growth Leaders 50 Index, which tracks the top 50 companies (out of approximately 3,500 stocks) offering the best growth potential based on the Growth at a Reasonable Price (GARP) metric.

According to Neiron, the Subcontinent is fast emerging as a favoured investment destination – and one that has, for the most part, managed to avoid the ongoing global trade conflict.

He notes that the drivers of the country’s investment opportunities include “higher GDP growth supported by policy tailwinds, favourable demographics and a growing middle class and government-led initiatives fostering improved efficiency”.

“Further, while many countries scramble to recalibrate in response to Trump’s shifting US trade policies, India’s relative detachment from global trade could help it weather shocks that may harm more trade-dependent economies.

“India’s tariffs are high, and its share of global exports remains under 2%. India’s vast domestic market has continued to fuel its growth,” Neiron said.

The launch of the two funds extends Van Eck’s range of exchange traded funds (ETFs) products to 46.