VanEck Blog & Insights

VanEck Vectors MSCI World ex Australia Quality (Hedged) ETF QHAL

Fund description: QHAL gives investors exposure to a diversified portfolio of quality international companies from developed markets (ex Australia) with returns hedged into Australian dollars. QHAL aims to provide investment returns before fees and other costs which track the performance of the Index.

Index description: The MSCI World ex Australia Quality 100% Hedged to AUD Index aims to capture the performance of quality stocks selected from the Parent Index, MSCI World ex Australia, by identifying companies with high quality scores determined by MSCI based on three key fundamental variables: high return on equity; stable year-on-year earnings growth; and low financial leverage.

Management style: Replication

 as at 17-Apr-19

  • Exchange

    ASX
  • ASX code

    QHAL
  • Bloomberg index code

    HA724440
  • Index provider

    MSCI Inc.
  • NAV1

    $26.58
  • Units outstanding1

    80,000
  • Net assets1

    $2.1M
  • Number of holdings1

    299
  • Inception date2

    21-Mar-19
  • ASX commencement

    25-Mar-19
1As of the close of the previous trading day.
2The date the ETF was seeded prior to quotation on ASX.

as at 17-Apr-19

The NAV is generally calculated daily after all markets are closed for that day based on the closing price of the securities on the relevant foreign stock exchange. The NAV is then converted to AUD based on the relevant London WM Reuters 4pm exchange rate. This means, due to Australia’s time zone, that the NAV will generally not be updated until around 3pm next business day.

Key points

Underlying Index
MSCI World ex Australia Quality 100% Hedged to AUD Index

Overview
The Index is based on a traditional market capitalisation-weighted parent index, the MSCI World ex Australia Index (the ‘Parent Index’), which includes large- and mid-capitalisation stocks. The Index aims to capture the performance of quality growth stocks selected from the Parent Index. The Index reweighs the selected quality growth stocks from the Parent Index to emphasise stocks with the highest quality scores. The components, sectors and countries represented in the Index will change over time.

Index calculation methodology
A four step process is followed to determine the Index constituents:

1. The eligible universe of securities is defined as the securities in the Parent Index.

2. A quality score is calculated for each security in the universe based on the following fundamental variables:
(a) return on equity;
(b) earnings variability; and
(c) debt to equity ratio.
If all three variables are available, a quality score for each security is calculated based on the average scores for the three variables. If (a) is positive and (b) or (c) is unavailable, the quality score is calculated based on the 2 available variables. If (a) is positive but both (b) and (c) are unavailable, the security is ineligible for inclusion.

3. The securities are ranked by quality score and a fixed number required to cover 30% of the Market Capitalisation of the Parent Index rounded up to the nearest 25 are selected, with the aim of attaining a high exposure to the quality factor, while maintaining sufficient Market Capitalisation and number of securities coverage. Individual issuer weight is capped at 5%.

4. Securities eligible for inclusion are weighted as follows: 
Quality weight = Quality score x Market Capitalisation weight in the Parent Index

Currency hedging
MSCI reduces the exposure of the Index to foreign exchange rate fluctuations between the Australian dollar and currencies in which the constituents are denominated by notionally entering into forward foreign exchange contracts on a rolling one-month basis at the end of each month. The Index is not fully hedged and retains some exposure to currency movements.

Rebalances
The Index is rebalanced on a semi-annual basis, usually as of the close of the last business day of May and November. The quality scores are recalculated at the end of April and October and used for May and November rebalances respectively. The updated Index is generally announced nine business days before the effective date.

Index provider
MSCI Inc. MSCI is not a related entity of VanEck Investments Limited.

QHAL is indexed to a MSCI index. QHAL is not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to QHAL or the MSCI Index. The PDS contains a more detailed description of the limited relationship MSCI has with VanEck and QHAL.

Index profile  

  • Bloomberg index code

    HA724440
  • Base date

    01-Jan-99
  • Rebalance frequency

    Semi-annual

Top ten index constituents (%) as at 31-Mar-19

Total constituents: 299
Constituent name
TIcker
Weightings (%)
MICROSOFT CORP
MSFT US
5.23
APPLE INC
AAPL US
4.85
FACEBOOK INC-A
FB US
3.36
JOHNSON & JOHNSON
JNJ US
2.84
ALPHABET INC-CL C
GOOG US
2.65
VISA INC-CLASS A SHARES
V US
2.64
ALPHABET INC-CL A
GOOGL US
2.53
MASTERCARD INC-CLASS A
MA US
2.26
NESTLE SA-REG
NESN VX
2.07
INTEL CORP
INTC US
2.06
Top ten total (%) 30.49
These are not recommendations to buy or to sell any security. Securities and holdings may vary.

Index country weightings (%) as of 31-Mar-19

  • Country

    Weightings (%)
  • UNITED STATES

    72.3
  • UNITED KINGDOM

    7.5
  • SWITZERLAND

    5.4
  • JAPAN

    3.0
  • FRANCE

    2.0
  • DENMARK

    1.7
  • NETHERLANDS

    1.6
  • HONG KONG

    1.5
  • GERMANY

    1.4
  • CANADA

    1.0
  • SPAIN

    0.6
  • SWEDEN

    0.6
  • FINLAND

    0.5
  • ITALY

    0.2
  • ISRAEL

    0.2
  • IRELAND

    0.1
  • SINGAPORE

    0.1
  • NEW ZEALAND

    0.1
  • BELGIUM

    0.0
  • PORTUGAL

    0.0
  • CHINA

    0.0
  • Total

    99.8

Index sector weightings (%) as at 31-Mar-19

  • Sector

    Weightings (%)
  • Pharmaceuticals

    10.3
  • IT Services

    9.4
  • Interactive Media & Services

    8.6
  • Software

    8.2
  • Semiconductors & Semiconductor Equipment

    6.3
  • Computers & Peripherals

    5.0
  • Textiles, Apparel & Luxury Goods

    3.7
  • Specialty Retail

    2.8
  • Personal Products

    2.7
  • Aerospace & Defense

    2.5
  • Biotechnology

    2.4
  • Food Products

    2.4
  • Hotels, Restaurants & Leisure

    2.4
  • Household Products

    2.2
  • Communications Equipment

    2.2
  • Industrial Conglomerates

    2.1
  • Insurance

    2.0
  • Health Care Equipment & Supplies

    1.9
  • Capital Markets

    1.8
  • Health Care Providers & Services

    1.7
  • Road & Rail

    1.7
  • Machinery

    1.6
  • Tobacco

    1.6
  • Chemicals

    1.5
  • Professional Services

    1.4
  • Entertainment

    1.3
  • Beverages

    1.1
  • Food & Staples Retailing

    1.0
  • Internet & Catalog Retail

    0.8
  • Electronic Equipment, Instruments & Components

    0.8
  • Auto Components

    0.7
  • Multiline Retail

    0.7
  • Electrical Equipment

    0.6
  • Trading Companies & Distributors

    0.6
  • Metals & Mining

    0.5
  • Household Durables

    0.5
  • Air Freight & Logistics

    0.5
  • Life Sciences Tools & Services

    0.3
  • Media

    0.3
  • Equity Real Estate Investment

    0.3
  • Wireless Telecommunication Services

    0.3
  • Diversified Telecommunication Services

    0.3
  • Building Products

    0.2
  • Health Care Technology

    0.2
  • Commercial Services & Supplies

    0.2
  • Automobiles

    0.1
  • Leisure Equipment & Products

    0.1
  • Airlines

    0.1
  • Real Estate Management & Development

    0.1
  • Marine

    0.1
  • Containers & Packaging

    0.1
  • Paper & Forest Products

    0.1
  • Construction & Engineering

    0.0
  • Transportation Infrastructure

    0.0
  • Total

    100.3