InvestmentsOct 24 2017

Van Eck lists two ETFs on London Stock Exchange

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Van Eck lists two ETFs on London Stock Exchange

Van Eck has launched two specialist ETFs to list on the London Stock Exchange.

The VanEck Vectors Preferred US Equity UCITS ETF invests in US preferred stocks and hybrid securities. VanEck Vectors Natural Resources UCITS ETF offers access to global commodities and commodity-related products and services.

The preferred shares ETF tracks the performance of the Wells Fargo Hybrid and Preferred Securities Aggregate Index.

The index is composed of so-called “preferred stocks and hybrid securities” of companies that are listed at US stock exchanges with an investment-grade rating.

Preferred stocks are fixed or floating rate securities with coupon payments subordinated to bonds.

With its combination of stock and bond features, this hybrid type of securities gives investors seniority over holders of ordinary stocks in the context of dividend pay-outs, and in the event of liquidation.

In exchange for this, the owners of preference shares give up voting rights. This ETF has total charges of 0.41 per cent.

The natural resources ETF  is based on the VanEck Natural Resources Index (RVEIT).

The index provides comprehensive exposure to worldwide companies that are involved in the production and distribution of commodities and commodity-related products and services.

It provides balanced exposure to agriculture, base and industrial metals, energy, forest products, and precious metals sectors, and it was one of the first commodity equity indices to include alternatives, such as water and renewable energy.

The total charges on this product are 0.5 per cent per annum.

Patrick Connolly, head of communications at advisery firm Chase De Vere said: “There is a wide and growing range of passive investments available for investors and their advisers.

"While we do use some passive funds, we don’t recommend specialist products, such as those investing only in commodities-related holdings.

"The US product could provide some protection in a falling market, although where we use passive investments we do so to get broad rather than selective market exposure.”

David.Thorpe@ft.com