VanEck Launches New Sentiment-Based EAFE ETF

The ETF ecosystem has expanded significantly in recent years. Since the ETF rule in 2019, especially, the wrapper has allowed asset managers to innovate and investor options to proliferate. Experienced asset manager shop Van Eck, which also launched two new sector ETFs this week, also dropped an intriguing new EAFE ETF that leans heavily on investor sentiment.

See more: Active ETFs Again Set AUM Record in February

VEFA, the VanEck MSCI EAFE Analyst Sentiment ETF (VEFA), offers investors a new option when it comes to international equities. Focused on developed markets, it may appeal to investors looking for “meaningful diversification benefits,” according to a press release from VanEck. 

Van Eck Adds New EAFE ETF, Sector ETFs

As international equities have picked up steam, the ETF will look to provide strong returns via its MSCI EAFE Analyst Sentiment Select Index, which includes 21 markets except the U.S. and Canada. The EAFE ETF employs a rules-based process to overweight firms with improving analyst outlooks, the release added.

“VEFA builds on VanEck’s history of identifying forward-looking investment signals and translating them into practical portfolio solutions,” said Ed Lopez, Managing Director and Head of Product Management at VanEck. “VEFA offers investors exposure to companies with improving analyst expectations and the potential for excess returns within a core international allocation.”

How, specifically, does the strategy invest, then? VEFA charges a 30 basis points (bps) fee for an approach that equally weights five “analyst sentiment revision” categories. Those include earnings per share, sales, cash flow, price targets and buy/sell recommendations. The index scores stocks based on indicators based on those categories. 

“Demand for international equity ETFs accelerated in the first quarter as advisors and end clients have looked to diversify away from US equities,” said VettaFi head of research Todd Rosenbluth. “This new Invesco ETF takes a smarter approach to traditional market cap weighting and could garner attention.” 

VanEck also added two new sector ETFs to go with the new EAFE ETF. That duo, the VanEck Financials TruSector ETF (TRUF) and the VanEck Healthcare TruSector ETF (TRUH), expanded its suite of TruSector ETFs.

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