VanEck High Income ETF Launches
The fund begins trading as investors seek distributions, active management.
Van Eck Securities Corp., which has $46.8 billion in exchange-traded funds, added another actively managed income ETF to its lineup as investors turn away from passive strategies amid heightened volatility and a plunging stock market.
New-York based VanEck, which manages 67 U.S.-based ETFs, launched the VanEck Dynamic High Income ETF (INC), on Thursday, according to a press statement. The fund has an expense ratio 0.43%, monthly distributions and is traded on the NYSE Arca, according to a description on the VanEck website. David Schassler, head of quantitative investment solutions at VanEck, will serve as portfolio manager.
INC will seek “to identify compelling sources of high income and dividends” to respond to “changing market conditions and to be able to take advantage of pricing anomalies within the market,” according to the company statement. The fund will invest across high-yielding equity and fixed income markets.
News of the fund’s launch comes at a tricky time for investors: The S&P 500 is having its worst year since 2008, with a nearly 22% decline, and the VIX volatility index has soared more than 56% during the same period.
Still, investors are jumping into high-yield fixed income vehicles, with Bloomberg reporting that nearly $1 billion was poured into the SPDR Bloomberg High Yield Bond ETF (JNK) last Friday, the fund’s largest one-day inflow since 2007.
The fund’s launch comes at a time when investors are hunting for returns, often seen in active strategies.
"The search for yield can no longer be a static activity," Schassler said in the statement, pointing to "rising rates, global volatility and increased economic uncertainty.”
Actively managed funds have gained traction this year at the expense of index, or passively managed, funds. They pulled in $65.8 billion, or almost 15% of the $453 billion invested in ETFs in 2022, according to ETF.com data.
Morningstar reports that 60% of new ETFs that have launched over the past two years have been actively managed, while about one-third, or 934, of all ETFs are actively managed.
Contact Shubham Saharan at [email protected]
