VanEck on Thursday announced the launch of the VanEck Future of Food ETF, its first actively managed equity exchanged-traded fund and a strategy the firm's director of ETF product development thinks will appeal to institutional investors, though he acknowledged initial hurdles may exist.
The fund will provide exposure to companies engaged in agri-food technology and innovation, the firm said in a news release.
"We have worked closely with institutional investors for years and certainly believe they will find the strategy appealing," said Brandon Rakszawski, VanEck's director of ETF product development, in an email. "The feedback we have received from existing clients on our research and outlook for the space as well as our exposure to it in other strategies is promising."
Still, Mr. Rakszawski acknowledged that some "early day" hurdles to adoption by institutional investors could exist, such as low initial assets under management and a limited track record. However, VanEck believes the new ETF and its underlying investment philosophy "will align well with several potential institutional objectives," he said.
"We believe the strategy presents a long-term structural growth opportunity driven by a growing global population, increasing focus on environmental sustainability, and shifting consumer preferences," Mr. Rakszawski said.
The strategy is also likely to find an appetite among sustainable investors given its focus on companies that disrupt the food and agriculture industries "in order to do more with less environmental impact, ultimately working toward solving some of the industry's most significant challenges," he said.
The new fund joins a lineup of sustainability-focused equity solutions that also includes the recently launched VanEck Green Metals ETF and VanEck Environmental Sustainability Fund, the news release said.
The VanEck Future of Food ETF is listed on the NYSE Arca and has a net expense ratio of 0.69%, the release said.
VanEck had about $82.2 billion in assets under management as of Oct. 31, including mutual funds, ETFs and institutional accounts.
