Is ALFA a good ETF?
ALFA is the VanEck Australian Long Short Complex ETF from VanEck. We classify it under AU, Geared, and Active. With about $36 million in assets it is a relatively small fund (worth checking spreads and liquidity before buying).
On a total-return basis, ALFA has delivered 7.37% a year over 1 year (ranked 153rd of 308 ETFs we track).
The management fee of 0.39% is reasonable. That's cheaper than the typical 0.5% for similar ETFs. It pays a low 0.89% yield, so most of its return must come from capital growth.
Portfolio turnover is very high at about 150% a year — the fund effectively rebuilds its portfolio each year, which realises capital gains aggressively and can create a meaningful tax drag, especially for higher earners holding it outside super.
Strengths
- Low-cost: a 0.39% management fee keeps more of the return in your pocket.
Things to watch
- High portfolio turnover (150% a year) means frequent trading that realises capital gains, adding tax drag — less efficient than a low-turnover index fund.
Good to know
- Low 0.89% yield — this is a growth-oriented fund, not an income play.
- Distributions are 30% franked, a tax bonus for Australian residents.
- Built on borrowed money (geared), which magnifies both gains and losses — a tactical tool, not a buy-and-hold core.
- Australian focus means franked dividends and no currency risk, but heavy concentration in banks and miners.
What ALFA's categories mean for you
How each category this ETF belongs to tends to behave across market cycles.
Australian shares. Home-market familiarity, fully franked dividends and no currency risk for local investors — but very concentrated in banks and miners, which dominate the index.
- Market regime
- Sensitive to commodity prices, Chinese demand and domestic interest rates. Generous income, but narrow sector diversification.
- In a portfolio
- A natural core for Australian investors thanks to franking, but should be paired with global exposure so you aren't over-reliant on a handful of banks and resource giants.
Uses borrowing (leverage) to amplify the return of the underlying assets — magnifying both gains and losses. Internally geared funds remove the margin-call risk but not the volatility.
- Market regime
- Amplifies whatever the market does. In choppy, sideways markets 'volatility decay' steadily erodes returns even if the index ends up flat.
- In a portfolio
- A tactical, short-to-medium-term tool for experienced investors — explicitly not a buy-and-forget holding. Fees are high and the ride is extreme.
Actively managed: a portfolio manager hand-picks holdings trying to beat the index, rather than simply tracking it. You pay more in fees for the chance of outperformance.
- Market regime
- Can add value in volatile, falling or inefficient markets where stock-picking and downside protection matter. In long, broad bull markets most active funds struggle to keep up with the cheap index after fees.
- In a portfolio
- Only worth holding if you have genuine conviction in the strategy — decades of evidence show the majority of active funds underperform their benchmark over 10+ years once fees are counted.
General information only, generated from the fund's published data — not personal financial advice. Past performance is not a reliable indicator of future returns. Consider your own circumstances or seek licensed advice before investing.