AVANA Invest launches debut ETF

Aug 7th, 2013 | By | Category: Equities

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AVANA Invest, a Munich-based investment manager specialising in exchange-traded fund (ETF) portfolios, has listed its first ETF: the AVANA Emerging Market Equity UCITS ETF Feeder.

AVANA Invest launches debut ETF

Goetz J. Kirchhoff, Founding & Managing Partner of AVANA Invest.

The fund, which has an actively managed component, has been listed on the Deutsche Börse (Xetra) and provides exposure to emerging market equities.

The fund enables investors to participate to at least 85% in the performance of the FundLogic Emerging Markets Equity Fund, the ETF’s master fun. Up to 15% of the assets can be invested in bank deposits or derivatives.

This innovative ETF construction is the result of cooperation between AVANA Invest and Morgan Stanley’s fund platform FundLogic Alternatives plc.

The investment objective of the master fund is to track the performance of the MSCI Emerging Markets Index, which in turn reflects the equity market performance of 21 emerging market countries: Brazil, Chile, China, Columbia, the Czech Republic, Egypt, Hungary, India, Indonesia, Malaysia, Mexico, Morocco, Peru, the Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand and Turkey.

The master fund tracks the performance of the MSCI Emerging Markets Index using a swap construction.

Dirk Grunert, Executive Director at Morgan Stanley, said: “We are pleased to act as the Designated Sponsor. On the one hand because of AVANA’s Founding Partner Götz J Kirchhoff, who is an ETF pioneer, and on the other hand because the Feeder-ETF is a unique product developed by AVANA and FundLogic.”

The fund may appeal to investors looking for low tracking error. According to the press release, the low cost of the master fund’s portfolio (0.20%) coupled with the underlying portfolio, which is not subject to securities lending, leads to an exact index replication minus cost.

Goetz J. Kirchhoff, Founding & Managing Partner of AVANA Invest, said: “With a total management fee of 0.40% p.a. and a service fee of 0.10% p.a. our ETF is currently, with a Total Expense Ratio of 0.50% p.a., one of the most cost efficient in this market segment.”

The fund will compete against a host of other ETFs based on the MSCI Emerging Markets Index including products from iShares, db-X trackers, SPDR, Lyxor, Amundi, HSBC and UBS, among others.

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