db X-trackers unveils two income-oriented industry-first ETFs on NYSE Arca

Jun 4th, 2013 | By | Category: Fixed Income

Deutsche Asset & Wealth Management has announced the launch of two ‘industry first’ exchange-traded funds (ETFs) on the NYSE Arca: the db X-trackers Municipal Infrastructure Revenue Bond Fund (RVNU) and the db X-trackers Regulated Utilities Fund (UTLT).

db X-trackers unveils two income-oriented industry-first ETFs on NYSE Arca

db X-trackers has unveiled two industry-first ETFs on the NYSE Arca, both offering a degree of exposure to utilities and infrastructure.

The new funds offer unique investment opportunities in markets not previously served by ETFs – an increasingly tough ask given the recent explosive expansion of the ETF universe.

RVNU becomes the only ETF on the market to offer investors targeted access to municipal infrastructure revenue bonds, which are backed by dedicated revenue streams from infrastructure projects, while UTLT is first ETF to provide investors with 100% exposure to regulated utilities, an asset class backed by a government-regulated rate base that produces stable earnings.

The launch of these two income-oriented funds comes just two weeks after the Frankfurt-headquartered asset manager introduced the db X-trackers MSCI Germany Hedged Equity Fund (DBGR), the first currency-hedged German equity ETF to hit the US marketplace.

Martin Kremenstein, head of passive asset management at Deutsche Asset & Wealth Management Americas, said: “UTLT and RVNU are unique in allowing access to two new market sectors. The new ETFs further demonstrate our commitment to growing the db X-trackers platform in the US with first-to-market products that fill gaps in investor demand.”

RVNU seeks to track the DBIQ Municipal Infrastructure Revenue Bond Index, a proprietary index of long-term US tax-exempt bonds focusing on investment-grade bonds issued for infrastructure purposes that are backed by dedicated revenue streams. The index has over 500 constituents representing approximately 150 unique municipal obligors with approximately $73 billion in total market value. The fund has a net expense ratio of 0.30%.

UTLT seeks to track the DBIQ Regulated Utility Index, a proprietary index of regulated utility companies from developed international markets including, among others, the US, the UK, Canada, Italy and Australia. This index includes companies whose primary business operations are in the regulated utility sector – such as water, electricity and gas. This includes companies whose non-utility businesses and/or unregulated utilities businesses represent 25% or less of EBITDA in any year on a three-year look back basis. Major holdings currently include National Grid, Dominion Resources, American Electric Power, Duke Energy and Southern Co. The fund has a net expense ratio of 0.45%.

Deutsche’s US exchange-traded products (ETP) platform includes 55 ETPs (a mix of ETFs and ETNs), with approximately $11.6 billion in assets under management. Globally, the platform was launched in 2006 and has risen to become the second largest ETP provider in Europe and the fifth largest in the world, with approximately $63 billion in assets under management as of May 24, 2013.

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