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The new EUR-hedged share class, which has been listed on the Deutsche Börse, follows the launch earlier this month on the London Stock Exchange of a USD-hedged share class for its db X-trackers MSCI Japan Index UCITS ETF.
The fund has approximately €2.2 billion in assets under management and is linked to the MSCI World Index.
The MSCI World is a capitalisation-weighted index tracking the performance of more than 1,600 large and mid-cap companies from 24 developed market countries.
The broad and diversified nature of the index – and thus the fund – makes it an ideal vehicle for investors seeking exposure to global developed equities in one simple trade. Currency-hedged versions allow investors to mitigate the risk of currency movements between the underlying currencies in the index and the base currency of the fund.
As an example of the potential impact of currency movements, the MSCI World Index was up 13.6% from 12 months earlier (as of 3 September 2013), compared with 21.1% for the euro-hedged version of the index.
Simon Klein, Deutsche Asset & Wealth Management’s Head of Exchange Traded Product Sales, EMEA and Asia, commented: “Increasing numbers of our clients are asking for currency-hedged exposure as they’ve witnessed the potentially diluting impact un-hedged exposure can have on their international equity performance. The euro-hedged MSCI World Index exposure will therefore be an important and welcome addition to our offerings.”
DeAWM offers a wide range of currency-hedged products, including sterling, US dollar, Swiss franc and euro-hedged exposures to various markets such as the S&P 500 and MSCI Japan, as well as commodities and bonds.
Among the most popular currency-hedged ETFs this year have been those offering exposure to the MSCI Japan. This is in part due to the policies of Japanese Prime Minister Shinzo Abe, which have led to a strong stock market and a weakening yen against major currencies.
Manooj Mistry, Deutsche Asset & Wealth Management’s Head of Exchange Traded Products, EMEA, added: “Currency-hedged exposure is an important product development theme, and we will be looking in future to add more currency-hedged offerings to our product line-up.”
The new share class trades under the ticker XWEH and comes with a total expense ratio of 0.52%.