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Deutsche Asset & Wealth Management (DeAWM), the asset management division of Deutsche Bank, is to create a range of low cost, physically replicated exchange-traded funds, each with an all-in fee of just 0.09% per annum.
The initiative aims to serve the needs of all types of investors aiming for efficiency in holding and trading ETFs.
As well as appealing to long-term, buy-and-hold investors seeking core portfolio holdings, the range is also expected to compete with non exchange-traded index trackers, which typically have relatively low total expense ratios (TERs).
The TER on the db x-trackers FTSE 100 UCITS ETF (DR) has been reduced from 0.30% per annum to 0.09% per annum, while the TER on the db x-trackers DAX UCITS ETF (DR) has fallen from 0.15% per annum to 0.09% per annum. The remainder of the line-up will consist of the existing db x-trackers EuroStoxx 50 UCITS ETF, which will be converted from indirect to direct, physical replication around the end of the first quarter, and a new ETF, the db x-trackers MSCI USA UCITS ETF also planned for around the end of the first quarter.
Reinhard Bellet, DeAWM’s Head of Passive Asset Management, commented: “With this range of low TER ETFs we aim not just to enhance our offering to current investors, but also to broaden our investor base. The combination of low TERs, intraday liquidity, visibility and transparency offered by our ETFs should make them appeal to an even wider cross-section of the investor community.”
In December 2013, DeAWM announced it would switch 18 of its largest ETFs from indirect, synthetic replication, to direct, physical replication. The provider now has approximately $9.4 billion (as at February 4, 2014) in assets under management that use direct, physical replication, or are earmarked to switch from indirect to direct replication in the weeks ahead.
The expansion of the provider’s physical ETF range continued in January with the high profile launch of the db X-trackers Harvest CSI300 Index UCITS ETF (DR) (ASHR) tracking China’s domestic CSI 300 A-shares index. This ETF has already attracted $95 million in assets.