SCM Private and Deutsche Bank team up to launch active multi-asset ETF

Feb 22nd, 2012 | By | Category: Alternatives / Multi-Asset

Private wealth manager SCM Private and Deutsche Bank’s ETF platform db X-trackers have teamed up to launch an actively managed multi-asset ETF that offers exposure to a portfolio of db X-trackers’ ETFs and ETCs.

SCM Private and Deutsche Bank team up to launch active multi-asset ETF

Private wealth manager SCM Private (Alan Miller, founder, pictured) and db X-trackers have teamed up to launch an actively managed multi-asset ETF.

The ETF allows investors to reap the benefits of a multi-asset fund of funds with the liquidity, transparency, low cost and tradability benefits of an ETF.

The db X-trackers SCM Multi Asset ETF provides access to a range of db X-tracker products (ETFs and ETCs), the selection and weightings of which will be determined by SCM Private. SCM Private’s existing absolute return strategy will form the basis of the asset allocation.

SCM’s Absolute Return Portfolio has returned 27% since inception (June 2009), this compares to the IMA Absolute Return sector average of 11% over the same period.

“Studies increasingly show that, for the most part, investment returns are determined by broad market exposures as opposed to individual stock or bond picking,” says Alan Miller, founding partner and chief investment officer of SCM Private in London.

At the end of January, the largest components of the strategy were UK equity (38%) and corporate bonds (22%). Emerging bonds and emerging markets followed with 8% and 7%, respectively.

Active asset allocation via passive instruments such as ETFs is set to gain momentum, believes London-based Manooj Mistry, head of db X-trackers for the UK. “At a more fundamental level, this product will appeal to investors looking for a straightforward and cost effective way to add an active element to their portfolio.”

At present, only ten ETFs in Europe focus on asset allocation, even fewer are actively managed.

The ETF has an “all-in” fee of 0.89% per annum, which includes the management fees associated with db X-trackers’ underlying ETFs and ETCs. The ETF will, however, charge dealing costs, estimated at 0.10% pa.

The fund is scheduled to debut on the London Stock Exchange on 24 February 2012.

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