Deutsche cross-lists ‘core’ MSCI emerging markets ETF on SIX

Jul 31st, 2017 | By | Category: ETF and Index News

Deutsche Asset Management has cross-listed the db x-trackers MSCI Emerging Markets Index UCITS ETF (XMME) on SIX Exchange. Introduced as part of Deutsche’s ‘core’ range of ETFs – low-cost, diversified funds designed to act as foundational building blocks for portfolio construction – the fund comes with a price tag of just 0.20%.

Deutsche cross-lists ‘core’ MSCI emerging markets ETF on SIX

Deutsche cross-lists ‘core’ MSCI emerging markets ETF on SIX

The underlying MSCI Emerging Markets Index comprises large- and mid-cap stocks that represent at least 85% of the free-float market capitalization of each sector within the entire emerging markets universe.

There are 27 countries represented in the index of which the largest by weight are China (24.1%), South Korea (15.6%), Taiwan (12.0%), India (8.9%), Brazil (6.8%) and South Africa (6.7%).

MSCI recently announced its intention to start including Chinese A-Shares within its global indices; consequently, the index provider plans to add 222 China A Large Cap stocks, representing on a pro forma basis approximately 0.73% of the weight of the MSCI Emerging Markets Index at a 5% partial inclusion factor. A two-step inclusion process will be used to account for the existing daily trading limits on Stock Connect.

The first inclusion step would coincide with its May 2018 Semi-Annual Index Review followed by the second step which would take place as part of the August 2018 Quarterly Index review.

The index’s sector allocations are dominated by the information technology (26.8%) and financials (23.7%) sectors, followed by consumer discretionary (10.5%), materials (7.2%) and consumer staples (6.6%). All data as of 27 July 2017.

The fund is accumulating in nature and trades in Swiss francs. It is also available on the London Stock Exchange in US dollars or in euros on Deutsche Börse Xetra.

There are several ETFs already listed in Europe which track the MSCI Emerging Markets Index including funds from providers HSBC, Lyxor, Source (recently acquired by Invesco), SPDR ETFs, iShares and UBS.

The iShares Core EM IMI UCITS ETF (LON: EIMI) is the largest, with AUM of $6.8bn and is also significantly cheaper than most of the other ETFs with a TER of 0.25%, although the UBS Emerging Markets UCITS ETF (SIX: EGUSAS) comes closest to competing on price with a TER of 0.32%; its AUM is $2.6bn.

Emerging market equities have experienced a good run of form over the past 18 months, with the MSCI Emerging Markets Index up approximately 34% since 1 January 2016.

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