Deutsche introduces GBP-hedged MSCI World ETF to Switzerland

Aug 10th, 2017 | By | Category: Equities

Deutsche Asset Management has launched a new share class for the db x-trackers MSCI World Index UCITS ETF, listed on SIX Swiss Exchange. The new share class (Ticker: XDWG) allows investors to gain access to the performance of the MSCI World Index, a widely followed benchmark for global equities performance, while hedging currency risk relative to the British pound.

Deutsche introduces GBP-hedged MSCI World ETF to Switzerland

The MSCI World Index captures large-, and mid-cap representation across 23 developed markets.

The MSCI World Index captures large-, and mid-cap representation across 23 developed markets, covering approximately 85% of the free float-adjusted market capitalisation in each country. The US dominates the index in terms of country exposure, accounting for a weight of almost 60%, while Japan (8.7%), the UK (6.6%) and France (3.9%) make up the next largest exposures. There are 1,656 constituents as of 30 July 2017 with the largest being Apple at a weight of 2.1%.

XDWG distributes income generated within the fund and has a total expense ratio (TER) of 0.29% which is the lowest fee of any MSCI World GBP-hedged ETF in the market.

Using back-tested data, the MSCI World 100% hedged to GBP TRN Index which underlies the new share class has returned 13.0% per annum over the past five years.

Investors can gain unhedged exposure to the MSCI World Index through a number of Europe-listed ETFs, the cheapest of which is the HSBC MSCI World UCITS ETF (LON: HMWO) at a TER of just 0.15%. HMWO has approximately £200 million in assets under management (AUM).

Deutsche’s unhedged version, the db x-trackers MSCI World Index UCITS ETF (LON: XWLD), is also competitively priced, costing 0.19%. It has over £1.5 billion in AUM. The iShares Core MSCI World UCITS ETF (LON: SWDA) is the largest ETF in Europe to track the MSCI World. It has AUM of £8.1bn and a TER of 0.20%.

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