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DB x-trackers launches short bond and emerging market bond euro-hedged ETFs


DB x-trackers, Deutsche Bank’s exchange-traded fund platform, has listed two innovative ETFs on Deutsche Börse, a short bond ETF and an emerging market bond ETF based on the Short iBo

DB x-trackers, Deutsche Bank’s exchange-traded fund platform, has listed two innovative ETFs on Deutsche Börse, a short bond ETF and an emerging market bond ETF based on the Short iBoxx € Sovereigns Eurozone Total Return Index and the Deutsche Bank Emerging Markets Liquid Eurobond Euro Index respectively.

‘DB x-trackers once again demonstrates its innovative capabilities by launching yet more market leading products, this time in the form of the first short bond ETF and euro-hedged emerging market bond ETF,’ says Thorsten Michalik, head of db x-trackers.

‘DB x-trackers’ provide investors access to all asset classes and continue to demonstrate outstanding flexibility in reacting quickly to market needs by offering investment solutions in line with their demands.’

The db x-trackers Short iBoxx € Sovereigns Eurozone Total Return Index ETF allows investors to take a short position on the overall sovereign debt issued by eurozone governments and, Michalik says, will be particularly interesting to investors forecasting continued long-term inflationary pressures driving up bond yields. The fund has an expense ration of 0.15 per cent.

The db x-trackers Emerging Markets Liquid Eurobond Index ETF will provide investors with euro-hedged exposure to 14 emerging market sovereign and quasi-sovereign Eurobonds while also providing access to the underlying index methodology, including macroeconomic factors that have proved to be highly rewarding in the past. The expense ratio is 0.55 per cent.

‘Currently the Emerging Markets Liquid Eurobond Index offers a yield of 6.09 per cent with duration of 5.55,’ says Marco Montanari, head of rates ETF structuring at Deutsche Bank, noting that Standard & Poor’s rates 34.95 per cent of the bonds at BBB, 42.32 per cent at BB and 22.72 per cent at B. ‘Bonds out of Mexico, Brazil, Venezuela, Russia, Bulgaria and Indonesia are responsible for more than 50 per cent of the index.’

Deutsche launched the db x-trackers platform in January last year and its ETFs are now listed on Euronext Paris, Borsa Italiana, Frankfurt Xetra, the London Stock Exchange and SWX Swiss Exchange, supported by market-makers providing liquidity in the ETFs.

Currently db x-trackers has a range of 84 ETFs outstanding based on equity, fixed income, credit, money market and commodity indices including ETFs tracking short indices, credit default swap indices, money markets and global high dividend yield strategy.

Deutsche says that last year db x-trackers ETFs saw the highest inflow of assets of any ETF provider in Europe, with ETFs based on the MSCI Emerging Markets Index, the Eonia Money Market Rate Index and the DJ Euro Stoxx 50 enjoying the highest inflows of new assets in Europe, while db x-trackers fixed-income ETFs were responsible for more than 50 per cent of all new inflows for the asset class in Europe.

DB x-trackers ETFs are sub-funds of the db x-trackers Sicav, an umbrella fund investment company domiciled in Luxembourg and covered by the Ucits III regime.

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