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Deutsche launches db x-trackers ETFs to provide long and short exposure to French equities


Deutsche Bank has launched two db x-trackers exchange-traded funds on Euronext Paris that provide long and short exposure to the French stock market, bringing the number of ETFs it has listed on the P

Deutsche Bank has launched two db x-trackers exchange-traded funds on Euronext Paris that provide long and short exposure to the French stock market, bringing the number of ETFs it has listed on the Paris stock exchange to 23.

The db x-trackers CAC 40 ETF is based on the CAC 40, the main benchmark index for Euronext Paris, which was launched with a base value of 1,000 as of December 31, 1987 and stood at 4,299.36 at the close on July 18.

The index is designed to reflect the performance of the largest and most liquid shares listed on Euronext’s regulated market in Paris. It is weighted by free float market capitalisation and is made up of 40 shares selected among the 100 largest and most traded stocks in Paris.

The db x-trackers CAC 40 Short ETF is based on the CAC 40 Short Index, which seeks to provide the inverse performance of the CAC 40 Total Return Index, and calculates the performance of the stocks assuming that all dividends and distributions are reinvested.

The short index reflects the daily inverse movement in the CAC 40 TR Index; if the long index is down 1 per cent, the short index will be up 1 per cent before interest and fees. The index incorporates a prorated portion of interest, based on double the Eonia rate.

The db x-trackers CAC 40 ETF has an annual total expense ratio of 0.20 per cent and the db x-trackers’ CAC 40 Short ETF, the 14th db x-trackers ETF to be based on a short index, has a TER of 0.40 per cent.

‘With the current market turbulence investors will now able to take a short position against the CAC 40, enabling them to take advantage of any down turns in the French stock market,’ says Manooj Mistry, head of equity ETF structuring for db x-trackers.

‘In the past only professional investors have had the tools to be able to go short, but our new CAC 40 Short ETF is also available to retail investors, offering them the opportunity to short the CAC 40 for low cost and at any size of investment.’

Pedro Fernandes, head of ETFs for NYSE Euronext’s European markets, says: ‘These two new db x-tracker ETFs will give the CAC 40 French benchmark index further exposure in international markets. We now have more than 330 listed ETFs and more than 220 underlyings on Next Track, Euronext’s dedicated ETF segment, confirming its position as a leader in ETF listings.’

Lisa Dallmer, head of the global index group at NYSE Euronext, adds: ‘Since its launch 20 years ago, the CAC 40 has rapidly won an international position as an excellent indicator for Europe. Today, it is the second most widely used index for management of passive funds, just behind the S&P 500. With these new ETFs, we now have five such ETFs from five issuers, including one from the US.’

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