db x-trackers, Deutsche Bank’s exchange-traded fund platform, has listed four ETFs in London that give investors access to key Asian emerging markets.
The ETFs track the MSCI China, MSCI India, MSCI Malaysia and MSCI Thailand total return equity indexes.
“Investors looking to take advantage of growth in these key emerging market countries want highly visible, transparent products that are easy to trade and inexpensive. Our emerging markets ETFs answer those needs,” says Manooj Mistry, head of db x-trackers ETFs UK.
The China index targets all companies with a market capitalisation within the top 85 per cent of the Chinese investable equity universe, and includes companies listed on the Shanghai Stock Exchange, Shenzhen Stock Exchange and the Hong Kong Stock Exchange.
A similar methodology, in terms of targeting companies with a market capitalisation within the top 85 per cent of the domestic market, applies to the Indian, Malaysian and Thai indexes.
By using swap-based replication, which negates the risk of there being a divergence in actual performance from the underlying index due to unpredictable elements such as rebalancing costs, db x-trackers offers precise tracking. The flexibility of the swap-based methodology also lets db x-trackers list products that reference traditionally difficult to reach underlyings.
“Our methodology gives investors the return of the index minus a highly competitive fee, and nothing less. With a transparent structure underpinning the investment, investors can take comfort from the fact that they are taking exposure to emerging markets in an optimal way,” says Mistry.