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db X-trackers launches Europe’s first short emerging markets ETF


Deutsche Bank’s exchange-traded fund (ETF) platform, db X-trackers, has launched Europe’s first ETF giving investors systematic daily short exposure to emerging markets.

The db x-trackers MSCI Emerging Market Short Daily Index ETF, designed for active, short-term traders, provides investors with the daily inverse performance of the MSCI Emerging Markets Index, an index that reflects the performance of large and mid capitalisation companies in emerging markets across the world. It has been listed on the London Stock Exchange and represents the latest addition to db X-trackers’ suite of daily short ETFs. db X-trackers is the largest provider in Europe of ETFs that give exposure to daily short indices.

“Our new emerging markets daily short ETF provides investors with a positive return when the underlying market experiences negative performance," says Manooj Mistry, head of db X-trackers, UK. "Active investors can, therefore, via a liquid and easily traded product, potentially profit when the underlying market experiences negative performance.".

The db x-trackers MSCI Emerging Market Short Daily Index ETF resets on a daily basis, which means its compounded performance across a number of days differs from the total return of the underlying index (see editor’s notes). The product is, therefore, particularly suited to active traders managing short-term positions. For tactical investors, the ETF provides a straightforward route to taking short exposure. ETFs do not require the management of margin positions, for example, as a futures contract would. The short ETF can therefore act as an effective substitute for a derivatives contract. The ETF can also be used as a hedging tool.

“Trading in emerging markets was extremely active in 2010. The db x-trackers MSCI Emerging Market Short Daily Index ETF gives investors the opportunity to actively hedge their long emerging markets positions on a short term basis should they wish to maintain that exposure but fear a downturn,” says Mistry.

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