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Deutsche Bank launches sterling hedged ETCs

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Deutsche Bank’s exchange-traded commodities (ETC) platform, db ETC, has launched the first sterling hedged gold ETC, as well as sterling hedged versions of its silver, oil and agriculture ETCs.

Sterling hedged versions of gold, silver, oil and agriculture db ETCs can now be traded on the London Stock Exchange. Commodities are generally priced in US dollars on the international markets, and the sterling-denominated ETCs provide a hedge on the sterling/US dollar currency risk.

“The db X-ETC platform has seen significant inflows since its launch in February last year. British pound hedged versions of some of the most popular db ETCs will let sterling-denominated investors participate in the commodity markets while minimising the impact of exchange rate risks on performance,” says Manooj Mistry, head of db X-ETCs for the UK.   

The launch of the sterling hedged products comes on the back of significant inflows into db ETC’s euro hedged products, which began listing last year – the db Physical Gold Euro Hedged ETC has to date generated more than EUR580 million in inflows. The development of such euro hedged products was also an industry first.  

The four new products are the db Physical Gold GBP Hedged ETC, the db Physical Silver GBP Hedged ETC, the db Brent Crude Oil Booster GBP Hedged ETC, and the db Agriculture Booster GBP Hedged ETC. The agriculture ETC references the prices of a range of agricultural commodities, including wheat, cocoa and sugar. For non-physical commodity ETCs, where exposure to the underlying index is acquired via the futures market, Deutsche Bank has developed a specialist futures buying methodology designed to make tracking more efficient. The products that use this methodology all have the word ‘Booster’ in their name (see notes below). This contrasts with db Physical ETCs, which directly hold the relevant commodity.

The db X-ETC platform’s assets under management currently stands (as of April 19) at EUR1.4 billion.  

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