Deutsche Asset & Wealth Management (DeAWM) has launched a range of interest rate hedged fixed income exchange-traded fund share classes.
The range includes a rates hedged version of its ETF providing exposure to higher yielding Eurozone sovereign debt, which generated significant inflows in 2013.
The new share classes, which have been listed on the Deutsche Börse, are designed for investors who wish to maintain full credit exposure to underlying bond markets while hedging the interest rate risk. The new launches are:
• db x-trackers II iBoxx Sovereigns Eurozone Yield Plus UCITS ETF – 2C Interest Rate Hedged
• db x-trackers II iBoxx EUR Liquid Corporate UCITS ETF – 2C Interest Rate Hedged
• db x-trackers II iBoxx EUR Liquid Corporate Non-Financials UCITS ETF – 2C Interest Rate Hedged
• db x-trackers II iBoxx EUR Liquid Corporate Financials UCITS ETF – 2C Interest Rate Hedged
Arne Noack, DeAWM’s head of exchange-traded product development, EMEA, says: “Many fixed income investors are currently looking for solutions to anticipated future interest rate rises. This range of interest rate hedged products serves that need.”
The non-interest rate hedged db x-trackers II iBoxx Sovereigns Eurozone Yield Plus UCITS ETF currently has around EUR1.35bn in assets under management. Meanwhile, a db X-trackers ETF offering the same exposure but focused on the one-to-three-year maturity bucket launched in August 2013 and has also generated significant inflows. The db x-trackers II iBoxx Sovereigns Eurozone Yield Plus 1-3 UCITS ETF was the most successful new launch ETF in Europe in 2013, in terms of assets under management at the end of the year. At the end of 2013 it had EUR430m in assets.
Simon Klein, DeAWM’s head of exchange-traded product sales, EMEA and Asia, says: “The success of our ETFs providing exposure to higher yielding sovereign Eurozone debt has been phenomenal, and there is every indication that the new interest rate hedged products will also be well received. Prior to listing, the interest rate hedged share class of our Eurozone Yield Plus ETF had already attracted around EUR40m in assets.”
