Deutsche Asset & Wealth Management (Deutsche AWM) has launched the first ETF to provide equal-weight exposure to the FTSE100 IndexTM.
The db x-trackers FTSE 100 Equal Weight UCITS ETF (DR) applies one of the most straight forward strategic beta approaches – the re-weighting of a market capitalisation-weighted index to equally weight all underlying stocks – with the aim of improving risk-adjusted returns. Between December 2004 and May 2015 an equal weight version of the FTSE 100 IndexTM would have outperformed the capitalisation-weighted version by 2.6% per annum1 (Source: Deutsche AWM, 15 July 2015).
“Removing the large cap bias effectively increases the weighting to the smaller cap companies in the index, which may improve the risk-adjusted performance over the long term. This is a useful alternative for investors looking for adjusted beta exposure, and complements our existing ETF on the FTSE 100TM, the db x-trackers FTSE 100 UCITS ETF (DR),” says Michael Mohr (pictured), Head of Exchange-Traded Product Development, EMEA, at Deutsche AWM.
The ETF, now listed on the London Stock Exchange, is a physical index replication fund and has an annual All-in Fee of 0.25% per annum. It does not engage in securities lending and distributes its income. The underlying index is re-balanced every six months.
The ETF broadens Deutsche AWM’s existing range of strategic beta ETFs, which consists of equity factor exposures, ETFs providing exposure to high dividend indices, as well as ETFs providing exposure to equal-weighted indices.
Also newly-listed on the London Stock Exchange is a USD-hedged share class of the db x-trackers JPX-Nikkei 400 UCITS ETF (DR), which provides strategic beta exposure to Japan’s equity market.