German investment bank Commerzbank has launched the ComStage Alpha Deutschland Dividende Plus UCITS ETF (F751 GR) on Deutsche Börse Xetra, providing exposure to German equities through a rules-based selection process while also employing an actively managed market hedging overlay.
Commerzbank will actively manage the risk of market downturns affecting the ETF’s performance.
The investment universe of the newly launched ETF comprises 160 German stocks from the DAX, MDAX, SDAX and TecDAX indices.
Using a multi-stage, quantitative process, 50 high-dividend stocks are selected from this universe based on dividend yield, liquidity, momentum, valuation, earnings and volatility. Constituents are equally weighted in the portfolio.
In addition, F571 offers flexible protection through active fund management. The degree of hedging in the ETF is reduced in rising or sideways markets and increased in falling markets.
Thomas Timmermann, divisional manager Asset Management at Commerzbank, said, “By combining a passive rules-based investment into German equities with active risk management, the new ComStage ETF has the potential to dramatically reduce exposure to the stock market in the event of a sudden deterioration in the stock market climate.”
The fund trades in euros and distributions occur annually. Its total expense ratio (TER) is 0.68%.
The new fund supplements the globally focused ComStage Alpha Dividende Plus UCITS ETF (F750 GR), launched in mid-2016, with a stronger focus on German dividend payers. F750 also combines rules-based, passive investing with an active hedging strategy that, according to Commerzbank, allows the investor to capitalize on the long-term potential in the equity markets while limiting the risk in critical market phases. Its TER is 0.71%.
“With the expansion of our ComStage Alpha offering, we offer investors even more choice,” said Thomas Meyer zu Drewer, head of the ComStage ETF business. “The ComStage Alpha ETFs appeal to investors who want to receive a regular stream of income while limiting the risk of investing in the stock market at certain stages.”
(Quotations translated to English from German)